Patent Alternative Dispute Resolution in the United States

Alternative Dispute Resolution (ADR) refers to alternatives to the court system for resolving disputes. While arbitration clauses are commonly specified in contracts s a mechanism for resolving disputes that arise in the future, and mediation is used in many different areas such as in labor disputes, it has not been much used in patent cases. There are three reasons for this:

• Most patent disputes arise between two parties who have never had a contract respecting patent issues and so would not be forced to arbitration
• For ADR to work both parties must agree to it. Since our legal system is slow, cumbersome and expensive it is usually to ones party’s advantage to avoid a timely resolution of the dispute and thus avoid ADR. This is typically the case with patent disputes especially where a large, well financed company infringes a patent held by an independent inventor or a small company.
• ADR is not in the interests of lawyers. ADR tends to be relatively quick and cheap in comparison to the court system. This means there is little financial incentive for lawyers to use or recommend ADR. Patent mediation would likely cost each party $10,000 or less, while patent litigation often runs into millions, and even tens of millions of dollars. (See Smoke, Mirrors and OJ) Our legal system rewards lawyers for postponing disputes and penalizes them for resolving them.

In the past, patent arbitration and mediation was used only occasionally and on an ad hoc basis. It is being treated more seriously since Tom Arnold wrote the Patent Alternative Dispute Resolution Handbook(Clark, Boardman, Callaghan, 1991) especially since he has given several talks promoting ADR over the last few years.

Maybe, the only place that institutionalizes ADR for patents is ACCORD (A Center for Conflict Obviation and Resolution of Disputes). Accord is a non-profit program operated under the auspices of the Franklin Pierce Law Center’s Patent Trademark, and Copyright Research Foundation and the Academy of Applied Science. ACCORD is supported by an illustrious group of advisors including Judge Pauline Newman of the Court of Appeals for the Federal Circuit, Senior Federal Judge Shane Devine of the New Hampshire U., S. District Court, Judge William of the New Hampshire Supreme Court and Tom Arnold, author of Patent Alternative Dispute Resolution Handbook

The American Arbitration Association (AIPLA) has an arbitration group. However, be aware that the AIPLA basically represents large companies.

Use of ADR

The most important thing to know about ADR is that it only is useful if both sides agree that there is a dispute and are want to resolve it. If that is the case it can usually be resolved by direct negotiation. If, however the two sides see very different resolutions as being fair, or one side just doesn’t admit there is a dispute or does not want to resolve it, ADR is a good alternative to litigation. But it takes both sides to agree to it.

An inventors biggest problem is to get a potential licensee or an infringer to want to enter good faith negotiations. If an infringer does not want to enter into good faith negotiations to resolve issues of infringement, the main value of offering them ADR is to look good to third parties.

Patents in the U.S. Code

The United States Patent Code appears in Title 35 of the United State Code.