JDR Intellectual Property Cases

Exquisite Examples of Creative Judicial
Dispute Resolution: The Potential of Alternative

Dispute Resolution for Intellectual Property
Cases
Alex Wellington*
Abstract
This article explores the potential of alternative dispute resolution (ADR)

processes in the context of intellectual property (IP) cases. Motivations to pursue
alternative dispute resolution are canvassed, drawing upon empirical research rel-
evant to intellectual property litigation. In addition, early research on the attitudes
and perceptions of disputants and their counsel to the prospect of alternative dis-
pute resolution processes for intellectual property cases is examined. Various inno-
vations in ADR are surveyed, including early neutral evaluation, summary trial or
mini trial, mediation and arbitration. In particular, a series of myths about the
respective merits and demerits of arbitration and litigation are scrutinized. The
article concludes that the most promising developments in the ADR toolbox for IP
cases are those aspects of case management and judicial dispute resolution which
have been introduced into Canadian (federal and provincial) courts through re-
forms to the Rules of Civil Procedure (Ontario) and the Federal Court Rules.
Dans cet article, lauteur explore le potentiel des modes non judiciaires de
resolution des conflits dans le contexte des dossiers en matiere de propriete intel-
lectuelle. Lauteur effectue un recensement des raisons qui motivent les parties a
recourir aux modes non judiciaires de resolution des conflits, en se fondant sur une
recherche empirique concernant le litige dans le domaine de la propriete intellec-
tuelle. De plus, lauteur examine la recherche initiale sur les attitudes et les per-
ceptions des parties au litige et de leurs procureurs concernant le recours aux
modes non judiciaires de resolution des conflits en matiere de propriete intellec-
tuelle. Lauteur survole les nombreuses innovations dans le domaine des modes
non judiciaires de resolution des conflits, incluant levaluation impartiale pre-
liminaire, le proces sommaire, la mediation et larbitrage. Il analyse plus particu-
lierement les mythes qui entourent les avantages et les inconvenients respectifs de
larbitrage et du litige. Lauteur conclut que les developpements les plus promet-
* LL.B.; LL.M. in ADR and LL.M. in IP (Osgoode Hall Law School); B.A. and Ph.D.
(Philosophy, York University); Assistant Professor at Ryerson University, Toronto,
Canada. The title is a play on the phrase, exquisite example of creative judicial
legislation from Pulse Microsystems v. Safe Soft System (1996), 67 C.P.R. (3d) 202 at
205 (Man. C.A.).
290 INTELLECTUAL PROPERTY LAW JOURNAL [23 I.P.J.]
teurs dans le domaine des modes non judiciaires de resolution des conflits en ma-
tiere de propriete intellectuelle sont ceux relatifs aux aspects de la gestion et de la
resolution des conflits qui ont ete integres au systeme judiciaire canadien (tant au
federal quau provincial) par les reformes des regles de procedure civile de
lOntario et des Regles de la Cour federale.
1. INTRODUCTION
What do disputing parties want? They want a response to their dispute which
is fair and accessible. They want justice that is relatively quick and cost effective.
They want an end to their dispute which settles things, rather than leaving matters
hanging; they need a determinative outcome. They want to avoid their Worst Alter-
native To a Negotiated Agreement (WATNA), and to match, or hopefully surpass
their Best Alternative To a Negotiated Agreement (BATNA). They want to reas-
sure themselves, and those they are accountable to, that they pursued any and all
possible avenues to satisfaction of their interests, recognition of their rights, and
realization of suitable remedies. But, given the constraints, resource and otherwise,
within and without the contemporary justice system, parties are unlikely to obtain
all these things in any given case. Many disputants find themselves having to seri-
ously consider what compromises they could live with. And increasingly, parties to
a dispute are looking at the prospects for alternative dispute resolution to address
parts, or even the whole, of their dispute. The field of intellectual property is no
exception to this general trend, albeit somewhat of a late arrival on the scene.
It has been said to be a vain thing to imagine a right without a remedy,1
the two being reciprocal; yet it is potentially a fertile and promising prospect to
imagine that disputants will satisfy their interests (not just their rights) with an im-
aginative rethinking of remedies. Such a rethinking of remedies is just what is
called for by the advocates and promoters of alternative dispute resolution. A con-
fluence of social forces have triggered public concerns about the merits and demer-
its of the adjudicative system, and ultimately impacted on that system. The salient
factors include cost-cutting on the parts of governments, increasing reliance upon
self help for disputing parties, and responses to the fairly well documented phe-
nomenon of clogged court dockets and rising price tags for litigation.2 Increasingly,
parties and their counsel have turned to alternatives to the highly expensive and
time-consuming course of traditional litigation.3
1 The quote is by Holt, C.J., in Ashby v. White (1703), 2 Ld Ryam at 938, 953.
2 For discussions of the challenges facing the justice system in Canada and Ontario, see,
for instance, Remarks of the Right Honourable Beverley McLachlin, P.C. Presented at
the Empire Club of Canada, Toronto, Ontario, March 8, 2007:
<http://www.0avocat.ca/portal/en/ArticleView.php?article_id=26> and Getting It
Right: The Report of the Ontario Bar Association Justice Stakeholder Summit, 2007:
<http://www.oba.org/en/pdf/Justice%20Summit_sml.pdf>
3 These are the words of a US court in the case of Poly Software International Inc. v. Su/
Datamost Corp., 880 F. Supp. 1487 at 1493. Ironically, the dispute at the centre of that
litigated case was one that had spun off from an earlier dispute, for which mediation
had been undertaken. The case is discussed below, in the context of potential conflicts
of interest for intellectual property-mediators.
IP AND ADR 291
The clarion call to give alternative dispute resolution serious consideration de-
rives from various motivations. One is the intense awareness of the much touted
inefficiencies of litigation, both in terms of cost and efficacy. It is almost quotidian
to observe that the adjudicative model of dispute resolution is cumbersome, expen-
sive in terms of time and resources (for the litigants and for society at large), and
slow to produce results.4 These same general problems apply to intellectual pro-
perty cases. Motivations to pursue alternative dispute resolution are highlighted in
Section Two, drawing upon some empirical research relevant to intellectual pro-
perty litigation. In order to properly survey the terrain of the options available, it
will be helpful to first set the stage with a few illustrative cases, which put the
contrast between adjudication and ADR in stark relief. Those cases are the focus of
Section Three.
It is important in reviewing the potential promise and pitfalls of ADR in the
context of IP cases, to determine what perceptual barriers or obstacles, or simply
inhibitions, will reside in the minds of disputing parties and/ or counsel about the
prospect of relying upon alternative dispute resolution processes. Thus, in Section
Four, I review some early research on the attitudes and perceptions of disputants
and their counsel to the prospect of alternative dispute resolution processes for in-
tellectual property cases. Section Five canvasses the various options available for
doing things differently in the context of intellectual property disputes, and assesses
the suitability of applying alternative dispute resolution techniques to such cases.
Those options include: arbitration, early neutral evaluation, summary trial or mini
trial, mediation, and judicial dispute resolution. I conclude that the most promising
developments in the ADR toolbox for IP cases are those aspects of case manage-
ment which have been introduced into Canadian (federal and provincial) courts
through reforms to the Rules of Civil Procedure (Ontario) and the Federal Court
Rules. In Section Six, I briefly touch upon an issue that practitioners need to be
mindful of, that of the potential implications of role shifting. Lastly, I conclude by
contextualizing the discussion in the global context in which both Intellectual Pro-
perty and Alternative Dispute Resolution have come of age together.
2. MOTIVATIONS TO PURSUE ALTERNATIVE DISPUTE

RESOLUTION
Alternative dispute resolution is an umbrella term that captures a wide range
of processes, techniques, methods and practices that rely upon something other than
adjudication by courts. The most familiar forms are negotiation, mediation and ar-
bitration. With negotiation, parties to a dispute aspire to reach an agreement
amongst themselves, whereas mediation involves a third party neutral who works
to help parties resolve their differences. The crucial aspects of mediation are that it
is a consensual process, a non-binding process, and commonly, a voluntary process
as well. Mediators rely upon their persuasive power, and their communication and
facilitation skills to assist parties to reach a mutually agreeable outcome. Arbitra-
4 Prior to the reforms of the Federal Court Rules, cases could take anywhere from one to
ten years, to go through all the stages/ steps of litigation, including possible appeals.
Ronald Dimock and Peter Stabins, IP Litigation in the Federal Court Under the New
Rules (1998) 5(2) Intellectual Property 274 at 274.
tion is the most like adjudication; in it binding decisions are made by a person or
body other than a court. Other forms of alternative dispute resolution include: the
pretrial, minitrial, summary jury trial, early neutral evaluation (discussed below in
Section V, along with mediation and arbitration).
The growth in ADR has been driven by a number of factors, which are out-
lined by Gregory Piasetzki as follows: (i) the expense for disputants, and delay, of
traditional litigation; (ii) the expense to society of operating the judicial system
the salaries of judges, clerks, registrars, stenographers and the cost of maintaining
buildings; (iii) the uncertainty of outcome in litigation which can be mitigated,
if not eliminated completely, in ADR; and (iv) the limited range of outcomes
available in litigation (usually of the win/lose variety).5 The initial scepticism of
ADR on the part of some members of the legal profession has gradually lessened,
and many lawyers, in a wide range of practice areas and specializations, have come
to embrace the inclusion of ADR into their practices.6 If a case is not going to end
up being adjudicated, then the earlier a settlement is reached the better, from a
resource allocation perspective. This is because parties incur substantial expenses
the longer the litigation process drags on, and because it is difficult to efficiently
allocate judicial resources when settlements occur later rather than earlier.7
Alternative dispute resolution practitioners often recommend that the choice of
process, generally, or technique, specifically, should be driven by the characteris-
tics of the dispute. The literature on ADR provides the following factors to assess
when, and how, ADR might be appropriate: (a) the nature of the case/ nature of the
dispute; (b) the relationship between the parties/ disputants; (c) the history of nego-
tiations between the parties; (d) the relief sought by the plaintiff; (e) the size and
complexity of the claim (including the amount at stake, the potential costs, and the
desired speed of resolution).8 These are all factors which are relevant and germane
5 Gregory Piasetzki, Alternative Dispute Resolution Process, in Ronald Dimock, edi-

