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The Federal Circuit Court of Appeals Advocates Arbitration in US Patent Cases

Saturday, December, 29, 2012


In 2012, the Federal Circuit Court of Appeals reaffirmed its strong advocacy of arbitration as a form of binding alternative dispute resolution.  This is especially true in disputes arising from patent and licensing issues, since an arbitration agreement on the forefront allows both parties to set the ground rules for resolution of any dispute that might arise between them.  Not only does this show foresight and a willingness to work together to resolve issues fairly and quickly—it shows that both parties are willing to trust the expertise of an neutral, third-party arbitrator if a dispute situation arises. 

An arbitration agreement gives businesses and individuals more leverage in setting the rules regarding the sale of a product, indemnity agreement, or patent license.  These rules can be structured in such a way as to satisfy all parties involved in case a future dispute arises, whether it is related to infringement, indemnity, or licensing dispute. 

Additionally, arbitration proceedings are given precedence over U.S. District Court proceedings if there is an arbitration clause that has been signed by both parties when entering into a contract or agreement with each other.  Arbitration rulings and clauses are enforced by Federal law and State law, and most cannot be appealed, except in extreme circumstances. 

The best thing about arbitration is that it doesn’t include the baggage of litigation, including crowded dockets, a distracted judge and a jury who might not be familiar with the intricacies patent law.  If the contract is solid, arbitration concerning the contract should be just as solid, and the outcome will be just as binding as if the parties had taken the case to the courts. To lower your risk of having a bad experience with patent arbitration, it is important to seek out a patent arbitrator who has experience in the area of patent law and has solid rules for conducting arbitration proceedings.