Peter “Bo” Rutledge, a professor at the University of Georgia School of Law and an arbitration law specialist, spoke at the North Carolina Journal of International Law & Commercial Regulation Symposium on Friday, January 27, on the complexities of intellectual property in international business. He argued that in the context of a private investor-state relationship, arbitration provides the medium to address competing interests—for example, a patent holder’s interest in the property rights of his/her product and the state’s interest in protecting its citizens while maintaining a stable financial status. He also pointed out the shortcomings of compulsory licenses, demonstrating that compulsory licenses do not equally speak to each party’s interests. The compulsory license favors the state because it compels the patent holder to hand over the product to the state which in turn, leaves very little incentive for patent holders to continue to submit inventions and products for a patent. The bilateral investment treaty, on the other hand, provides incentive to arbitrate if a dispute arises and neither country can engage in expropriation. Christopher Gibson also touched on many of the issues in his article, A Look at the Compulsory License in Investment Arbitration: The Case of Indirect Expropriation.
I think it is apparent that both are correct in suggesting that arbitration may be the best way to resolve the competing interests in investor-state relationships involving intellectual property. Arbitration would allow the investor to bring a claim directly. Claims are very rarely being brought in this context because arbitration is a mechanism against the state. Nevertheless, arbitration can prove to be a viable, and attractive option because it balances the interests of both parties, costs less than litigation, and is expedient as well as flexible. Additionally, as Rutledge noted, arbitration can be leveraged, and neither party wants to “pull the trigger.” Rutledge suggested that this leverage may be the most beneficial aspect of arbitration in the investor-state dispute context because it prevents disputes from going too far and allows for parties to attempt to settle their disputes before “pulling the trigger” and deciding to arbitrate. I also tend to agree with him on this point—while arbitration may rightly be a great option to balance competing interests in the investor-state disputes, it would be even more appealing if the parties settled their disputes and did not have to resort to arbitration at all.
 Christopher S. Gibson, A Look at the Compulsory License in Investment Arbitration: The Case of Indirect Expropriation, 25 Am. U. Int'l L. Rev. 357 (2010).
Posted by Melody B. Rowell on Thu. March 1, 2012 11:34 AM
Intellectual property, International Dispute Resolution