Keep it cheap - Ten tips for minimizing costs

• Author: Jeremy Phillips
• Pages: 23-25

Some things are so obvious they are easily over-

looked. One of them is the contrast between IP

laws and the rules that govern the resolution of

disputes involving IP rights.

For more than a century, nations have worked to

harmonize their IP laws, making IP law one of the

biggest and longest-lasting areas of cooperation

between countries and resulting in national laws

that give citizens and businesses of other coun-

tries the same rights and benefits as they accord

to their own. In contrast, every country in the

world has a dispute resolution system that re-

flects its culture, historical roots and political ide-

ology. Those national characteristics are deep-

rooted, often cherished and tenaciously

defended whenever talk of reform is in the air.

Consequently, while IP rights are increasingly

comparable the world over, the cost and effec-

tiveness of their enforcement reflect each nation’s

economic and cultural DNA.

The quest for global

truths

This contrast raises the question: if IP enforce-

ment mechanisms and costs are different every-

where, is it possible to point to any general truths

that hold universally, and that can be applied in

the litigation-happy U.S. and court-shy Japan, in

industrial economies such as Germany and in de-

veloping nations where enforcement of rights

and the protection of legitimate interests may be

viewed as a matter for tribal loyalties and local

custom rather than – or as well as – the remote

application of arbitrary rules?

Before answering this question myself, I sought

the advice of readers of my weblog, who are

drawn from nearly 150 countries. The one overar-

ching truth that emerged came from readers of

common and civil law backgrounds and from

both developing and developed economies –

that is, that anyone contemplating IP litigation,

arbitration or another form of dispute resolution

should think carefully before they act. The word

“carefully” is mine. I was initially skeptical as to

whether careful thought would help to reduce

dispute settlement costs, as it could encourage

would-be disputants to bring proceedings they

otherwise might not have. However, on the basis

that careful analysis (i) might persuade disputants

to drop a claim not worth bringing and (ii) might

more easily result in an early and satisfactory con-

sensual settlement thus cutting out courts or oth-

er arbitral costs, it deserved to be included.

The 10 tips

Here, then, are my 10 tips for minimizing IP dis-

pute settlement costs everywhere – or almost

everywhere:

1. Think carefully before entering an IP dispute.

This is not merely for the reasons given above, but

because some IP disputes can be solved more

cheaply or easily by treating them as business

problems rather than as legal ones. For example,

in the case of lookalike products or packaging, a

business that has few or weak IP rights might find

it cheaper to redesign its own product around

stronger IP rights and use that as the basis of a re-

launch rather than press ahead with expensive lit-

igation of which the outcome is highly uncertain.

2. Identify the best and worst possible outcomes

of the dispute.

If even the best outcome will not

get an IP owner what it wants or if the worst pos-

sible outcome is intolerable, the IP owner should

hesitate before committing to a dispute.

KEEP IT CHEAP

TEN TIPS FOR

MINIMIZING IP DISPUTE

SETTLEMENT COSTS

>>>

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IPKat

blogmeister Jeremy Phillips is once again contributing a list of top ten recommendations to the WIPO

Magazine. Last time his advice was for businesses trying to use their IP to attract financing (see “IP Financing:

the Ten Commandments” in issue 5/2008), this time he advises on how to save money in IP disputes.