tor, Intellectual Property Disputes: Resolutions and Remedies, Volume One (Toronto,
ON: Thompson Canada Limited, 2002), 13-1 at 13-5.
6 Gregory Piasetzki mentions the proliferation of ADR-related texts, articles and educa-
tional programmes as a reflection of the growth in the interest of using ADR. Some
examples of Canadian books on mediation targeted at lawyers include: Laurence
Boulle and Kathleen J. Kelly, Mediation: Principles, Process, Practice: Canadian Edi-
tion (Toronto, ON: Butterworths, 1998); Cinnie Noble, L. Leslie Dizgun and D. Paul
Emond, Mediation Advocacy: Effective Client Representation in Mediation Proceed-
ings (Toronto, ON: Emond Montgomery, 1998); Michael Silver with the assistance of
Peter Barton, Mediation and Negotiations: Representing Your Clients (Toronto, ON:
Butterworths, 2001). Mark Partridges book titled Alternative Dispute Resolution: An
Essential Competency for Lawyers (Oxford University Press, 2009), specifically fo-
cuses on IP litigation practice. For a piece which specifically addresses the use of ADR
for IP cases in the Canadian context, see Robert Nelsons manuscript, ADR and Ef-
fective Advocacy in the Resolution of Intellectual Property Suits, presented to the
Insight Information Conference on Intellectual Property Litigation, February 22-23,
1999, Toronto, Ontario, Canada.
7 Piasetzki, supra note 6 at 13-5.
8 Robert Baruch Bush, Using Process Observation to Teach Alternative Dispute Reso-
lution: Alternatives to Simulation (1987) 37 Journal of Legal Education 46.
IP AND ADR 293
to intellectual property cases. In certain high profile intellectual property cases, the
significance of these factors stands out in stark relief.
Data that helps to underscore the point about expenses has been collected in
the US context. James Besson and Michael Meurer summarize the findings of re-
search undertaken by the American Intellectual Property Law Association
(AIPLA), reported on in 2003:
For patent suits, with less than $1 million at risk, the median estimated cost
of discovery is $290,000 and the media estimated total litigation cost is
$500,000; for suits with $125 million at risk, the median estimated cost of
discovery is $1 million and the median estimated total litigation cost is $2
million; for suits with more than $25 million at risk, the median estimated
cost of discovery is $2.5 million and the median estimated total litigation
cost is $3.995 million. [All figures in US dollars]9
Other studies have highlighted the issues of time. The American Arbitration
Association (AAA) recounts analysis undertaken by the IP litigation firm of Har-
ness, Dickey and Pierce, setting out the following estimated times:
Case evaluation phase: 1-2 months
Pre-trial proceedings (pleadings, discovery, motions): 1218 months
Trial: 2-3 weeks
Appeal: 812 months
Second Trial (occurring approximately 53 per cent of the time): 1321
months10
As Philip McConnaughay emphasizes, public court litigation may end up tak-
ing longer than the life cycle of the product involved, given that some instances of
technology can have a very short shelf life.11 By contrast, the AAA emphasizes
that the time frame for a typical arbitration is about one third the amount of time for
a litigation case, the culmination is reached in substantially less time, and as a re-
sult the overall costs are decidedly lower.12
Other data from the United States can substantiate the point often made that
9 James Besson and Michael Meurer, Lessons for Patent Policy From Empirical Re-
search on Patent Litigation (2005) 9 Lewis and Clark Law Review 1 at 2, reporting on
American Intellectual Property Law Association (AIPLA) Report of the Economic Sur-
vey 2003 at 22. A review of patent damages decisions from 19821992 indicated that
litigation costs related to attorney fees could exceed $1 million, as noted by Ronald
Coolley, Overview and Statistical Survey of the Law on Patent Damages (1993), 75
J. Pat. & Trademark Off. Socy 515.
10 American Arbitration Association, Intellectual Property Arbitration vs. Litigation:
Products of the Mind Require Special Handling at 4: <http://www.adr.org/si.asp?
id=5004>
11 Philip McConnaughay, ADR of Intellectual Property Disputes, <http://
euro.ecom.cmu.edu/program/law/08-732/Courts/ADRPMcCon.pdf>
12 AAA at 4 state that in 73 per cent of the IP cases filed during FY 2006, hearing time
was 7 or fewer days, and that the median number of days from filing to award was 396
even for complex IP cases with claims and counterclaims exceeding $1 million. The
AAA stresses that considerable reductions in time can be achieved through curtailing
the process of discovery.
few civil cases which start out in the litigation process actually end up with a judi-
cial decision, a point that applies to intellectual property cases as well. From 1994
to 2002, intellectual property cases in US federal courts increased by 20 per cent to
a total of 8,254. Less than 2 per cent of cases litigated in US federal court reached
the stage of trial verdict. Of those that did reach that stage, 3.2 per cent were patent
cases, 1.5 per cent were copyright cases, and 1.2 per cent were trademark cases.13
Data from the year ending September 30, 2010 indicates that of 2051 copyright
cases, 31 or 1.5 per cent reached trial; of 3465 trade-mark cases, 53 or 1.5 per cent
reached trial; of 2786 patent cases, 110 or 3.9 per cent reached trial.14
Appreciation of the implications of data on intellectual property litigation can
showcase ADR as a prudent option.15 Efficiency would suggest that inventors
and businesspeople should spend their time innovating, creating, developing, ad-
vertising and distributing products, and thereby capturing and keeping market
share, rather than litigating. Sensitivity to these factors tends to lead to a greater
willingness to do things differently.
As former US President Ronald Reagan said, upon pronouncing the amend-
ments to patent law providing for arbitration:
A major deterrent to using the patent system, especially by small business
and independent inventors, is the inordinately high cost of patent litigation.
This bill authorizes the voluntary arbitration of patent validity and infringe-
ment disputes. This will not only improve the patent system and encourage
innovation, but will help relieve the burden of the Federal Courts. The de-
velopment of new technology is a vital ingredient in . . . [the] plan for eco-
nomic recovery. This measure is a significant step in this process.16
Here one finds the image of patents as an engine of economic progress, but
also the image of litigation as an obstacle to economically efficient dispute
resolution.
The other motivating force is that there are significant negative consequences
to protracted litigation, especially in sectors of the economy which depend heavily
upon ongoing business relationships. Sensitivity to the human dimension of intel-
lectual property disputes brings into focus the other, human costs, in terms of di-
minishing or destroying what were previously functioning business relations, and
13 Mark Motivans, Federal Justice Statistics Program, Intellectual Property Theft, 2002:
Bureau of Justice Statistics Special Report (2004) 8. <http://www.ojp.gov/bjs/pub/
pdf/ipt02.pdf>
14 See Table C-4 US District Courts Civil Cases Terminated, by Nature of Suit and
Action Taken, During the 12-Month Period ending September 30, 2010.
<http://www.uscourts.gov/uscourts/Statistics/JudicialBusiness/2010/appendices/
C04Sep10.pdf>
15 Nancy Neal Yeend and Cathy E. Rincon, ADR and Intellectual Property: A Prudent
Option (1996) IDEA: The Journal of Law and Technology 601.
16 Press Release of (then) President Ronald Reagan, August 27, 1982. Quoted in Joseph
Day, Commercial Arbitration in Intellectual Property Matters (1988) 25 C.P.R. 145
at 159 note 32.
IP AND ADR 295
creating a climate of mistrust between and among organizations.17
3. A FEW ILLUSTRATIVE CASES

A few American intellectual property cases tend to figure prominently in the
discussions contrasting adjudication and alternative dispute resolution. One of them
involves Symantec and Borland, and is widely viewed as a graphic illustration of
the potential downside of dealing with disputes over intellectual property with
strictly legalistic measures. Deanna Hodgin summarizes the case thusly:
Symantec [was at] the epicentre of a[n] historic moment in [Silicon] Valley
history: the rancorous trade secret and unfair competition claims filed by
rival software maker Borland International Inc., which ultimately led to the
California Supreme Courts 1996 ruling in People v. Eubanks18 . . . The
fight now a case study in business school textbooks arose out of e-mail
Borland vice-president Eugene Wang had sent to Symantec CEO Eubanks
between July and September 1991, as Wang was leaving Borland to work
for Symantec.
Borland officials alleged that the email held the equivalent of corporate
crown jewels customer lists, marketing plans, product information. The
Santa Cruz County district attorney convened a grand jury and filed a felony
indictment charge against both Wang and Eubanks. Criminal charges would
ultimately be dismissed, [and] Borland and Symantec [ultimately] settled
the civil dispute.19
The fallout of the scorched-earth battle (as it was dubbed) led to the eco-
nomic downturn of Borland and the rising fortunes of Symantec perhaps not
what would be expected. Companies may be winners of discrete legal cases at an
instance in time, but they are not necessarily the winners of the overall competitive
business war. Many commentators felt that this particular instance of litigation was
an abuse of the legal system . . . a case of one competitor using local law enforce-
ment to impede its competitor.20 The most contested aspect of the case seemed to
be the reliance upon criminal sanctions for trade secret misappropriation. The case
reflects the distinctiveness of the US approach to trade secret protection.21 Admit-
17 The conflict between two companies IBM and Fujitsu over allegations of in-
fringement of intellectual property rights grew so bitter that an arbitrator com-
mented: these parties have hardly been able to agree what color a stoplight is. Joseph
Badaracco Jr., The IBM-Fujitsu Conundrum, published in W. Michael Hoffman,
Judith Brown Kamm, Robert E. Frederick, and Edward S. Petry Jr., editors, Emerging
Global Business Ethics (Westport, CT: Quorum Books, 1994) 79 at 81. The case is
discussed in Section III.
18 14 Cal. 4th 580.
19 Recounted in Deanna Hodgin, Dressed for Success (November 1998), IP Magazine.
20 Ibid.
21 A lawyer for a different firm, which was not involved in the dispute, says that the
moral of the story is: I think the conventional wisdom is that criminalizing trade
secrets was a big mistake and nothing good has come out of it. Ibid. In Canada, mis-
appropriation of confidential information, or breach of confidence cases are purely civil
matters, and dealt with by courts under various causes of action which together ensure
the protection of intangible business interests. The Supreme Court of Canada found in
tedly, the Symantec-Borland dispute may not be a representative type of case with
which to fairly take the measure of litigation, but it does tend to be the kind of case
which is held up as a cautionary tale.
What alternative dispute resolution can do, instead, is to provide for win-
win solutions, where each party can retain their claim to rightness.22 A good
example of this is the IBM-Fujitsu case, resolved by arbitration, and in which ulti-
mately both companies claimed they had been exonerated.23 The case had in-
volved six years of bitter conflict (beginning in 1982), over copyright infringement
allegations.24 As Karl Mackie explains: Fujitsu had developed and committed it-
self to offering an IBM-compatible line of operating system software, and had cus-
R. v. Stewart, [1988] 1 S.C.R. 963, that confidential information should not be consid-
ered property for the purposes of the theft or fraud provisions of the Criminal Code.
The Supreme Court recommended that if their interpretation of the existing legal situa-
tion was deemed inadequate, then it would be up to Parliament to bring about a change
in the law, which has not happened as to date.
22 Paraphrasing the comments of a seasoned intellectual property litigator: I always re-
present victims. Either my client (plaintiff) is the victim of a violation or infringement
of their intellectual property rights, or my client (defendant) is the victim of a frivolous
and vexatious lawsuit for infringement, resting upon an unwarranted assertion of intel-
lectual property rights.
23 The case is summarized by Badaracco supra note 18, based on The IBM-Fujitsu Dis-
pute, case material of the Harvard Business School, No. 9-390-168. International Busi-
ness Machines Corporation v Fujitsu Limited, Respondent and Counterclaimant, Case
No. 13T-117-0636-85 of 15 September 1987, Journal of International Arbitration Vol-
ume 4 Issue 4 (1987), Case date: 15 September 1987; International Business Machines
Corp. v. Fujitsu Limited, Opinion of 15 September 1987, case no. 13T-117-063-85, van
den Berg (ed) in Yearbook Commercial Arbitration 1988 Volume XIII (1988), Case
date: 15 September 1987.
24 The background context for the dispute is outlined by Badaracco as follows: IBM had
dominated the world computer industry since the early 1960s when it introduced the
System 360 family of computers. By the early 1970s, IBMs cash flow, R and D spend-
ing, and capital investments were vast . . . During the 1980s, however, IBMs position
began to deteriorate. Many forces lay behind this change, but two are particularly rele-
vant to the intellectual property dispute. First, computer users began shifting from
large, single, central processing units usually IBM mainframes toward networks
of smaller computers. This trend seriously threatened IBM, which was, in essence, a
mainframe company . . . IBM was investing heavily in systems software in order to
defend, as best as it could, its mainframe business . . . IBMs second problem . . . was
the rise of the Japanese computer industry, and in particular, the growing strength of
Fujitsu . . . Fujitsus principal business was selling IBM-compatible mainframes. Cus-
tomers that bought Fujitsu computers could run IBM application software . . . The dis-
pute over operating systems originated in the early 1970s, when Fujitsu was laying the
foundation of its long-term strategy. During this period, when Fujitsu developed its
first IBM-compatible operating systems, its programmers made substantial use of IBM
programming material. Fujitsus later operating systems, introduced in the early 1980s,
relied in part on these earlier operating systems and the IBM material included in
them. Badaracco, supra note 18 at 79-80.
IP AND ADR 297
tomers dependent on these software systems.25 IBM claimed that Fujitsu had in-
fringed copyright on IBMs software. Initially, there were numerous complicating
factors about whether copyright law protected system software, and whether IBM
had clearly demarcated what was or was not off limits.26
The companies engaged in 8 months of negotiation and came up with an initial
settlement, but it failed to stop subsequent arguments over further infringe-
ments.27 The ongoing dispute was resolved finally by the intervention of two arbi-
trators provided for by an ADR clause in an earlier agreement.28 The arbitrators
made no finding of wrong-doing, although they acknowledged the legitimacy of
IBMs claims by requiring Fujitsu to make large payments to IBM.29 The pay-
ments were as compensation for the use of IBMs operating systems software in its
previous distribution of computer programs30, as well as for future marketing. IBM
granted a license to Fujitsu; the latter company did not admit to copyright infringe-
ment.31 A distinctive part of the agreement was a Security Facility Regime,
which allowed for each company to examine, under elaborate safeguards, certain
parts of the other companys software.32 The party doing the examining could use
information obtained in developing its own software, in return for adequate com-
pensation, and the company would be assured of immunity from claims of copy-
right violations.33 An independent expert would monitor the arrangement to en-
25 Karl Mackie, ADR in Europe Lessons From A Classic US Case: IBM v. Fujitsu
(1992) 14(5) European Intellectual Property Review 183 at 184.
26 The uncertainty over the entitlement to copyright protection for operating systems was
reduced by court rulings, but the scope of the protection remained unclear. Badaracco,
supra note 22, at 87, note 2. To further complicate matters, IBM had not clearly dis-
tinguished information about the internal design of its operating systems from the inter-
face information that outsiders could use with impunity. [Moreover,] [o]n occasion,
IBM had even revealed internal design information to customers. Badaracco, supra
note 18 at 81.
27 Mackie, supra note 26.
28 The neutral experts were Robert Mnookin, a professor at Stanford Law School, and
John Jones, a retired executive from a railroad company and computer expert. Karl
Kilb, Arbitration of Patent Disputes: An Important Option in the Age of Information
Technology (1993) 4 Fordham Intellectual Property Media and Entertainment Law
Journal 599 at 615 citing Eric D. Green, Alternative Dispute Resolution in Patent and
Antitrust Cases, in Patent Antitrust (PLA Patents, Copyrights, Trademarks and Liter-
ary Property Course Handbook Series, 1989).
29 Badaracco, supra note 18 at 86.
30 Kilb, supra note 29 at 615. As Badaracco notes, supra note 22 at 87, Fujitsu had never
objected to making such payments.
31 Ibid. [Kilb].
32 Ibid. [Kilb].
33 Ibid. [Kilb]. As Badaracco, supra note 18 at 87, recounts: Fujitsu was granted ongoing
access to the information it needed to develop and maintain IBM-compatible system
software. Fujitsu was allowed to inspect current and future IBM programming material,
even if IBM considered them strategically crucial. Fujitsu could then develop new
products from these materials, and its customers could not be prosecuted by IBM for
using these products.
sure the terms of settlement were being complied with. The arbitrators
acknowledged that it was healthy and valuable for certain information to flow
freely among companies and for firms to be able to improve and market what they
learn from others.34 And ultimately, customers would benefit from the continued
availability of software that had been developed through the use of the Security
Facility Regime process.
A sample of passages from the press releases of Fujitsu and IBM can illustrate
the way in which each company was able to claim victory, and still maintain a
unique and distinctive perspective on the case. The quotes are as follows:
Fujitsu is very pleased with the resolution of disputes between Fujitsu and
IBM. The resolution of these disputes fulfils Fujitsus desire to have rivalry
with IBM returned to its natural and appropriate arena the marketplace
. . . The Arbitrators determination of Fujitsus rights provides a secure
foundation for Fujitsus product development plans . . . This certainty has
been completely lacking in the past, largely because of the ambiguities of
intellectual property law in many jurisdictions around the world. [emphasis
added]
IBM is pleased with the results of this arbitration. The decisions announced
today will limit and control Fujitsus use of IBM copyrighted software . . . while
requiring Fujitsu to make additional substantial payments to IBM . . . todays deci-
sions recognize in an international context that IBMs intellectual property
rights are entitled to protection.35 [emphasis added]
One of the most interesting things about the wording of the press releases is
the way that each side felt justified in claiming that their rights had been recognized
and upheld. Earlier on in the process, an arbitrator had remarked that not inconsid-
erable cultural differences had intensified the anger and frustration experienced by
the parties.36 It is really difficult to imagine that they would both have felt so vindi-
cated had there been an adjudicated win-lose, or zero-sum, outcome to the case.
The parties themselves publicly stated: We believe alternative methods of dispute
resolution, such as those employed in this arbitration (turned-mediation), are more
likely to produce rational answers to [the] issues than conventional litigation
procedures.37
In the context of adjudication, in which one party will lose and one party will
win, by definition, there can really only be one right side, and there must, it
seems, be a wrong side. There may be both a social interest, and a jurisprudential
interest, in having certain cases dealt with on a win-lose basis, and in obtaining a
34 Badaracco, supra note 18 at 87.

