World Intellectual Property Organization

A Cost-Effective Alternative

February 2010

The growing number of international IP transactions has substantially changed the ways in which cross-border disputes are resolved worldwide. Due to the significant length, costs and complexity of IP court litigation, parties increasingly employ alternative dispute resolution (ADR) mechanisms, often seen as more efficient.

As portrayed in the previous articles in this WIPO Magazine, IP litigation before national courts can undeniably be very expensive and lengthy. The table below describes the average length and costs of patent litigation in various jurisdictions.


This table has been developed by the WIPO Arbitration and Mediation Center, based on figures provided in “Patent Litigation, Jurisdictional Comparisons, The European Lawyer Ltd, London 2006”, as well as the insights and experience of patent practitioners in particular jurisdictions. It provides an indication of the average duration and cost of patent litigation in those jurisdictions.

The WIPO Arbitration and Mediation Center

Established in 1994, the WIPO Arbitration and Mediation Center (the WIPO Center) offers ADR options for the resolution of international commercial disputes between private parties. The WIPO Center is recognized as an international and neutral forum especially appropriate for cross-border and cross-cultural disputes. It has developed different types of ADR procedures that are conducted under the WIPO Mediation, Expedited Arbitration, Arbitration and Expert Determination Rules (WIPO Rules).

The WIPO Rules contain specific provisions particularly suitable for IP, technology and entertainment disputes, such as those concerning confidentiality and technical evidence. The WIPO Center makes available, in different languages, model clauses and agreements that parties may use as a basis for submitting disputes to WIPO.

Experience has shown that the effectiveness of ADR depends largely on the quality of the mediator, arbitrator or expert. The WIPO Center maintains a database of over 1,500 qualified neutrals from 70 countries with further candidates added according to case needs. The candidates on the WIPO List of Neutrals range from seasoned dispute resolution generalists to highly specialized practitioners and experts in the different areas of IP. The WIPO Center assists parties in the appointment of neutrals so that each procedure under the WIPO Rules is decided by neutrals who share the Center’s commitment to time and cost-effectiveness.


The effectiveness of ADR depends largely on the quality of the mediator, arbitrator or expert. The WIPO Center maintains a database of over 1,500 qualified neutrals from 70 countries. (iStockphotos)

The WIPO Center operates on a non-profit basis. Fees for ADR procedures – payable to the Center and the mediator, arbitrator or expert – are calculated in accordance with a schedule of fees based on the amount in dispute and in consultation with the parties and neutrals. The Center believes effective dispute resolution must be affordable and is committed to providing ADR mechanisms that save time and costs.

ADR procedures offered by the WIPO Center

ADR allows parties to solve their disputes outside of court with the assistance of a qualified neutral intermediary of their choice. It affords parties the opportunity to exercise greater control over the way the dispute is resolved than would be possible in court litigation. This increased autonomy can result in a faster process and cost savings, as parties are free to choose the most efficient procedure for their dispute. For instance, they can resolve globally – through a single procedure – disputes relating to the same technology protected by patents registered in several jurisdictions, instead of filing multiple costly court proceedings in all relevant jurisdictions. Other benefits of ADR include flexibility, neutrality, finality, confidentiality and, very importantly, the expertise of the neutral.

WIPO Mediation

Mediation is an informal procedure in which a neutral intermediary, the mediator, assists the parties in reaching a dispute settlement by facilitating dialogue and helping the parties to identify their interests. Unlike an arbitrator or judge, the mediator does not render a decision on the merits of the dispute. Settlements in mediation proceedings are reflected in an enforceable contract between the parties.

Because of its less adversarial nature, mediation is an efficient and cost-effective means of dispute settlement. It allows parties to explore workable and interest-based solutions, to determine the outcome of the procedure according to their business needs, and to preserve the relationship in the long term.

There are two sets of fees for WIPO mediation procedures. First, the WIPO Center’s administration fee, which amounts to 0.10 percent of the value in dispute, up to a maximum of US$10,000 where that amount is US$10 million or more. Where no disputed amount is indicated, as in most cases, the administration fee is US$1,000. Second, the mediator’s fees, which are negotiated at the time the mediator is appointed. Those fees are usually calculated on an hourly or daily basis, at a rate taking into account the circumstances of the dispute, such as its complexity and economic importance, as well as the experience of the mediator. The WIPO Center takes an active role in negotiating reasonable mediator fees. The Schedule of Fees for the WIPO Mediation Rules sets out indicative hourly and daily rates for mediators’ fees. Based on the Center’s experience, WIPO mediation costs average between US$6,000 and US$60,000.

Mediation proceedings are often settled rapidly and therefore minimize the cost exposure normally associated with dispute resolution. In WIPO mediation, 73 percent of cases have settled within one to seven months, including some very complex patent and information technology disputes. Most settlements occur during the mediation phase, consistent with the parties’ intent in using that mechanism and with the role of the mediator, although a certain number of WIPO cases also settle after completion of the mediation. By enabling the parties to identify their interests and better understand the dispute, mediation can provide a sound basis for direct negotiation between the parties after mediation.

