At the International Delegates Meeting held in Vancouver, Canada, in late October, Ron Grudziecki handed over the gavel to me for the year 2007-2008. Ron and his Board have done a great job in improving the accessibility and visibility of LESI in this past year, including the development of the LESI Web site and the 2007 CD membership directory, both of which could not have materialized without the valuable contributions of the Communications Committee. LES Chile, our newest society, received the LES flag in Vancouver, and LESI is now composed of 32 member societies with about 12,000 members worldwide. Since there is practically no way for all the members to get together in one place, it is becoming more important to have effective communication and networking means among LES societies and among individual members. For this purpose, one of my objectives this year is to improve our Web site with special attention to its contents, regular updates and the accuracy of the information therein. However, such improvement will not be accomplished without having cooperation and assistance from each member society and individual members at large. There are many ways to do this, but effective and punctual communication between LESI (both the Board and the various committees) and representatives of the member societies (at both their board level and international delegates level) is the key to this goal.

Volume XLII No. 4

The common metaphor for a patent portfolio has always been a sedentary piece of real estate with a picket fence. But patent picket fences are insufficient for protecting ideas in todays intense global competition. Companies that thrive today are only those that can deliver innovative products and services to consumers again, and again, and again. And, the globalization of innovation is changing the way in which companies achieve this goal. In our book, iProperty: Profiting from Ideas in an Age of Global Innovation,1 we argue that todays innovator companies, whether large or small, local or international, can benefit from a global strategy and global execution backed by a healthy dose of business-driven common sense. In the present article, we set the stage for developing a global intellectual property strategy by surveying some of the important factors shaping the way that the world innovates.

Portfolios are instruments for analyzing and visualizing strategic positioning and lines of attack. The diversity of portfolio techniques is immense, although every technique has its blind spot as a result of the choice of axis dimensions. This contribution is based on the so-called St. Gallen approach to the management of technologies and patents. The approach was developed in the early 1990s at Europe’s well-known Institute of Technology Management at the University of St. Gallen, Switzerland (e.g. Boutellier et al. 2007) and has been constantly fine-tuned to practice on the basis of numerous industry projects. The methodology for the strategic management of patent portfolios, based on and developed from this approach, is presented below (Gassmann and Bader 2007).

As long as an arbitral award arises out of a relationship which involves property located abroad, envisages performance or enforcement abroad, or has some other reasonable relation with one or more foreign states, then the arbitral award shall be recognized and enforced under the terms of the NY Convention. The Convention is the legal tool employed to confirm an arbitration award relating to a licensing agreement rendered in a foreign forum and converted it into a U.S. judgment enforceable in any state of the United States, whether the award is rendered in the United States or elsewhere. A complimentary Act for domestic and maritime arbitration disputes is the Federal Arbitration Act (FAA). This Act established a national policy favoring arbitrating and enforcing awards that arise from this action. An important example of an arbitration award dispute in a licensing case is Yusef Ahmed Alghanim v. Toys R Us. This was a dispute involving both the NY convention and the FAA. This will be discussed in more detail later in the paper.

My career in licensing began in 1951 and overlaps the history of LES. I participated in at least one of the early discussions that gave birth to LES. It took place at a PLI seminar in New York City on the handling of surplus technology about 1960. The first president of LES (Dan Stice) and the first editor of les Nouvelles (Jack Ott’s predecessor) took part in that meeting. Since 1941 I have been a participant and an observer in the practical and business aspects of creating, acquiring and disposing of intellectual assets including but not limited to what is commonly referred to as licensing. I have personally observed and participated in thousands of licensing transactions and the related activities of the business community in the area of intellectual property with a particular focus on the automobile, military and pharmaceutical industries. From my perspective licensing is a tool for commercializing intellectual property per se. Its use and significance depends entirely on how much value is attached by the community at large to the intellectual subject matter involved, legally, morally and economically. What I have rightly or wrongly learned beyond the nuts and bolts of licensing per se throughout my 66 year long career may be of interest to present day licensing professionals.

The purpose of this paper is to provide an overview of technology transfer practices in India, with a focus on technology transfer programs in academic institutions. In the first part of this paper, I provide an analysis of the current research and development framework in India, outline the applicable governmental policies and discuss in detail the governmental organizations and agencies that promote and sponsor research in Indian colleges and universities. In the second part of the paper, I provide an overview of the intellectual property regime in India and discuss the Indian patent, copyright and trademark laws. In Part III, I discuss and outline the intellectual property policies of seven (7) premier Indian educational institutions as well as discuss the initiative of the government of India to promote awareness of intellectual property rights through academic institutions. Part IV of the paper covers the interface between industry and academia in India. Part V is a detailed discussion of the technology transfer practices of the each of the seven (7) Indian Institutes of Technology (IITs) and India’s most renowned science institution, the Indian Institute of Sciences (IISc). Lastly, in Part VI, I discuss the Indian government’s efforts to encourage and facilitate technology transfer in India.