35 Quoted in Mackie, supra note 26 at 186.
36 Arbitrator Robert Mnookin quoted in Carmen Collar Fernandez and Jerry Spolter, In-
ternational Intellectual Property Dispute Resolution: Is Mediation the Sleeping Giant?
(May 1998) 1(3) The Journal of World Intellectual Property 555 at 560.
37 Quoted in Fernandez and Spolter, ibid., citing ADR Report, BNA 228, Vol. 1. 1 Octo-
ber 1987.
IP AND ADR 299
declaration of right and wrong.38 Nevertheless, in other cases, and other circum-
stances, there may not be such a social interest or a jurisprudential interest in adju-
dicated outcomes. Moreover, given the finding that over 90 per cent of cases settle
prior to receiving a judicial decision, the chance to have that adjudicated outcome
may not materialize anyway (as was evidenced by the data recounted above in Sec-
tion II).
One might expect to find many more IP cases dealt with by ADR in the annals
of history, but there has not been a plethora or abundance of them. Why, then, have
more IP disputes not been models for the promise of ADR? I turn now to a discus-
sion of some of the research which has been done to date to help address that
question.
4. EARLY RESEARCH ON ATTITUDES TOWARDS ADR IN THE

IP CONTEXT
An American study done in 1981 the PTC Research Report on attitudes
towards arbitration and mediation in intellectual property disputes, is quite re-
vealing.39 Fifty-one companies returned the survey, of which roughly 25 per cent
had used arbitration and only 6 per cent had used mediation to settle patent, know-
how, or license disputes (roughly a four-to-one margin).40 The amount of money
at stake was a crucial factor influencing willingness to try ADR; companies are
much less willing to try ADR when the stakes are very high.41 The research found
generally that company patent departments were less willing to arbitrate questions
38 This is the gist of the complaint that Owen Fiss, and others, have raised against alterna-
tive dispute resolution. See Fiss, Against Settlement (1984) 93 Yale Law Journal
1073.
39 The study was carried out by researcher Arnito S. Muskat at the Franklin Pierce Law
Center. See PTC Research Report: Alternatives to Court Litigation in Intellectual Pro-
perty Disputes: Binding Arbitration And/Or Mediation Patent and Nonpatent Is-
sues (1981-1982) 22(4) IDEA The Journal of Law and Technology 271. The survey
consisted of 14 questions, which were primarily multiple choice with opportunity to
comment, given out to attorneys employed by companies, companies which were ma-
jor intellectual property players. That is, each responding company had been issued
more than 11 patents per year; 86 per cent of the companies had been issued 21 or
more patents annually, and 33 per cent of the companies had obtained 100 or more
patents a year. PTC Research Report, at 272.
40 Ibid.
41 The Research Report found: Of the companies polled, 29 per cent stated that they
were involved in litigation which they would consider settling by binding arbitration.
Of these companies, 47 per cent had used arbitration or mediation before . . . When
dollar figures were introduced as a variable, the companies generally responded more
favourably to arbitration and mediation as viable alternatives. For example, if the dis-
pute involved less than $100,000 [US], 69 per cent said they would agree to arbitrate or
mediate on the issue of validity, 71 per cent on the issue of damages, and 73 per cent
on the issue of infringement . . . As the dollar amount increased to more than
$1,000,000, however, there was a marked hesitation to use alternatives to litigation,
with the respective percentages dropping to 10 per cent [validity], 24 per cent [dam-
ages], and 14 per cent [infringement]. Ibid.
of validity than questions of infringement or damages. The PTC Research Report

shows that respondents were more prepared to consider using binding arbitration
and/ or mediation for disputes involving trademarks, copyrights, trade secrets, etc.,
than for patent cases.42
The findings of that study may indicate several things. As many commentators
have noted, familiarity may explain . . . why lawyers and clients still favour litiga-
tion over ADR.43 Nevertheless, as mediation comes to be integrated into the adju-
dication process, as with the mandatory mediation in the Ontario civil justice sys-
tem (discussed below in Section Five) and the incorporation of the changes to the
Federal Rules (discussed below in Section Five) ADR will become both more
familiar, and also more likely to be accepted.
More recent research, from the Northern District of California, surveying the
use of Early Neutral Evaluation (ENE)44, has found that ENE is a case manage-
ment tool that has particular utility in IP cases.45 Survey feedback showed that
both attorneys and clients opined that IP cases would benefit from ENE.46 The
basic features of Early Neutral Evaluation, in that program, are these: (1) it is free
42 For instance, 69 per cent were willing to consider arbitration, and 59 per cent were
willing to consider mediation, for non-patent disputes. PTC Research Report, supra
note 35 at 274. I should point out that the changes in American law which provided for
the enforcement of patent arbitration awards did not occur until after the study was
done (i.e., in 1983). Results on a similar survey in the United States today should differ
significantly, if for that reason alone.
43 James Sobieraj and Michael Anderson, Contracting for Alternative Dispute Resolu-
tion: An Application to Intellectual Property (1994) 2(2) Intellectual Property Law
111 at 118.
44 Roderick Thompson and Michael Sacksteder, Judicial Strategies for Resolving Intel-
lectual Property Cases Without Trial (July 1998) 1(4) The Journal of World Intellec-
tual Property 643 at 644, outline the components of the Early Neutral Evaluation pro-
gram in the Northern District of California as follows: (i) a fifteen- to thirty-minute
presentation by each party; (ii) a discussion, led by the evaluator, of ways to reduce the
scope of the dispute and to identify areas of agreement; (iii) a candid evaluation of the
strengths and weaknesses of the arguments and evidence presented, including a specific
discussion of likely outcomes and the dollar range of potential damages; and (iv) a plan
for expeditious discovery designed to provide the parties with the information neces-
sary to conduct early settlement discussions. Judges in the Northern District of Cali-
fornia adopted an experimental ENE program in 1985, then enlarged it after positive
feedback, eventually making it a permanent program. Certain cases are assigned di-
rectly to ENE, and others are assigned to the multi-option ADR program. Parties as-
signed to the multi-option program can then select ENE as their option. Ibid.
45 Ibid. at 643.
46 Ibid. at 651. Thompson and Sacksteder report that Professor Levine of Hastings Col-
lege of the Law found that 90 per cent of attorneys and 100 per cent of clients thought
IP cases would benefit from ENE. Another survey found that a significant majority of
lawyers who had taken part in ENE preferred ENE to initial status conferences (ISCs).
Approximately three out of four lawyers surveyed found ENE superior to ISCs in clari-
fying issues; roughly four out of five preferred ENE for communicating information
about the case across party lines and enhancing the prospects of settlement; and a large
majority preferred ENE for setting the groundwork for cost-effective discovery. Ibid.
IP AND ADR 301
for the first four hours47; (2) it occurs early48; (3) it is non-binding, and there are
no penalties for not accepting the evaluators assessment or procedural sugges-
tions49; (4) it is confidential; and (5) the evaluator has subject matter expertise.50
The evaluators are experienced lawyers, who are selected for their expertise in the
relevant areas. Since confidentiality is such a crucial issue, it is worth emphasizing
that a Local ADR Rule provides that the parties, their counsel and the court shall
treat all statements and communications made during the ENE as confidential.51
Furthermore, the written evaluation statements which the parties submit, as well as
the evaluation provided by the neutral lawyer are also confidential, and will not be
disclosed to the judge ultimately assigned to the case.52
Early Neutral Evaluation has become the single most popular ADR technique
in that district, and it has been characterized as a close fit for intellectual property
disputes.53 The magistrate judge settlement conference is almost as popular as
ENE, whereas mediation (facilitative) has proven to be a distant third.54
5. ADR OPTIONS FOR IP CASES

I begin with an examination of the arbitration option, the one which is most
decidedly and definitively in the realm of private justice, and thus an alternative to
the public justice system of dispute resolution. The remainder of the discussion in
this section will start out with preliminary comments on pre-trial conferences, hone
in on early neutral evaluation and summary trials, then turn to mediation (which
can be carried out in the context of either private justice or public justice and in a
sense, bridges them), and lastly, judicial dispute resolution.
(a) Arbitration
Arbitration is considered a form of third party neutral evaluation, in both its
binding and non-binding forms.55 It is the quintessential form of private justice.
International Commercial Arbitration has become pervasive, almost commonplace
and even institutionalized. Companies conducting business transnationally will typ-
ically insert contractual provisions, as a matter of course, calling for private arbitra-
tion in case of a dispute. A number of international institutions have formed to
47 After that, the evaluator may charge $150 an hour.

48 Ibid. at 646. Thompson and Sacksteder report: The ENE session generally takes place
within one hundred and fifty days of the filing of the complaint.
49 Ibid.
50 Ibid. at 647.
51 Ibid.
52 Ibid.
53 Ibid. Roderick Thompson and Michael Sacksteder, report the following: in those cases
where the parties were allowed to choose, 68 out of 227 (or 30 per cent) of the parties
chose ENE, and in a slightly higher percentage, 52 out of the 143 (or 36 per cent) of
those cases actually conducting an ADR session, the ADR method selected was ENE.
Ibid.
54 Ibid. at 646.
55 Piatsetzki, supra note 6 at 13-6.
provide international commercial arbitration services, and have developed procedu-

