Posts Tagged: "arbitration"

In commercial contracts, especially with foreign entities, it is very common to agree on arbitration as a dispute resolution method. A typical arbitration agreement specifies arbitrable matters, arbitration institution, place of arbitration, and arbitration rules. In crafting an arbitration agreement, especially when the arbitration clause is embedded in the main body, contracting parties normally write into the contract the applicable law and dispute resolution authority for the main contract, but rarely do the same for the arbitration agreement itself in addition to the main contract. In general, if a dispute involves issues surrounding the validity (or arbitrability) of an arbitration clause, whereas the arbitration agreement does not provide anything about arbitrability, two questions may come up in practice: (1) what is the applicable law on resolving the arbitrability issue? (2) who has jurisdiction over the arbitrability issue – a court or an arbitration institution?

On November 12, the United States Court of Appeals for the Federal Circuit (CAFC) affirmed the decision of the U.S. District Court for the Northern District of California that compelled arbitration and dismissed Rohm Semiconductor USA’s declaratory judgment action without prejudice, holding that an arbitrator must determine arbitrability. In 2007, Rohm Japan and MaxPower Semiconductor entered into a technology licensing agreement (TLA). According to the TLA, Rohm Japan and its subsidiaries were permitted to use certain power-related technologies of MaxPower developed under a Development and Stock Purchase Agreement in exchange for royalties paid to MaxPower. In 2011, the TLA was amended to include an agreement to arbitrate “any dispute, controversy, or claims arising out of or in relation to this Agreement or at law, or the breach, termination, or validity thereof.” Further, the amendments provide that arbitration must be conducted “in accordance with the provisions of the California Code of Civil Procedure (CCCP).”

The U.S. Court of Appeals for the Federal Circuit (CAFC) today issued an order denying MaxPower Semiconductor, Inc.’s appeal and Petition for Writ of Mandamus with respect to the Patent Trial and Appeal Board’s (PTAB’s) decisions to institute ROHM Semiconductor USA, Inc.’s petitions for four inter partes review (IPR) proceedings of MaxPower patents. The five-page Order was authored by Judge Reyna over a 17-page partial dissent by Judge O’Malley. The majority first explained that a decision to institute IPR is non-appealable under 35 U.S.C. §314(d), which plainly “confirms the unavailability of jurisdiction” for the CAFC to hear the direct appeals. Section 314(d) also presents a challenge to the mandamus petition, said the court, because MaxPower did not meet the criteria necessary to invoke the “collateral order doctrine.”

In over 40 years of handling trade secret disputes, I have seen plenty of “successful” results, but never a time when my client said, “Gee that was fun; let’s do it again!” They may tell me they’re happy with the outcome, but hey, I know that it also feels good to stop hitting yourself with a hammer. It’s a fact that more than 90% of trade secret cases settle without a trial. But too often those settlements only happen after years of litigation. There are ways to make that process less painful, and in an earlier article we looked at the advantages and limitations of arbitration and private judging as means to recapture some amount of control over the dispute. But unless the parties already had an arbitration agreement before the problem arose, one of them will probably see an advantage to playing it out in court….This is precisely why that other form of alternative dispute resolution, mediation, is the perfect method for resolving trade secret disputes.

Chief Judge McMahon, in deciding the defendant’s motion to compel arbitration, ruled the arbitration clause did not prevent Jedi from accessing the federal district court and refused to compel arbitration. “The fact that Mr. Haan signed up for SCRUFF is insufficient to conclude that his actions bound Jedi to Perry’s TOS,” McMahon wrote. “For there to be an agreement to arbitrate, there must be evidence that Jedi (not Haan) knowingly agreed to Perry’s TOS and the arbitration clause contained within it. Since Jedi never signed up for SCRUF, there must be evidence that Jedi authorized Haan to assent to the clause on its behalf.”

