Arbitration in intellectual property rights issues, like other commercial arbitrations, has been on the rise in recent years. The growth and development of arbitration is due to the principle of the sovereignty of the will of the parties and the desirability of controlling the dispute handling process by the parties. Despite this, the arbitrator is not subject to the will of the parties in all circumstances, and the issuance of an enforceable and effective award that is favorable to the parties and the arbitration court, requires considerations that are evident in intellectual property claims in terms of being in the middle of public and private law issues. For this purpose, the arbitrators must be sure that, firstly, the subject is arbitrable, and secondly, the subject of arbitration is potentially compatible with public order.
Getting legal expert advice could be very helpful in protecting the interests of the related authorities. Legal experts can anticipate and address almost all potential issues. In this context, Karimi & Associates Law Firm, with its experienced and professional team, can offer excellent service.
Arbitrability
It refers to the simple question of whether a dispute can be resolved through arbitration. The traditional meaning of arbitrability is related to the “object of arbitration”. The meaning used in the New York Convention and the UNCITRAL Model Law, some authors believe that arbitrability is a clear boundary between where the function of contractual freedom ends and the mission of public law begins. For this reason, the issues of intellectual property rights are very controversial in the discussion of arbitrability; the existence of the element of public interest in lawsuits related to these rights and the role of national governments in granting these rights is one of the very important reasons for doubting the arbitrability of its disputes.
Public order
Some people believe that due to the vague nature of public order, it is not possible to provide a comprehensive definition of it. However, some have considered the national public order to be the set of mandatory rules contained in a national legal system and fundamental norms resulting from good ethics.
Some also believe that public order is about the basic norms of morality and justice of a government, the violation of which is harmful to the public interest or is an attack on reasonable and normal members of society. Areas related to public order are outside the scope of arbitration and remain in the exclusive jurisdiction of public authorities and can prevent the arbitration of some specific lawsuits. Since the issue is related to national public order, arbitrability differs from one country to another; therefore, we must emphasize that the limitations that are applied in the mandatory rules, found in an international legal relationship or the limitations that are imposed in terms of public order in general, affect the arbitrability of this legal relationship. In intellectual property rights, since the government and public institutions have the exclusive authority to recognize and grant rights arising from various instances of intellectual property, disputes related to these rights are basically related to public order, both domestic and international.
Iran’s regulation
Iran’s legislator has not explicitly provided a criterion for the arbitrability of claims of this category of rights in any of the existing laws related to intellectual property rights. Article 59 of the Law on Patents, Industrial Designs and Trademarks approved in 2016 stipulates that handling disputes arising from the implementation of this law and its executive regulations is the jurisdiction of a branch or specific branches of Tehran public courts. Regarding whether the purpose of this article is the provision of exclusive jurisdiction or not, doubts have been raised. It seems that the above regulation does not mean the exclusive jurisdiction of the courts and considering these issues as non-arbitrable, and the exclusive judicial handling of these claims in Tehran has been considered.
In Iran’s comprehensive arbitration bill, which has not yet been approved by the Islamic parliament, for the first time the arbitrability of intellectual property claims has been clearly addressed, and according to its article 5, claims related to the principle of intellectual property rights that need to be registered cannot be referred to arbitration.
The third paragraph of the article also does not consider the claims regarding the principle of intellectual property rights, which are raised by the relevant government institution, such as the Industrial Property Office or the Ministry of Culture and Guidance, to be referred to arbitration.
Also, the note of this article stipulates: claims related to violation of rights, transfer of rights, rights of exploitation and the like can be referred to arbitration. Therefore, if this bill completes the approval process, in its Article 5, arbitrable intellectual property claims and non-arbitrable claims are clearly specified.
Considering that there is no explicit or implicit mention of public order in Iranian law in this bill, it seems that the criteria considered by jurists for the non-arbitrability of some intellectual property claims is the jurisdiction of government institutions in registration and finally the exclusive jurisdiction of dealing with these disputes.
Conclusion
The basis of the non-arbitrability of some areas of intellectual property rights may be due to countries’ views on public order, public interests, the limits of arbitrator’s jurisdiction, the nature of arbitration as a contract or the identification of exclusive jurisdiction for national authorities. As we have seen, in justifying the non-arbitrability of some issues, the arguments are sometimes so close to the issues of public order that this ambiguity arises that in every case a dispute is not arbitrable, in short, it is because of dealing with public order.
It should be noted that public order is often not the basis of non-arbitrability, and also all issues related to public order are not considered non-arbitrable only in terms of this connection; for example, many competition law issues are related to the public order of countries; but the recent procedure shows the tendency to arbitrate them. In many issues of intellectual property rights, the basis of non-acceptance of arbitration is due to reasons other than public order. For example, not accepting arbitration in copyright claims and related rights, or at least not being arbitrable in claims related to the intellectual rights of the creator, despite the fact that there is no rule of public order related to the registration of rights in them, with the aim of preserving the respectable values of the society, due to these rights are non-transferable.
Most of the time, the impossibility of arbitration is due to the recognition of the exclusive jurisdiction of the states and the preservation of their sovereignty. Although this exclusivity may be inferred from public policy, it does not mean that the doctrine of public policy is entirely related to the concept of arbitrability. It seems that despite the proximity of these two concepts and their connection with each other, these two should be considered as independent concepts.
For arbitration in intellectual property matters in Iran, you can seek legal advice from Karimi & Associates Law Firm. Our team specializes in IP law and arbitration, can provide the guidance you need. Visit our website to learn more and get in touch with our lawyers.