ral rules for carrying out the process; services specifically devised for intellectual
property cases are offered by the World Intellectual Property Organization
(WIPO).56
It should be helpful to situate the discussion of the application of arbitration to
intellectual property disputes in context of developments in international commer-
cial arbitration more generally. During 1985-1986, Canadian arbitration law under-
went what Paul Davidson has characterized as revolutionary changes57: acces-
sion to the United Nations Convention on the Recognition and Enforcement of
Foreign Arbitral Awards (also known as the New York Convention)58; passage of
the federal United Nations Foreign Arbitral Awards Convention Act59 and federal
Commercial Arbitration Act60 and crucially, implementing legislation in the prov-
inces and territories.61 Given the understanding that arbitration and enforcement of
56 The generic institutions include the International Chamber of Commerce (ICC), the
American Arbitration Association (AAA) and the London Court of International Arbi-
tration (LCIA). The World Intellectual Property Organization (WIPO) offers IP Arbi-
tration, IP Mediation and Expert Determination.
57 Paul J. Davidson, Current Issues in International Commercial Arbitration: Interna-
tional Commercial Arbitration Law in Canada (Spring/ Summer 1991) 12 N.W. Intl
L. & Bus. 97 at 98.
58 330 U.N.T.S. No. 4739 (1959). The Convention was adopted on 10 June 1958 and
entered into force on 7 June 1959. As of mid-2011, there are 145 parties to the Conven-
tion, including Canada and the United States. Canada filed its instrument of accession
on 1 May 1986, and as of August 10, 1986 (90 days later), the Convention was in force
in Canada. <http://www.uncitral.org/uncitral/en/uncitral_texts/arbitration/ NYConven-
tion_status.html> Joseph Day, Commercial Arbitration in Intellectual Property Mat-
ters (1988) 25 C.P.R. (3d) 145 observes that Canada was very slow to accede to the
1958 New York Convention. However, Day notes that starting from mid 1985, speedy
and significant legislative reforms were carried out by both federal and provincial
levels of government.
59 R.S.C. 1985, c. 16 (2nd Supp.) This federal Act implements the United Nations Con-
vention on the Recognition and Enforcement of Foreign Arbitral Awards, in relation to
matters within jurisdiction of the federal Parliament. It received Royal Assent on 17
June 1986.
60 R.S.C. 1985, c.17 (2nd Supp.) The Commercial Arbitration Act is based on the Model
Law adopted by the United Nations Commission on International Trade Law on June
21, 1985 (UNCITRAL Model Law), and applies to matters where at least one of the
parties is the federal government, a federal departmental corporation or Crown corpora-
tion or in relation to maritime or admiralty matters. It received Royal Assent on 17
June 1986.
61 [Alberta] International Commercial Arbitration Act, Alta. Stat. ch I-6.6 (1986-87);
[British Columbia] Foreign Arbitral Awards Act, B.C. Stat. ch. 74 (1985); [Manitoba]
International Commercial Arbitration Act, Man. Stat. ch. 32 (198689); [New Bruns-
wick] International Commercial Arbitration Act, N.B. Stat. ch. I-12.2 (1986); [New-
foundland] International Commercial Arbitration Act, Nfld. Stat. ch. 45 (1986); [Nova
Scotia] International Commercial Arbitration Act, N.S. Rev. Stat. ch. 234 (1989); [On-
tario] International Commercial Arbitration Act, Ont. Stat. ch. 30 (1988); [Prince Ed-
ward Island] International Commercial Arbitration Act, P.E.I. Stat. ch. 14 (1986);
IP AND ADR 303
arbitral awards were matters falling within the legislative competence of the prov-
inces62, the federal government was required to pursue federal-provincial-territorial
cooperation to bring about the goal of adherence to the international convention.
The laws are generally uniform, although differences in wording could lead to dif-
ferences in interpretation.63 These legal developments provide the tools for a party
to have an arbitration award enforced by Canadian courts, although it needs to be
acknowledged that a party with assets in more than one jurisdiction (such as in
more than one province) may have to undertake multi-jurisdiction proceedings.
Commentators stress that in the context of ever increasing globalization of busi-
ness, arbitral awards are commonly more easily and reliably enforced than judicial
judgments, since national courts, unlike arbitration tribunals, can be reluctant to
enforce the laws of another nation.64
In some circles, at various points in time, there has been considerable reluc-
tance to accept private justice for intellectual property disputes and that has led to
considerable debate and discussion amongst practitioners and scholars. The merits
of arbitration, in particular, are trumpeted by the AAA in a document titled Intel-
lectual Property Arbitration vs. Litigation in which they attempt to dispel and dis-
prove myths about arbitration.65 The myths they address include the following: (1)
Arbitration is no quicker than litigation; (2) Arbitration is no less expensive than
litigation; (3) The arbitration process is impossible to control; (4) Arbitration does
not permit interim injunctive relief; (5) IP cases are best decided in a court setting
[Note that this consideration, in effect, encapsulates many of the others]; (6) Arbi-
tration cant be used effectively in patent infringement disputes; (7) Arbitration is
not as preferable an option as mediation for IP cases. The seventh consideration,
which contrasts arbitration with mediation will be discussed below in the subsec-
tion focusing specifically on the use of mediation for IP disputes. The other six will
be addressed here.
The first two issues of speed and cost have already been introduced above (in
[Quebec] An Act to amend the Civil Code and Code of Civil Procedure in Respect of
Arbitration, Que. Stat. ch. 73 (1986); [Saskatchewan] The Enforcement of Foreign Ar-
bitral Awards Act, Sask. Stat. ch. E-9.11 (1986), as amended by Sask. Stat. ch. 8 (1988-
1989); [Northwest Territories] International Commercial Arbitral Act, N.W.T. Ord. ch.
6 (1986(1)); [Yukon] Foreign Arbitral Awards Act, Yuk. Stat. ch. 4 (1986). See David-
son, supra note 82 at 106ff for discussion of the ways that the provincial and territorial
laws, as well as the federal law (Commercial Arbitration Act) have relied upon, and in
some cases, departed from, the UNCITRAL Model Law.
62 Authority over these matters derives from subsections 92(13) and 92(14) of the divi-
sion of powers in the Canadian Constitution, and in keeping with the holding in the
Labour Conventions case, that where international obligations deal with provincial
heads of power, they need to be implemented through cooperation between the federal,
provincial and territorial governments. A.G. for Canada v. A.G. for Ontario, 1937 A.C.
326 (1937), also known as the Labour Conventions Case.
63 Davidson, supra note 58 at 104-105 provides examples of some of the differences and
wording across the country, and signals a significant difference in the Quebec legisla-
tion (no commercial reservation).
64 This point is made by Philip McConnaughay, supra note 12.
65 AAA, supra note 11.
Section II); a few further points are worth making here. The pursuit of private jus-
tice, through the resort to arbitration, is often motivated by expediency: the desire
for quicker, and often cheaper results. At least one US study comparing arbitration
(done under the auspices of the American Arbitration Association) with court ac-
tion (federal and state) has confirmed that arbitration definitely provides for faster
results, although it may not necessarily be any cheaper.66 Other assessments of ar-
bitration have found that even the speed of arbitration may not always live up to
expectations. The pace of arbitration, reports Randy Pepper, can vary enormously
depending upon the type of dispute, the degree of cooperation between the parties,
the determination of the adjudicator [arbitrator] to proceed quickly, and so on.67
Arbitration proceedings can be commenced quite expeditiously, rather than waiting
for ones space to open up on the court docket, which means that the outcome
should be achieved sooner.68
The third issue, that of party control, is seen to be a very significant factor
favouring ADR processes. Parties have control over selection of the third party
neutral(s), and can thus ensure that the arbitrator(s) will have the requisite level of
experience and familiarity with intellectual property issues.69 The AAA points out
that 99 per cent of the IP cases filed with them involved the use of customized
arbitration agreements, some drafted pre-dispute and others crafted post-dispute.70
Karl Kilb emphasizes that disputants are free to use and modify AAA procedures,
thereby significantly enhancing their autonomy.71 The aspects that parties can exer-
cise control over through such agreements include: the issues to be addressed dur-
ing hearings, the choice of procedural or substantive law, the hearing locale, the
selection of the third party neutral, time constraints overall, as well the extent of
discovery. In addition, such agreements can address matters such as access to in-
terim relief (the fourth consideration). The AAAs Commercial Arbitration Rules
authorize arbitrators to award injunctive relief and measures for the protection or
conservation of property.72 Having access to emergency and interim relief can be
a make or break factor for companies dealing with alleged infringement of patents
or copyrights or misappropriation of a trade secret or unauthorized disclosure of
confidential business information. Such companies need expedited responses to
prevent further economic harm.73 The AAA Commercial Arbitration Rules include
66 Herbert Kritzer and Jill Anderson, The Arbitration Alternative: A Comparative Analy-
sis of Case Processing Time, Disposition Mode, and Cost in the American Arbitration
Association and the Courts (1983), 8(1) The Justice System Journal 6.
67 Randy A. Pepper, Why Arbitrate?: Ontarios Recent Experience With Commercial
Arbitration (Winter 1998) 36(4) Osgoode Hall Law Journal 807 at 818. Pepper insists
that it is difficult to generalize about either the cost or the speed of arbitration.
68 McConnaughay, supra note 12.
69 This point is emphasized by the AAA, supra note 11, as well as by Kilb, supra note 29,
and McConnaughay, supra note 12.
70 AAA, supra note 11 at 4.
71 Kilb, supra note 29 at 613.
72 AAA, supra note 11 at 4 .
73 Ibid. The AAA has developed Optional Rules for Emergency Measures of Protection,
under which an emergency arbitrator can be appointed from a special AAA panel
IP AND ADR 305
a provision that authorizes the parties to seek interim judicial relief without waiving
their right to arbitrate, an important reassurance. It is worth noting that the possibil-
ity of pursuing interim measures is preserved in the New York Convention and the
UNCITRAL Model Law.74
Whether IP cases are better suited for litigation and trial or arbitration (the
focus of the fifth myth) has generated considerable discussion on both sides. In
favour of arbitration, the AAA insists that disputants will face a greater likelihood
of obtaining adjudication from arbitration, given the high proportion of cases which
settle at some point in advance of the adjudicated outcome of a trial. The AAA also
observes that data obtained in a study conducted by Price Waterhouse Coopers in
2006 indicated that only about 30 per cent of the patent-damages decisions issued
by US federal district courts are affirmed by appellate courts.75 The inference is
that the high likelihood of reversals or at least reconfigured decisions, particularly
in cases involving patents, reduces the certainty of initial trial decisions. Moreover,
there is always a risk with litigation that not only the case, but also the intellectual
property at stake, will be lost. With arbitration, an adverse decision is limited solely
to the particular claimant.76 The outcome of an arbitration, or a mediated settlement
for that matter, cannot be binding on, or necessarily persuasive to any party not
directly involved in the arbitration or mediation.77
To counter the claims that arbitration can be more optimal for intellectual pro-
perty disputes (responding to objections to the myths), a number of arguments
have been presented. Familiarity is one reason that lawyers and clients may tend to
favour litigation for intellectual property disputes (as was evidenced by the empiri-
cal research discussed above in Section IV), but it is not the only reason. One of the
main sources of resistance is the notion that the public interest at stake in intel-
lectual property disputes necessitates state intervention in private disputes, espe-
cially where patents were concerned. It is very difficult to separate out the determi-
nation of ownership or validity during infringement litigation, since defences to
infringement actions will inevitably raise the challenge of invalidity or improper
title on the part of the owner of the intellectual property right.78 In cases where
within one business day, and a hearing schedule can be established within two days
thereafter.
74 David Caron, The World of Intellectual Property and the Decision to Arbitrate
(2003) 19 Arbitration International 441 at 441. <http://works.bepress.com/
david_caron/34> The New York Convention is the United Nations Convention on the
Recognition and Enforcement of Foreign Arbitral Awards, discussed briefly just above.
The UNCITRAL Model Law refers to the Model Law adopted by the United Nations
Commission on International Trade Law on June 21, 1985.
75 AAA, supra note 11 at 2.
76 Ibid.
77 James Gilliland Jr., Alternatives to IP Resolution (1996) The Recorder
<http://www.ipmag.com/agilled.html>
78 As William Grantham emphasizes, in many jurisdictions, invalidity is a defence to an
infringement claim. William Grantham, The Arbitrability of International Intellectual
Property Disputes (1996) 14(1) Berkeley Journal of International Law 173 at 182 note
47.
patent validity was in question, it is typically thought that the court system has to
be involved to rule on title in the public interest. The argument runs as follows: due
to the statutory basis of the issues concerning validity and infringement, there is a
grave public interest in their determination, which makes it contrary to public
policy for such disputes to be resolved privately.79
Concern about the loss of procedural safeguards is also seen to be a significant
barrier to the acceptance of ADR processes. James Sobieraj and Michael Anderson
point out that many intellectual property disputants will not be willing to accept the
procedural trade-offs, which come in the form of reduction, or even elimination, of
discovery.80 There are two different sources of concern regarding discovery. On the
one hand, parties can try to build into the process as extensive a discovery process
as they wish, or as many of the procedural safeguards as they like. But doing so
will surely entail that the process can be neither as timely nor as cost-effective as
may have been hoped for initially. Providing discovery of the same scope as what
is permitted by the rules of civil procedure would effectively eliminate one of the
major advantages of arbitration.81
On the other hand, although arbitration may produce significant time and cost
savings through streamlined discovery procedures, this may be deemed too great a
sacrifice by the parties. Sobieraj and Anderson recognize that the reduction or elim-
ination of discovery can be particularly undesirable for intellectual property dispu-
tants. As they write, [s]ince the opponent may be the only source for certain types
of evidence, discovery is vital in most intellectual property cases . . . Therefore, one
or both parties may perceive some substantive disadvantage if they are denied dis-
covery.82 There are other procedural safeguards which parties to intellectual pro-
perty disputes may be reluctant to give up, such as the exclusion and the cross-
examination of witnesses.
It is clear that much of the discussion weighing the respective merits and de-
merits of arbitration and litigation focuses on the context of patent cases (which
engages the sixth consideration). Karl Kilb, for instance, characterizes arbitration of
patent disputes as an important option in the age of information technology.83
79 Day supra note 17 at 158. See Grantham, supra note 79, for elaboration of the debates
over this argument. Grantham asserts that it is not really clear what the intrinsic feature
of intellectual property is that would justify a blanket prohibition on resort to private
justice in such matters.
80 Supra note 44 at 118.
81 James Gilliland, supra note 78, specifically mentions a case in which the arbitration of
an alleged breach of a technology exchange agreement . . . took 4 1/2 years, and 365
[hearing] days, to complete. The case ended up in court subsequently.
82 Sobieraj and Anderson, supra note 44 at 118, present the following examples: [A]
trade secret owner needs discovery to ascertain the extent of the misappropriation of its
trade secrets, and the alleged misappropriator loses several ways to attack the validity
of trade secrets if it cannot take discovery from the trade secrets owner . . . [A] patent
owner usually needs documents and depositions to prove wilful infringement, and the
accused infringer generally needs testimony and documents from the inventor to show
either the defence of failure to disclose the best mode of or inequitable conduct
[of especial relevance to US patent jurisprudence].
83 Supra note 29.
IP AND ADR 307
Kilb emphasizes the confidentiality and privacy of the arbitration process, guaran-
teed by a provision of the AAAs Code of Ethics for Arbitrators in Commercial
Disputes84, as yet one more factor making arbitration attractive for disputes involv-
ing both patents and trade secrets.
In the United States, it should be noted, inhibitions against IP arbitration have
considerably lessened over time, and there has been significant movement towards
the acceptance of patent arbitration specifically. That movement has been both
spearheaded by, and evidenced by, legislative change.85 There is now an explicit
84 Canon VI of the AAA Code of Ethics for Arbitrators in Commercial Disputes states:
An arbitrator should be faithful to the relationship of trust and confidentiality inherent
in that office.
A. An arbitrator is in a relationship of trust to the parties and should not, at
any time, use confidential information acquired during the arbitration pro-
ceeding to gain personal advantage or advantage for others, or to affect ad-
versely the interest of another.
B. The arbitrator should keep confidential all matters relating to the arbitra-
tion proceedings and decision. An arbitrator may obtain help from an asso-
ciate, a research assistant or other persons in connection with reaching his or
her decision if the arbitrator informs the parties of the use of such assistance
and such persons agree to be bound by the provisions of this Canon.
<http://ethics.iit.edu/indexOfCodes-2.php?key=15_15_1511>
85 US Patent Act, 35 U.S.C. 294 (1988)
Voluntary arbitration
(a) A contract involving a patent or any right under a patent may contain a
provision requiring arbitration of any dispute relating to patent validity or
infringement arising under the contract. In the absence of such a provision,
the parties to an existing patent validity or infringement dispute may agree
in writing to settle such dispute by arbitration. Any such provision or agree-
ment shall be valid, irrevocable, and enforceable, except for any grounds
that exist at law or in equity for revocation of a contract.
(b) Arbitration of such disputes, awards by arbitrators and confirmation of
awards shall be governed by title 9, to the extent such title is not inconsis-
tent with this section. In any such arbitration proceeding, the defenses pro-
vided for under section 282 of this title shall be considered by the arbitrator
if raised by any party to the proceeding.
(c) An award by an arbitrator shall be final and binding between the parties
to the arbitration but shall have no force or effect on any other person. The
parties to an arbitration may agree that in the event a patent which is the
subject matter of an award is subsequently determined to be invalid or unen-
forceable in a judgment rendered by a court of competent jurisdiction from
which no appeal can or has been taken, such award may be modified by any
court of competent jurisdiction upon application by any party to the arbitra-
tion. Any such modification shall govern the rights and obligations between
such parties from the date of such modification.
(d) When an award is made by an arbitrator, the patentee, his assignee or
licensee shall give notice thereof in writing to the Director. There shall be a
separate notice prepared for each patent involved in such proceeding. Such
and established intersection and interpenetration of the public and private aspects of
IP disputes in US law. As one commentator explains, if the arbitrator finds that the
patent at issue is invalid, the award cannot be enforced until the Patent and Trade-
mark Office has been informed of the awards existence.86 There has been, not
surprisingly, a significant increase in the number of IP cases taken to arbitration
over the years in the United States.87 In Canada, there has not yet been any
equivalent legislative reform measure pertaining to patent arbitration, although
there has been noticeable progress with the framework for commercial arbitration
generally (as has been mentioned above).
Kilb and other commentators do acknowledge that a considerable attraction of
litigation is the right to an appeal on the merits. Arbitrators need not provide rea-
sons for their decisions, and their decisions are subject to appeal for only limited
reasons.88 Even though few intellectual property cases ever actually proceed to the
appellate courts level, nevertheless, some clients feel a comfort factor in knowing
that with formal litigation an appeal on the merits is always available.89 There are
some grounds which can serve as the basis for a legal challenge to arbitration. Ex-
amples include the following: that a valid arbitration agreement was not made;
that the arbitration clause was induced by fraud; that the party sought to be com-
pelled to arbitrate is not a signatory to the arbitration agreement; that the issues
sought to be arbitrated are not arbitrable; or that there has been a waiver of the right
to arbitrate.90 Other potential grounds that can lead to an award to be vacated
include egregious procedural defects, a finding of manifest disregard of the law, or
misconduct by an arbitrator.91 These grounds have played a role in challenges to
intellectual property cases putatively resolved by arbitration. Yet, as commentators
have noted, the law overwhelming favours arbitration, and challenges to it are
notice shall set forth the names and addresses of the parties, the name of the
inventor, and the name of the patent owner, shall designate the number of
the patent, and shall contain a copy of the award. If an award is modified by
a court, the party requesting such modification shall give notice of such
modification to the Director. The Director shall, upon receipt of either no-
tice, enter the same in the record of the prosecution of such patent. If the
required notice is not filed with the Director, any party to the proceeding
may provide such notice to the Director.
86 Grantham, supra note 79 at 195.
87 The number of IP disputes to come before the American Arbitration Association went
from 27 in 1987, to over 139 in 1993. Patrick Nutzi, Intellectual Property Arbitration
(1997) 19(4) European Intellectual Property Review 192. See also Kritzer and Ander-
son, supra note 94. The AAA reports that there were 375 IP cases filed with the AAA
in 2006. Supra note 11 at 2.
89 Sobieraj and Anderson, supra note 44 at 119.
90 Alan Mittman, Arnold Klein and Loretta Gastwirth, Despite ADR Consent, IP Cases
End Up in Court (Monday October 1997) National Law Journal.
91 Kilb, supra note 29 at 620. Kilb also includes the factor of antitrust concerns, citing US
authority that plaintiffs antitrust claims are not subject to arbitration.
IP AND ADR 309
often rejected.92
A case that illustrates the potential complications for intellectual property arbi-
tration is the American case of SCS Business and Technical Institute v. Interactive
Learning Systems Inc.93 SCS Business and Technical Institute (SCS) and Interac-
tive Learning Systems Inc. (Interactive) had an agreement under which SCS was
granted an exclusive license by Interactive to use Interactives teaching system
software for a 5 year period. SCS decided to terminate the agreement, an option
which was provided for in the contract. However, SCS failed to return diskettes and
made copies of Interactives software.94 As the contract provided for, the parties
entered into arbitration in January 1989. The arbitration award granted Interactive
damages for copyright infringement and the unreturned diskettes. SCS moved to
vacate the arbitration award on the grounds that Interactive failed to seek and
obtain copyright registration, thereby precluding it from statutory damages.95 In-
teractive countered the argument by insisting that the arbitrator had referred to cop-
yright damages only by analogy.96 The court remanded the case to the arbitrator, in
order to ensure that any award of damages for improper copying and interference
with Interactives exclusivity rights is not pre-empted by the Copyright Act.97
In the intellectual property field, where there is substantial legal uncertainty on
specific issues, the perception may be that there is much to be gained from the
jackpot approach risking it all on going up to another level of court for a po-
tentially big win. Many commentators have noted that disputants, faced with the
potential for very high gains or losses tend to avoid arbitration.98 This is partly
because disputants feel more comfortable with the supposed predictability of rules
of evidence and rules of civil procedure. There is a psychological dimension as
92 Ibid. The authors are speaking about the American situation. See Day, supra note 17 at
158, for a discussion of the situation in Canada.
93 No 92 Civ. 0724, 1992 WL 196737 (S.D.N.Y. Aug. 3, 1992); 3 CCH Computer Cases
46,687 (1992).
94 The case is summarized in Kilb, supra note 29 at 621-622. SCS held on to 29,168
diskettes.
95 Ibid.
96 Kilb, ibid. at 622 reports that the arbitrator testified before the court that as an arbitra-
tor, he was not required to follow the statute on damages for copyright infringement
because were in arbitration, we dont have to apply the statute exactly . . . [W]e are
not in court. The courts ruling held that: It is a fundamental axiom of copyright law
that valid copyright registration is a condition precedent for recovery of statutory copy-
right damages . . . To the extent that the Award was intended to remedy a purported
violation of Interactives copyright rights, the arbitrators decision was contrary to
well-established controlling principles of law. Moreover, SCS brought this rule of law
to the attention of the arbitrator, who indicated that he understood the rule. 1992 WL
196737 at 4.
97 1992 WL 196737 at 4.
98 Steven Elleman, Problems in Patent Litigation: Mandatory Mediation May Provide
Settlements and Solutions (1997) 12(3) Ohio State Journal on Dispute Resolution
759, at 773. Elleman writes that it is often difficult to persuade clients to submit a
high-stakes patent dispute to arbitration. Ibid. This is borne out by research which was
cited earlier in Section IV.
well. Steven Elleman remarks that when clients are faced with large gains or
losses, they tend to feel more secure if they have invested large amounts of re-
sources into bolstering their position.99 David Caron highlights the contrast be-
tween the flexibility in process design provided by arbitration with the flexibility in
strategic and tactical options provided by litigation. When a disputant is concerned
that the family jewels are in jeopardy, there can be a tendency to resort to all out
war, or take no prisoner approaches more commonly associated with litiga-
tion.100 Moreover, some people are so committed to winning at all costs that they
would view a compromise as being no better than a loss.101
The defenders of arbitration tend to concur with Karl Kilb: In a world where
information is power and many inventions are in demand for only a limited period
of time before becoming obsolete, the private, quick, relatively inexpensive dispute
resolution offered by arbitration may be exactly what some companies need to re-
main competitive.102 Others, however, are not convinced. They maintain that for-
mal binding arbitration can suffer from many of the same disadvantages as litiga-
tion, namely expense, delay, uncertainty, and hardening of positions.103 Mediation
is typically considered to offer more flexibility, even more control by the parties
over the process, and a wider range of potential outcomes, or creative solutions.
Mediation (the focus of the seventh myth listed above) is discussed below, after a
survey of various ADR processes accompanying litigation, including early neutral
evaluation, summary trial or mini trial.
It is now an apposite time to examine the options which can involve incorpo-
ration of ADR processes into the public justice system for IP disputes, beginning
with pre-trial conferences.
(b) Pre-Trial Conferences

