51ÉçÇø

What do science and technology firms need to know about leveraging technical experts in alternative dispute resolution proceedings for intellectual property claims?

Commercial success in many technological sectors depends on smartly navigating intellectual property (IP) disputes, including many well beyond patent law. Many science-driven companies have relied on arbitration, mediation, and conciliation for resolving contract disputes involving deliverables, costs, and delay. However, alternative dispute resolution approaches apply equally to disputes involving licensing agreements, non-disclosure agreements, trade secret assets, and research and development collaborations. To protect IP and prevail in dispute resolution, science-driven companies can benefit from understanding how alternative dispute resolution proceedings like arbitration function in IP cases and the critical role of technical experts. 

Since science- and technology-driven companies often rely on cross-border partnerships — IP license agreements, research collaborations, funding agreements, and product development deals — arbitration is uniquely suited to these types of companies operating internationally. However, the distance between operations and markets, complexity of products, the process by which new products evolve, and other similar issues can all pose substantial challenges to sorting through the technical merits of a potential claim. 

Parties to arbitration will benefit from devoting considerable effort to confirming their experts are technically qualified and able to communicate complex technical issues at the appropriate level, including to non-technical audiences.

Given the involvement of the right technical expertise at the right time, multidisciplinary scientific and engineering analysis and insights can help stakeholders in IP disputes effectively marshal admissible technical evidence. They can also assess whether alleged IP has been misappropriated, whether technical terms of licensing agreements have been violated, whether IP has been improperly disclosed, or whether IP is performing as promised. 

These four approaches can help companies realize the substantial benefits of effectively integrating technical experts into arbitration. 

1. As early as possible, develop themes, define technical terms, and establish conceptual boxes around the intellectual property.

By moving faster than the opposition, a dispute party can strive to draw "the conceptual box" around IP and clearly define it for the arbitrators. The goal of leveraging expert technical support is to make the disputed issues easy for the arbitrators to understand. Defining key concepts early creates a framework that can guide the discovery and organization of admissible evidence. For instance, expert witnesses can help arbitrators understand whether a public patent disclosure tells the whole story or whether a product relies on additional trade secret information. An early investment in effective technical research can help clarify the issues and even encourage an early, cost-saving resolution. 

2. In disputes over licensing deals, focus on contract language. 

Based on our expert engagement in several IP arbitrations, the words in a contract generally outweigh those in a patent. While arbitration over licensing deals frequently arises because a collaborating partner has infringed a patent or developed unlicensed products from the originator's patent, what matters to an arbitrator is that the licensee stepped outside the bounds of a contract. On the other hand, disputes purely involving patent infringement or invalidity allegations typically belong in government courts. 

Technical experts can help arbitrators understand the bounds of contract terms as they would be commonly understood by someone in the industry. For example, if the bounds of the term "product assembly" appearing in a contract without specificity are in dispute, expert evidence can assist in providing arbitrators with perspective as to how one with technical know-how in that specific industry would expect to design, develop, sell, or procure that assembly. Conditions to the licensing agreement may also frequently include references to derivatives of licensed technology. Expert analysis can again be essential in establishing the boundaries of novelty in iterative or future generations of a product, or conversely, the likelihood of independent ideation in the specific technical domain in question.

Through rigorous data analysis, technical experts can develop and test hypotheses and leverage the data to draw conclusions that are free from expectation or bias about whether an alleged technology was developed beyond the scope of a licensing agreement. With the aid of such analysis, arbitrators can be better equipped to determine whether a partner's market share and royalty payments are consistent with the terms of a licensing agreement or whether a rapid product development timeline reflects an unfair advantage achieved through IP misappropriation. Moreover, technical experts with specific knowledge of an industry and the context of IP within it can help arbitrators understand whether parties took "commercially reasonable efforts" to execute the contract or protect alleged trade secrets.

3. Engage qualified experts early.

Arbitration arguments are frequently centered on technical evidence presented by experts. Parties to arbitration will benefit from devoting considerable effort to confirming their experts are well qualified and able to communicate complex technical issues at the appropriate level, including to non-technical audiences. The parties should ensure that the expert's portfolio aligns with the necessary expertise and prioritize candidates who are familiar with the arbitral process. 

Engaging experts early equips them with a deeper understanding of case nuances, allowing them to anticipate challenges from the opposing counsel. Expert testimony can help establish whether a party's actions are compatible with the technical decisions and obstacles that a reasonable company in a similar situation or industry would have encountered in executing a contract. Based on the collection of evidence and analysis, technical experts can advise on issues such as whether the patented methodology was used to design a product, helping refine the case strategy and avoid costly missteps or untenable technical positions. For instance, an expert could flag whether an alleged trade secret could be found in a publicly available third-party product. Involving experts early enables thorough vetting of issues before finalizing claims or defenses, reducing the risk of having to drop unsupportable claims or defenses later. 

4. Lean into a less adversarial process.

Arbitration can be a less confrontational process than a trial in a court of law. As such, arbitration supports reaching settlements and preserving ongoing global business relationships. This is aided by the confidentiality associated with arbitration proceedings. As companies pursue claims through effective research on technical IP issues, they may well decide against proceeding with a claim or reach a settlement in advance. 

Conducting a compelling presentation before an arbitration panel requires significant investment, especially when intellectual property surrounding complex technology is involved. Effective pre-arbitration research and consultation with qualified experts can clarify and narrow the issues, thereby saving time, money, and goodwill among commercial disputants. Expert joint statements are one mechanism for creating a less adversarial process by identifying mutual agreements and removing them from further contention. This streamlines the issues, allowing the tribunal to focus solely on contested matters. Even if the arbitration proceeds, the early investment can help reduce overall costs.