Douglas Clark, Head of Global Dispute Resolution Practice, discussed the issue of IP dispute arbitration in Hong Kong. This article is jointly published by Rouse and Lusheng Law Firm (a strategic partner of Rouse).
What is the choice of applicable law for arbitration in Hong Kong?
In most arbitration cases, the parties agree to the arbitration institution to administer the arbitration. The parties can also agree to ad hoc arbitration, but for intellectual property cases, ad hoc arbitration is not recommended, even if the ad hoc arbitration is based on the UNCITRAL Arbitration Rules. First, emergency relief is not available in ad hoc arbitration. Second, the procedures for appointing arbitrators under the UNCITRAL Rules are cumbersome and may take a lot of time. Third, ad hoc arbitration in Hong Kong cannot apply for interim measures in mainland China.
In institutional arbitration, the institution is responsible for the management of the arbitration and, most importantly, the appointment of arbitrators if the parties cannot reach an agreement.
For IP cases, there are a number of institutions in Hong Kong that can handle such cases, including:
- The Hong Kong International Arbitration Centre ( “HKIAC” ), which has a professional IP panel, handles numerous disputes involving China and other countries in Asia. http://www.hkiac.org/
- China International Economic and Trade Arbitration Commission (“CIETAC”), a leading Chinese arbitration institution that handles numerous arbitrations in Mainland China, has an office in Hong Kong to handle arbitrations under the Hong Kong Arbitration Ordinance. http://www.cietac.org/China International Economic and Trade Arbitration Commission Hong Kong arbitration is conducted in accordance with the China International Economic and Trade Arbitration Commission Rules.
- The International Chamber of Commerce ( “ICC” ) Court of Arbitration also has an office in Hong Kong and handles various IP cases in Hong Kong. http://www.iccwbo.org/dispute-resolution-services/
- The World Intellectual Property Organization (“WIPO”) Arbitration and Mediation Center, in accordance with its own rules on intellectual property disputes, provides arbitration and mediation services in conjunction with a panel of intellectual property experts. http://www.wipo.int/amc/en/ The seat of arbitration in Hong Kong can be selected according to the rules of the World Intellectual Property Organization.
In institutional arbitration, the arbitration agreement specifies the rules applicable to the chosen arbitration institution. The Institutional Rules set forth basic principles including: the commencement time of the arbitration, the appointment and questioning of the arbitrators, the composition of the arbitration panel, the handling of the case (eg pleadings, evidence, consolidation and security for costs), awards and decisions, and fees to be paid.
Most institutional rules provide for an application for emergency relief if a party needs an emergency injunction before the arbitral tribunal can be established. The rules of the Hong Kong International Arbitration Center, the World Intellectual Property Organization, the International Chamber of Commerce and the China International Economic and Trade Arbitration Commission all provide provisions for emergency relief.
The World Intellectual Property Organization also publishes expert determination rules. https://www.wipo.int/amc/en/expert-determination/rules/ An expert determination can be used to adjudicate a narrow range of technical points between the parties without the need for full arbitration. For example, if the parties cannot agree on whether a certain part of a product has a certain function, but does infringe a patent if it is so designed, or does not infringe a patent if it is not so designed, then they may accept that the issue is relevant expert ruling. The World Intellectual Property Organization provides three other cases suitable for expert determination. https://www.wipo.int/amc/en/expert-determination/why-is-exp.html
In institutional arbitration and ad hoc arbitration cases, the parties have the right to stipulate in the agreement any other applicable rules or procedures, such as the qualifications for the appointment of arbitrators, the rules for the production of documents, and the method of admissibility of evidence.
The IBA Rules on the Taking of Evidence in International Arbitration are a set of generally accepted rules. https://www.ibanet.org/resources This rule sets out procedures for matters such as the production of documents, the calling of witnesses, the writing of expert reports, and the calling of expert evidence. It also includes rules on the admissibility of evidence. Even if there is no agreement to include it in the arbitration agreement, the parties will usually accept, or the arbitral tribunal instructs that the IBA Rules of Evidence be used as a guide.
Special Instructions in Intellectual Property Cases
Intellectual property cases may require special instructions. For example, in cases involving patents, arbitral tribunals are advised to give directions on defenses of infringement and validity, including the preparation and filing of a comparative table of patent claims.
The parties may wish to agree on a system of confidentiality that goes beyond the general confidentiality requirements set forth in domestic regulations and agency rules. The move is provided for by the conclusion of a special confidentiality agreement, or if the parties fail to reach an agreement, the non-disclosure agreement is enforced by the arbitral tribunal. A case where such an agreement is required is where the defendant discloses a commercial process to show that it is not using the plaintiff’s process. Defendants have no intention of sharing this information with Plaintiffs and are only requesting limited or “Outside Counsel’s Eyes Only” disclosures.
For further information, please contact:
Carol Wang, Partner, Rouse