Choice of Law - Chapter 8 - Arbitration of International Intellectual Property Disputes
Theodore J. Folkman is a Shareholder in the law firm of Murphy & King, P.C., in Boston, Massachusetts. He is a business litigator with experience across a wide range of industries. His clients have included private equity firms, major teaching hospitals, and biotechnology companies. He also represents shareholders and investors in corporations of all sizes, and small businesspeople in commercial disputes. Mr. Folkman also focuses on the international aspects of US civil litigation and has experience dealing with both the procedural and the substantive complexities of cross-border litigation. He is the author of Letters Blogatory, a blog on international judicial assistance, and of International Judicial Assistance for Massachusetts Lawyers, to be published in 2012 by Massachusetts Continuing Legal Education. The past chairman of the Massachusetts Practice and Procedure Committee of the Boston Bar Association, he regularly writes and speaks on civil procedure and other topics.
David Evans is a Shareholder in the law firm of Murphy & King, P.C. in Boston, Massachusetts, where he represents large public corporations, closely held companies and individuals in the resolution of complex business problems and intellectual property disputes. Mr. Evans also maintains an active practice as a certified neutral Arbitrator and mediator, serving in more than 300 cases. He has presided over a broad range of business disputes involving areas such as intellectual property rights, finance and accounting, technology development and transfer agreements, stock purchases, medical devices, and business separations. Mr. Evans is a member of a number of mediation and arbitration panels, including the Commercial and Large, Complex Case Panels of the American Arbitration Association, and the Panel of Distinguished Neutrals of the International Institute for Conflict Prevention and Resolution (CPR). Mr. Evans was selected as a Massachusetts or New England Super Lawyer in every year since inception of the award (2006-2011) and maintains an "AV" rating (the highest ethical and competency rating available) from Martindale-Hubbell.
Originally from Arbitration of International Intellectual Property Disputes
This chapter discusses conflict of laws and choice of law in international IP arbitration.1 There are several layers of complexity inherent in these topics. Conflict of laws is complicated in its own right. Conducting a conflict of laws analysis in an international arbitration adds a layer of complexity because in an arbitration there are usually multiple lurking conflicts questions.
Once the tribunal decides on the law governing the substance of the dispute, it may also need to decide the law governing the arbitration proceeding itself--the lex arbitri. It may also have to decide the law governing ancillary (but sometimes vital) issues such as the capacity of the parties to agree to arbitrate, the validity of the arbitration agreement and other issues relating to the arbitration agreement itself. And it must carry out these analyses in light of any mandatory rules of law that apply. Finally, there is the complexity that arises in international IP disputes specifically. For example, a simple patent license that covers a United States patent and a number of counterparts issued under the laws of other countries can involve legal issues which should be decided under each of those countries laws; a simple single jurisdiction choice of law provision may simply be insufficient to deal with this complexity.2
The focus of this chapter is on the taxonomy of the various institutional arbitral rules, the national arbitration statutes and the major scholarly or legislative attempts at codifying a conflict of laws approach for international IP disputes. The goal is to provide a useful guide, or at least a starting place, for practitioners.
The first topic of this chapter is the substantive law that an arbitral tribunal will apply to an IP dispute in the absence of an agreement by the parties on choice of law. There are various approaches to conflict of laws prescribed by the procedural rules of some of the more prominent tribunals.3 The national arbitration statutes at the place of the arbitration also bear on the tribunal's conflict of laws decision as to the substantive governing law. Finally, this section of the chapter considers the limitations on the parties' freedom to make a choice of law, which are much more pronounced in the IP context than in many other areas in which international civil or commercial disputes arise.
II. Law Governing the Merits
A. The Factors used by the Tribunal to Choose the Applicable Substantive Law in the Absence of a Choice of Law by the Parties
B. What Substantive Law Will the Tribunal Apply?
C. Limits on the Parties’ Freedom of Choice
III. Law Governing the Arbitration
A. Law Governing the Arbitration in the Absence of a Choice of Law
B. Limits on the Parties’ Freedom of Choice
IV. Law Governing the Arbitration Agreement