Alternatives to patent litigation are desirable now more than ever. Arbitration can help to resolve patent disputes more easily than the much more complex, expensive and timely endeavor of Patent Trial and Appeal Board (PTAB) proceedings. Patent litigators must deal with an overly complex Inter Partes Review (IPR) system as a result of the Supreme Court’s SAS Institute v. Iancu (138 S. Ct. 1348 2018) decision, new amendment process, and evolution of the “broadest reasonable interpretation” standard. Costly and complicated PTAB proceedings and a lengthy appellate process make arbitration an appealing option to obtain a patentability ruling in a streamlined manner. Below are the top 10 reasons that arbitration can be a better route to follow than an IPR or other PTAB proceeding.

It’s a challenge to resolve business disputes when emotions run high, which includes almost all trade secret cases. So, I was especially pleased when, in a hard-fought litigation where I had been appointed as a “referee” to resolve discovery disputes, both lawyers eventually reached out to tell me how much they appreciated my involvement in the case, which had settled. What was it about this variation on typical legal combat—where a private party is selected to rule on some important aspects—that they found so satisfying? First, they had saved their clients a lot of time, and probably money, compared to the cost of dealing with unpredictable court calendars. And second, they felt that the decisions they received were thoughtful, balanced and practical, reflecting an understanding of the relevant business environment.

On Friday, January 19th, a magistrate judge in the District of Delaware entered a memorandum opinion ordering Cornell University to enter into arbitration proceedings to resolve a dispute with licensee Life Technologies Corporation. The dispute arises out of a patent infringement case in which both parties are plaintiffs after Cornell felt that it was fraudulently induced into a settlement agreement with Life Technologies and Illumina, Inc., the defendant in the case.

Uber Technologies, Inc. and Ottomotto LLC (“Uber”), appealed the district court’s order, denying Uber’s motion to compel arbitration of pending litigation with Waymo, LLC (“Waymo”). Levandowski, a former employee of Waymo, was an Intervenor in this case. Uber sought to compel arbitration on the basis of Waymo’s arbitration agreement with Levandowski, not because of any arbitration agreement with Waymo.

The Supreme Court of Canada has just released a decision (Douez v. Facebook, Inc., 2017 SCC 33) that provides a framework for assessing the enforceability of forum selection clauses. The decision continues the trend of affording protection to consumers in the face of considerations of uneven bargaining power in un-negotiated online contracts referred to as “contracts of adhesion”… A few years ago, Facebook released an advertising product that used the name and picture of Facebook users, allegedly without their consent. BC’s Privacy Act offers a cause of action for breach of privacy rights. The Plaintiff in this case sought to adjudicate the alleged infringement of her privacy rights in BC courts (as part of a class action comprising Facebook users).

Oracle and Parallel Networks settled that arbitration in January 2013. So, more than four years after Jenner & Block lost the Oracle case and abandoned its client, they received nearly $500,000 in additional contingency fees from Parallel Network’s settlement with Oracle – despite the fact that they were not representing Parallel Networks when this January 2013 settlement with Oracle was negotiated and concluded (in point of fact, in January 2013 Jenner & Block was suing Parallel Networks in arbitration). While arbitrator Jerry Grissom’s rationale for awarding millions of dollars to Jenner & Block in contingency fees under his “interpretation” of the CFA is absurd, his acceptance of Jenner & Block’s “just cause” excuse which allowed Jenner & Block to abandon Parallel Networks and still retain a right to get paid, is truly bizarre.

The Court determined that the scope of the arbitration provision did not cover the intellectual property claims before the district court because the arbitration provision only covered the obligations established by the Agreement (the promotion of the plaintiff’s products).

BlackBerry Ltd (NASDAQ:BBRY) announced that it had reached an agreement with San Diego, CA-based semiconductor designer Qualcomm, Inc. (NASDAQ:QCOM) to resolve arbitration proceedings over tech royalty payments made between the companies. Terms of the agreement involve Qualcomm paying BlackBerry a total of $940 million to account for net royalties due to BlackBerry during 2016’s calendar year and 2017’s first quarter. The announcement indicates that the payment were to be made before or on May 31st.