The Inclusion of Intellectual Property Rights Disputes in Arbitration in India

Khurana and Khurana, Advocates and IP Attorneys India

Indian courts have expressed varying opinions regarding the arbitrability of intellectual property rights disputes.  This has led to a dilemma that necessitates the adoption of legislative measures. The authors argue that arbitration should be included as a form of dispute resolution in every IPR statute, including those pertaining to copyrights, patents, and trademarks, both procedurally and substantively.


When upheld, a right in rem becomes a right in personam.


Arbitration settles rights in personam, whereas IPR is a right in rem. Are the two able to be combined? "Disputes relating to sub-ordinate rights in personam arising from rights in rem have always been considered to be arbitrable," is the Supreme Court's affirmative response to this question.  While the majority of High Court benches have not followed this interpretation, some have, and that is admirable.  Given the advantages and practicality of intellectual property, the author ought to be permitted to use it in contractual arrangements. Therefore, the only basis for enforcing the author's moral and economic rights is the civil liability in tort.


Quick Resolution Is Necessary For IPR.


Yes, the law is a pain in the ass, Mr. Dickens. Numerous cases still bear a striking resemblance to the gloomily drawn-out Jarndyce v. Jarndyce lawsuit, as noted by courts in Kenya, Sri Lanka, the United States, and India.  The U.S. Court of Appeal has actually bemoaned the risks associated with protracted litigation, stating that the parties involved risk losing sight of their initial goals and the circumstances surrounding their case. 


Arbitration is urgently needed because India's current caseload, which only consists of 55.5k out of 4.39 crore cases, will take 324 years to resolve at the current rate of disposal. This is reaffirmed in a 2018 Niti Aayog report that calls for the 1996 Arbitration and Conciliation Act to be amended in order to establish India as a centre for arbitration.


Strong legal frameworks lead to robust economic conditions. Due to its promotion of efficient use and production cost recovery, this effect in commerce is particularly noticeable in relation to property rights.  The territorial competitiveness of the nation, which is the foundation of intellectual property rights (IPR), is negatively impacted by an inefficient legal system, which discourages foreign investment.


The aforementioned fact serves as the main justification for the use of arbitration in IPR disputes. In addition, the typical term of an IPR is about 20 years. Furthermore, the cost of creating intellectual property (IP) is high because it requires a lot of labour, personality, and skill; as a result, the reward system serves as a motivator for IP creators.  The intellectual property owner may profit financially if IPR disputes fall under the purview of arbitration, which will encourage foreign investment, increase territorial competition, and boost the nation's economy as a whole.


Skilled arbitrators are required for IPR disputes.


IPR requires that cases be decided on the basis of facts and circumstances, which means that decisions vary from judge to judge. This issue of predictability can be resolved because arbitrators ideally have more subject-matter expertise than do non-specialized judges or juries.  It should be possible for the parties to a lawsuit to choose an arbitrator who is fluent in IPR, as this is typically desired.


Confidentiality is maintained via arbitration.


This particularly applies to trade secrets.  The confidentiality of the arbitration process is discussed in Articles 75 through 78 of the WIPO Arbitration Rules. Public access to the entire arbitration process, including all disclosures and awards, is possible. Since both the arbitration centre and the arbitrator are required to keep trade secrets confidential, disclosure would be easier to control because they are extremely sensitive pieces of information. For the sake of confidentiality, it is imperative to bring trade secret disputes under the purview of arbitration since India lacks a dedicated tribunal for such cases.


An institutional framework for arbitration is required.


Any commercial law should aim to preserve international court uniformity in order to effectively promote international trade. IPR disputes can be arbitrated in the majority of nations.  WIPO has also established formalised procedures for arbitrating intellectual property disputes. 


India's economy is expected to grow by five trillion dollars as it transitions from a developing nation to one that depends heavily on foreign investment, which is made possible in large part by intellectual property rights. Consequently, the antiquated opinions held by Indian courts must not sabotage the advancement of judicial systems, as this will hinder economic expansion, privacy, and the standardisation of international institutional frameworks. Justice cannot be sacrificed in order to uphold the law.


Khurana and Khurana, Advocates and IP Attorneys

About the Firm

Khurana and Khurana, Advocates and IP Attorneys

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Contact PersonTarun Khurana

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