INTRODUCTION

I encountered a copyright dispute during my internship at an IP law firm. An author and a movie director, once collaborators and friends, found themselves on opposite sides of a courtroom. Observing their unravelled partnership, I couldn’t shake one thought: What if there was a better way? Mediation could have not only resolved their dispute but also preserved their relationship. Mediation provides the parties with space to clear up misunderstandings. Lawyers, now need to adopt Mediation as a viable option, get better at Mediation Advocacy and advise their clients on creating value through mediation.

There are various IP disputes in India which are being referred to and resolved through mediation. In a recent case, Medecins Sans Frontieres International V/S Dharma Productions Private Limited And Ors. (2024), MSF (Medicine Sans Frontiers/ Doctors Without Borders) filed a suit against Dharma Productions for the use of MSF trademark in the movie ‘Jigra’ starring Alia Bhatt. The Delhi High Court, however, has referred the parties to mediation.[i]

THE GLOBAL SHIFT TOWARDS MEDIATION IN IP DISPUTES

At the European Union Intellectual Property Office (EUIPO) Conference 2023, which was held in Spain, one of the panelist judges stated that “There is no IP dispute that cannot be mediated. If the parties want to, they can mediate anything.” After the Conference, in November 2023, EUIPO started a Mediation Centre which will mediate disputes involving Trademarks, Copyrights, Patents, Domain Names, etc. This is just the tip of the iceberg. World Intellectual Property Organisation’s Arbitration and Mediation Centre has established procedures and rules to promote the use of Mediation in Intellectual Property Disputes since 1994.

Moreover, The Singapore Convention on Mediation is a monumental step forward in the promotion of Mediation. It provides for a uniform framework in order to recognize and enforce mediated settlement agreements resolving international commercial disputes. The Convention opened for signature on August 7, 2019, and since then, as many as 57 countries have signed it, including US, China and Singapore (major commercial partners). India, although a signatory, has not ratified it yet.

INDIA’S EVOLVING LEGAL LANDSCAPE

Mediation is not new to India. While its essence is rooted in the tradition of Panchayat system, in modern India, a significant shift in the approach was brought about by the Mediation Act 2023 which institutionalizes and provides a framework for the use and regulation of Mediation in India. At the same time, that is not the only authority that promotes Mediation. According to Section 12A of the Commercial Courts Act, 2015, pre-institution mediation is mandatory in IP disputes. The only exception is when there is an urgent need for interim relief.

Recently, the Himachal Pradesh High Court in Novenco Building & Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Another (2024), refused to hear a patent and design infringement suit citing plaintiff’s non-compliance with the Section 12A mandatory requirement. “This order highlights the need for the courts to develop a precise yardstick to determine what constitutes an ‘urgency’ sufficient to justify an exemption under the above provision.”[ii]

The Court also relied on Yamini Manohar v. T.K.D. Keerthi (2024) which outlined the role of the Court in such cases by holding- “when a plaint is filed under the Commercial Courts Act, with a prayer for an urgent interim relief, the commercial court should examine the nature and the subject matter of the suit, the cause of action, and the prayer for interim relief. The prayer for urgent interim relief should not be a disguise or mask to wriggle out of and get over Section 12A of the CC Act.”

Regarding the practical approach to mediation in IP disputes within the judiciary, landmark cases have shaped its implementation. For example, the case of Salem Advocates Bar Association Tamil Nadu v. Union of India laid down the extent to which mediation can be utilized in disputes including IP matters. Another important case, Afcons Infrastructure Ltd. v. Cherian Varkey Construction Co, led to the development of Model Civil Procedure Mediation Rules. These Rules have been adopted by the Supreme Court and High Courts throughout India, which, in turn, has enhanced the judiciary’s capacity to resolve IP-related disputes.

CHALLENGES W.R.T MANDATORY PRE-INSTITUTION MEDIATION

One of the many challenges raised while implementing pre-institution mediation is that the parties’ intent is not sought before referring the dispute to mediation pushing the parties into ‘forced mediation’. It is also believed by many that not only does this reduce the settlement success and cause delays but also frustrates the foundational principles of mediation. However, it is important to note the difference between making mediation ‘mandatory to start’ versus ‘forcing participation or settlement’ (as discussed here). The former option ensures that parties at least attempt mediation while still keeping the process voluntary at its core. In India, where litigation delays are common, this approach could increase ADR awareness and efficiency, especially in commercial disputes where time and cost savings are crucial.

The second major challenge with mandatory pre-institution mediation is the lack of a clear standard for determining which cases qualify for urgent interim relief. The Supreme Court’s approach in Johnson Paints Pvt. Ltd v. Johnson Paints Co (SLP dismissed) stands in contrast to the Himachal Pradesh HC’s stance in Novenco Building & Industry A/S v. Xero Energy Engineering Solutions Private Ltd. & Another (2024). In Johnson Paints, the Court chose not to intervene when compliance with Section 12A was waived, despite a significant seven-month delay between the suit’s filing and the request for interim relief. The standard for “urgent interim relief” thus remains vague, leading to diverging judicial applications.

