The theme of the second panel at the Schiefelbein Global Dispute Resolution Conference was Pharmaceuticals & Life Sciences Disputes.  The panel was moderated by Jonathan Fitch, of Fitch Law Partners LLP in Boston, MA.  The panelists were:

• Steven M. Bauer, Mediator, Arbitrator, and Special Master of JAMS (Boston, MA)
• James P. Mr. Duffy IV, Reed Smith LLP (New York, NY)
• Grant L. Kim, LimNexus LLP (San Francisco, CA)
• Dorothee Schramm, independent arbitrator (Geneva, Switzerland)

The panel started with a discussion about the arbitrability of patents. Dr. Schramm emphasized that the most problematic areas of patent arbitration would likely be patent entitlement, particularly patent validity in different states. Dr. Schramm mentioned that there are three groups of states when it comes to patent arbitration. The first group she refers to as “liberal countries,” in which courts will recognize an arbitral award regarding patent validity, ownership, and registration.  Mr. Kim stated that Hong Kong and Singapore are firmly established in the liberal group, and they do not differentiate the country of registration in this regard. According to Dr. Schramm, most countries belong to the second group, in which patent disputes are arbitrable, but the outcome is only binding between the parties. Mr. Kim observed that the United States is in this group. Dr. Schramm described the third group as the “group of strict countries,” in which patent arbitrations are not recognized or are subject to strict restrictions. Mr. Kim asserted that China is likely in this group. To circumvent the non-arbitrability of patents, Dr. Schramm advised drafting the contract such that it addressed those concerns in advance, with special regard to the country where enforcement will be sought.

The panel generally agreed that arbitration was more beneficial in the IP field than litigation. Mr. Kim stated, for example, that in arbitration parties may choose arbitrators with relevant knowledge of the field and it is cheaper than litigation. Dr. Schramm emphasized the increased speed of arbitration over litigation. She also stated that one of the pros of arbitration is the fact that it does not have a foreign blocking statute for evidence. Mr. Bauer and Mr. Duffy agreed that private litigants tend to prefer faster dispute resolution, and arbitration provides that. However, Mr. Kim cautioned that jurors tend to favor inventors, and inventors sometimes prefer litigation thinking they will have better odds than in arbitration.

The panel concluded with Mr. Bauer and Mr. Duffy expressing their views on long-term collaboration agreements in the fields of pharmaceuticals and life sciences. Mr. Bauer and Mr. Duffy agreed that because of necessary collaboration in the field, parties may wish to resolve disputes quickly. However, they disagreed about the specific modalities for resolving those disputes. Mr. Bauer advised that the International Chamber of Commerce (ICC) has a dispute resolution body that helps companies overcome their disputes. Mr. Bauer emphasized that most of the rules of alternative dispute resolution that are being tried in the life sciences industry are generally from the construction industry where a similar collaborative environment exists. However, despite the success the ICC had in the construction field, Mr. Duffy did not think ICC rules were completely implemented in the pharma and life sciences field. Mr. Duffy considered emergency arbitration a better tool for alternative dispute resolution. Mr. Duffy warned that if a case goes to litigation, it would likely be costly and long-lasting. In contrast, Mr. Duffy worked on a complex arbitration that was resolved via an emergency arbitration in only fourteen days.