Many organizations no longer do all of their R&D in-house. Increasingly, companies innovate by using a combination of R&D and externally sourced technologies. These may be acquired by licensing or sometimes by imitating competitors. Many of the larger companies which formerly had large R&D units are now slimming them down and getting many of their ideas from outside. Bell Labs and General Electric have cut back on R&D expenditure because they are not getting a good enough return and Procter and Gamble have announced a target of 50% externally sourced technologies. Intel has acquired much of its technology from outside sources.

Many studies have examined the possible reasons for two or more parties having strengths in disparate but complementary disciplines to come together to form a cooperative exchange relationships or open-ended sharing relationships. These studies have concluded that a reasonable hypothesis would be the desire of one party to garner the specialized skills of the other to derive increased return which he would not otherwise have achieved. Licensing is perhaps one of the most prevalent cooperative mechanisms practiced in the market place. Licensing involves a product belonging to a person or a corporation being produced, marketed, or maintained by another person or corporation. Although this coming together of different entities in cooperative ventures is undertaken to increase both the chances of success and the expected joint return, there always exist incentives for these entities to direct efforts to maximize their individual returns while undermining the joint returns. Since, both parties are aware that unless suitable harnessing and incentive mechanisms are in place, the other party would rather seek maximization of the individual return rather than the maximization of the joint return, they enter into a contract, such as a licensing contract, hoping to modulate the behavior of each party.

Many see our profession as more focused on public good than revenues. Nevertheless, I firmly believe that academic technology transfer is a business, and that we best serve the public good when we view it that way. Since 1997, the Patent Foundation has operated under what we refer to as a deal-based business model. Under this model, in most cases a license is negotiated before the big money is spent on converting a provisional patent application to a PCT or regular U.S. application. We believe this model has proven to be far better than the patent-based model under which a separate (and sometimes open-ended) budget for patenting expenses drives the conversion process.

In negotiations, offering multiple options to the other party sometimes improves the efficiency and the probability of reaching an agreement. The more creative the options are in view of the issues to be resolved, the more likely the negotiation will be successful. This general principle also applies when negotiating IP license agreements. The various clauses of a license agreement represent a variety of options to negotiate. However, most of the focus in negotiations is on the consideration, e.g. the royalty clause. This clause principally defines the monetary consideration payable to the licensor, i.e. the royalty amount and its payout schedule. This article provides a description of commonly used royalty structures that are part of the toolbox of IP licensing practitioners. It further describes different valuation techniques that are well-known in the finance industry, such as the discounted cash flow analysis and the real-option analysis, and shows how to apply those valuation techniques in the context of IP licensing. For the sake of understanding, those valuation techniques are applied to specific hypothetical numerical examples: a plain vanilla running royalty stream, a floored royalty stream and a royalty buy-out option.

DevCo, an Alberta corporation based in Calgary, has developed and now manufactures and distributes novel detector heads that are used in the image capture device in digital x-ray systems. These units have unique designs for the image capture process and use proprietary software (the Image Software) to overcome the weaknesses in the image quality that is inherent in the digital x-ray process. By adapting the detector head, one version can be use by veterinarian for animals and a second version by x-ray technicians/radiologists for humans. DevCo has developed software and proprietary techniques (the Manufacturing Software and Manufacturing Techniques) for the manufacture of the detector heads. DevCo has Canadian and U.S. patents and patent applications covering some of the hardware and Image Software.

This paper is the fourth such report of an annual survey conducted by The Licensing Foundation, a wholly owned subsidiary of LES (USA & Canada). As in prior years, the survey was conducted by an online questionnaire of the membership of LES (USA & Canada). The data were obtained primarily in February 2007 were for the period 2006. Two related but distinct survey questionnaires were used, one for IP asset owners (buyers or sellers, licensors or licensees), and one for service providers such as outside law firms and consultants. As in all prior years, once the responses were deemed authentic they were correlated within one of eight segments, and anonymized. The eight distinguished segments were large and small companies,4 based on the number of companys employees—greater or less than 500, and, further, by four industry groups: Health, DICE (Digital Information Computers Electronics), Industrial, and University/Government.

Volume XLII No. 3

A recent decision of the United States Supreme Court will have a profound impact on organizations that license intellectual property, either in or out. The decision, which was announced January 9, 2007, addresses an important issue: when can a licensee challenge a patent licensed under a technology transfer agreement?

