IP rights: Litigation should be last resort

HIGH-PROFILE patent and trade mark disputes involving Singapore companies have put the spotlight on the use of litigation as the way to resolve intellectual property (IP) cases.

Disputes that have hit the headlines here include a trade mark row involving the exclusive Ku De Ta club at Marina Bay Sands SkyPark, and another between tea company Tsit Wing (Hong Kong) and Singapore- based TWG Tea.

But there is much to weigh up before pursuing a court tussle. Other ways exist of resolving a dispute.

For example, Singapore in April last year introduced the use of "expert determination" in patent proceedings heard by the Intellectual Property Office of Singapore (Ipos).

Under this approach, complex patent issues that are in dispute can be referred to experts in the relevant technical area.

Any company thinking of taking action against a competitor should consider this decision within the larger framework of its product strategies and business models.

For example, is it to stop or delay the launch of a competing product? Is it to secure licensing fees? For some companies, patent cross-licensing agreements can be an attractive proposition.

Google and Samsung, two of the world's most impactful technology companies, have successfully negotiated patent cross-licensing deals with their competitors (and each other) in a bid to increase productivity and eliminate the threat of litigation.

Notably, in January last year Swedish communications technology company Ericsson announced it had reached an agreement with rival Samsung that ended all ongoing related legal disputes between them and included global patent cross-licensing of cellular technologies between them.

Another viable option is R&D collaboration, through which companies bring in external technologies or ideas through joint-venture agreements.

For companies that face a lack of resources, knowledge or market reach, this can lower the cost of driving innovation and accelerate time for a new product to be brought to market.

If a dispute cannot be resolved through such agreements, alternative dispute resolution (ADR) should be considered.

ADR options include negotiations between the parties, mediation where a trusted third party facilitates such negotiations and Ipos' "expert determination" option for patent disputes, where a mutually agreed-upon third party makes a decision on specific technical issues in the case.

Special counsel Dan Collopy and patent engineer Serene Ong of IP firm Spruson & Ferguson note: "With the introduction of this new procedure, it is more encouraging for applicants to acquire and enforce their patents in Singapore, knowing that there is a variety of options parties can pursue in resolving potential disputes."

If litigation is the only option, the next question is where to do so. IP rights are essentially "territorial".

When a party registers a trade mark or is granted a patent in one country, it has rights only within that country.

However, a company may choose to apply for corresponding rights in the countries in which it operates. Consequently, a company with IP rights all over the world may be exposed to multinational IP disputes.

A high-profile example is the patent dispute between California-based Apple and South Korean rival Samsung.

The companies were embroiled in prolonged patent wars in more than eight countries, with each accusing the other of infringing patents for smartphones and tablets.

Last August, they agreed to settle all patent suits outside the United States.

Apart from the strength of the case in each country, deciding where to initiate action involves pragmatic questions such as the location of the target's manufacturing facilities, major markets and assets.

Also, how quickly can a case be heard in a country and what are the remedies (including interim search, stop or freezing orders) which can be obtained?

Once the countries of interest have been identified, it is important to decide where proceedings in those countries should be brought: the courts, the IP office, or possibly the competition or trade authorities.

It will be necessary to identify an officer who will have overall charge of the litigation strategy.

It is advisable to engage an external lawyer to coordinate this strategy, and ensure that consistent positions are taken in all countries.

Consider the recent dispute between the partners of Bali's Ku De Ta beachfront club and its Singapore namesake at the Marina Bay Sands SkyPark.

The Singapore Court of Appeal ruled on Dec 22 last year that the "Ku De Ta" trademarks registered in Singapore should be transferred to the Bali partnership.

These marks had been registered by a company set up by Australian businessman Arthur Chondros, who was one of the partners of Ku De Ta Bali.

In deciding, the Court of Appeal placed considerable importance on statements made by Mr Chondros in Australian proceedings, which showed that he had always viewed and understood the right to use the "Ku De Ta" name as belonging to the Bali partnership as a whole and not just to him alone.

Clearly, inconsistency in positions or actions across different countries may adversely affect proceedings in another country.

Overall, then, companies looking to assert their IP rights must take into account the objectives of their action, and weigh the various routes they can take to achieve their desired outcomes.

Value-creating options such as cross-licensing, R&D collaboration, or alternative dispute resolution should be the foremost considerations, with litigation being the last resort.

stopinion@sph.com.sg

The first writer is a senior legal counsel at the IP Academy, and director of the hearings and mediation group at the Intellectual Property Office of Singapore. The second writer is a legal counsel at Ipos.

This article was first published on March 12, 2015.
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