In May 2012, the Singapore government had convened an IP Steering Committee to formulate a master plan to assist Singapore’s development as a global IP Hub in Asia. The IP Steering Committee, chaired by Mr Teo Ming Kian, Chairman of MediaCorp Pte Ltd, submitted the Intellectual Property Hub Master Plan (“Master Plan”) to the government in March 2013.

On 1 April 2013, the Government formally accepted the Master Plan. The Master Plan identifies three strategic outcomes which Singapore ought to target to achieve:

(i)                   a hub for IP transactions and management (Strategic Outcome 1);

(ii)                 a hub for quality IP filings (Strategic Outcome 2); and

(iii)                a hub for IP dispute resolution (Strategic Outcome 3).

Olswang Asia’s Managing Partner Rob Bratby has set out a fuller summary of the Master Plan as well as his take on the ambitious nature of the plan.

Hub for IP Dispute Resolution

In line with the nature of this blog, this post will focus primarily on Strategic Outcome 3.

The strategy identified by the Master Plan to effect Strategic Outcome 3 is to “[d]evelop Singapore as a choice venue for IP dispute resolution, through a Strong IP Court and deep IP alternative dispute resolution capabilities” (see page 2).

In respect of IP litigation, the Master Plan proposes that,

“Singapore is in good stead to position itself as a choice location for IP dispute resolution, given its international reputation for quality judgments and efficiency of its Courts. Singapore should raise international awareness of its IP Court and IP Judges to attract more IP litigation cases to Singapore. In addition, given the degree of complexity of IP cases, the efficiency and adjudication function of the IP Court can be strengthened even further, through the adoption of a specialised IP docket (or case management system) and more active appointments of assessors and amicus curiae.” (see paragraph [12] of the Executive Summary)

The Master Plan also states in respect of ADR for IP disputes that,

“Singapore should also promote the use of alternative dispute resolution (ADR) routes, including arbitration, mediation and expert determination, to resolve IP related disputes, particularly contractual and licensing disputes. We should establish a panel of top, international IP arbitrators in Singapore to enhance the international profile of Singapore’s IP ADR capabilities and attract more IP-related ADR cases to Singapore. Greater publicity of Singapore’s IP ADR capabilities should also be undertaken, in close collaboration with the various ADR institutes in Singapore such as the World Intellectual Property Organisation Arbitration and Mediation Centre (WIPO AMC) and Singapore International Arbitration Centre. (SIAC). Singapore as the venue for ADR should be actively promoted and, where practicable, included in IP-related contracts.” (see paragraph [13] of the Executive Summary)

The Master Plan identifies two important trends for IP disputes. First, IP disputes are on the rise globally. Second, ADR for IP disputes is “gaining traction, albeit slowly” (see Chapter 5, paragraphs [5.1.1] to [5.1.3]). While acknowledging the territorial nature of IP, the Master Plan states that “Singapore should also aim to position itself as a preferred choice for the arbitration of disputes involving IP that is not registered in Singapore” (see paragraph [5.1.5]).

On this point, the Master Plan points to the strong economic growth in China, India and the ASEAN region as reasons for the increasing usage of ADR (arbitration, mediation and expert determination) to resolve disputes in general. The strengths of ADR identified by the Master Plan at paragraph [5.3.5] are those that readers of this blog would be familiar with. These include:

(i)               A single forum to resolve multi-jurisdictional disputes (especially in complex cross-border contractual arrangements);

(ii)              Avoiding the complexities of different local legal systems;

(iii)     Cross-border enforcement through the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards; and

(iv)             Significant cost savings where ADR is well-managed.

At the same time, the Master Plan rightly notes that the use of ADR in respect of IP disputes (especially validity and infringement issues) is still relatively uncommon because of a number of factors (see paragraph [5.3.3]).

• Uncertainty over the arbitrability of IP disputes, particularly disputes involving IP validity, and the corresponding uncertainty of the enforceability of arbitral decision of such disputes, across different jurisdictions.
• Conventional preference and familiarity of parties of using litigation to resolve IP-related disputes. This could be due to IP being territorial in nature.
  • Companies may favour going to Court depending on their international business strategies, for example to seek immediate injunctions on their competitors.
  • In most jurisdictions, the finality of an arbitral award limits the scope of appeal. Parties may prefer litigation due to the ability to appeal a court judgment.
• Lack of a contractual relationship between parties to IP disputes. More often than not, IP infringement disputes occur between parties without any prior contractual relationship.

Notwithstanding the difficulties identified above, the view of the IP Steering Committee is that companies “could increasingly turn to ADR avenues to resolve contractual and licensing-type disputes, especially those cross-border in nature…” (see paragraph [5.3.6]).

Conclusion

We are heartened that the Master Plan identifies the issue of the arbitrability of IP disputes. One of the main obstacles to the use of arbitration to resolve IP disputes involving infringement and validity of patents is the uncertainty as to whether (and if so, the extent to which) such IP disputes are arbitrable to begin with, that is, whether they are capable of being subject to arbitration. The difficulty with this is that until such issues are adequately resolved (and not just locally, but we would argue also internationally), then there is always a danger that any arbitral award arising out of such a dispute will be open to challenge.

In the United States of America, this issue has been resolved through a statutory provision which permits the voluntary arbitration of patent disputes, including question of infringement and validity of the patents in issue. However, such an approach has not been broached in the Master Plan. These are other issues will, no doubt, be explored and further discussed as Singapore takes the first steps to increase the role and prominence of IP related arbitrations and other forms of ADR here.