On June 29, 2007, following more than a year and a half of contentious debate and controversy surrounding numerous proposed revisions to the General Public License (“GPL”), the Free Software Foundation (“FSF”) released the final text of the third version of the GPL (“GPLv3”). For those developers that choose to adopt it, GPLv3 will replace the second version of the GPL (“GPLv2”), which, since 1991, has governed a substantial majority of all large-scale open source software (“OSS”) projects, including most notably the Linux kernel, the GCC compiler, the Samba file server software, and the MySQL database, and which has facilitated the evolution of OSS from a hobby of academics and independent developers to a multi-billion dollar a year revenue-generating business platform. This article follows up on an article published in the June 2007 issue of les Nouvelles calling on the members of the committee participating in the GPLv3 revision process to reconsider certain draconian provisions designed specifically to limit the ability of OSS and proprietary software companies to use intellectual property (“IP”) licensing and other collaborative endeavors to bridge their technical differences in order to respond to growing consumer demands for greater interoperability, innovation, and choice in the IT marketplace. Unfortunately, as described below, the ideological extremism motivating the principal authors of GPLv3 leads to a license that not only fails to achieve the FSF’s primary legal and philosophical objective of undoing the 2006 interoperability collaboration between Microsoft and Novell, but actually gives rise to a number of unintended adverse consequences for the very community it was designed to serve and to the IT marketplace more broadly.

Nowadays, the valorization of research is a topic of enhanced interest at universities and public or private research institutes. Research organizations generally have a (considerable) portfolio of patents on their shelves, waiting for a sustainable exploitation strategy. However, the transfer of technologies from academia and other research institutes to commercial parties and/or the commercial exploitation of inventions is still in its infancy, as in-house business knowledge, experience and skills are often lacking. Moreover, financial valuation methods may be unknown, so the monetary value of technological inventions is generally difficult to obtain. Having experience in several technology transfer projects, we developed a novel technology business valuation model following a stepwise approach, starting at the invention, passing through a stage of business awareness creation and defining its business perspective, then entering the phase of business development and technology transfer after having elaborated on a process of business valuation, including both technological and financial points of view (Figure 1). In this paper we will discuss these phases in some detail.

Different entities use the patent system in different ways, depending on their respective business models. It is important to acknowledge this dynamic when evaluating the propriety of revising the patent system to combat trolling or promote other goals. Many vociferous opponents to patent trolls claim that trolls are a drag on society. Patent trolls are accused of using the patent system to extort unreasonable royalty payments from companies who benefit the economy by developing products that consumers want. The extortionary royalty payments, it is said, constitute a “tax” that ultimately leads to less product development and higher prices for consumers.

Technology Commercialization Is Not For Wimps. It is difficult enough to successfully transfer and commercialize technology within a single company, let alone trying to bridge the cultural gap between an organization largely supported by government research funding (such as a National Laboratory) and private commercial companies. Much has been written about various means of improving this transfer process. One factor that can be overlooked is the persistence and continuity necessary to successfully complete the transfer and commercialization process over what is frequently a decade long or greater time period.

The 1980 enactment of P.L. 96-517, The Patent and Trademark Law Amendments Act, usually referred to as the Bayh-Dole Act, dates the current authority for the transfer of new technology from university laboratories to the private sector (1). The University of California, San Diego (UCSD) through its Technology Transfer and Intellectual Property Services (TechTIPS) program has experienced some success in implementing this Act (2). To enhance the UCSD technology transfer effort, in 1999, the Jacobs School of Engineering and the William J. von Liebig Foundation agreed on creating a novel Entrepreneurial Center within the pending construction of the Powell-Focht Bioengineering Hall (3). This article is a report of the Center’s first four years of operation and the “von Liebig Effect” on the commercialization of UCSD Jacobs School of Engineering faculty inventions and a culture of entrepreneurism.

In a world of open innovation, every company needs to pay closer attention to its IP than it used to do. Protecting ideas is costly and time consuming, but it has become too important to innovation to neglect. For the same reasons, the management of licensing must also be revisited. Too often, licensing decisions are driven by a legal perspective, where prior precedents and licensing policies take on a life of their own. Instead, licensing decisions must be driven by the needs of the business model, which will vary over the technology life cycle of the IP in question

At many universities, intellectual property (IP) managers aren’t encouraged to work closely with university inventors throughout the IP commercialization process—from developing strategies to executing agreements. Some universities even discourage this type of comprehensive collaboration for fear of fomenting conflicts of interest, or because they think that the opinions of scientists shouldn’t bias the judgment of business people. However, working closely with inventors during the entire IP commercialization process can have many benefits such as (a) establishing optimized licensing plans, (b) maximizing the potential of corporate sponsored research, (c) educating the campus community about IP, and (d) cultivating inventors to be satisfied if not delighted with their IP licensing office.

