Autumn Conference 2021: day two round up

15th Oct 2021

How to break a deadlock in a mediation and the key tools to reach a settlement were important take aways from the concluding day of our Autumn Conference

Denise MacFarland speaking.jpg

Our delegates and speakers shared their expertise and enthusiasm across a variety of subjects, inspiring and engaging the industry once again.

Mediation 

“Mediation offers parties full control over the method in which their dispute will be submitted and the outcome of the process,” Tom Cadman from the Chartered Institute of Arbitrators told our delegates.

As mediation is a non-binding procedure, meaning that those involved do not need to continue after the first meeting.

It also means that a decision cannot be imposed upon the parties – it must be agreed by those involved. 

Tom suggested that mediation is a useful alternative to resolving a dispute where any of these are priorities of either or both of the parties:

  • Minimising cost exposure
  • Maintaining control
  •  A speedy settlement 
  • Confidentiality 
  • Preservation or development of a business or commercial relationship (e.g. licence, distribution agreement, or research and development contract). 

Experienced mediator Guy Tritton, from Hogarth Chambers, told delegates that “out of the box thinking is very important to a successful mediation.”

He shared two ways that a mediator might try to break a deadlock. 

1. Risk analysis

Where the mediator gets the parties to look at their best and worst case scenarios if no settlement is reached and the matter goes to trial. 
“The mediator will try to reorientate the parties from thinking that they are conceding hugely if they are, for example, not accepting £150k in damages and costs and just accepting £25k,” he said. 

2. Focus on the interest of the parties 

“Once you identify the interests [of the parties], an agreement can be reached fairly quickly. 

“For example, it may be in the interests of both parties that the defendant enters into a licence agreement with quality controls that prevent reputation loss,” said Guy.   

“Mediation is a great option, but not the only option,” Denise McFarland from Three New Square suggested to our delegates. 

Early neutral evaluation (ENE) is an alternative way of resolving disputes.

Compared to facilitative mediation, ENE involves an independent party expressing a merits-based option about the dispute. 

Commercial benefits of ENE include: 

  • Assisting with identification of the issues 
  • Speed
  • Focus point for the minds and realities of the parties 
  • Facilitate a realistic starting point to explore arbitration mediation 

A full article on this panel discussion will be published shortly. Mediation will also be explored in more depth at our Live Mediation Seminar in November

Settlement agreements in IP disputes

Dr. Brian Whitehead explored the practicalities of executing a settlement agreement, and identified ways to ensure that the agreement is watertight.

He shared three key tools that can be used to achieve settlement: the without prejudice rule, subject to contract, and part 36 offers. 

While all three are powerful and can be used to significant effect, Brian said he finds part 36 offers to be “useful when the parties are largely in agreement on there is infringement, but very far apart on damages. For example, where there’s a claim for damage to reputation or a claim for damages to lost sales whereas the defendant maintains that it should be on a royalty basis”.

He then went on to discuss the formal requirements of an agreement. This included consent orders: if proceedings have already been issued, either a Tomlin order or a standard order is required.

It is also crucial to consider the clauses bespoke to the contract, including delineating what is and isn’t included in the contract, if there are any claims already in existence and the parties’ obligations to one another.

On the topic of boilerplate clauses, Brian commented that “it’s very easy and tempting, because they are a standard block of text, to treat them as unchanging. This is, perhaps needless to say, a mistake”.

It’s important to review these clauses each time to ensure that they are necessary in the specific contract and that they don’t require adaptation.

Finally, Brian shared his ten key areas to take into account, and shared a case study to demonstrate the potential for enforcement rights to degrade over time.

EU case law update

Dr. Frederik Thiering from Bird & Bird touched on ten significant EU judgments from the past year, providing an overview of key developments.

In Ardagh vs EUIPO, the applicant attempted to file the sound of a can opening, followed by a second of silence and a nine second “tingling” noise.

This was rejected because the audio file submitted was not sufficiently unique to the product, and was a functional aspect rather than a distinct feature.

It also did not ‘depart significantly from normal customs’. The applicant appealed again, but this led to confirmation that the sound did not have recognition value.

He also explored Achtung! vs EUIPO. This mark was rejected due to the fact that “Achtung” is simply the German for “attention”.

The applicant claimed that it can also have other meanings, like referring to appreciation or respect, but the judge established that the inclusion of the exclamation mark specifies that it should be read as “attention”. 

The mark would therefore be perceived as an advisory or advertising message, not as a specific slogan.

Commenting on Oatly vs EUIPO, Dr. Frederik noted that the inclusion of the word “but” in the slogan “like milk, but made for humans” calls into question the notion that dairy milk is a normal thing for humans to consume.

This sets off a cognitive process in the mind of the consumer, building recognition between the statement and the brand.

Read the round up from day one of the conference here.