IP Litigation costs - An introduction

• Pages: 2-2

IP LITIGATION COSTS

2

FEBRUARY 2010

1 For details of the case

and the settlement

agreement see WIPO

Magazine 2/2006

“Copyright in the

Courts: The Return of

the Lion”

2 Working documents of

the meeting, as well as

the chair’s conclusions,

are available at

www.wipo.int/meetings/

en/details.jsp?meeting_i

d=17445.

IP LITIGATION COSTS –

AN INTRODUCTION

lution models (see “A Cost-Effective Alternative” on

page 19) or simplified procedures, especially in the

field of border enforcement. Emphasis was placed

on mechanisms to reduce litigation costs for par-

ties in need, including legal aid, or provision for liti-

gation on a pro-bono basis. In that regard, refer-

ence was made to South Africa where the bar

association requires its practicing members to con-

duct a certain number of pro-bono cases per year,

thereby supporting public interests and certain

provisions of the Bill of Rights.

Another approach suggested was the conducting

of litigation on a contingency basis (see “U.S.

Contingency Fees: A Level Playing Field?” on page

3). Obviously, such a model could only be attractive

in the case of litigation seeking monetary payment,

as opposed to injunctive relief. With that in mind,

another suggestion was proposed: establishing

state-administered funds for instituting IP litigation.

Such funds, it was argued, could be derived from

registration fees. More broadly, the Committee

looked at pre-emptive measures as a possible

means of controlling enforcement costs. The sug-

gestions in that respect touched on defining trade

policies and business models – so as to diminish

the demand for counterfeit goods – and bringing

prices into a more balanced alignment.

The ACE, an advisory body with no norm-setting

mandate, is a forum for exchanging information and

does not work towards binding solutions on any of

the matters it addresses. Discussions nevertheless

clearly revealed that overly expensive IP litigation is a

serious concern in many countries, and is perceived

to have negative effects on effective law enforce-

ment and the acceptance of the IP system in general.

This issue of the WIPO Magazine on IP Litigation

Costs addresses the aforementioned challenges in

IP litigation and looks in particular at the costs and

particularities of IP dispute resolution in jurisdictions

such as Africa (page 14), Europe (page 6 and 12),

Japan (page 16) and the U.S. (page 3). The WIPO

Arbitration and Mediation Center, co-editor of this

issue, explains the benefits of Alternative Dispute

Resolution (page 19), which appears to be an effi-

cient way out of costly and complex IP litigation.

Finally, a range of useful practical tips are provided

for minimizing IP dispute settlement costs (page 23).

The settlement of the famous 2006 “The Lion

Sleeps” copyright case – with its happy ending for

the heirs of the author – was widely reported in the

press and celebrated as an example of successful

use of the intellectual property (IP) system in ensur-

ing remuneration of creators.1It should, however,

be kept in mind that this case was exceptional in

many respects, including the funding of the litiga-

tion. Given the song’s popularity and its cultural im-

portance, the institution of the case benefited from

significant financial sponsoring. In reality, for most

litigants, one of the greatest obstacles associated

with IP litigation is high, if not excessive, costs.

To what extent does the situation prevent right

holders from taking legal steps against infringe-

ment? Do high litigation costs fuel a perception,

more generally, that the IP system only benefits

wealthy or large companies equipped with expen-

sive legal expertise? And, against that background,

in what possible ways could high litigation costs be

addressed in the broader context of an enabling

environment within which IP rights are respected?

These were among the thorny questions addressed

at the November 2009 session of the WIPO

Advisory Committee on Enforcement (ACE). The

Committee, composed of WIPO Member States

and accredited observer organizations, focused its

discussions on “Contributions of, and costs to, right

holders in enforcement, taking into consideration

Recommendation No. 45 of the WIPO Development

Agenda.” The Committee discussed issues, based on

expert analysis presented, including the reasons for

the high costs of IP litigation, especially for litigants

in developing countries, and looked at suggestions

for making the system more accessible.2

High attorneys’ fees were viewed with concern. At

the same time, at least in certain areas of IP dis-

putes, they were seen in the context of the high

level of specialization required for directing such

cases. The often costly evidential burden (see “The

UK: Can a high-cost country change its way?” on

page 6) was also raised. It was suggested that

greater use of presumptions could be worth further

analysis, especially in civil cases.

The ACE discussed in some detail suggestions for

alleviating the financial burden on parties – for in-

stance, through the use of alternative dispute reso-