Over the past few years, les Nouvelles has published many articles that have provided new ways of doing the business of Intellectual Asset Management…and I have learned a lot from those articles. I also have noticed that LES has continued to grow substantially with many new people entering into the IP protection and commercialization fields. So, I wanted to write an article that goes back to the basics, with the objective of briefly providing a summary of various IP protection approaches and then what they mean to commercializing technologies…sort of an IP 101 course

The motivation for writing this commentary, comes from the general misconception, that computer programs (also known as software) are not protected in the European Union (EU) and its Member countries, by the Law of Patents. Such mistaken belief is based on the ground that Article 52 (2) of the European Patent Convention (EPC) excludes computer programs “as such” to be a patentable subject matter. 1. The Information Era Nowadays, a new revolutionary age is on course. The world is shrinking, and humanity is experiencing globalized changes, in similar ways, like the ones that in the XV Centur y were caused by the development of printing press by Gutenberg, or in the XIX Century by industrial machinery.

Concern for the access to research material—broadly defined to include cell lines, monoclonal antibodies, reagents, animal models, combinatorial chemistry libraries, clones and cloning tools, databases, and software under some circumstance—is not new nor has it gone unaddressed. In response to complaints from researchers that restrictive terms in material transfer agreements (MTAs) were impeding the sharing of research materials, the National Institutes of Health (NIH) urged NIH-funded entities to adopt policies and procedures to encourage the exchange of research tools by minimizing administrative impediments, ensuring timely disclosure of research findings, ensuring appropriate implementation of the Bayh-Dole Act, and ensuring the dissemination of research resources developed with NIH funds (1999)

SUPREME COURT’S DECISION IN KSR ALTERS APPLICATION OF OBVIOUSNESS STANDARD BY THE FEDERAL CIRCUIT, AND THE BOARD OF PATENT APPEALS AND INTERFERENCES Determining when a discover y is sufficiently inventive to be entitled to patent protection is one of the most complex challenges in patent law. To be entitled to patent protection in the United States, the discovery as defined in the patent claims must be novel and must not be obvious to a person having ordinary skill in that field of technology. The Court of Appeals for the Federal Circuit had developed an approach for analyzing obviousness known as the “teaching, suggestion, or motivation” test (“TSM test”) under which a patent claim is only proved obvious if some motivation or suggestion to combine the prior art teachings can be found in the prior art, the nature of the problem, or the knowledge of a person having ordinary skill in the art. This test has been criticized by some as creating too low a burden for patentability, while others have considered it a good tool for analyzing obviousness. In KSR International Co. v. Teleflex Inc., No. 04-1350 (April 30, 2007), the US Supreme Court addressed the validity of the TSM test, and found that the test as applied by the Federal Circuit is improper

On 11 July, the European Court of First Instance (CFI) held that the European Commission should pay compensation to French electrical distribution company Schneider for some of the losses incurred as a result of the Commission’s prohibition of its planned merger with Legrand in 2001. In a key judgment, the CFI stated that the Commission’s failure to give Schneider an opportunity to defend itself adequately during the administrative proceedings (which culminated in the prohibition of the merger) was a sufficiently serious error to trigger.

Volume XLII No. 2

1.1 Dreadful Drafter, the hero of our story, has been told by his employer, DevCo, an Alberta based specialty software developer, that it has started strategic alliance discussions with InterCo, a Texas based distributor of specialty software, and as a result there will be a two way exchange of information. Dreadful Drafter has been asked to prepare a nondisclosure agreement (NDA). He mentally checks off the points that his NDA should cover (a) What information is to be protected by the NDA; (b) How can this information be used and by whom; (c) How will the secrecy of this information be maintained; (d) How long will the secrecy/restricted use obligations last; and (e) What dispute resolution mechanism will be used if there is a dispute or misappropriation/misuse of information

Abstract: The U.S. continues to move towards being a knowledge-based economy. However, corporate balance sheets still only present asset values at a given moment in time, and intangible asset values are often not disclosed. A recent accounting pronouncement, SFAS 157, requires more detail and is an important step towards more meaningful presentation of the value of companies’ assets. However, analysis and reconciliation will still be required, particularly for intangible assets. Introduction Anybody who has ever bought or sold a car knows that perceptions of value can differ among a range of possible buyers. Certainly, those that have traded in a car for less than they thought the car was worth sorely understand this concept. Likewise, in the financial world, there are multiple measures and perspectives on value

