13

Overcoming Problems with Use of Arbitration forIntellectual Property Disputes（*）
Research Fellow: Kazushige Ogawa

The purpose of this study is to inquire into what should be done to make arbitration more appealing toparties involved in disputes relating to industrial property as a means to solve their disputes, and promote
their use of arbitration. The study also aims to clarify what kinds of capabilities are required of persons
engaged in resolving industrial property disputes (e.g. parties' representatives, arbitrators, and arbitralinstitutions). This report reviews the measures to promote the use of arbitration that have been proposedthus far and identifies the problems with these measures. Through comparison and analysis of the current
status and characteristics of the use of arbitration in the field of industrial property arbitration and various
other fields, including international commercial arbitration, investment arbitration, and sports arbitration,
as well as the results of the questionnaire surveys targeting arbitral institutions, the report further intends
to explore and reveal the demands placed upon the dispute resolution system for industrial property
disputes and find solutions for the issues that have been designated as the purpose of the study.

Ⅰ Introduction
As a means to resolve industrial property
disputes, arbitration and other alternative dispute
resolution procedures are available, except where
the dispute involves the issue of the validity of apatent right or other right, which is basicallyunder the jurisdiction of the administrative
agency. However, arbitration is not frequently
used in the field of industrial property, or even
including other fields.
This study inquires into what should be done
to increase the use of arbitration, focusing on
arbitration of industrial property disputes.
Another aim of this study is to explore and reveal
the demands placed upon the dispute resolution
system itself and the persons concerned in thisarea, and also to clarify what kind of capabilities
are required of legal professions engaged inresolving industrial property disputes.
Arbitration is a type of dispute resolution
procedure wherein the parties agree to leave
their dispute to be resolved by the decision of an
independent and impartial third party and abideby this decision. The third party in charge ofresolving the dispute is an arbitrator, the decision
made by the arbitrator is an (arbitral) award, andthe agreement to leave a dispute to the arbitrator
and accept the terms of the award is an arbitrationagreement.
Merits of arbitration are that the proceedings(*)

are flexible, speedy, low-cost, and closed to the
public; a decision made by a specialist is
promising; and an arbitral award is enforceable. In
addition, arbitration is advantageous in resolving
international civil disputes in that it does not
involve any court in any country, and that theenforceability of an award is assured anywhere in
the world in accordance with the international
conventions.
However, arbitration is not free fromdemerits. The biggest one is that arbitration isunavailable if there is not an arbitrationagreement between the parties. This is the limitof such an agreement-based dispute resolution
procedure as arbitration. A new problem that has
recently come to light is that arbitration
proceedings tend to be delayed as they become
more akin to court proceedings. There is also a
cost problem; as compared to court proceedings
operated by the State and supported by tax,
arbitration proceedings incur more costs,
including the remuneration for the arbitrator(s)and the administrative fees for the arbitralinstitution, despite the fact that arbitration
proceedings are speedy enough to be finished in asingle instance.
Since most provisions of the Arbitration Act
are not mandatory, the parties may decide detailsof proceedings freely by agreement. At the sametime, arbitration proceedings are not easy for
those inexperienced to handle. As a help for them,This is an English translation of the summary of the report published under the Industrial Property Research
Promotion Project FY2010 entrusted by the Japan Patent Office. IIP is entirely responsible for any errors in
expression or description of the translation. When any ambiguity is found in the English translation, the original
Japanese text shall be prevailing.

