By Brian D. Edmonds
February 4, 2010
What is Mediation?
Mediation is a form of alternative dispute resolution (ADR) that can most simply be defined as “facilitated negotiation.”[i] The Ontario Rules of Civil Proceduredescribe it as a process wherein “a neutral third party facilitates communication among the parties to a dispute, to assist them in reaching a mutually acceptable resolution.”[ii] That neutral’s job is “to assist the parties to generate, evaluate and negotiate settlement options.”[iii]
Mediation can be more fully defined “as the process by which the participants, together with the assistance of a neutral person or persons, systematically isolate disputed issues in order to develop options, consider alternatives, and reach a consensual settlement that will accommodate the parties’ needs.”[iv]
New Ontario Rules as of January 1, 2010
The Law Society of Upper Canada’s Rules of Professional Conduct impose the following obligation on Ontario lawyers:
The Canadian Bar Association’s Code of Professional Conduct contains a similar requirement.[vi]
The majority of intellectual property (IP) contractual disputes are heard in the superior courts of the provinces. The Ontario Superior Court of Justice has been requiring mediation in some cases, in some regions, for over 10 years. It has expanded those cases and regions over time. The most recent amendments took effect on January 1, 2010.[vii] Mandatory mediation applies to actions commenced in Toronto, Ottawa and the County of Essex. It is no longer limited to case managed actions, and so will now occur with increasing frequency.
The Federal Court Experience
In the Federal Court, where the majority of IP infringement and validity disputes are litigated, mediation is becoming more commonplace. Under that court’s rules, after close of pleadings the solicitors for the parties are required to “discuss the possibility of settling any or all of the issues in the action and of bringing a motion to refer any unsettled issues to a dispute resolution conference.”[viii] In addition, at the subsequent pre-trial conference, the parties must be prepared to discuss “the possibility of settlement of any or all of the issues in the action and of referring any unsettled issues to a dispute resolution conference.”[ix] Such a conference is to be conducted by a case management judge or a court official called a prothonotary.[x] One possible form is:
The court’s rules even assist parties in availing themselves of other means of dispute resolution, including mediation before persons other than a judge or prothonotary.[xii]
Interrelated IP disputes frequently take place in the courts of numerous countries at the same time. In such cases the effect of conducting, or not conducting, mediation of a particular dispute must be considered from the points of view of a number of different legal systems. In the UK, for example, failure to meaningfully participate in mediation can have costs consequences after trial, even for the successful party.[xv] In other jurisdictions participation in mediation can suspend the running of a limitation period.[xvi] In some jurisdictions ADR is mandatory.
Settlement is Likely
In any event, as one US judge has said, “… mediation helps the inevitable happen faster. In the vast majority of cases, the parties will ultimately settle rather than go to trial.”[xvii] For example, more than 95 per cent of US Trademark Trial and Appeal Board proceedings are either settled or decided by the entry of pre-trial judgment.[xviii]
As another example, in the year ending September 30, 2008, in the US District Court system, 3727 copyright cases were terminated. Only 1.3 per cent of them were terminated during or after trial. Of 3460 terminated trade-mark cases, the figure was 1.7 per cent. For 2875 patent cases, it was 3.8 per cent.[xix] In every category, the vast majority of cases were resolved before trial.
Given increased focus on mediation in both the Ontario and Federal Courts, it is increasingly likely that you will have to mediate your IP dispute. Early and efficient resolution of a dispute through mediation can yield major benefits, compared to a resolution achieved on the courthouse steps after years of disruption and expense. The following statistics are noteworthy:
[i] Allan J. Stitt, Mediating Commercial Disputes, Canada Law Book Inc., Toronto, 2003 at 1