Alternative dispute resolution (ADR) means solving disputes outside the courts. Unlike litigation, which will have a binary outcome (win or lose), parties can use ADR to tailor the outcome and the dispute resolution process.
ADR includes negotiation, mediation and arbitration. It allows parties to combine these methods and tailor the rules to fit their needs.
On this page
- Benefits of ADR
- Types of ADR
- Get professional help
Benefits of ADR
ADR methods offer many potential advantages:
- a speedier resolution
- cost effectiveness
- a flexible dispute resolution process
- the ability to deal with multiple jurisdictions in a single settlement
- the possibility to maintain pre-existing business relationships
ADR could resolve a multi-jurisdictional (across provinces, countries) matter with a single process, thereby avoiding multiple lawsuits that often result in contrasting outcomes.
Those benefits explain why ADR is often chosen over traditional litigation.
ADR methods require the consent of both parties. Quite often, businesses enter into agreements that mandate the resolution of possible disputes through ADR methods, for reasons of confidentiality and cost control.
Parties in a legal dispute have the option to pursue ADR methods in a parallel process, upon consent by all parties. This way, parties can resolve their differences even during litigation.
Types of ADR
ADR provides a variety of ways to resolve your dispute. Even if litigation is already in progress, it is never too late to turn to ADR for a custom-tailored solution, as ADR can be pursued as a parallel process.
Negotiation is often the first approach taken to resolving an intellectual property (IP) dispute. The parties or their counsel hold discussions in the hope of reaching a mutually satisfactory agreement. A negotiated agreement can become a contract enforceable by the courts.
Mediation is process where an impartial third party mediator assists the parties in reaching a resolution by facilitating communication between them. Mediators often highlight the parties' needs and interests and help overcome impasses.
Unlike a judge or an arbitrator, the mediator does not decide who is right or wrong. Instead, the mediator provides insights and helps parties resolve the conflict through collaboration. Then, the parties can craft their own solution to the conflict rather than giving up decision-making control to a third party, such as a judge. In this way, mediation can reduce the uncertainty inherent in an adjudicated outcome.
The mediator is normally chosen by the parties themselves. The parties can select a mediator who is knowledgeable in the subject matter. This may help parties solve the dispute without other subject matter experts who would need to provide evidence to a court concerning the technology, for example.
Mediation can also result in the parties agreeing to cross-licenses and royalty rates, or other arrangements that may not be available if the case is decided by a court.
A mediated agreement in the context of a court dispute may be approved by the court. This gives the agreement the same force and effect as a court decision.
Generally, the parties share the mediator's fees. Some jurisdictions provide mediation or conciliation services free of charge. The Federal Court may, in some cases, provide the parties with a mediator.
To summarize, mediation is a confidential process. It offers many benefits, including the following:
- The dispute is resolved by the parties rather than having a solution imposed by a third party.
- It is often quicker and more flexible than other resolution methods.
- A mediator can assist the parties in reaching creative and custom solutions.
- It helps maintain business relationships and reduce business disruptions.
- The parties reserve the right to proceed with litigation or arbitration if an agreement is not reached.
However, if infringement is the issue, mediation does not send a public message to deter other infringers.
Arbitration is a voluntary approach to dispute resolution that involves an arbitrator. The arbitrator is an impartial third party chosen by the parties themselves. The arbitrator hears both parties and their witnesses in the manner of a trial and provides a decision based on the evidence presented by each party and the applicable law.
Arbitration is a more formal method of dispute resolution than mediation. It is simpler and faster than litigation. The arbitrator's final decision is both determinative and legally binding. It may be approved by a court, which makes it binding in the same way as a civil judgment.
Arbitrations are intended to lead to finality. The options to see an appeal or judicial review of an arbitral decision are limited.
Note: Arbitrators do not have to comply with strict procedural and evidentiary rules.
The benefits of arbitration include the following:
- Both parties agree on the choice of arbitrator, the costs and the location and governing jurisdiction of the decision.
- Arbitrators can be selected based on their IP expertise.
- The process is private and fast.
- The process is confidential.
- The process is flexible (less formal than litigation).
- Arbitration usually costs less than a trial.
- The decision is legally binding.
Choosing between mediation and arbitration
The choice between arbitration and mediation depends on your situation and most pressing issues.
Your case involves problems in multiple jurisdictions or involves multiple types of IP.