The information technology (“IT”) industry is experiencing the highest level of interoperability in its history and customers today are the direct beneficiaries experiencing an unprecedented level of competition, choice, and innovative solutions. The world has changed considerably in that a key path to achieving interoperability is often the partnering and technical collaborations among otherwise ardent competitors. This unprecedented level of cooperation has led to significant technological developments and innovations that serve customers well. Unfortunately, the latest proposed revision to the “General Public License” (“GPL”), the principal license under which hundreds of open source software (“OSS”) products, including Linux, are distributed, contains certain provisions that, if adopted, would threaten not only to drive a major rift among OSS developers seeking to license their products, but also to upend such interoperabilityenhancing collaborations and chill innovation and customer choice. Hopefully, the authors of this proposed revision—dubbed “GPLv3”—will reconsider this close-m

This article is focused on the risks associated with technology-based intellectual property (“IP”) and will provide transaction evaluators and originators with a working list of risk-influenced items to consider when reviewing opportunities involving the purchase of IP for securitization, specifically in cases where the source of the asset’s value is derived from commercialization, re-commercialization, and assertion. It is intended to assist practitioners in identifying and assesing these risks, making better-informed investment decisions, and achieving their transaction goal.

The pharmaceutical industry is responding to the challenges of decreasing productivity and increasing costs by concentrating its promotional activities on top-selling drugs and licensing more products. In fact, all of the world’s top selling drugs in 2005 involved some form of commercial collaboration (Table 1). There are two major forms of joint marketing which are used to promote a pharmaceutical product, namely co-promotion and co-marketing. And these terms are often confused. Co-marketing involves two companies selling the same drug under two different trademarks in direct competition, whereas co-promotion allows two companies to combine their resources and promote the product under one name. Overall, copromotion is playing an ever greater financial role in pharmaceutical collaborations, especially when marketing drugs with large sales potentials. Nevertheless, co-marketing is still widely used in many local situations. In this article, I intend to describe the essential elements of the changing pharmaceutical environment and outline how companies have responded by pursuing these two forms of joint commercialization.

The “Long Walk” is the title of a 1950’s book that recounts the remarkable story of Slavomir Rawicz, a Polish cavalry officer who surrendered to the Russians in 1939 and was harshly imprisoned. After being transported and marched to Siberia (2,000 miles) by his hosts, he escapes into the surrounding wilderness. Surviving more than a year of chronic starvation, pestilence, deserts, swamps, mountains and the elements, he miraculously makes his way across the Asian land mass, north to south, completing a journey of close to 5,000 miles.

Contract negotiators and lawyers around the country spend hours negotiating seemingly slight changes in contract language. Often these slight changes have significant legal consequences. Other times, they do not. For example, most negotiators and lawyers, in an effort to protect a client, will fight hard to remove a ‘best efforts’ standard from a contract in favor of the more palatable ‘commercially reasonable efforts’ or ‘reasonable efforts’ standard. The common belief is that ‘best efforts’ is a term-of-art that imposes an unreasonably high standard on the obligated party.

Technology licensing has recently become a broader trend in many industrial firms. However, the insights into the current extent and management of corporate out-licensing are strongly limited. Therefore, this paper presents the results of a questionnaire-based study into the outlicensing activities of 154 European firms across industries. The study provides large-scale empirical evidence for the scope of corporate out-licensing activities. Moreover, it deepens our understanding of the current state of managing out-licensing activities in industrial firms. After an introduction to the topic, the design of the study is described. Then, the results of the survey are presented, and managerial implications are discussed.

“There is nothing more powerful than an idea whose time has come.” Victor Hugo’s notion was never more true than with the emergence of the commercialization of intellectual property (“IP”). Long illiquid, IP is becoming monetized at a decidedly rapid pace, foreshadowing a rare opportunity to participate in recasting the role of the Idea Business in ways never before seen. A Time Of Change The intrinsic value of technology has morphed over the past 25 years. Traditionally, if a person or company desired new technology, it would be developed in-house or acquired from others and used for internal purposes to make or do something useful. IP, at that time, was valued primarily as an incidental part of that desired commercial process. With the advent of the personal computer in the 1980’s, people began to use technology for individual as well as commercial purposes. Licensing technology for personal use became a conventional norm, transitioning technology from an integral part of a production process into a commoditized product. During the dotcom era, IP fully reversed its historical role. Instead of being incidental to a product, or a product to be sold on its own, IP became a driver of value when its worth imbued both product and use components derived from related sales, advertising, customers and collaborations. Just exactly how much value inured to any one technology firm because of stellar IP was regularly determined by both stock exchanges and bankruptcy courts. When operating and liquidation values regularly included “two comma” technologies ( i.e. _,000,000) someone got the keen idea that IP assets might be ripe to exploit on a standalone basic.