Pre-trial conference Andrew Pirie notes, have a long history in North Ameri-
can justice systems.104 The changes in their goals exemplify the shift from a civil
justice system pre-ADR, to a civil justice system post-ADR. Initially, the focus of
pre-trial conferences was on strict trial preparation; eventually, that changed to in-
clude case management, with settlement being a by-product of good pre-trial pro-
cedure.105 Formerly, parties at pre-trial conferences concerned themselves with
simplifying issues, ensuring pleadings are in order, obtaining admissions, deter-
99 Ibid.
100 Caron, supra note 75 at 445. Examples given by Caron of the strategic flexibility in-
clude the opportunities to generate delay, impose costs and to bring arguably unrelated
claims.
101 As Robin Williams puts it, such hard-driving winners . . . care little about whether the
non-win is a draw or a loss. Robin Williams Jr., Values, Conflict and Conflict Reso-
lution (Fall 1983) 3(2) Man, Environment, Space and Time 83, at 102.
103 Piasetzki, supra note 6, 13-2.
104 Andrew Pirie Alternative Dispute Resolution: Skills, Science, And the Law (Toronto,
ON: Irwin Law, 2000), at 336.
105 Ibid.
IP AND ADR 311
mining the length of trial and the numbers of witnesses, and so on.106 When pre-
trial conferences are focused on settlement, then they are more analogous to negoti-
ations in which settlement is the goal. Parties may engage in extensive discussions,
and ultimately agree on the nature of the information or proposals to be ex-
changed, the manner in which they are exchanged, and the individuals on each side
who are to be involved in an ongoing process of communication and dialogue.107
Pre-trial conferences, and other early interventions into the litigation process,
are increasingly directed to active promotion of settlement. What Andrew Pirie
calls the ADR expansion of settlement conferences is part and parcel of ongoing
efforts to redesign the litigation process, as is emphasized by Gregory Piatsetzki.108
The spirit of ADR can be evidenced in the provision of early neutral intervention,
summary trials, or mini-trials, which are discussed below. Judges now have juris-
diction, discretion and rules at their disposal to undertake judicial dispute resolu-
tion, also discussed below. That judicial dispute resolution can take any of a num-
ber of forms: (i) a judge or prothonotary (court official) can personally take on the
role of mediator in settlement conferences; or (ii) a judge or prothonotary can refer
the parties to a mediation process outside the court; or (iii) parties can be required
to attend a mini trial or summary trial, at which a judge or jury can provide a non-
binding opinion on the probable outcome of a trial.109
(c) Early Neutral Evaluation

Early Neutral Evaluation, which has been discussed above in the context of
empirical research on attitudes and perceptions of disputants in IP cases (Section
Four), can be contrasted with mediation, arbitration, and settlement conferences.
There are several different forms of Early Neutral Evaluation, including Mini Trial
or Summary Trial and Expert Evaluation.110 Andrew Pirie offers the following def-
inition of Early Neutral Evaluation:
A non-binding process, typically required under the relevant rules of court,
wherein the parties and their counsel meet shortly after the initiation of a court
proceeding and confidentially present the factual and legal bases of their cases to
each other and a third-party lawyer experienced in the substantive area. The third
party identifies the issues, assesses the strength of the cases, structures a plan for
the progress of the case, and if requested by the parties, may encourage
settlement.111
ENE needs to be distinguished from private judging, which can involve an
106 Ibid.
107 Piasetzki supra note 6 at 13-7.
108 Ibid.
109 Ibid.
110 Gregory Piasetzki characterizes the Summary or Mini Trial as follows: A fairly formal
presentation to an evaluator, generally relying on presentations by counsel on the facts
and law. Agreement on some or most facts or the limited use of affidavits are common
variants used to establish the necessary facts. Upper or lower limits on recovery may be
agreed on to justify the use of a summary procedure in which, of necessity, the evi-
dence and argument will be abbreviated. Supra note 6 at 13-6.
111 Pirie, supra note 105 at 49.
experienced lawyer or a judge, who is hired by the parties and can render a binding
decision for them. With private judging, the process is, in effect, a private trial,
governed by the rules of the private court, rules specifically drafted by the parties
or relevant arbitration legislation.112 Private judging can include arbitration which
is discussed below.
In the American context, Early Neutral Evaluation is comprised of Expert
Evaluation, and in some jurisdictions has had significant application to intellectual
property disputes. The process consists of the following steps or stages: litigants
meet with an experienced practitioner, a neutral, after the complaint has been
served and answer filed, but before extensive discovery begins.113 The evalu-
ator reviews the written submissions of the parties and conducts a face-to-face
meeting with disputants. The evaluator ultimately renders a non-binding prelimi-
nary opinion about the strengths and weaknesses of the respective cases of the
parties.114
The salient differences are outlined by Roderick Thompson and Michael Sack-
steder.115 First, the ways in which ENE differs from mediation is outlined, then
ENE is contrasted to early settlement conference, and arbitration. ENE is not, as
Thompson and Sacksteder emphasize, mediation, although it is open to the parties
to choose to convert the process to mediation. Mediation, in that context, is not
evaluative; instead, it is facilitative. ENE is explicitly evaluative, and the evaluation
is based on the information shared by all parties only. Mediators (facilitative ones)
typically have process expertise, and they need not have subject-matter expertise;
the early neutral evaluator, by contrast, must have subject-matter expertise.
Presentations in mediation are directed to everyone present, and especially to the
other side. The content of presentations will normally highlight the interests of the
parties, rather than their positions.116 In ENE, on the other hand, presentations are
to be directed to the evaluator. The focus in ENE is on evidence and law, and
ultimately, case management. ENE has multiple case management purposes, and
the purpose of settlement is secondary, as opposed to mediation which has the prin-
cipal purpose of obtaining settlement. The neutral, in ENE, first and foremost,
passes judgment on the merits of the respective parties positions. That neutral will
often help with case development planning, and also, if requested, can help with
settlement.
Early Neutral Evaluation differs also from an early settlement conference. In
the former, the evaluator has no authority to compel settlement negotiations, and
the parties are under no duty to negotiate settlement, or even to discuss settlement
options. Early neutral evaluation will generally occur earlier than would arbitration.
112 Ibid. at 82.

