Originally from Arbitration of International Intellectual Property Disputes

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I. Introduction

Confidentiality is likely to be a crucial concern for one or both parties to an IP dispute. The concern goes beyond the general desire, shared with all parties to commercial disputes, to avoid airing the dispute in public. The reason for heightened concern in IP disputes is that the documents produced or the testimony adduced at the hearings, indeed even the subject matter of the dispute, may involve or contain valuable business or technology information that, if made public, would cause severe damage. A trade secret dispute by its very nature involves subject matter that must be protected from disclosure in order to remain a trade secret. Even if the dispute relates to IP which itself is public--for example, patents or trademarks--evidence may contain information that one or the other party desires to protect from public disclosure.1

Parties often elect to resolve their IP dispute through arbitration rather than in court because they correctly perceive that arbitration affords them and their dispute more privacy. However, as stated in Chapter 1, establishing the boundaries of confidentiality in an arbitration is a more complicated matter than is at first apparent. Confidentiality protection for exchanged information is distinct from the privacy of the hearing itself. In addition, the obligations that may be imposed upon the diverse participants to an arbitration vary, the rights of non-parties may be different from the rights of participants and there is substantial country-to-country variation in the "default" protection afforded by law.

Almost all definitions of arbitration include the word "private", whether in reference to the use of a private third-party neutral or in defining the process itself. Many people assume that the privacy of the process equates to confidential treatment of information exchanged during arbitration. Statements are also made about confidentiality being integral to the arbitration process. Indeed, decisions of the United States Second and Fifth Circuit Courts of Appeals, in a system viewed by many other countries and commentators to be among the least friendly to confidentiality in arbitration, have stated that confidentiality clauses are so common in arbitration that an "‘attack on the confidentiality provision is, in part, an attack on the character of arbitration itself.'"2