Arbitrability of IP Disputes in Singapore.

Introduction: 

The strength of intellectual property rights is based on how well they can be enforced. Particularly when parties from different jurisdictions are involved, disputes involving intellectual property rights are increasingly being addressed through arbitration as a private and confidential process in this context. Arbitration may be more able than court litigation to deal with some particular characteristics of intellectual property disputes.

The question of arbitrability, or whether the subject matter of a dispute may be settled through arbitration, has historically been raised by the arbitration of various IP disputes. It was proposed that disputes involving Intellectual rights, including patents, provided by national authorities should be resolved by a public body acting within the national system.

However, it is now widely accepted that disputes over intellectual property rights can be resolved by arbitration, just like disputes over any other type of privately owned rights. Any right that a party can dispose of through settlement should, in theory, also be capable of being the topic of arbitration as arbitration is founded on party agreement, just like a settlement. Due to the arbitration being a consensual procedure, any awards rendered will only be enforced against the parties that took part in it; they will not, however, have any effect on other parties.

A variety of conflicts may arise in relation to IP rights. Conflicts over intellectual property arise when someone uses it without the owner's permission. Ownership disputes arise when there is disagreement over who is the actual owner of the intellectual property. Validity conflicts happen when parties differ on whether an IP right is real or was unintentionally granted. Licensing issues occur when an agreement to license IP rights is breached.

The passage of the Intellectual Property (Dispute Resolution) Bill in August 2019 clarified the arbitrability of intellectual property rights ("IPR") issues in Singapore by amending both the Singapore Arbitration Act ("AA") and the International Arbitration Act ("IAA"). The updated regulations become effective on November 21, 2019.

Sections 26B of the IAA and 52B of the AA both expressly provide that the subject of an IPR dispute is subject to arbitration.

The recently revised AA and IAA define "IPR" to mean a variety of IP-related rights, including but not limited to patents, trade names, registered designs, and copyrights. To provide for the possibility of introducing new types of IPRs as they could evolve in the future, the list was purposely left unfinished.

An IPR dispute is defined to include:

• a dispute over the enforceability, infringement, subsistence, validity, ownership, scope, duration, or any other aspect of an IPR;

• a dispute over a transaction in respect of an IPR; and

• a dispute over any compensation payable for an IPR.

It is made clear by the updated AA and IAA that the arbitrability of IPR issues would not be lost just because legislation from Singapore or another country: I designate a specific entity as having jurisdiction over the IPR dispute, and (ii) includes no reference of a prospective arbitration resolution.

A third-party licensee or third-party holder of a security interest in respect of the IPR (or any person claiming through or under the same) is not regarded by the revised AA and IAA as a party to the arbitral proceedings with regard to the enforcement of arbitral awards, nevertheless.

The judgment upholding the award cannot, therefore, be relied upon by such parties; only the parties themselves or those bringing claims on their behalf may do so. In other words, the judgment exclusively binds the parties (in person) and does not apply to third parties.

Due to changes made to the AA and IAA, Singapore now formally recognizes the arbitrability of IPR disputes. This marks a substantial break from the antiquated notion that IPR issues can only be resolved by national authorities or national courts. This increases the attraction of arbitration as a means of resolving IP issues and inevitably raises Singapore's profile as a preeminent international arbitration hub.

The arbitral awards made under the same will only continue to be binding on the parties and not third parties, which means that there is still a restriction on the arbitrability of IPR issues notwithstanding the statutory amendments.

Despite the aforementioned limitations, the explanations provided about the arbitrability of IPR issues are a positive step. Particularly the AA and IAA revisions will provide flexibility to take into account different IPR types in different jurisdictions and any new IPR kinds or IP-related issues that may occur in the future.

Conclusion:

One of the key changes to the IP dispute resolution structure is the establishment of a specialized track for IP dispute litigation. This fast-track option is intended for plaintiffs who might lack the resources to file a High Court complaint or for whom it might not be practicable to pursue the case throughout the duration from a financial standpoint. Parties might anticipate expedited procedures and cost-saving measures when the track is introduced in due time. Overall, the Act streamlines the processes for owners to enforce their IP rights while offering inexpensive ways for third parties to file lawsuits. The knowledge that their rights have been carefully considered and confirmed to be robust and valid will provide patent owners peace of mind.