113 Gilliland, supra note 78.
114 Ibid.
115 Supra note 45 at 648-649.
116 See Roger Fisher and William Ury with Bruce Patton, Getting to Yes: Negotiating
Agreement Without Giving In, Second Edition (Boston, MA: Houghton Mifflin, 1991)
for elaboration on the principled approach to negotiation which distinguishes be-
tween positions taken and underlying interests.
IP AND ADR 313
ENE involves no taking of testimony under oath and no cross-examination.117

Thus, it tends to result in less disclosure of trial strategy, than would be the case in
arbitration. There is no award or filed result which comes out of an ENE session.
Furthermore, the proceedings in an ENE session are more confidential than arbitra-
tion, since ENE sessions may not be recorded.118
Thompson and Sacksteder outline the specific types of information which
have to be provided to evaluators in intellectual property cases which are the sub-
ject of ENE. In copyright cases, claimants are required to produce: copyright regis-
tration for the allegedly infringed work(s); exemplars of the protected work(s) and
of the allegedly infringing work(s); a systematic comparison showing points of
similarity between those works; direct or indirect evidence of copying; and a state-
ment indicating whether statutory or actual damages are sought.119
For patent disputes: A party who alleges patent infringement is required to
submit an element-by-element analysis comparing the claimed invention to the ac-
cused device or process. This partys written statement must also include its theory
or theories of damages and all available information in support of each theory.
Accused infringers who intend to base their defence on prior art must submit
an exhibit that describes each example of prior art and the relationship between the
prior art and the claimed invention. The statement must also explicitly describe the
basis for any claim of non-infringement.120
One of the main strains of potential criticism of ENE focuses on the use of
lawyers, rather than judges, to evaluate cases. It could be considered as an abdica-
tion of judicial responsibility; it has also been criticized as potentially less effec-
tive.121 Thompson and Sacksteder retort that few judges would have to time to
devote to ENE sessions, which can run to four hours, plus the additional time re-
quired for preparation.122 They also point out that any judge who performs an ENE
should be exempted from hearing the subsequent trial, if the case does proceed to
trial. Otherwise, the parties would be concerned that the judge could not be suffi-
117 Thompson and Sacksteder, supra note 45 at 648.

118 Ibid. at 649.
119 Ibid. at 652. Thompson and Sacksteder recount that for trade-mark cases, involving
allegations of trade-mark or trade-dress infringement, or unfair competition, the party
making such an allegation must provide the evaluator with the following: any relevant
trade-mark registrations; exemplars of the use of the mark by both the plaintiff and the
defendant, including a description of the goods and services in connection with which
the marks are used; any evidence of actual confusion; the nature and extent of advertis-
ing and the volume of goods sold (where secondary meaning is in issue. Both parties
are required to describe in their evaluation statements the manner in which the public is
exposed to their respective marks and goods and services . . . The alleged infringer is
required to reveal the dollar volume of sales and profits from the goods or services sold
in connection with the allegedly infringing mark. Ibid.
120 Other aspects of the case to be presented include factors which are especially rele-
vant in the US context, such as those relating to the prosecution history to ground a
prosecution history estoppel defence. Ibid. at 653.
121 Ibid. at 649.
122 Ibid.
ciently objective and impartial.123

Another potential concern is that ENE happens so early in the process that it
may not provide sufficient time for preparation in complex, and comprehensive
cases, or that at the least it forces lawyers and parties to invest time, effort and
expense to come to grips with the facts and the merits of their case much earlier
than normal.124 Yet, ultimately, the public policy goals of bringing cases to culmi-
nation sooner rather than later underlies the use of ENE, as is the case with sum-
mary trials or mini trials. The underlying assumption is that prompt and forthright
communication and realistic case analysis contribute to readiness to work towards
the possibility of settlement.125 Barriers to such communication will in turn con-
tribute to litigation costs, and the unnecessary expenditure of court time and exper-
tise.126 ENE and other early interventions are designed to overcome those barriers,
and to encourage realistic case analysis, opportunities to hear the other side, and
to provide a forum and a venue for negotiation of a settlement.127
(d) Summary Trial or Mini Trial

Andrew Pirie provides helpful characterizations of the mini trial and the sum-
mary jury trial.
Mini Trial: This informal and inherently flexible process, often used in com-
mercial disputes between corporate entities, combines mediation, negotiation, and
non-binding arbitration. The exact structure is determined by agreement between
the parties, but involves, after a limited preparation period, the summary presenta-
tion by counsel of each partys best case to a panel consisting of the opposing deci-
sion makers . . . and often a neutral third party. The third party [neutral] may render
an advisory opinion at the conclusion of this information exchange. The princi-
pals then attempt to negotiate a settlement with the assistance of the third party
acting as mediator. If no settlement is reached, the parties may proceed to trial. This
process is distinguishable from a summary trial.128
Summary Trial: A pre-trial procedure in which disputing parties cases are
presented to a mock jury, the members of which are chosen by the court from the
jury list. The mock jury hears the evidence and arguments and then returns a ver-
dict. Although the verdict is not binding, the members of the jury are not informed
of this until after the verdict has been rendered. This procedure generally takes
place late in the litigation process, when negotiations have come to a halt, and is
123 Ibid. This problem is addressed in the Federal Courts approach to ADR, under the
revised Rules in Canada, which is discussed below.
124 Ibid. at 650. This concern is echoed in the worry that the new rules for the Federal
Court will create undue hardship in intellectual property cases, unless there is recourse
to the specially managed proceedings option. This point is mentioned below.
125 Pirie, supra note 105 at 336-337.
126 Pirie recounts some of those barriers: pleading practices, the failure of lawyers to de-
velop theories of the case at the outset, unrealistic clients, time-management pressures
on lawyers, the distancing of the parties in litigation, the real difficulties parties have in
making major decisions and the adversarial nature of litigation. Ibid. at 337.
127 Ibid.
128 Ibid. at 82.
IP AND ADR 315
meant to indicate to the parties the likely decision of a real jury so as to assist them
in reaching settlement without having to go to trial. Counsel may review the case
with the jury after the verdict.129
The former (mini trial) represents a process which comprises private justice,
whereas the latter (summary trial) is a hybrid process, which functions as a compo-
nent of the public justice system.
Andrew Pirie points out that rule changes have expanded options for summary
proceedings, including summary trials. Judges have jurisdiction to grant judgment
based only on affidavit evidence, interrogatories, examinations for discovery, or
admissions in cases where the court is able to find the facts necessary to decide
issues of fact or law.130 The general purpose of such rules is to achieve a simpli-
fied procedure, in light of aspirations for less expensive and more expeditious reso-
lution of cases.
There is a continuing debate whether such procedures sacrifice justice for ex-
pediency. In the words of a former Chief Justice, summary trials may not be able to
furnish perfect justice in every case but that elusive and unattainable goal cannot
always be assured even after a conventional trial.131 A full trial with all the proce-
dural safeguards, and spreading over as much time as parties and counsel feel is
required, is increasingly considered a luxury which society cannot afford to provide
for each and every case. Moreover, judges have discretion to refuse to proceed if
there would be an injustice resulting from the amount involved, the complexity of
the issues, the urgency of the matter, the likelihood of prejudice from delay, costs
and the course of proceedings to date.132
(e) Mediation Voluntary and Mandatory

In the context of intellectual property disputes, mediation, or facilitated nego-
tiation has been referred to as the forgotten alternative or the sleeping giant.133
The Ontario Rules of Civil Procedure defines mediation as a process wherein a
neutral third party facilitates communication among the parties to a dispute, to as-
sist them in reaching a mutually acceptable resolution.134 Mediation has become
commonplace in certain areas of law, such as family law, or insurance, and for
129 Ibid. at 52.

130 Ibid. at 338.
131 Former Chief Justice McEacherns discussion of British Columbias summary trial
rules in Inspiration Management Ltd. v. McDermid St. Lawrence Ltd. (1989), 36
B.C.L.R. (2d) 202 at 214 (C.A.). Quoted in Pirie, supra note 105 at 338.
133 William Heinze, for instance, uses the phrase in Patent Mediation: The Forgotten Al-
ternative in Dispute Resolution (1991) 18 AIPLA Quarterly Journal 333. The latter
phrase is part of the title for the article by Fernandez and Spolter, supra note 37. In it,
at 567, they quote former Bank of America General Counsel George Coombe who
characterizes mediation as the sleeping giant of international dispute resolution mech-
anisms. The AAA, supra note 11 at 2, reports that of the 375 IP cases filed in 2006,
354 (94 per cent) chose arbitration as opposed to 21 (6 per cent) that selected
mediation.
134 Rules of Civil Procedure for Ontario, Rule 24.1.02.
many business disputes. Mediation has expanded into a court-connected, or court-

