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Mediating the IP Dispute Part III: Preparing for the mediation session

Wednesday, April, 30, 2014


David Allgeyer

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In the first two articles in this series we explored the importance of timing the mediation in an intellectual property dispute and mediator selection.   Mediating too soon can mean there is too little information to allow an informed settlement decision.  Mediating too late can mean unnecessary expense and entrenched positions.  We further explored how the nature and stage of the case can help you to make a better timing decision.  Next we focused on mediator selection, suggesting that you demand no less than a mediator who is skilled and experienced in intellectual property cases and also one who brings significant mediation skills and experience to the process. 

We will now address the next critical step of the mediation process:  preparing for the mediation session. No two disputes are alike, so the process should be molded to fit the problem and the unique issues in the case.  But a few general principles emerge.

One approach that seems to work well in many cases, and particularly well in IP cases, is to focus the parties on the issues through the exchange of mediation statements, sharing with the opposing party and the mediator your side’s assessment of the case and settlement value of the case, as well as an exchange of opening offers.  This process can be enhanced by encouraging the parties to provide a confidential and candid statement to the mediator of any other issues or concerns a party believes would be appropriate to help the mediator understand the dispute and find ways to guide a settlement. 

The flexibility of mediation can also be realized by helping the mediator explore various settlement options that wouldn’t necessarily be available in court including licenses, cross licenses, covenants not to sue, entry into a mutually beneficial supply relationship, and other creative solutions.  

The key virtue of the exchange of positions in advance of the mediation is to forego the time -- and often unproductive emotions -- generated by the first exchange of positions at the mediation itself.  Exchanging written positions allows the parties to more objectively analyze the strengths and weaknesses of each party’s position and to begin to consider the “business case” for settlement.  Similarly, the exchange of offers before the mediation helps to avoid the often time consuming and frustrating games of who goes first, whether the other parties’ offer was actually made in good faith because it was too low or two high to be serious, and other distracting disputes that often arise as the mediation session begins. 

In IP cases in particular, there is often a wealth of information the parties can make available to the mediator to help him or her understand the issues and guide the parties to a negotiated solution.   Depending on the stage the case is in, in a patent case for example, the parties often will have exchanged infringement charts, claim construction statements, invalidity charts, and expert reports on liability and damages.  There may be pretrial rulings on claim construction and other issues as well. Similarly, in a trademark case the parties may have exchanged survey reports and damages reports.  This background will enable the mediator help the parties objectively evaluate their risks and possible rewards to arrive at reasonable settlement value for the case. 

Based on this preparation, the mediator may have questions or ideas to raise with the parties that will help move the parties toward a serious negotiation.  The mediator will often find it of great benefit to contact counsel for each party to begin to understand the dynamics of the situation and the human side of the dispute. 

In short, the key to a successful IP mediation, as with any mediation, is careful and deliberate preparation that allows the parties to begin to understand and evaluate the business case for settlement.