IIP Bulletin 2011 Vol.20● 1 ●some arbitral institutions lay down rules forarbitration proceedings and administer arbitration
proceedings. Such institutions existing in Japan
include: Japan Commercial Arbitration Association(JCAA); Japan Shipping Exchange, Inc.; JapanIntellectual Property Arbitration Center (JIPAC);
and Japan Sports Arbitration Agency (JSAA).
There are a number of arbitral institutions inother countries. There are also international
arbitral institutions, such as the International
Chamber of Commerce (ICC) International Courtof Arbitration, the London Court of International
Arbitration (LCIA), the WIPO Arbitration andMediation Centre, and the Court of Arbitrationfor Sport (CAS).
The main subject of this study is arbitrationof industrial property disputes, which refers toarbitration of disputes over licensing agreementsfor patents, trademarks and other industrial
property rights, and disputes arising from theinfringement of these rights. The study also
targets other important fields where arbitration isfrequently used to resolve disputes, namely,international commerce arbitration, sports
arbitration, domain name arbitration, andinvestment arbitration.
The research methods applied in this study
include: document investigation on the pastmeasures to promote the use of arbitration;
analysis of the characteristics of the disputes
brought to arbitration; review of the results of thequestionnaire surveys implemented relatively
recently, targeting the arbitral institutions and thelegal affairs personnel in enterprises; and analysisof the rules of arbitral institutions.

Ⅱ Current Situation of Industrial
Property Disputes, and Current
Status and Problems of Industrial
Property Arbitration
Before considering the measures to be taken
to promote the use of arbitration for industrial
property disputes, it is important to find out whattypes of disputes have occurred in this field andhow they were finally resolved.
The total annual number of ordinary civil
cases relating to intellectual property received by
district courts has continued to stand at a level ofaround 500 for the past three years, from FY2007
to 2009, with a slight increase seen in FY2009.
The number of such cases received by highcourts has remained at a level of around 130 to
140 during the same three-year period1.
Among those ordinary civil cases relating tointellectual property newly received by district
courts, patent-related cases account for thelargest share, followed by copyright-related cases.
The percentage of trademark-related cases was
exceeded by that of unfair competition-relatedcases in FY2009.2
The average period of pendency among all
ordinary civil cases relating to intellectual
property handled by district courts was 25.7
months in 1998. It became shorter until 2004, andremained at a level around 12 to 14 months in thepast five years. Looking at the number of ordinary
civil cases relating to intellectual property
pending before high courts in the second instance,by the period of pendency, 108 cases (77.1%)
were finally resolved within one year, and 134
cases (95.7%) within two years. Even taking into
account the time required for proceedings before
the Supreme Court, Japanese court system
handles intellectual property disputes in an
expeditious way 3.
According to statistical data compiled by theIntellectual Property Division of the Tokyo
District Court, both in FY2008 and FY2009, cases
finally resolved by a court judgment or orderaccounted for over 30% but less than 40%,
suggesting that almost half of the cases brought
to that division were resolved by settlement. Also
based on the data concerning all civil cases
handled by the Tokyo District Court, about 40%
are closed by a court judgment, whereas
settlement is made to close about one-third of thetotal. This comparison shows that the Intellectual
Property Division frequently resolved cases bysettlement4.
The disputes handled with Industrial
property arbitration can be divided into two major
types, disputes relating to licensing agreements
and those relating to infringement. The JapanIntellectual Property Arbitration Center (JIPAC)
and the WIPO Arbitration and Mediation Centre
exist as Japanese and international arbitralinstitutions specialized in industrial property
disputes, respectively. Arbitration is often
initiated based on an arbitration agreement
contained in a contract, and handled by a generalarbitral institution.
Problems with industrial property arbitration
should be studied from the following two
perspectives: (i) the scope of legal issues suitable
to be addressed in arbitration; and (ii) the
currently low use of arbitration.
Industrial property disputes brought toarbitration sometimes involve disputes over thevalidity of the relevant industrial property rights.

● 2 ●IIP Bulletin 2011 Vol.20

However, this legal issue cannot be definitively
determined by arbitration, which makes it
impossible to completely put an end to the dispute.
Even taking this problem into account, thenumber of industrial property arbitration cases inJapan is rather too small. For instance, JIPAC
received more than 20 requests for mediation or
arbitration in 2003, but after that, the number ofrequests it received exceeded 10 only in theyears 2004, 2006, and 2007, while it received only
5 requests or so in other years. Furthermore,
arbitration accounted for only 5% of all cases
received, which means that the JIPAC handed one
or fewer arbitration cases, each year 5 . Thistendency is also seen on a global scale.
Reportedly, since its establishment in 1994, theWIPO Arbitration and Mediation Centre has
handled more than 240 disputes, of which thepercentage of those relating to industrial property
is not so large6.