annexed process, in many jurisdictions, including Ontario.135 The Mandatory Me-
diation Program was designed to help parties settle their cases early in the litiga-
tion process, thereby saving both time and money.136 It is a key component in
the overall Civil Justice Reform Strategy, which itself has the objective of creating
a modern, faster, more affordable and accessible civil justice system.137
In Ontario, the relevant rules for mandatory mediation are Rule 24.1 and Rule
75.1 of the Rules of Civil Procedure.138 When mediation is made mandatory, it
means that parties to a civil suit cannot proceed past a certain point in the litiga-
tion process until mediation has been attempted.139 Rule 24.1 calls for a mediation
135 As is outlined on the website for the Ministry of Attorney General in Ontario, Public
Information Notice Ontario Mandatory Mediation Program, the program started on
January 4, 1999 in Toronto and Ottawa, expanded to Windsor on December 31, 2002.
The document is dated December 9, 2010. <http://www.attorneygeneral.
jus.gov.on.ca/english/courts/manmed/notice.asp> See Pirie, supra note 105 at 313 and
339 note 30 for discussion of developments in British Columbia with respect to
mediation.
136 Ann Merritt, Ontario Mandatory Mediation Program (Fall 1999) Canadian Forum on
Civil Justice, Issue 2. <http://www.cfcj-fcjc.org/issue_2/n2-on.htm> At the time of
writing that piece, Merritt was the Provincial Mediation Coordinator of the Mandatory
Mediation Program for the Ontario Ministry of the Attorney General. The Evaluation
of the Ontario Program, based on research on the first 23 months of its operation, found
that: mandatory mediation resulted in significant reductions in time taken to dispose of
cases and decreased costs to litigants with a high proportion of cases (roughly 40 per
cent) being completely settled earlier in the litigation process. See Robert G. Hann and
Carl Baar, with Lee Axon, Susan Binnie and Fred Zemans, Evaluation of the Ontario
Mandatory Mediation Program (Rule 24.1) Final Report The First 23 Months,
March 12, 2001 at 7. <http://www.attorneygeneral.jus.gov.on.ca/english/
courts/manmed/eval_man_med_final.pdf>
137 Ibid. [Merritt]. Canadian Bar Association Task Force on Alternative Dispute Resolu-
tion, Alternative Dispute Resolution: A Canadian Perspective (Ottawa, ON: Canadian
Bar Association, 1989); Canadian Bar Association Task Force on Systems of Civil Jus-
tice, Report of the Task Force on Systems of Civil Justice (Ottawa, ON: Canadian Bar
Association, 1996); Department of Justice, Charting the Course: Report of the Cana-
dian Forum on Dispute Resolution (Ottawa, ON: Department of Justice, 1995); The
Honourable Coulter A. Osborne, [Ontario] Civil Justice Reform Project: Summary of
Findings and Recommendations, November 2007. <http://www.attorney- gen-
eral.jus.gov.on.ca/english/about/pubs/cjrp/CJRP-Report_EN.pdf> See also the newslet-
ter item on Civil Justice Reform Update, in the Canadian Forum on Civil Justice,
Issue 2, Fall 1999. <http://www.cfcj-fcjc.org/issue_2/n2-upd.htm>
138 Ontario Rules of Civil Procedure, R.R.O. 1990, Reg. 194, as amended by O. Reg. 453/
98, amended to O. Reg. 206/ 02. Rule 24.1 initially established mandatory mediation
for case managed non-family law civil litigation. O. Reg. 438/08, enacted under the
Courts of Justice Act (in force January 1, 2010), amending Reg. 194 of R.R.O. 1990,
expands the application of Rule 24.1 to all cases commenced in Ottawa, Toronto or
Essex, and thus mandatory mediation is no longer limited to case managed or simpli-
fied procedure cases. Rule 75.1 covers mandatory mediation for contested estates,
trusts and substitute decision matters.
IP AND ADR 317
session to occur at an early point in the lawsuit, and certainly before trial. There
is a prescribed format and timeline for mandatory mediations.140 The parties can
agree on any mediator they choose, but if they dont agree or dont choose, than a
mediator will be assigned from a list.
It is important to emphasize that what is actually mandated is the meeting with
a mediator; there is no requirement that a settlement be reached, although reaching
settlement is strongly encouraged, and ultimately endorsed. It should be acknowl-
edged that there are extensive debates in the literature of alternative dispute resolu-
tion over whether mediation, made mandatory, can be truly as effective as when it
is voluntary.141
The prospect of mediation being more widely used for addressing intellectual
property disputes merits serious consideration, according to several commenta-
tors.142 What has helped to raise the profile of mediation, in the United States and
to a lesser extent in Canada, is the prominence of experienced intellectual property
litigators taking on the role of mediator, or even switching over completely to be-
come full time IP mediators.143 Margaret Anderson (an American intellectual pro-
perty lawyer turned mediator) suggests that an attorney-mediator should ask a se-
140 Gary Smith outlines the general model of mandatory mediation in Ontario as follows:
The mediation session would commence ninety days after the first defence is filed in
an action [r. 24.1.09(1)]. The parties would therefore be represented by counsel in a
lawsuit. The parties and their lawyers are required to attend mediation sessions
[r.24.1.11(1)], but counsel would undoubtedly attend any way. If one or both parties
does not attend [r.24.1.10.24.1.12] or file a statement of issues with documents neces-
sary to inform the mediator of the nature of the matter, the mediator files a certificate
of non-compliance [r.24.1.13]. If the Case Management Master or Judge invokes them,
penalties for non-compliance range from the imposition of a timetable for the action,
through striking of documents, including the defence, dismissal of the action, costs
sanctions, or any other order that is just [r.24.1.13(2)]. There is a provision for exemp-
tions [r.24.1.05] or postponement [r.24.0.09(1)] of the session. Gary Smith, in Unwill-
ing Actors: Why Voluntary Mediation Works, Why Mandatory Mediation Might Not
(Winter 1998) 36(4) Osgoode Hall Law Journal 847 at 850-851.
141 See Steven Elleman, supra note 124, for a proposal that not only mediation, but
mandatory mediation, should be seriously considered for intellectual property cases,
especially patent disputes. For a contrary view in the Canadian context, see for in-
stance, Daniele Ciraco, Forget the Mechanics and Bring in the Gardeners: An Explo-
ration of Mediation in Intellectual Property Disputes (2001) 18 C.I.P.R. 433. Ciraco is
less sanguine about the prospect of mandatory mediation than is Elleman, and advo-
cates for voluntary mediation. Gary Smith, supra note 141, examines the critiques of
mandatory mediation more generally.
142 See Ciraco, supra note 142; Elleman, supra note 99; Fernandez and Spolter, supra note
37; and Heinze, supra note 134.
143 Margaret Anderson has written extensively on making such a shift. She has been said
to be likely the first woman in Texas named to be a principal in an intellectual pro-
perty firm, who ultimately left that firm to concentrate full time on ADR, teaching,
training and writing. Eugenia Hansen, Women in Intellectual Property Law (April
1997) Patent World 22, at 23. See Margaret Anderson, Intellectual Property Media-
tions: Special Techniques For A Special Field (1994) 3 Texas Intellectual Property
Law Journal 23, at 24.
ries of questions about the client(s) or the case at hand: Does the client really want
to settle rather than going to trial? Would the client like to see a result that goes
beyond the limits on what a court can provide? Is the case very complicated? Are
both parties corporations? If the answers to these questions are yes, then alternative
dispute resolution could be very promising. Anderson cautions, however, that there
may need to be some adaption in terms of the techniques of ADR in the context of
IP cases. This is especially the case if an acceptable settlement agreement [is]
likely to be more complicated than a simple document stating how much will be
paid by one party to another.144
In situations which involve complex issues, Anderson recommends against us-
ing continuous sessions (trying to complete the entire mediation process in one
day). As she puts it, corporations representatives are not likely to be pressured, by
attempted psychological incarceration, deprival of food, and/or arm twisting, into
making a decision for their own immediate personal comfort, particularly if huge
sums and/or injunctive issues regarding valuable technology are involved and/or
their principals can afford to go to trial.145 Andersons preferred approach is to
build in a separate intake conference with each party prior to the day on which
mediation proper begins. The goals of the intake conference include: meeting the
mediator, discovering the history, and exploring each partys walk-away alterna-
tives to a negotiated settlement.146 The intake conference option, she says, will
enable the accomplishment of many of the same things that otherwise must be
done in lengthy first caucuses in a conventional mediation.147 Anderson sounds a
cautionary note about the use of caucusing, which she says is so common that
many practicing attorneys equate mediation with shuttle diplomacy.148 Anderson
warns that not only is excessive caucusing inefficient, but that it can also tend to
keep the parties polarized, or even increase their animosity.149 Ultimately, reli-
ance upon caucusing could discourage rather than encourage, participation of the
parties. The overarching and overriding goal of alternative dispute resolution is to
empower clients to determine the outcome of their own case, and thus caucusing
144 Ibid. [Anderson].

145 Ibid. at 25.
146 Ibid. at 28.
147 Ibid.
148 Ibid. at 26. Caucusing is carried out as follows: In a caucus, the disputants are physi-
cally separated from each other and direct communication between parties is intention-
ally restricted. Caucuses are initiated in response either to external forces that affect the
negotiators and the general conflict situation or to problems arising from issues, events,
or dynamics in the joint session. Christopher Moore, The Mediation Process: Practi-
cal Strategies for Resolving Conflict, Second Edition (San Francisco, CA: Jossey-Bass,
1996) at 319. Caucuses function to restrict direct communication between the parties,
for a time out period, and as a corollary, to enhance communication with the media-
tor. Gary Smith, supra note 141 at 868871, specifically discusses problematic aspects
of caucusing for mandatory mediation sessions, in which both parties are not equally
favourably inclined towards the mediation process itself.
149 Ibid. [Anderson] at 26.
IP AND ADR 319
could end up being counter-productive.150

David Morrow offers some insights based on a participants perspective
on the most effective ways that ADR can be used to help resolve IP disputes.151 He
encourages mediators to be proactive in drawing out the parties positions, in both
joint and separate sessions (i.e., caucusing).152 Morrow emphasizes that the parties
need to assure each other, and the mediator, that the individuals present at the
mediation have full authority to settle the case, or to obtain instructions immedi-
ately from someone who can authorize a settlement that is outside the scope of
authority given to the participant.153 He suggests that evaluative mediation, in
which a mediator expresses a view on the merits of the parties respective positions
is preferable to merely facilitative mediation. However, David Morrow also recog-
nizes that it is less feasible, and less desirable, for that approach in complex techni-
cal cases, especially those dealing with patent infringement. Moreover, mediation
will not be effective, and could even be counterproductive, if parties have radi-
cally different views of the strength of their cases, or if there are significant factors
outside the immediate litigation that have to be brought into play.154 In such situa-
tions, Morrow suggests that early neutral evaluation or judicial mini-trials could be
more fruitful, although even these may not suffice for complex patent cases.
Although some intellectual property cases, such as those which involve con-
tractual issues, are handled by provincial courts, a substantial proportion of intellec-
tual property cases, especially those involving infringement and validity disputes,
are heard in the Federal Court of Canada.155 The twinning of mediation, or early
neutral evaluation, with judicial dispute resolution in the Federal Court has height-
ened the profile, and enhanced the appeal, of mediation for intellectual property
disputes considerably. I now turn to that topic.
(f) Judicial Dispute Resolution: The Most Promising Option

The most effective type of alternative dispute resolution, for intellectual pro-
perty cases, is likely to be judicial dispute resolution. Andrew Pirie explains how
judges have increasingly come to adopt a more active, managerial approach to
150 Ibid. at 29.

151 David Morrow, Federal Court Connected ADR: Drawbacks And Avoiding the Pit-
falls (November 22, 2002), Canadian Bar Association Symposium on Intellectual Pro-
perty Alternative Dispute Resolution, Ottawa, Ontario. Morrow discusses the following
cases: Levi v. Lois (Federal Court, Trial Division); Henkel Corporation v. Brent
International PLC (Ontario Superior Court of Justice); Visx v. Nidek (Federal Court,
Trial Division); Gallium v. NAV Canada (Ontario Superior Court of Justice); and
Foster-Miller Inc. v. Babcock and Wilcox Canada Inc. (Federal Court, Trial Division).
In these cases, mediation did not immediately lead to a settlement, but in most of them,
there was a settlement sometime afterwards.
152 Ibid.
153 Ibid.
154 Ibid.
155 Dimock and Stabins, supra note 5 at 274. Licensing issues and employment contracts
imposing confidentiality obligations are examples of cases that would naturally fall
within the domain of provincial courts.
their role.156 As Pirie and others have observed, in many jurisdictions, judges and
prothonotaries are specifically being assigned as case managers. The basis for
judges acting as mediators can be found in legislation, in litigation rules of court,
or in a practice direction from a courts Chief Justice.157 These expansions of the
judicial-mediating-managerial role are aimed at achieving the objectives of just,
speedy, and inexpensive, and fair, effective and accessible dispute resolution for
disputants. Judicial intervention is exercised during pre-trial conferences, pre-trial
motions, and during breaks from the trial proceedings.
Andrew Pirie explains that there are various procedural rules, operating in pro-
vincial civil justice systems and in the Federal Court, which provide for summary
determinations of civil cases, and are designed to avoid the high costs of protracted
proceedings. He elaborates as follows:
Rules allow cases to be dismissed for want of prosecution where undue de-
lay in moving the case forward by one party has caused prejudice to another
party. Other rules allow pleadings to be struck out at any stage in a proceed-
ing if they disclose no reasonable claim or defence; are unnecessary, scan-
dalous, frivolous, or vexatious; may prejudice, embarrass or delay a fair
trial; or are an abuse of the process of the court. More rules allow the parties
to state a special case to a judge involving a question of law or fact and to
set down a point of law for hearing. The answer to the question or the deci-
sion on the point of law may substantially dispose of the whole action.
There are rules that permit the parties to apply to the court for summary
judgment on the grounds that there is no defence or that there is no merit in
the claims being made.158
These rules provide for summary determination of a case without a full trial,
and they can be invoked at early stages of the proceedings. Nonetheless, the cir-
cumstances in which these rules will be appropriate are quite limited, and there
may not be many intellectual property cases which would be suitable candidates.
The reforms to the Federal Court Rules, which came into effect in April of
1998, are outlined by Ronald Dimock and Peter Stabins, in IP Litigation in the
Federal Court under the New Rules.159 The particulars of those rules are spelled
out fully in Roger Lafreniere, Dispute Resolution, Settlement Negotiations and
Case Manage-ment.160 Under Rule 257, upon close of pleadings, solicitors for
parties are required to discuss the possibility of settling any or all of the issues in
the action and of bringing a motion to refer any unsettled issues to a dispute resolu-
tion conference. At a subsequent pre-trial conference, parties must be prepared to
discuss the possibility of settlement of any or all of the issues in the action and of
referring any unsettled issues to a dispute resolution conference, in accordance

157 Ibid. at 330.
158 Ibid. at 337.
159 Supra note 4.
160 Included in Ronald Dimock, editor and instructor, Course Materials for Remedies, Os-
goode Hall Law School Professional Development program, Winter 2004. See also
Brian Edmonds, Mediating Intellectual Property Disputes Do I HAVE To? New
Ontario Rules Likely Mean YES! IP Neutrals of Canada, February 4, 2010.
<http://www.ipneutralscanada.com/articles/article2.asp>
IP AND ADR 321
with Rule 263(a). Rule 387 provides for a dispute resolution conference, which can
take the form of either mediation, early neutral evaluation, or a mini trial.161 The
case management judge or the prothonotary handling the case has the specific au-
thority to carry out that dispute resolution conference. As per Rule 387(a), media-
tion is intended to assist the parties by meeting with them together or separately to
encourage and facilitate discussion between them in an attempt to reach a mutually
acceptable resolution of the dispute. Although mediation is not mandatory in the
Federal Court, the court can elect to order that a proceeding be referred to media-
tion, in accordance with Rule 386(1). Rule 390 permits the disputing parties to
obtain a temporary stay (to avoid running afoul of deadlines) to pursue dispute
resolution of their own choice (not court-annexed).162 The parties can thus choose
to pursue mediation with persons other than the case management judge or pro-
thonotary. Rule 151(2) provides for a higher onus for confidentiality than was pre-
viously required, and allows participants in an ADR process to make any arrange-
ments they choose to preserve the confidentiality of information and
documents.163
Ronald Dimock and Peter Stabins emphasize that there are provisions for in-
tellectual property cases to become instead specially managed proceedings,
which may seem to be the other end of the spectrum from summary determinations.
Specially managed proceedings are assigned a case management judge; the case
manager fixes the timeline for the action, hears motions, and fixes and conducts
references.164 The timeline for such proceedings is more flexible, and importantly,
it does not have to meet the deadlines under the revised rules. Due to the complex-
ity and the comprehensive nature of the issues at stake, many IP litigators will wish
to avail themselves of recourse to the specially managed proceedings option. The
concern with trying to push IP cases forward too quickly was echoed in some of the
criticisms raised against the ENE process in the Northern District of California,
discussed above (in Section IV).165
As Andrew Pirie observes, judges are particularly well suited for their roles in
judicial dispute resolution:
[T]he judge because of his or her experience, position, or assessment of the
case is able to encourage or push the parties or their lawyers to rethink a
position, drop a demand, make a concession, rethink damages, or otherwise
substantially alter the presentation or progress of the issues.166
Ultimately, the judge has at her or his disposal considerable resources to influ-
ence the resolution of the dispute itself, over and above the power to adjudicate at
trial. As Randy Pepper notes, in cases where uncooperative parties resort to stalling
tactics, a judge is frequently better able than an arbitrator to ensure that the matter
161 See Piasetzki, supra note 6 at 13-3 note 4 and 13-6 note 17. Piasetzki notes that the
mini trial has not been as commonly used.
162 Ibid. at 13-4, 13-5. The rule allows for a stay of not more than six months and includes
previously stayed proceedings.
163 Ibid. at 1318 note 20 and 1319.
164 Dimock and Stabins, supra note 5 at 276.
165 See Thompson and Sacksteder, supra note 45 at 650.
166 Pirie, supra note 105 at 329-330.
proceeds quickly.167 The same would apply to a judge in comparison with a