Like many managers with profit and loss responsibilities, licensing professionals are often responsible for making forecasts concerning the financial performance of active license agreements within their portfolio. However, unlike managers of existing products or services that enjoy historic sales and marketing data, the licensing professional typically has no such data, especially for new licenses. Statistical tools normally available for financial forecasting such as multivariate time series analysis or econometric methods are impractical to apply under these circumstances [1]. In addition, the very nature of intellectual property licensing implies new business partners, new products and new markets; consequently making any attempt to model the complex and interrelated underpinning factors useless [2]. If traditional quantitative methods have been judged inadequate at the commencement of the forecasting activity, the most often used alternate is a class of forecasting methods involving a judgmental approach [1]. This paper will present a hybrid forecasting method based on the synthesis of a time-honored judgmental forecasting technique for structured group analysis with the use of fuzzy numbers as its modeling construct. Finally, the practical application of the method in license revenue forecasting will be explored and a particular implementation of the method will be presented.

Of the 20,000+ drugs that are sold on markets around the world, the 2004 WHO list of drugs that are important in the management of disease that impacts public health amounts to 316. This suggests that there is a great deal of similarity in the drugs that are sold on the market for the treatment of disease. As a consequence the population is repeating similar medication. It is also recognized that close to 50 percent of all drugs that are used are ineffective. Moreover, 10 percent of all drugs sold worldwide are fake and the 2004 figure suggests this latter market is as big as US$ 32 billion. These dilemmas negate the efforts of governments worldwide to fight disease effectively because these practices are believed to be an indirect cause responsible for the development of drug resistance.

Accused infringers no longer need to show a reasonable apprehension of being sued before filing A lawsuit to challenge the validity of a patent. Until recently, patent owners generally could identify products they believed were infringing their patents during negotiations with an accused infringer without fear of being sued by the accused infringer. This allowed patent owners to put an accused infringer on notice of the potential infringement without immediately subjecting themselves to possible litigation. If, however, the words or actions of the patent owners caused the accused infringer to have “a reasonable apprehension of being sued,” then the accused infringer could bring a suit to challenge the validity and enforceability of the patent. This allowed an accused infringer to initiate a legal action when a patent owner was keeping a cloud over the accused infringer’s business with threats of infringement suits.

Volume XLII No. 1

It is an issue addressed in virtually all contract negotiations. Anyone involved with transactional work routinely deals with it. When raised, it often becomes the subject of a heated debate. And yet, it is probably one of most important but misunderstood and neglected issues dealt in contractual negotiations. The “it” is the issue of whether the contract should designate that disputes between parties arising under the agreement should be resolved by either mediation/ arbitration or by litigation. In other words: To Arbitrate or to Litigate

Intellectual property is a central component of the contemporary knowledge economy and its efficient exploitation is of crucial importance. Disputes, however, can interfere with the successful use of intellectual property rights and even put at risk a company’s success. While the careful drafting of contracts may reduce their frequency, disputes inevitably arise. Therefore, it is essential that they be managed and resolved efficiently. In order to do so, parties must be familiar with their dispute resolution options. Although an intellectual property dispute can be resolved through court litigation, parties are, with increasing frequency, submitting disputes to mediation, arbitration or other alternative dispute resolution (ADR) procedures. ADR suits most intellectual property disputes, especially those between parties from different jurisdictions. ADR can empower the parties by enhancing their control over the dispute resolution process. If well managed, ADR can save time and money. In addition, because ADR procedures originate in the agreement of the parties, their application can sometimes result in a less adversarial process. This effect allows the parties to continue or enhance their business relationship.

Mediation is not a familiar process to most international business executives. The most widely accepted definition of mediation is “a voluntary process in which a neutral third party, who lacks authority to impose a solution, helps participants reach their own agreement for resolving a dispute.” As further explained elsewhere “cutting the cake, splitting the baby and compromising somewhere in the middle is not the key objective, but rather refashioning the structure of the relationship or of several relationships involved in the dispute—in order to create additional value then available for distribution between the parties.” Mediation is a highly confidential and relatively unstructured and informal procedure in which the participation in the process as well as the acceptance of any outcome depends on the parties agreement. The main feature of mediation, as opposed to arbitration and court action, is its lack of any means of compulsion.3 In this respect, sets of rules play a fundamentally limited role in mediation compared to binding arbitration. Mediation as a negotiation process emphasizes the ‘interests’ and ‘needs’ of the parties as opposed to their ‘rights’ and ‘obligations’. In mediation, more possibilities are available for conflict resolution, particularly with regard to the structuring and framing of the parties’ future business relationship.