A recent example is the copyright battle between Nayanthara and Dhanush, where Netflix challenged Wunderbar’s suit for bypassing pre-institution mediation. On this, the Madras High Court held that urgent interim relief was necessary, citing the following reason: “It is settled law that as long as any infringing material remains on air and for each moment that the material continues to be screened will dilute the rights of the copyright holder and is a continuous cause of action.” Intellectual Property cases almost always have a continuous cause of action, and if courts consistently allow the urgent interim relief, doesn’t that render mandatory mediation ineffective? For this reason, a well-defined framework to balance mandatory pre-institution mediation with urgent interim relief is necessary.[iii]

WHY MEDIATION IS THE IDEAL CHOICE FOR IP DISPUTES

While it is true that the potential of mediation for preventing and resolving IP disputes is not being realized because most owners of Intellectual Property and their lawyers are still relying on traditional means, at the same time, the economic importance of Intellectual Property has grown enormously. Various companies consider their IP as their basic assets. This means that if there are disputes with respect to such IP assets, they are going to interfere with the companies’ daily activities. Moreover, IP assets are used and exploited by companies across multiple borders and therefore, disputes involving such IP assets can span across multiple jurisdictions.[iv] Given that intellectual property disputes are often transnational, mediation, being universal, transcends territorial concerns and serves as a compelling alternative to litigation.

IP disputes can be complex and technical. Mediation allows the parties to appoint a technical expert as a mediator. Additionally, it is a voluntary process where parties can engage in mediation at any time, even midway during litigation proceedings. They can also terminate the mediation at any time, it is very flexible. Moreover, it is a non-adversarial process, allowing the parties to shape the outcomes themselves rather than being imposed on them. Through Mediation, they can even maintain control over the dispute settlement process by upholding the principles of confidentiality and thereby protect their reputations. It often happens that these are shared interests for both the parties when a dispute arises.

It gives the parties a platform to discuss issues outside of the strict legal framework, to explore a wide range of creative and unique solutions suited to their specific needs, some of which, may not be feasible in litigation or arbitration. Mediation is typically less expensive, less time-consuming, and more efficient than litigation, providing a significant advantage. It safeguards sensitive information such as trade secrets from public disclosure, which is impossible in litigation due to open court proceedings. Mediation also helps preserve commercial relationships by fostering cooperation and collaboration, which is particularly valuable in maintaining licensing agreements and other business relationships.

CONCLUSION

Mediation offers a practical and effective alternative to traditional litigation for IP disputes. It brings flexibility, cost-effectiveness, confidentiality, and the chance to maintain relationships, making it an appealing option for those looking for resolutions beyond the courtroom’s constraints. This process has gained acceptance from judges and support from lawmakers. This shows its increasing importance in Indian Courts. It is important to know that mediation is not the best fit in every situation, especially those needing urgent relief or where there is significant power imbalance. However, as discussed above, a well-defined framework to balance mandatory pre-institution mediation with urgent interim relief is necessary. Despite these limitations, mediation is a valuable tool for resolving IP disputes. It offers a constructive path forward for many parties. In this context, I would like to quote Joseph Grynbaum- “an ounce of mediation is worth a pound of arbitration and a ton of litigation!”

I would like to thank Akshat sir for his valuable suggestions on this post.

End Notes:

[i] Bhavini Srivastava, ‘Jigra movie: Delhi High Court orders mediation in trademark row’ (Bar and Bench, December 17, 2024) <https://www.barandbench.com/news/jigra-movie-delhi-high-court-mediation-trademark-row> (Accessed on December 23, 2024)

[ii] Samridhi Chugh, ‘“No Whisper of Urgency”: HP HC Dismisses Infringement Suit for Not Complying with the Mandate on Pre-Institution Mediation’, (SpicyIP, September 04, 2024) <https://spicyip.com/2024/09/no-whisper-of-urgency-hp-hc-dismisses-infringement-suit-for-not-complying-with-the-mandate-on-pre-institution-mediation.html> (Accessed on December 23, 2024)

[iii] Disha Thakkar, ‘Mandatory pre-litigation mediation: The Yamini Manohar paradigm shift’, (Bar and Bench, December 11, 2024) <https://www.barandbench.com/columns/mandatory-pre-litigation-mediation-the-yamini-manohar-paradigm-shift> (Accessed on February 07, 2025)

[iv] WIPO, ‘Resolving IP Disputes through Mediation and Arbitration’, (WIPO Magazine, April 14, 2006) <https://www.wipo.int/wipo_magazine/en/2006/02/article_0008.html> (Accessed on December 23, 2024)

This article was first published on IPRMENT LAW