WIPO spring cleans its Arbitration Rules

In the growing world of new technology, intellectual property (IP) rights are a businesses' most precious asset. The expansion into emerging markets can offer a multitude of opportunities for a business to market its IP, but this inevitably comes with the threat of infringement of those IP rights and illegal exploitation by others.

HSF is seeing a growth in international arbitration in the sector as companies are continually seeking stronger ways in which to protect and enforce their IP rights on a global scale. Arbitration is increasingly a preferred forum for resolving IP disputes, not only because it offers a private and confidential forum in which to have the dispute heard by an experienced and specialised tribunal, but also because international arbitration offers the best available mechanism for enforcement of decisions across jurisdictions, and reduces the risk of parallel litigation which often comes hand-in-hand with IP disputes.

Given the nature of IP rights, their enforcement and protection requires careful planning. It is recommended that, from the outset, parties consider carefully the arbitration forum in which they might want their disputes resolved and the rules that will govern that process. Although numerous institutional arbitration rules may be used in such disputes, specialist rules like the Arbitration Rules of the World Intellectual Property Organisation (WIPO)¹ provide a forum tailor-made for IP disputes.

The WIPO Center has updated its Mediation Arbitration and Expedited Arbitration Rules, with the new rules taking effect on 1 June 2014. The key changes, including new provisions on joinder, consolidation and the availability of interim relief from an emergency arbitrator, are set out below. Further to the changes, the Center's Arbitration Rules provide a modern framework for the resolution of IP disputes.

The WIPO Center was created in 1994, but most of its 350 mediation, arbitration and expert determination cases have been instituted in recent years. Given this growth, the Center has been keen to ensure that its Rules reflect current practice and, this year, has updated its Mediation, Arbitration and Expedited Arbitration Rules to take into account developments in international arbitration best practice, including the 2010 revision of the UNCITRAL Arbitration Rules. The amendments are designed to enhance rather than alter the procedural framework laid down by the previous Rules, which were last updated in 2002, and are a welcome enhancement of WIPO arbitration. We set out the key amendments below.

• In the interests of facilitating the increasing caseload of multi-party arbitrations, the 2014 Rules introduce new provisions on joinder and consolidation.
  • Joinder – New provisions on joinder have been inserted into the 2014 Arbitration Rules and 2014 Expedited Arbitration Rules at Articles 46 and 40 respectively. These allow for the Tribunal to join additional parties to the arbitration subject to the consent of all the parties and the joining party (the joining party must also agree to the appointment of arbitrators if already made). Requests for joinder should be addressed together with the Request for Arbitration or Answer to Request, although a party that gains knowledge of circumstances relevant for joinder at a later stage of proceedings has 15 days from acquiring that knowledge within which to make a request. In deciding whether to make a joinder order, the Tribunal will consider all relevant circumstances, including the stage reached in the arbitration.
  • Consolidation – Article 47 of the 2014 Arbitration Rules and 41 of the 2014 Expedited Arbitration Rules now allow for consolidation of a new arbitration with existing arbitration proceedings, subject to agreement of all the parties and the Tribunal, in circumstances where the subject matter in dispute in the new and pending proceedings is substantially related or involves the same parties. All relevant circumstances will be taken into account in the consolidation, including the stage reached in the pending arbitration. 
• Appointment of arbitrators in multi-party scenarios – The language of Article 18 of the Arbitration Rules, which provides for the appointment of arbitrators in multi-party cases, has been streamlined and includes additional flexibility. The revised 2014 Arbitration Rules provide that, in the event of default of joint appointment by the Respondents, the Claimant/Claimants' nomination does not automatically fall away, but the Center may now appoint one or both side's arbitrators (the presiding arbitrator to be nominated by the two arbitrators so appointed). In addition, the parties are no longer required to expressly exclude the application of Article 18 in their arbitration agreements. 
• Extension of the "list-procedure" – The procedure established by Article 19 of the Arbitration Rules by which the Center appoints the sole or presiding arbitrator where such appointment has not been made by the parties – the so-called "list procedure" – has been extended and is now available in expedited arbitration and mediations (Article 14(b) of the 2014 Expedited Arbitration Rules and Article 6 of the 2014 Mediation Rules). 
• Mandatory preparatory conference – The preparatory conference suggested in Article 47 of the previous Arbitration Rules has been made a mandatory stage of the proceedings under Article 40 of the 2014 Arbitration Rules and 34 of the 2014 Expedited Arbitration Rules, reflecting the time and cost efficiencies that are garnered from the holding of such conferences. The preparatory conference must be convened within 30 days of the constitution of the Tribunal and should encourage the Tribunal and parties to consider any appointment of independent experts at this stage.
• Emergency arbitrator – Under Article 49(b) of the 2014 Arbitration Rules or 43(b) of the 2014 Expedited Arbitration Rules, parties now have the ability to seek interim relief from an emergency arbitrator prior to the Tribunal being established. Applications for emergency interim relief are made to the Center which will normally appoint a sole emergency arbitrator within 2 days. If arbitration is not commenced within 30 days from the start of the emergency relief proceedings, those proceedings will be terminated. Any interim measure ordered by the emergency arbitrator may be modified or terminated by the emergency arbitrator or the Tribunal, once established. This addition to the 2014 Arbitration Rules and 2014 Expedited Arbitration Rules does not deprive the parties of their ability to seek urgent relief from a national court, but is designed to fill the void in situations when a party cannot wait for the Tribunal to be appointed. The provisions will only apply to Arbitration Agreements entered into on or after 1 June 2014, unless the parties agree otherwise.

The 2014 WIPO Mediation, Arbitration and Expedited Arbitration Rules entered into effect on 1 June 2014 and will apply to all WIPO mediations, arbitrations and expedited arbitrations commenced on or after that date (with the exception of the provisions on emergency relief as set out above). The Center has also updated the Expert Determination Rules which will come into effect on the same date.

For further information, please contact Nicholas Peacock, Partner, Anna Wren, Senior Associate, or your usual Herbert Smith Freehills contact.

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¹ WIPO is a global forum for intellectual property services, policy, information and cooperation. It was established in 1967 as a self-funding agency of the United Nations and has 187 member states. The WIPO Arbitration and Mediation Center (the Center) was established in 1994 to administer mediation, arbitration, expedited arbitration and expert determination cases under the WIPO Rules.