Alternative dispute resolution (ADR), including mediation and arbitration, is regularly applied in disputes concerning intellectual property in Australia. The primary forum for intellectual property litigation in Australia is the Federal Court of Australia. The Federal Court has power to refer proceedings for mediation or arbitration.

Parties often agree to arbitrate their disputes for a multitude of reasons: arbitration is generally faster and cheaper than court litigation; confidentiality, or rather, disputes are decided out of public view, thereby preserving business reputation and protecting any trade secrets and company records; and the arbitrators may have particular expertise relevant to the dispute compared to the regular training of judges. Further, when it comes to international disputes, neither party may be comfortable with the national courts of the other party, thereby agreeing on a neutral forum. In Brazil, the rules governing arbitration have dramatically changed and strong efforts have been made for the development and use of arbitration. In fact, it had to, since a country like Brazil, which is more and more involved in the fabric of international trade, cannot be isolated from the rest of the international community, thereby making it difficult for its businessmen to enter into international commercial agreements. Also, the interest in mediation has increased and a bill is to be presented before the Brazilian Parliament.

Arbitrations of both domestic and international commercial disputes are frequently conducted in Canada. The development of Canada’s reputation in international arbitrations arises from its significant talent pool of arbitration counsel and other advantages as a venue for arbitration, including the favourable attitude of Canadian Courts, large selection of qualified arbitrators, and its status as an advanced common law jurisdiction. In 2006, Canada hosted two major conferences on international arbitration: the 17th Congress of the International Counsel for Commercial Arbitration (ICCA) and the 72nd Biennial Conference of the International Law Association.

Arbitration and mediation are two very common methods of dispute resolution. Historically, the PRC is not a litigious country. This article will explain the arbitration procedures and mediation in the PRC.

In 1996 Lord Woolf, Master of the Rolls, delivered “Access to Justice”, his final report on the civil justice system in England and Wales, to the Lord Chancellor. This report identified the need for fair, speedy and proportionate resolution of disputes and the need to use alternative routes to resolution before going to court. These principles are reflected in the Civil Procedure Rules introduced in 1999 and the preaction protocols introduced since 1999. These rules and principles govern the way in which civil court cases are conducted in England and Wales. References to Alternative Dispute Resolution (ADR) have been strengthened over the last few years. For example, the UK Patent Office has been given statutory powers to give nonbinding opinions on patent validity and infringement of opinions. It will be interesting to see how much weight courts or other tribunals place on these UK Patent Office opinions.

The Act which officially provides for the possibility in France for the parties to any form of litigation to try to settle their case through mediation (articles 131-1 and following of the Civil Code of Procedure) is dated 8 February 1995. Since that time, however, the development of mediation has been relatively limited and has not had any significant success. The few sectors or geographical areas where mediation has taken place are mainly because of the will of a specific judge within their jurisdiction. However, over the past three years, there have been a number of signs that mediation is in the process of developing in France, surprisingly in business matters.

Arbitration is a dispute submitted to one or more arbitrators, who make a non-appealable, binding decision on a dispute, as indicated by an arbitration agreement between the parties. The legal basis for arbitration in Japan was established by the Arbitration Act in 2003 (Law No. 138 of 2003.) and became effective in March, 2004. This replaced the existing Arbitration Act of 1890. Under the 2003 Arbitration Act, which is based on the UNCITRAL (i.e., United Nations Committee of International Trade Law) Model Law on International Commercial Arbitration, the principle of party autonomy is set forth, and no discrimination is given between the domestic arbitration and international arbitration.

The substantial cost, time and risks associated with intellectual property litigation in the United States are well known. Consequently, parties frequently consider various forms of alternative dispute resolution (ADR). This paper will provide an overview of the two most common forms of ADR: arbitration and mediation.

There is a widespread notion that civil and commercial matters should be dealt with in a reasonable, businesslike and rational way, and that personal feelings and emotions should be reserved for the private sphere. Business mediations and negotiations still tend to reflect this view. In a conversation with the person who suggested I write this article, we talked about a recent negotiation in which a team member of one of the parties sabotaged all attempts and blocked any possible agreement. We then talked about the personal dynamics implicit in every negotiation and concluded that it would be worthwhile to dedicate an article to the psychological dynamics of negotiation and mediation. As I am not a psychologist, I had my doubts about how to approach this article. In the end I decided to write the article based on my own perspective as a mediator and negotiator.