Ⅲ Measures to Promote the Use of
Arbitration Proposed Thus Far
Measures to promote the use of arbitration,
which have been proposed thus far, relate to the
Arbitration Act, arbitrator, raising awareness on
arbitration, and internationalization. There havebeen a number of measures proposed to promote
the use of arbitration in the field of industrial
property, which are almost the same as thoseconcerning arbitration in general7.
The Arbitration Act was criticized for being
too old. Until it went through overall revision in
2003, the Arbitration Act had been left unrevised
since its enactment, more than a century ago.
Due to the out-of-date provisions and the limited
number of judicial precedents in arbitration cases,
uncertainty in regard to the interpretation andapplication of the Arbitration Act remained 8.
Securing a skilled arbitrator is the key toensuring that arbitration proceedings are carriedout speedily and correctly, and that a high-quality
award is handed down. From this point of view,
many experts emphasized the quality of arbitrator.
Specifically, they proposed the introduction of the
training programs implemented by foreign arbitralinstitutions into Japan, and the granting of aqualification for arbitrator9.
Raising awareness of arbitration was also
advocated. It was proposed that active efforts
should be made to enhance education atuniversity as well as to provide information to the
public with regard to arbitration. Anotherproposed measure was to disclose awards actively

IIP Bulletin 2011 Vol.20

so as to enable the public to know the content of
the awards actually handed down10.
In the context of internationalization, thefollowing problems were pointed out. (i) A person
qualified as a legal professional under foreign law
but not qualified as such under Japanese law
serving as a representative for a party toarbitration constitutes a violation of Article 72 of
the Attorney Act (this problem has beencorrected through legislation). On the other hand,
if such person has served as an arbitrator, he/shewould not be in violation of Article 72 of the
Attorney Act. However, there was still a risk ofbeing accused of violation because this treatment
was only based on the interpretation of said
Article and not stipulated by law 11 . (ii)
Presumably, foreign nationals and enterprises felt
anxiety as they were unable to understand thedetails of Japanese laws or the way of thinking ofJapanese people, and this might be the cause of
their unwillingness to use the arbitration system
in Japan. The importance of providing more
information on Japanese laws to other countries
was voiced12. In connection with this problem, it
was also argued that foreign parties would refuse
to respond to arbitration in Japan for the reason
that the lists of arbitrator candidates, prepared by
the arbitral institutions located in Japan,
contained no person of their nationality13.

Ⅳ Current Status and Characteristicsof Use of Arbitration
1

Overview

Until around the early 1990s, arbitration had
been used mostly on the occasion of resolving
disputes arising from commercial transactions
between enterprises of industrialized countries.
This type of arbitration is called “internationalcommercial arbitration.” In the past decade,however, the situation has changed drastically.
Arbitration is now chosen as an alternative tocourt proceedings, which is provided by the State,by parties in disputes for which court proceedings
are unavailable for some reason, or for which noeffective resolution may be expected throughcourt proceedings, due to the procedural cost,time, and other constraints.
2

International commercial arbitration

The number of requests for arbitration
submitted to the major institutions engaged inhandling international commercial arbitration has● 3 ●been increasing each year. The ICC International
Court of Arbitration, which is a famous arbitralinstitution in the world, received 599 requests in
2007, 663 requests in 2008, and 817 requests in2009. On the other hand, the JCAA, a Japanesearbitral institution, did not receive so many
requests: only 15 in 2007, 12 in 2008, and 18 in
200914.
Based on the data on the ICC International
Court of Arbitration, the trends and characteristicsof the current international commercial arbitration
are analyzed as follows. By 2010, the ICC
International Court of Arbitration had handled
slightly less than 17,000 arbitration cases, inwhich only a limited number of Japanese persons
were involved as disputing parties or appointed asarbitrators, and Japan was rarely chosen as theplace of arbitration15.
The type of dispute that has traditionallybeen popular is construction-related disputes,
constantly accounting for about 15% of the total.
This is followed by disputes related to energy,
telecommunications,andfinance/insurance,
respectively standing in the range of 7 to 10%.
Disputes related to mining, transportation,industrial equipment, and general sales/ trade
hold about a 5% share respectively16. The amountin the dispute exceeded 100,000 US dollars inmost cases, which suggests that arbitration was
not frequently used for a small amount in
dispute17.
3