WIPO Mediation of a Trademark Coexistence Dispute

A North American company requested mediation in a dispute with two Italian companies and one Spanish company, based on a mediation agreement the parties had reached under the WIPO Mediation Rules. The goal of mediation was to help the parties avoid confusion and misappropriation of their similar trademarks and to regulate future use of the marks.

The Center proposed potential mediators with specific expertise in European trademark law and fluency in English and Italian. The parties selected an Italian mediator with a trademark practice. The mediator conducted an initial telephone conference with the parties’ lawyers, during which he set the timing of mediation and agreed on the procedure.

Two months later, the mediator met with the parties in a two-day session in Milan. The meeting was held in joint session with the exception of two brief caucuses. At the end of the second day the parties – with the assistance of the mediator – drafted and signed a settlement agreement covering all pending issues in dispute. The total cost of mediation amounted to US$15,000.

In light of the undeniable advantages of mediation and the comparatively low costs involved, a number of disputes pending before national courts are being referred to WIPO mediation in order to increase the chances of settlement.

WIPO Arbitration and Expedited Arbitration

Arbitration is a private procedure in which parties submit a dispute to one or more chosen arbitrators for a formal decision based on the parties’ rights and obligations. The award rendered is final and enforceable internationally under the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. Unlike court decisions, which can generally be contested through one or more rounds of litigation, arbitral awards are not normally subject to appeal and can therefore result in time and cost savings.

The cost-effectiveness of arbitration proceedings depends largely on the quality of the arbitration clause and how the procedure is conducted. Statistics show that 82 percent of the costs involved in arbitration relate to the parties’ lawyers fees and expenses in connection with the presentation of their case.1 If well managed, arbitration can save the parties time and money. One option is to use the WIPO Expedited Arbitration Rules. WIPO Expedited Arbitration provides for a sole arbitrator and is carried out in a shortened time frame at reduced cost. The time limits that apply to the various stages of arbitral proceedings are shorter and the fees lower than those related to arbitration conducted under the WIPO Arbitration Rules (as shown in the WIPO Arbitration Schedule of Fees).

Limiting the amount of evidence parties may produce during arbitration also helps to reduce the duration of arbitration proceedings and related costs. In a recent case, a U.S. company that supplies data processing software and services commenced a WIPO expedited arbitration proceeding against an Asian bank, claiming infringement of an agreement regarding the provision of account processing services. The contract between the parties included a WIPO Expedited Arbitration clause, indicating that New York would be the place of arbitration, and that no discovery would be permitted. The parties agreed upon a sole arbitrator who held a two-day hearing. The parties and arbitrator agreed to use the WIPO Center’s electronic case communication facility “WIPO ECAF,” which allows for secure filing, storing and retrieval of case-related submissions in an electronic docket. Three months after the request for expedited arbitration, the arbitrator rendered a final award finding partial infringement of the agreement and granting damages to the U.S. company. The total costs of this expedited arbitration amounted to approximately US$50,000.

Another cost-effective dispute resolution option is to use escalation clauses that provide for a first phase of mediation followed by arbitration or expedited arbitration, or to use mediation at different stages of arbitration in order to maximize the chance of settlement. Parties to WIPO proceedings have elected to use escalation clauses in 20 percent of cases.

WIPO Arbitration cases cover a broad range of disputes, including complex patent licenses, trademark and IT disputes. The amounts claimed range from the thousands to millions of dollars. WIPO Arbitration proceedings generally last from 3 to 14 months.

Other tailored ADR procedures

In addition to administering disputes under standard WIPO mediation and arbitration procedures, the WIPO Center develops tailor-made dispute resolution procedures for specific types of recurrent IP disputes. For example, the Center developed WIPO Expedited Arbitration Rules for AGICOA – a procedure for certain audiovisual disputes – tailored to the specific needs of AGICOA right holders.2

More recently, the WIPO Center launched the WIPO Mediation and Expedited Arbitration Rules for Film and Media, specifically tailored to resolve potential disputes in the film and media sectors, such as those arising out of co-production, distribution, broadcasting, copyright, music synchronization, artist and talent or new media agreements. For such disputes, the Center’s administration fee and mediators’ and arbitrators’ fees have been reduced in order to adapt them to the typical features of the disputes in the relevant sectors.

As shown in the above diagrams, the WIPO Mediation and Expedited Arbitration Rules for Film and Media provide for a mediation procedure and expedited arbitration procedure that can either be combined or used independently at the parties’ discretion. These rules take into account the specific needs of those in the media and film sectors seeking an expedited procedure. The time limits in the WIPO Arbitration Rules that apply to the various stages of the proceedings are shorter in order to expedite the chosen dispute resolution mechanism.

 By Berly Lelievre-Acosta, WIPO Arbitration and Mediation Center
Acknowledgement Ignacio Decastro and
Sarah Theurich, WIPO Arbitration and Mediation Center

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1 “Techniques for Controlling Time and Costs in Arbitration”, Report from the ICC Commission on Arbitration
2 See “Collective Management of Audiovisual Works,” WIPO Magazine 5/2009

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