Mediation of Patent Disputes—Part 3 of 3

In the first two parts of this series (Part 1, Part 2), we examined what mediation is and considered reasons why a party might desire to engage in mediation. In our final segment, we discuss how parties may come to mediate a patent dispute and provide an overview of the mediation process.

Getting to Mediation

Parties can arrive at mediation in various ways.

1. Some courts order parties to a patent litigation to participate in compulsory mediation. The old adage “you can lead a horse to water but you can’t make it drink” is applicable to court ordered mediations. While parties may be ordered to participate in mediation, they cannot be ordered to agree to terms of settlement. If the parties are not motivated to resolve the matter, they will only go through the motions. For this reason, court ordered mediations are less likely to be productive of a settlement than those to which parties voluntarily submit. 
2. Courts may inquire whether the parties desire to mediate. Some courts will refer the matter to federal magistrates or a private mediator if the parties are so inclined.
3. Some contracts include a provision that requires a party to engage in mediation prior to the filing of a lawsuit. 
4. Parties to a dispute can privately agree to engage in mediation before or after the initiation of a lawsuit in an effort to find an acceptable resolution of the matter. 

Preparation for Mediation

Frequently, mediators will request that each party submit a written mediation statement that sets forth the party’s view of the case and the relief sought. The purpose of the written statement is to inform the mediator of the subject of the dispute and the posture of the matter.

In preparation for mediation, parties should consider a number of questions that are virtually certain to be front and center during the discussions. Some of these questions are summarized below.

1. What are the objectives you seek to accomplish through mediation and what are the underlying interests that would be furthered if these objectives were achieved?
2. What is understood with respect to the objectives of the other party and what are the underlying interests of the other party that would be furthered if their objectives are achieved?
3. What options exist for resolution of the dispute? This question should be considered with the recognition that it is unlikely that the matter will resolve if all of one party’s interests are met and none of the other party’s interests are met. Accordingly, consider options that would be acceptable to you and may be acceptable to the other party. Such options are not limited to the remedies that would be available through litigation—in mediation they are limited only by the creativity and desires of the parties.
4. What is the best alternative available if the matter does not resolve through mediation, and what are the implications if that alternative is pursued in lieu of a negotiated agreement?
5. What are the implications in terms of cost, time to resolution, market disruption, productivity, sales, etc., if the parties do not resolve the matter through mediation?

Preparation for the mediation increases the likelihood of a satisfactory outcome. A satisfactory outcome may involve a settlement on negotiated terms or the recognition that some alternative course of action would be preferable to a settlement on terms available through the mediation. Having considered the above questions in advance of the mediation, the parties will be well positioned to have a constructive dialogue around possible bases for resolving the dispute through mediation.

The Mediation Process

At the outset of the mediation hearing, mediators typically explain the mediation process to both parties. A representative of each party with authority to settle the matter should be present for mediation to be effective. The mediator will confirm that the persons in attendance have such authority if such has not been confirmed in advance of the hearing. In addition to a representative of each party with decisional authority, counsel for each party may attend to provide advice to their client during the course of the mediation. 

Following an explanation of the mediation process, a mediator may elect to engage in a joint session in which each party explains their position and their objectives. Not all mediators commence the mediation with a joint session. Some mediators are of the view that starting the mediation with a joint session only heightens tensions in an already stressful situation. Mediators of the view that an initial joint session may not be beneficial will proceed to private sessions in which they explore the interests of the respective parties and options for resolution of the matter proposed by the parties. The mediator typically engages in shuttle diplomacy between the parties, sharing information that each party has authorized the mediator to disclose to the other party. In private sessions, the parties typically are more willing to confide in the mediator with respect to underlying motivations for positions they may have and possible solutions, while understanding that the mediator will keep in confidence information that is not to be disclosed to the other party.

If the parties arrive at a resolution in mediation, a memorandum summarizing the terms of their agreement is typically drafted. The memorandum may be reduced to a formal settlement agreement by counsel for the parties.

Mediation is not the answer for every party involved in a patent dispute. Nevertheless, given the advantages afforded by an early settlement, it should always be considered.