Can mediation be used to resolve intellectual property disputes in India?

At the recent European Union Intellectual Property Office (EUIPO) Conference 2023 held in Spain, a panellist judge stated with conviction, “There is no IP dispute that cannot be mediated. If the parties want to, they can mediate anything."

Her conviction came from her experience of frequently witnessing parties entrenched in positions, after being persuaded by her to mediate, coming back with a resolution. Following the success of the conference, EUIPO started a Mediation Centre in November 2023 to mediate IP disputes dealing with copyright, trademarks, domain names, patents etc.

Mediation is being recognised as a global and cost-effective dispute resolution process as against the traditional win/lose solutions.

Current law in India supporting mediation for IP disputes

The Mediation Act, 2023 provides a strong framework for the use of mediation in India. 

Under Section 12A of the Commercial Courts Act, 2015, pre-litigation mediation for IP disputes is mandatory unless there is an urgent need for interim relief. 

Why choose mediation for IP disputes?

Flexibility and creativity

In mediation, the facts are viewed for negotiation and not for the determination of who is right and who is wrong as in the adversarial processes of arbitration and litigation. The Indian Evidence Act and the Code of Civil Procedure (CPC) do not enable flexibility and creativity. A complaint on misuse or infringement of patent can become the opportunity for a patent license through mediation.  

The judge at the EUIPO conference narrated the case of the two companies that fought over a trademark. Through mediation, they agreed to tweak their respective trademarks and as they came out of the mediation, suggested in jest that they sell the original trademark and share the proceeds.  

Confidentiality

The Mediation Act, 2023 protects confidentiality at several levels- evidentiary, structural and social. Confidentiality is a privilege under the Act. When businesses seek to protect sensitive information and save the reputation of the company, mediation is the most suitable process.

Handles complexity

IP disputes could be complex. They may require specialised technical inputs. There could be ambiguity in the scope of IP protection of the trademark, copyright or patent. Similarly, there could be ambiguity while assessing the precise value of IP.  Several IP rights can coexist in a single work, and each could be under separate ownership. There could be multiple licences or assignments and granted wholly or partially. Brand expansion could lead to a complex network of rights attaching to a brand. 

As mediation is a process based on understanding, there is scope to unravel the facts and specifically address the complexities of each case. The outcome is decided by the parties who are the experts in their field. They are assisted in their decision-making by a professional team comprising the mediator, lawyers and even other technical experts. The chances of the outcome being of a superior quality and more business-friendly are far higher in mediation as compared to a decision by a judge who is not normally chosen for his expertise on the subject.   

Internationality

Situs and conflict of laws are not issues, as mediation is essentially negotiation. The possibility of virtual meetings allows easy management of mediation meetings involving different geographic locations. 

Enforceability

Domestic mediation in India is enforced under the Mediation Act, 2023, which provides that a mediated settlement agreement can be enforced like a final, non-appealable judgment or decree of the court.  

The Singapore Convention to which India is a signatory, provides for the enforceability of an International Mediated Settlement Agreement. This makes it possible for a judgment of one jurisdiction to be enforced in a foreign jurisdiction. 

Speed

IP disputes normally need a quick resolution as the life cycles of most technical products are very short and a dispute on the product can have a severe impact on the marketability of such products. In mediation, these disputes could be resolved in a few sessions. 

Improves relationships

In an environment that fosters collaboration and builds communication, disputants are most likely to improve the relationship that soured during conflict, an important factor for business.  

How can IP disputes be mediated effectively?

Success in the mediation of an IP dispute is heavily reliant on carefully navigating the mediation process. Some factors to consider are:

1. Selecting the right mediator

Competence: The mediator needs to understand the language of an IP dispute to be able to participate intelligently in the conversation. Just as it is important for a good judge and a good lawyer to be educable, the mediator must be educable. When a dispute arises, several barriers to negotiation arise – cognitive, structural and information related. Cultural differences need to be handled. Specialised skills are required to once again build trust, foster communication, handle egos, enable crucial conversation on possible opportunities, risks involved and consequences of failed negotiation. A mediator with process expertise can handle these barriers and pave the way for parties to generate creative options and find mutually acceptable solutions. Hence, process expertise is the priority.

