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‘Intellectual property and role of arbitration in copyright infringements’


Nathan Searle, a Partner at Hogan Lovell’s firm, United Kingdom.

Confidentiality of business agreement has been identified as one of the striking advantages of arbitration over litigation in disputes resolution particularly as they affect copyright infringements. In this interview with SUNDAY AIKUNOLA, an international arbitration expert, Nathan Searle, gave reasons why cases arising from copyright infringement take a lot of time and resources to be settled.

He also proffered ways of controlling cost of arbitration without compromising the fairness of the process of business agreement which has been identified as one of the striking advantages of arbitration over litigation in disputes resolution, particularly as they affect copyright infringements.

What are the advantages of using arbitration over litigation in intellectual property/copyright infringement?

The advantages of arbitration are evident when you have an ongoing business relationship with the parties. You can resolve disputes confidentially; select a tribunal with the relevant expertise.

It may also be possible in appropriate cases, to divide the hearing into the issues of infringement and damages.

In this case, the parties can agree to have different tribunals with different areas to expertise. Arbitration can provide more certainty as arbitral awards are generally final; and businesses want certainty.

Arbitration takes shorter time which guarantees certainty whereas local courts take longer time, particularly where their resources are stretched and there are multiple levels of appeal.

In summary, the advantages of using arbitration over litigation are based on potential time savings, ability to choose arbitrators with relevant expertise and confidentiality.

For example, if you are a distributor for a brand and you have a dispute under a licence agreement with the owner of the intellectual property, it may be in the best interest of both parties to resolve the dispute confidentially in order to preserve their business relationship and avoid trade secrets being disclosed in open court as well as appointing a tribunal which understands the relevant brand or technology so that the dispute can be efficiently resolved by arbitrators who are experts in the field.

In this part of the world, cases arising from copyright infringement take a lot of time and resources to be settled. How can this be mitigated?

Let us look more broadly into the African region where we often see intellectual property disputes arising in cases of technology transfer and trademark licensing.

In a situation like this where the subject matter is highly technical, parties may wish to use arbitration in order to bring in specialists with relevant technical knowledge to act as arbitrations.

This is done in order to cut through these technical issues that often arise in intellectual property disputes because they already have experience and expertise in these technical issues and how damages work in an intellectual property context.

If you have a decision maker that has the expertise and experience in the relevant subject matter, then they can resolve an arbitration more efficiently leading to large savings of time and cost for the parties.

Time is reduced in the proceedings as the tribunal can identify the important issues based on the expertise and direct the parties to address them so that time is not wasted on unimportant matters.

In your opinion, what are some of the difficulties of arbitrating intellectual property/copyright infringement disputes?

I think difficulties arise in disputes where there is no contractual relationship between the owner of the intellectual property and the alleged infringer. Arbitration requires both parties to agree to submit to the process.

Also, since arbitration is a consensual process, it is generally not possible to obtain urgent relief without the tribunal hearing submissions from both parties.

However, in the court, a party may be able to obtain an injunction in cases of urgency without the court hearing from the other party. Seeking injunctive relief is often a feature of intellectual property infringement cases.

What are the best ways to control the cost of arbitration without compromising the fairness of the process?

In many cases, this boils down to the choice of the arbitrators. It is important to select arbitrators who are familiar with the arbitral process and will drive the case forward efficiently, and in cases involving complex legal or technical issues, those who have relevant knowledge and experience.

An arbitrator can decide that in appropriate cases, there is a preliminary issue that can be disposed of easily at an early stage which can make the whole arbitration more efficient.

A good tribunal will engage with the parties’ law firms at an early stage to agree on how the arbitration process can be run in an efficient and effective manner. Although this depends to a certain extent on the cooperation of the parties involved.

The parties are also free to set time limits in their arbitration clause and we often see arbitration clauses these days that require low value disputes to be decided on paper so that this reduces the cost of the arbitration.

In spite of its many obvious benefits, the use of arbitration and other ADR mechanisms in resolving disputes has not gained much popularity among Nigerian litigants as many still want to go to court to settle their disputes. How can we stimulate interest in arbitration in our commercial environment?

Clients’ views of arbitration and how to resolve their disputes are often influenced by their lawyers.

Accordingly, a key way to stimulate interest in arbitration is to educate and train lawyers, and create a forum for lawyers to discuss and engage on how to drive forward arbitration in Nigeria.

There are a number of organizations in Nigeria seeking to do this, including the Association of Young Arbitrators in Nigeria.

Focusing on younger practitioners and showing the benefits of arbitration for resolving commercial disputes for small to medium-sized enterprises (particularly as the procedures are flexible and can be adapted to suit the parties and the nature of the dispute) can drive growth in the use of arbitration.

In that regard, what strategy do you suggest would cause an increase in the awareness of arbitration in Africa, African arbitrators and sufficient, unified arbitration laws in Africa and Nigeria specifically?

I think that there are lots of arbitration centres in Africa which is exciting. However, I expect to see some consolidation and increased cooperation between these arbitration bodies over the next few years with larger centres playing a more regional role.

Globally, successful arbitration centres have tended to adopt a regional approach by seeking to bring arbitration users from outside their specific jurisdictions to conduct arbitrations.

Nigeria is obviously very well placed for that. When you look at the Chartered Institute for Arbitrators, half their members in Africa are Nigerians.

So, Nigerian arbitrators are well placed to capitalize on the opportunities presented by arbitrations taking place in the region.

Therefore, I think it is about getting the word out there and not just about arbitration in Nigeria but about Nigeria becoming more of a regional hub for arbitration, particularly as Pan- African trade increases.

Another trend we are also seeing is for parties not just to identify in their contracts a legal seat of arbitration (which is often a neutral jurisdiction with arbitration friendly laws and limited rights of appeal) but also, to specify the venue where the arbitration hearings will take place.

London is popular legal seat for arbitration because it is generally neutral and there are limited rights to appeal an arbitral award in courts.

However, even where parties have chosen London as a seat of the arbitration, we are seeing an increasing trend for parties to specify in their contract that the venue of the hearings will be held locally where the project is based.

So, if all the witnesses are in Nigeria, the parties may agree that the arbitration should be done in Lagos or Abuja.

There is an increasing number of ways that African arbitration community is connecting, such as through the African Arbitration Association, the Chartered Institute of Arbitrators and the Association of Young Arbitrators that I mentioned earlier, just to name a few.

All these projects take time to filter through and it is really impressive to see more Africans becoming involved both as leaders in global arbitration institutions as well as the younger generation of African lawyers developing a passion for arbitration.

In Nigeria, intellectual property theft and piracy is very rampant and investors lose billions over these issue. How can this be addressed?

I think it is partly about creating awareness of the repercussions of IP theft and piracy. The exciting thing is that Nollywood has a huge domestic demand and also exporting the content of those films internationally.

Consumers need to understand the policy behind protection of intellectual property rights and realize that it is about protecting the investments of those creating the content and essential to the growth and success of the creative industries. I think it is something that will take time because it involves changing people’s culture and values.

It also requires the government and judiciary being supportive of laws to protect intellectual property rights and by ensuring that there are resources to clamp down the pirates and support intellectual property owners in taking action to enforce and protect their rights.

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