Having chosen to resolve your issues by use of Mediation/Arbitration to, among other reasons, save costs and time, you are now faced with the problem of having to expend just such costs and just such time to seek enforcement of the judgment and award that you have secured. One weakness of Arbitration proceedings is that, generally speaking, arbitrators have no legal power to enforce their judgments and awards. While most arbitral awards are voluntarily complied with by the parties, this is not always the case. In those instances when one of the parties does not voluntarily comply with an arbiter’s judgment and award, then the other party must seek, judicial intervention to enforce it.

For intellectual property and technologies to lead to commercial products injections of technical and commercial ideas, development resources, investment capital and business discipline are needed at determinant points along the way. This holds true if the inventing organization is a public sector laboratory chartered to develop technology for someone else to commercialize for the public good, or is a private sector for-profit company capable of commercializing itself, if it chooses to do so. The path from invention to product has twists, turns, surprises and delays even when one organization keeps control and ownership from beginning to end. When the inventing organization will not be the one to complete the technology development, but instead intends to license and transfer it to an acquiring party as To-Be-Developed Technology for that party to complete and commercialize, then a process discontinuity arises that adds delays and costs to both licensor and licensee unless both parties address the stumbling issues that stand in the way of a better and faster outcome.

There is no question that patents have become one of the leading drivers of wealth generation in the global business community. When managed properly, they serve to protect a firm’s business strategy by erecting formidable barriers to entry. They also prevent existing competitors from profiting from the firm’s research and development investments. Increasingly, a solid patent portfolio is the foundation for a company’s success in the marketplace. Understanding the value of your patents is an important part of successfully managing your resources effectively. There are a number of steps that are taken in a typical patent valuation. One of the first things determined when valuing patents is the reason for undertaking the analysis. The most obvious situations are those in which a third party has an interest in the value of the patents. For example, the tax authorities will want to know the basis of value if a portion of the purchase price is allocated to any patents included in the acquisition of another company.

Universities produce a large amount of inventions every year and are a useful source of intellectual property. More companies are realizing the importance of gaining access to this source of intellectual property through technology transfer. To reduce any likely disputes stemming from poorly drafted technology transfer agreements between universities and the biotechnology industry, understanding licensing agreements that pertain to universities is critical. This paper reviews the mechanism of each key clause of a licensing agreement, the potential related disputes and how to avoid those disputes. First, the Definition Clause deals with definitions of key terms in the agreement and becomes a basis for resolution when parties disagree. Second, the Grant Clause determines the kinds of rights given in the agreement—exclusive or non-exclusive rights, material subject to license, sublicensing/assignment of rights to third parties, and field of use. Third, the Best Efforts/Due Diligence Clause imposes the licensees’ obligation to commercialize the licensed technology. Fourth, the Royalty Clause is a highlight of the agreement and five different types of royalties will be covered: (1) upfront payments, (2) minimum annual royalties, (3) earned royalties (running royalties), (4) reach-through royalties, (5) patent cost, and (6) royalty-free licenses. Fifth, most university agreements that cover patented technology contain a provision about infringement by others. This clause predicts how both parties will act if they have to bring an infringement action or defend one. Lastly, various other clauses such as Termination, Warranties and Indemnification, and Confidentiality will be covered. Warranties and Indemnification, and Confidentiality Clauses connected with a university’s publication policies may be peculiarly controversial in university licensing agreements because they often cover the conflicting policies between the industry and universities. This paper presents a summary of the key clauses of a university’s licensing agreement and provides examples of possible disputes from each key clause. This review will be useful for negotiating and drafting a licensing agreement between a university and the biotechnology industry.

Section 337 is one of the most powerful weapons that a U.S. patent-holder can wield against patent-infringing imports. Section 337 investigations can be initiated at the U.S. International Trade Commission (ITC) for all patent infringing activities involving importation. For situations involving infringing imports, the ITC is a more efficient and effective forum than the U.S. District Court system. The Patent Act of 2005, which was enacted to quash patent squatting, promises to make the District Court system an even less inviting forum for patent holders to defend their rights.

We are off to a significant start to attaining our goals this year. A full-time LESI administrative assistant has been hired (Stephanie Silverstein). Stephanie has started and attended our Winter Planning Meeting in Miami, January 18 and 19. We welcome her to our organization and look forward to working with her in the future. She resides at the LES (USA & Canada) offices in Alexandria, Virginia but her sole responsibilities are to LESI. When you see her, please give her a warm LESI welcome. Her e-mail is ssilverstein@les.org.