mediator.
Gregory Piasetzki opines that in complex IP/ IT (information technology) dis-
putes, a non-legally trained mediator will be of limited assistance, since evaluation
of some of the legal issues is typically required to resolve the dispute.168 The AAA
points to the lack of a pool of experienced mediators possessing IP expertise to
assert that arbitration is preferable to mediation for IP cases (in addressing the sev-
enth myth).169 Piasetzki surmises instead that a judges, or retired judges, possible
findings regarding validity and infringement will often be highly persuasive for dis-
putants in patent cases.170 As is frequently emphasized by commentators, a judges
evaluation, as to whether a given factual or legal outcome is probable, will carry a
lot of weight for disputants and their counsel. Piatsetzki continues by saying that
judicial input, of an evaluative nature, could be especially useful in promoting set-
tlement for patent cases.171
The advantages to adjudication are significant and substantial. Some forms of
relief can only be granted by courts, especially those relating to validity, expunge-
ment or declaration of ownership and title to intellectual property rights. Court pro-
ceedings can compel an unwilling party to participate in a resolution, lest they face
a default judgment otherwise.172 Courts can more effectively deal with parties who
have deliberately violated prior agreements.173
Yet, alternative dispute resolution offers its own rewards. It can provide par-
ties with more flexibility, control over the process, the timing and the implementa-
tion of the steps towards settlement. Parties can use ADR techniques and methods
to tailor the process to the problem: to try to meet the particular needs of the
parties, adapt to the personalities involved, and respond to the specific circum-
stances of the dispute.174 With an ADR process, parties can address non-legal is-
sues much more easily, and they can elicit or offer extra-legal remedies, such as
apologies.
In the Canadian context, then, it would be difficult to find a consensus on
whether litigation or arbitration or mediation, taken in isolation, is more optimal for
intellectual property disputes, especially if patent cases are at issue. The incorpora-
tion of ADR processes, techniques and practices into public justice is most likely to
hold out promise for achieving party satisfaction, and the flourishing of creative
167 Pepper, supra note 68 at 819.

168 Piasetzki, supra note 6 at 1316.
169 Supra note 11 at 5. The AAA points out that for some IP cases, parties may need to
hire additional persons with IP expertise to serve as co-mediators, which adds cost,
time and another level of schedule coordination challenges. The AAA emphasizes the
pool of experienced arbitrators available who have IP expertise.
170 Piasetzki, supra note 6 at 13-7.
171 Ibid. at 1330.
172 Ibid. at 13-12.
173 Ibid.
174 Ibid. at 13-13, 13-14. Parties can agree to limit the issues on which evidence is re-
quired, set constraints on how evidence is to be introduced, and constrict the scope of
discovery. Ibid.
IP AND ADR 323
solutions to the granting of remedies. The non-arbitration options of early neutral

evaluation, or mini trial, or mediation, within the context of litigation, are most
likely to have the greatest appeal for disputants in intellectual property cases in
Canada.
6. SOME CHALLENGES
There have some legal cases, dealing with alternative dispute resolution,
which have worked their way through the courts in the United States, involving a
range of issues. Those issues include: (i) exemptions from attending mandatory me-
diation; (ii) the enforcement of mediated agreements; (iii) liability of the mediator
with respect to agreements; (iv) confidentiality in mediation, and the potential for
subpoenas to mediators175; (v) apparent breaches of confidentiality by parties in-
volved in ADR; (v) the authority of lawyers, as agents, to effect a settlement176;
and (vi) the potential for conflict of interest of lawyer-mediators (in subsequent,
and related, legal proceedings).177 With some exceptions, there have not been
many high profile legal cases which have revolved around intellectual property
ADR.
(a) Expanding Tool Kits; Potential Role Confusion

It is interesting to note that there are professional obligations incumbent upon
lawyers in Ontario to consider the use of alternative dispute resolution (ADR) for
every dispute, and, if appropriate, the lawyer shall inform the client of ADR op-
tions and, if so instructed, take steps to pursue those options.178 Thus, lawyers
have good motivation to be well versed in the developments in alternative dispute
resolution. As Gregory Piasetzki remarks: ADR is not a threat to lawyers in gen-
eral, or litigators in particular, and often requires that lawyers employ most of the
same analytical and advocacy skills that they have traditionally employed on behalf
of their clients.179 It will be tempting for some intellectual property specialists to
expand their tool kits and to broaden the range of services which they can offer to
clients. However, the highly technical nature of the field may mean that the same
people could be called upon to perform multiple roles in similar cases with some of
the same parties at different times.
175 The list so far derives from Andrew Piries list. See supra note 105 at 314319, for
elaboration.
176 Gregory Piasetzki, supra note 6 at 1338.
177 The issue of potential conflict of interest for intellectual property mediator-lawyers,
specifically, is briefly discussed just below.
178 The Law Society of Upper Canada, Rules of Professional Conduct, as amended up to
June 24, 2009, Rule 2.02(3). See also the Canadian Bar Association, Code of Profes-
sional Conduct, 2009, Chapter IX, Commentary 9.
179 Piasetzki, supra note 6 at 13-3. He does go on to note that ADR may require a some-
what different mind set, however.
An American case, Poly Software International Inc. v. Su/ Datamost Corp.180

highlights some of the problems which could arise for intellectual property lawyer-
mediators. In a case involving alleged threat of software documentation and
claimed copyright infringement, an intellectual property lawyer was disqualified
from representing one of the parties on the grounds that the lawyer had served pre-
viously as a mediator for a dispute between the same two parties and their former
employer.181 In the first instantiation of the case, two software engineers left their
employer, and formed their own company. They were later sued by their former
employer for copyright infringement and theft of related documentation (users
handbooks). Subsequently, the partnership between the two software engineers dis-
solved, and each formed their own company. Litigation on the issues of copyright
infringement and theft of related documentation arose between the two former part-
ners.182 One of the parties obtained the former mediator-lawyer as counsel, and the
other party challenged that choice. The court found that the subsequent dispute be-
tween the two software engineers involved a clearly related matter to the earlier
dispute with their former employer. Not only was the intellectual property lawyer
disqualified from representation, but the entire firm was also disqualified under the
doctrine of vicarious or imputed disqualification.183 Lawyer-mediators thus need
to be cognizant of the potential pitfalls from consecutive role shifts.184
7. CONCLUSIONS: THE EVOLVING GLOBAL CONTEXT

When David Vaver set out to write the conclusion for his much awaited Sec-
ond Edition of Intellectual Property Law, he took stock of what had and had not
changed in the interim.185 As a highly notable development, Vaver emphasized the
intensification of the internationalization of intellectual property.186 The efforts of
companies to protect increasingly important and crucially valuable corporate intel-
lectual property assets have been key drivers of developments in litigation in Can-
ada and elsewhere.187 At the same time, the continuing globalization of business
transactions has meant that alternative dispute resolution has come to the forefront,
particularly in the context of disputes with multijurisdictional dimensions.
Francis Gurry locates the space occupied by the combination of ADR and IP
180 880 F. Supp. 1487 (D. Utah, 1995). The case is discussed in Carrie Menkel-Meadow,
Conflicts of Interest and Mediation Practice (Spring 1996) ABA Dispute Resolution
Magazine.
181 Ibid.
182 Ibid.
183 Ibid.
184 Other situations which spill over from ADR into litigation are discussed in Mittman,
Klein and Gastwirth, supra note 91.
185 David Vaver, Conclusion to Intellectual Property Law: Copyright, Patents, Trade-
Marks Second Edition (Toronto, ON: Irwin Law, 2011) at 666 ff. The First Edition was
published in 1997; the Second Edition is current as of April 1, 2011.
186 Justice Marshall Rothstein of the Supreme Court of Canada remarks that the ascen-
dance of intellectual property is perhaps the most striking development in this area of
law, in his Foreword to David Vavers book, supra note 183 at xxiv.
187 This point is also emphasized by Justice Rothstein, ibid.
IP AND ADR 325
as the junction of two of the most rapidly developing areas in the practice of
law.188 The World Intellectual Property Organization (WIPO) began its Arbitra-
tion and Mediation Center in 1994 and expects the demand for its services to in-
crease, as the exploitation of intellectual property rights continues to be globalized,
with disputes over those rights following along in tandem.189 WIPO promotes their
provision of ADR processes for intellectual property cases, in light of the economic
downturn and the need for stakeholders to seek more efficient and affordable
means of dispute resolution.190
David Vaver also observed that the prospect of cheap, quick, and just resolu-
tion of IP disputes still seems a pipe dream in the Canadian context.191 This com-
ment, specifically directed at the litigation process, indicates just how much room
for improvement still remains. Those interested in developments in the field of in-
tellectual property in Canada should be attuned to the sea changes occurring in the
civil justice system, and their spillover onto intellectual property disputes as well.
Some of the most significant changes include the incorporation of Mandatory Me-
diation into civil cases in Ontario, and the reforms to the Federal Court rules, pro-
viding for alternative dispute resolution to be integrated into the litigation process.
These developments have brought about the melding of Alternative Dispute
Resolution into adjudication in the Canadian context. They reflect the empirical
research and anecdotal experience of practitioners, which show that parties can be
fruitfully assisted in their settlement discussions over their innovative products of
the mind with innovations of the civil justice system. As one IP practitioner has
emphasized, the key to identifying win/win solutions is that counsel and the par-
ties must attempt to think outside the normal box in which rights and obligations
[and remedies] are considered within the narrow legal framework of the dis-
188 Francis Gurry, The Dispute Resolution Services of the World Intellectual Property
Organization (June 1999) 2(2) Journal of International Economic Law 385 at 385.
Gurry was writing as Assistant Director General and Lead Counsel for the World Intel-
lectual Property Organization. WIPO is an intergovernmental organization that has
been around for well over a century.
189 As Gurry, ibid. at 387, observes: where the international character of the dispute
comes from the fact that the parties belong to different countries, neither party will
want to have the dispute submitted to the jurisdiction of the courts of the other party,
since this would give the other party an advantage of familiarity with the law, lan-
guage, and institutional legal culture of the other party.
190 World Intellectual Property Organization website, Efficient Alternative Dispute Reso-
lution in Intellectual Property, June 2009.
<http://www.wipo.int/wipo_magazine/en/2009/03/article_0008.html> The website pro-
vides a WIPO Caseload Summary, recounting that in over 240 mediation and arbitra-
tion cases, the settlement rate for mediation has been 73 per cent of cases settled, and
for arbitration the settlement rate has been 58 per cent. See the WIPO website for
Caseload Summary, WIPO Mediation Case Examples, and WIPO Arbitration Case
Examples.
191 Vaver, supra note 183 at 668. A case which is an exemplar of cumbersome and bur-
densome (for disputants and legal officials) litigation is Remo Imports Ltd. v. Jaguar
Cars Ltd., 2007 FCA 258, which generated 6,000 exhibits, an eight-week trial spread
over a year, and 143-page judgment, ending up being reversed in part upon appeal.
pute.192 What is also crucial is that the person the third party neutral making
the determination be respected by both sides as having the appropriate level of
knowledge, whether it be of the technology, legal issues, or procedural matters.193
Canadian courts are continuing to provide creative options for hybrid dispute
resolution processes, incorporating some of the most fertile features of alternative
dispute resolution into the litigation process. Intellectual property disputants stand
to benefit, as does society at large, from these reforms.
192 Piasetzki, supra note 6, at 1317.

193 Ibid. at 13-7.
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Exquisite Examples of Creative Judicial

Dispute Resolution: The Potential of Alternative

This article explores the potential of alternative dispute resolution (ADR)

2. MOTIVATIONS TO PURSUE ALTERNATIVE DISPUTE

5 Gregory Piasetzki, Alternative Dispute Resolution Process, in Ronald Dimock, edi-

creating a climate of mistrust between and among organizations.17

3. A FEW ILLUSTRATIVE CASES

34 Badaracco, supra note 18 at 87.

4. EARLY RESEARCH ON ATTITUDES TOWARDS ADR IN THE

of validity than questions of infringement or damages. The PTC Research Report

5. ADR OPTIONS FOR IP CASES

47 After that, the evaluator may charge $150 an hour.

provide international commercial arbitration services, and have developed procedu-

(b) Pre-Trial Conferences

(c) Early Neutral Evaluation

112 Ibid. at 82.

ENE involves no taking of testimony under oath and no cross-examination.117

117 Thompson and Sacksteder, supra note 45 at 648.

ciently objective and impartial.123

(d) Summary Trial or Mini Trial

(e) Mediation Voluntary and Mandatory

129 Ibid. at 52.

many business disputes. Mediation has expanded into a court-connected, or court-

144 Ibid. [Anderson].

could end up being counter-productive.150

(f) Judicial Dispute Resolution: The Most Promising Option

150 Ibid. at 29.

156 Pirie, supra note 105 at 329.

proceeds quickly.167 The same would apply to a judge in comparison with a

167 Pepper, supra note 68 at 819.

solutions to the granting of remedies. The non-arbitration options of early neutral

(a) Expanding Tool Kits; Potential Role Confusion

An American case, Poly Software International Inc. v. Su/ Datamost Corp.180

7. CONCLUSIONS: THE EVOLVING GLOBAL CONTEXT

192 Piasetzki, supra note 6, at 1317.

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