Originally from Dispute Resolution Journal

Intellectual property, particularly the field of patent licensing, is rife with the potential for disputes. Litigation in this area has led to some of the most intractable and expensive court cases, some of which have lasted for 10 years or more. It is difficult to see any advantage to litigating these disputes. Instead, the author urges patent owners to seek faster and more economical means of enforcing their patent licenses. An experienced IP practitioner, he argues that arbitration is ideal, since it offers the parties a private process, a quicker and less costly resolution, and the ability to select experienced experts as arbitrators to resolve these disputes.

This article discusses some partial solutions to consider when confronting the dilemma of enforcing patents and patent licenses in a timely and affordable manner. Unfortunately, one cannot be seriously engaged in licensing intellectual property (either as a licensing specialist or licensing professional) without becoming involved in litigation. Whether your organization owns a large portfolio of IP or a modest one, it will inevitably be confronted by another company that will challenge your organization’s rights in a patent or license, possibly due to the belief that your company is not prepared to enforce its contractual rights, or is too small and insignificant to take on a bigger and more powerful challenger. Another rationale behind some companies’ decision to litigate is the belief that the opposing company’s infringement always trumps their own.

In my practice as a litigator in trials and appeals of IP matters, I have too often seen business executives with grand titles and egos blithely rely on such flimsy reasons in deciding to commit significant amounts of corporate dollars to long-lived IP litigation. Experience shows that it is simply unrealistic to expect decisions about IP—whether about licensing, cross-licensing, litigation or settlement—to be made solely on the basis of dispassionate, rational, economic analysis. So while you can be reasonably sure that the contract you enter into to buy a refrigerator at your local “big box” store will not end up in court, the same cannot be said about a contract to license IP.