- Mediation may avoid multiple lawsuits in multiple jurisdictions.
- Mediation can achieve a global settlement and resolve all aspects of the dispute for all IP matters in a single agreement.
- Arbitration may avoid multiple lawsuits in multiple jurisdictions.
- An arbitration award can decide all aspects of the dispute and can be enforced internationally.
You are a busy person or time is of the essence. It is important for you to try to resolve the dispute in accordance with a timeline you control.
- Discussion between the parties can start almost immediately. There is no need to wait for pre-trial measures such as discovery and examination if these are not desired.
- Parties set the timeline.
- It is possible to achieve immediate results such as an agreement to stop infringement or unauthorized actions.
- Arbitration can be quicker than traditional litigation.
- The process and timeline can be adjusted to suit the needs and schedule of the parties.
You like flexibility and the opportunity to be creative in solving your problem.
- Mediation is a voluntary process that permits a wide range of creative solutions agreed to by the parties. The mediator will assist the parties in developing creative business solutions, which may extend beyond the legal dispute.
- A court, on the other hand, can only address the specific legal issues before it and only within its procedural framework.
- Court rules of procedure do not provide the same flexibility and creativity.
- Arbitration allows parties to choose their own decision maker with IP expertise.
- They can make the process and timeline suit their needs.
- However, the remedies an arbitrator can award are limited to the parties themselves.
You are concerned with costs.
- Even accounting for the costs of the mediation, which are usually shared by the parties, the cost to resolve the dispute by mediation is considerably less than that for litigation or arbitration.
- As a rule, mediation is less formal, which also reduces costs.
- Arbitration usually costs less than litigation, and parties have more control over those costs.
- Arbitration awards are final and binding, avoiding costly appeals.
The thought of a public litigation and of a trial causes you stress and anxiety.
- Mediation offers you the option of settling the dispute in a private setting not open to the public. The attendees are limited to the mediator, the parties and those present by invitation. In contrast, courtrooms for litigation are public forums, and the public can listen. Mediation is also less formal and quicker than going to court.
- Mediation also provides for a caucus with the mediator, so the parties do not have to be in the same room all the time.
- Arbitration offers the option of resolving the dispute in a private setting (e.g. a boardroom) in the presence of the parties and other persons agreed to by the parties. The public cannot attend.
- The arbitration process can also reduce time and stress. When the parties collaborate and participate in designing the process, it is often less intimidating to them.
You are interested in preserving or expanding business relations with the opponent in the dispute.
- Mediation offers the possibility to preserve, expand or even create business relations and opportunities.
- The parties can collaborate in the solution to avoid a "winning" and "losing" party.
- Mediation creates a forum for parties to openly discuss what really matters and better understand what led to the dispute to prevent it from happening again in the future. The mediator can encourage the parties to explore business opportunities.
- In mediation, the parties are the decision makers.
- Arbitration better allows the parties to maintain or create a business relationship. The arbitrator has more leeway than a judge to suggest ways to do this.
- The arbitrator is the decision maker. Having a neutral third party to resolve a dispute can make arbitration a less formal and more collaborative process, which can lead to a quicker and less expensive resolution than that offered by litigation.
- However, keep in mind that the arbitrator has the final say on the outcome of the dispute.
Confidentiality is important to you.
- The process is confidential, which allows the parties to keep their business information private.
- If there is no resolution, the information exchanged during the mediation process cannot, as a general rule, be admitted as evidence in court.
- The process is confidential, which allows the parties to keep their business information private.
- There is no published decision.
You want to settle a strict legal issue or you need a ruling to send a clear message.
- Mediation is not the best option.
- Arbitration, courts or tribunals such as an opposition board, federal court or provincial court are suitable options.
- Arbitration is a suitable option for many types of disputes, such as determining the ownership of IP or interpreting a contract or license agreement.
- However, an arbitration award is binding only on the parties to the arbitration; a court or tribunal decision binds third parties as well.
Get professional help
Solving conflicts involving IP rights is often complex. Consult an IP professional, such as an IP agent or lawyer, to discuss the next steps if you believe your IP rights are being infringed upon.
If IP infringement is happening in another country, a Canadian IP professional may be able to coordinate with an IP professional in the other country to enforce your IP rights.
You can also get professional help from the following organizations that offer ADR services: