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Ip Litigation Costs Special Edition GENEVA – FEBRUARY 2010 – No.1 2-25 IP LITIGATION COSTS SPECIAL EDITION 26 WIPO’S NEW TOP MANAGEMENT New Parties to WIPO Administered Treaties in 2009 During 2009, 68 instruments of accession or ratification of treaties administered by WIPO were deposited with the Director General of WIPO. The treaties and new adherents are as follows: In the field of industrial property Patent Cooperation Treaty (PCT) (1970) – Chile, Peru and Thailand (3), bringing the total number of States to 142. The Madrid System for the International Registration of Marks (Madrid Agreement (1891) and Madrid Protocol (1989)) – Egypt, Liberia and Sudan (3) adhered to the Madrid Protocol, bringing the total number of States/IGOs to 81. Trademark Law Treaty (TLT) (1994) – Morocco, Nicaragua and Peru (3), bringing the total number of States to 45. Singapore Treaty on the Law of Trademarks (2006) – Estonia, France, Liechtenstein, Mali, Netherlands (The Netherlands will become bound by the Treaty three months after the deposit of the instruments of ratification of Belgium and Luxembourg), Poland, Russian Federation and Spain (8), bringing the total number of States to 17. Strasbourg Agreement Concerning the International Patent Classification (1971) – Serbia and Ukraine (2), bringing the total number of States to 61. Locarno Agreement Establishing an International Classification for Industrial Designs (1968) – Argentina and Ukraine (2), bringing the total number of States to 51. Vienna Agreement Establishing an International Classification of the Figurative Elements of Marks (1973) – Serbia and Ukraine (2), bringing the total number of States to 27. Hague Agreement Concerning the International Registration of Industrial Designs – Germany, Poland and Serbia (3) adhered to the 1999 Geneva Act of the Hague Agreement, bringing the total number of States/IGOs to 37. Patent Law Treaty (PLT) (2000) – France, Liechtenstein and Russian Federation (3), bringing the total number of States to 22. In the field of copyright and related rights WIPO Copyright Treaty (WCT) (1996) – Austria, Bosnia and Herzegovina, Denmark, Estonia, European Union, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Spain, Sweden, Tajikistan, United Kingdom and Uruguay (20), bringing the total number of States/IGOs to 88. WIPO Performances and Phonograms Treaty (WPPT) (1996) – Austria, Bosnia and Herzegovina, Denmark, Estonia, Finland, France, Germany, Greece, European Union, Ireland, Italy, Luxembourg, Malta, Netherlands, Portugal, Spain, Sweden and United Kingdom (18), bringing the total number of States/IGOs to 86. Convention for the Protection of Producers of Phonograms Against Unauthorized Duplication of Their Phonograms (1971) – Bosnia and Herzegovina (1), bringing the total number of States to 77. GENEVA, FEBRUARY 2010 CONTENTS 2 IP LITIGATION COSTS – AN INTRODUCTION 3 U.S. CONTINGENCY FEES – A LEVEL PLAYING FIELD? 6 THE UK: CAN A HIGH-COST COUNTRY CHANGE ITS WAYS? 9 AN EU COMPETITION LAW PERSPECTIVE ON REVERSE PAYMENTS 12 A SINGLE PATENT COURT FOR EUROPE: DREAM OR REALITY? 14 IP LITIGATION IN AFRICA 16 RESOLVING IP DISPUTES IN JAPAN – COUNTING THE COST 19 A COST-EFFECTIVE ALTERNATIVE 23 KEEP IT CHEAP – TEN TIPS FOR MINIMIZING COSTS 26 INTRODUCING WIPO’S NEW TOP MANAGEMENT TEAM WIPO MAGAZINE ISSUE 2010/1 © World Intellectual Property Organization Editor: Sylvie Castonguay Acknowledgements WIPO Contributors Graphic Designer: Odile Conti Ignacio de Castro and Sarah Theurich (WIPO Arbitration Heike Wollgast, Enforcement and Special Projects Division, and Mediation Center), p. 19 p. 2 Cover image Berly Lelievre-Acosta, WIPO Arbitration and Mediation iStockphotos Center, p. 19 2 FEBRUARY 2010 IP LITIGATION COSTS – AN INTRODUCTION The settlement of the famous 2006 “The Lion lution models (see “A Cost-Effective Alternative” on Sleeps” copyright case – with its happy ending for page 19) or simplified procedures, especially in the the heirs of the author – was widely reported in the field of border enforcement. Emphasis was placed press and celebrated as an example of successful on mechanisms to reduce litigation costs for par- use of the intellectual property (IP) system in ensur- ties in need, including legal aid, or provision for liti- ing remuneration of creators.1 It should, however, gation on a pro-bono basis. In that regard, refer- IP LITIGATION COSTS IP LITIGATION be kept in mind that this case was exceptional in ence was made to South Africa where the bar many respects, including the funding of the litiga- association requires its practicing members to con- tion. Given the song’s popularity and its cultural im- duct a certain number of pro-bono cases per year, portance, the institution of the case benefited from thereby supporting public interests and certain significant financial sponsoring. In reality, for most provisions of the Bill of Rights. litigants, one of the greatest obstacles associated with IP litigation is high, if not excessive, costs. Another approach suggested was the conducting of