Chemistry: The success of mediation often hinges on the rapport between all the participants with the mediator. A mediator with whom both parties and their attorneys feel a connection, an ease and a confidence, tends to secure the best results. 

Tenacity: A mediator who demonstrates persistence is of immense value. Mediators work untiringly to keep the process moving forward  and are the last to give up. Such mediators resolve almost all the disputes they mediate. 

Affordability: Mediator fees are of a wide range. It is important to consider the mediator's fees against the potential savings by avoiding a prolonged legal battle. Skills are crucial to enable quicker, more amicable and sustainable resolution.

2. Knowing when to mediate

Necessary information available: Only when sufficient information is available can parties take informed decisions. Although the information required for self-determination in mediation is much less, as compared to what is required for a decision by a judge in the adversarial processes, the necessary information for resolution is required. It follows the 80/20 rule.  

Timing: Early efforts at mediation can prevent the entrenchment of positions. IP disputes often involve heavy lawyering. The more effort and time that has been expended, the more likely the lawyers and parties become reluctant to agree to mediation. Loss aversion could be an obstacle.      

3. Lawyers with mediation orientation 

Lawyers are critical for success in mediation. The additional skills that are   required for lawyers to represent clients in mediation include: 

Mediation advocacy: The ability to pivot from the traditional adversarial approach to a more collaborative, problem-solving approach, the skills to write a good mediation brief and a recognition that mediation is the opportunity to make a ‘deal’ and not to ‘prove a point’ are essential.

A mindset to listen: Understand what the other side’s needs are, what is motivating their position and an ability to present their client’s needs in a manner that is not aggressive but persuasive. 

Prepare for mediation: Prepare thoroughly with the facts and the law. The other side needs to know that the lawyer for their opponent is reasonable and yet, if need be, can put up a strong fight in court. 

Prepare for negotiation: Lawyers are the negotiation coaches for their clients, and they need to be familiar with both distributive and interest-based negotiation.

Prepare the parties: Parties need to understand mediation and be able to distinguish their role and their lawyer’s role in mediation as compared to litigation/arbitration. This allows them to feel safe and trust the process.      

Prepare the mediator: Lawyers prepare the mediator to handle the complexities of the facts, the law and the people issues involved in the dispute. The mediator is coming into the dispute mid-stream and lawyers need to ensure that the mediator is well briefed to conduct the process efficiently and successfully.   

Guard the client’s interests: Protect the legal, professional and personal interests of the client always. 

Borrow the mediator’s power: The unrealistic expectations of clients must be softened. It is a good strategy to use the mediator to deliver to the client the bad news on the weaknesses and hard realities of the case in court. 

Flexible and creative: The vast and varied experience of the lawyer can be the source for flexible and creative ideas for a solution. 

Draft a mediated settlement agreement: Normally in mediation, it is the lawyers who draft the settlement agreement. Mediated settlement agreements must be clear, comprehensive, legally binding and enforceable. When multiple jurisdictions are involved, the lawyer needs to be familiar with the laws of all the concerned jurisdictions. A well-drafted mediated settlement agreement has minimal scope for future disputes on the issues involved. 

Conclusion

Indian courts are setting the trend for mediation of IP disputes. Campus Activewear Ltd v. Asian Footwear Pvt Ltd and others, filed in the Delhi High Court, is an IP dispute that was resolved through mediation. The practice is bound to grow rapidly in India and IP lawyers need to look at it as a viable option, adopt it and get adept at it. Commercial entities need speedy resolution to focus on what really adds value to their businesses. 

The late Fali Nariman, recognising the need for speedy, cost effective and commercial solutions for commercial disputes in India said,

“There is a growing body of opinion around the world that arbitration, domestic and international, even arbitration that is well conducted by competent arbitrators, is not necessarily the most successful way of resolving disputes, especially commercial disputes. Other ways have to be explored. Skilled mediators are now able to achieve results satisfactory to both parties, far beyond the power of lawyers, and even of courts, to achieve."

Laila Ollapally is a lawyer and mediator. She is the Founder of CAMP Arbitration and Mediation Practice and a Founding Coordinator of the Bangalore Mediation Centre.        

Deepank Singhal, Advocate & Legal Consultant, Delhi High Court and Anubhab Banerjee, Principal Associate Mediation at CAMP Arbitration and Mediation Practice, are the researchers for this article.