The case for IP arbitration


Juan Pablo Silva

For many years there has been an arbitration system in Chile to regulate the granting of internet domains that are in dispute between two or more parties.

The procedure is simple, fast and has proven to be very efficient. NIC Chile, the entity charged with managing everything related to internet domains in this country, has given sufficient confidence to users, who do not hesitate to submit to this dispute resolution mechanism to resolve domain disputes.

What reason would there be for such a mechanism not to apply to matters such as trademarks, patents and designs? The World Intellectual Property Organization (WIPO) has pointed out that this conflict resolution formula will be increasingly used and has overwhelming support from those countries that want to promote arbitration and mediation in their territories. Canada, France, Portugal and the US, among others, already employ the application of this mechanism in their legislation, and it is increasingly common for conflicts to be avoided or resolved through these procedures.

There are several reasons for encouraging arbitration, but it is worth noting the most obvious:

1) If a conflict is affecting industrial property assets in different territories, which is not unusual for multinational companies, the solution might have to be obtained country by country, and the results could be dissimilar. Instead, with using international arbitration, this problem is eliminated because a single ruling will be obtained for all territories.

2) Second is the issue of delays. Deadlines for obtaining a court judgment in matters related to industrial property are usually lengthy and even more so when dealing with matters of special complexity such as a technical patent process. If a case like this is handled through arbitration, it is feasible to advance it much faster to the consequent advantage of the parties.

Chile has already proven to be very efficient in relation to the settlement of cases of internet domains through arbitration, and thousands of cases have been resolved this way. 

3) Confidentiality is an element to be considered. In arbitration proceedings, both processing and the outcome can be kept secret, which is not the case in a judicial process.

There are other benefits such as neutrality, ie, the fact that there is no particular actor that can be favoured because of locality in a particular trial. Also noteworthy is the fact that arbitration awards are usually resolved in a single instance, unlike judicial procedures or other types of litigation in which appeals are possible.

As pointed out above, Chile has already proven to be very efficient in relation to the settlement of cases of internet domains through arbitration, and thousands of cases have been resolved this way. In addition, for 25 years in Chile there has been the Arbitration and Mediation Center of the Chamber of Commerce of Santiago (Cam Santiago), which has also resolved some industrial property issues.

In fact, there are already some trademark cases that have been resolved by arbitration, which means that there is growing interest in these matters. There is nothing to prevent these cases from increasing in the future, but for that to happen, the dissemination and support of entities such as WIPO is necessary in order for companies and authorities to support these systems.

It is clear that judicial activity cannot and should not be replaced since there are cases where such action will be absolutely necessary, for example when seeking to set a precedent that is public and establishes a type of jurisprudence. This will only be obtained by way of a judicial decision since the arbitration award will only be valid between the parties, and it may also be necessary to go to court if one of the parties refuses to cooperate at any point in the process. With arbitration, it will be impossible to force both parties to continue, which is not the case judicially. But notwithstanding these limitations, as mentioned above, mediation and arbitration have already caught on in the world of industrial property, especially in developed countries. It will only be a matter of time for it to spread massively.  

Juan Pablo Silva is an attorney and founding partner at Silva. He can be contacted at:

Juan Pablo Silva, Silva, trademark, designs, patent, World Intellectual Property Organization, Arbitration and Mediation Center,