litigation on a contingency basis (see “U.S. To what extent does the situation prevent right Contingency Fees: A Level Playing Field?” on page holders from taking legal steps against infringe- 3). Obviously, such a model could only be attractive ment? Do high litigation costs fuel a perception, in the case of litigation seeking monetary payment, more generally, that the IP system only benefits as opposed to injunctive relief. With that in mind, wealthy or large companies equipped with expen- another suggestion was proposed: establishing sive legal expertise? And, against that background, state-administered funds for instituting IP litigation. in what possible ways could high litigation costs be Such funds, it was argued, could be derived from addressed in the broader context of an enabling registration fees. More broadly, the Committee environment within which IP rights are respected? looked at pre-emptive measures as a possible means of controlling enforcement costs. The sug- These were among the thorny questions addressed gestions in that respect touched on defining trade at the November 2009 session of the WIPO policies and business models – so as to diminish Advisory Committee on Enforcement (ACE). The the demand for counterfeit goods – and bringing Committee, composed of WIPO Member States prices into a more balanced alignment. and accredited observer organizations, focused its discussions on “Contributions of, and costs to, right The ACE, an advisory body with no norm-setting holders in enforcement, taking into consideration mandate, is a forum for exchanging information and Recommendation No. 45 of the WIPO Development does not work towards binding solutions on any of Agenda.” The Committee discussed issues, based on the matters it addresses. Discussions nevertheless expert analysis presented, including the reasons for clearly revealed that overly expensive IP litigation is a 1 For details of the case the high costs of IP litigation, especially for litigants serious concern in many countries, and is perceived and the settlement in developing countries, and looked at suggestions to have negative effects on effective law enforce- agreement see WIPO 2 Magazine 2/2006 for making the system more accessible. ment and the acceptance of the IP system in general. “Copyright in the Courts: The Return of High attorneys’ fees were viewed with concern. At This issue of the WIPO Magazine on IP Litigation the Lion” 2 Working documents of the same time, at least in certain areas of IP dis- Costs addresses the aforementioned challenges in the meeting, as well as putes, they were seen in the context of the high IP litigation and looks in particular at the costs and the chair’s conclusions, level of specialization required for directing such particularities of IP dispute resolution in jurisdictions are available at cases. The often costly evidential burden (see “The such as Africa (page 14), Europe (page 6 and 12), www.wipo.int/meetings/ en/details.jsp?meeting_i UK: Can a high-cost country change its way?” on Japan (page 16) and the U.S. (page 3). The WIPO d=17445. page 6) was also raised. It was suggested that Arbitration and Mediation Center, co-editor of this greater use of presumptions could be worth further issue, explains the benefits of Alternative Dispute analysis, especially in civil cases. Resolution (page 19), which appears to be an effi- cient way out of costly and complex IP litigation. The ACE discussed in some detail suggestions for Finally, a range of useful practical tips are provided alleviating the financial burden on parties – for in- for minimizing IP dispute settlement costs (page 23). stance, through the use of alternative dispute reso- 3 U.S. CONTINGENCY FEES – A LEVEL PLAYING FIELD? This article by William R. Towns, a partner and General Counsel at Novak Druce + Quigg LLP, focuses on contingency fee arrangements in the context of patent litigation in the U.S. Mr. Towns is a seasoned at- torney and mediator whose litigation and dispute resolution practice concentrates on IP matters. He is a WIPO Approved Neutral and has served as a WIPO Domain Name Dispute Resolution Panelist since 2003. A study of the results of patent litigation at the ly to the efforts of appellate level revealed that patentees only won lawyers working on a some 25 percent of infringement cases from 2002 contingency fee basis Photo: iStockphotos Photo: to 2004.1 While these statistics might seem to to increase the return suggest that the scales are tipped in favor of de- on their investment. fendants, the eye-popping cost of patent litiga- Detractors of contin- tion in the United States – on average $3 to $10 gency fees decry the million – can deter many accused infringers from oft-stated goal of im- fighting cases in court; it may just be less expen- proving access to the sive to pay a licensing fee or royalties than to legal system as mis- challenge a patent in court. At the same time, leading, claiming that contingency fee arrange- The eye-popping cost of patent litigation in the U.S.
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