Domain name arbitration

Domain name arbitration is a type ofarbitration used to resolve a dispute over adomain name, meaning an Internet address suchas iip.or.jp. The conflict arises between the
person who owns a trademark right or other rightin relation to the trademark, or service markidentical or similar to the domain name, and theregistrant of the domain name.
This type of dispute can be prevented bysubstantially examining, upon the registration of adomain name, whether or not there is any
trademark right, etc. that might be affected bysuch registration. In Japan, domain name disputes
can be resolved by a court of justice in accordancewith the Unfair Competition Prevention Act.
However, too many domain name registrations
prevent registrar to check every single one.
Furthermore, court proceedings might be an
impractical approach in cases where theregistration of the domain name by the registrant
is found to be of malicious nature. For thesereasons, arbitration is used as a simple andspeedy way of resolving disputes relating todomain names.
The decision in domain name arbitration is
published. Although a decision is not binding as aprecedent in a strict sense, it plays a significant
role in enhancing and refining the substantive
laws on resolution of domain name disputes.
In Japan, the Japan Intellectual Property
Arbitration Center (JIPAC) has been approved toresolve domain name disputes, and from 2000 to
2010, it handled 78 arbitration cases 18 . With
regard to disputes over domain names used on a
global scale, such as .com, .net, and .org, theWIPO Arbitration and Mediation Centre serves as
an authorized dispute resolution institution.
4

Investment arbitration

Each country sets regulations for foreign
investment, while comparing the various factors
concerned, such as the need to attract investment
from outside the country, and the need to protect
the development of its own industry. Dependingon the economic or political situation, or due toviolent fluctuations in resource prices, the hostcountry may suddenly change its investment
regulations or nationalize the rights and interests
acquired by investors. A dispute arising between
the investor and the host country under suchcircumstances is referred to as an investment
dispute.
From the perspective of seeking a fair andequitable resolution, it is inappropriate to bringan investment dispute to a court of the hostcountry, because the host country would have tostand as a defendant in the case. It is also difficult
to choose a court of another country due to thedoctrine of sovereign immunity. Furthermore,this type of dispute cannot be submitted to theInternational Court of Justice because a private
person has no standing to sue.
To rectify the situation where there was no
realistic remedy for investment disputes, theConvention on the Settlement of Investment
Disputes between States and Nationals of Other
States took effect in 1966, and the International
Centre for Settlement of Investment Disputes(ICSID) was established accordingly, making
arbitration available for resolving investment
disputes (this type of arbitration shall hereinafter
be referred to as "ICSID arbitration").
It was not until recently that ICSID
arbitration started to be frequently used.
Especially in the past decade, the number of● 4 ●IIP Bulletin 2011 Vol.20

requests for ICSID arbitration has significantly
increased. Behind this sharp rise is the spread ofbilateral investment treaties (BITs). A BIT isdesigned to promote mutual investment between
the contracting parties, by completely or
gradually abolishing their regulations for foreign
investment, and also to protect investors andinvestment assets. In order to resolve a disputeby ICSID arbitration, as in the case of other typesof arbitration, there must be an arbitrationagreement. However, if the investor's homecountry and the host country have made anarrangement in advance to provide ICSID
arbitration as a means to resolve any investment
dispute that may arise between the investor andthe host country, such an arrangement can
substitute for an arbitration agreement. This
arrangement between the countries concerned isincluded in a BIT.
Each Contracting State has the obligation to
enforce an award rendered in ICSID arbitration.
An award is not to be disclosed in principle, but isactually made public in most cases. Although an
ICSID arbitration award is not binding as aprecedent in a strict sense, it has a significant
influence in the process of developing international
investment law.
5

Sports arbitration

Sports dispute is a term that collectively
refers to disputes over doping sanctions,selection of athletes and other decisions made bysport federations, athlete transfer to other teams,
and contracts between athletes or sports
federations and sponsor companies.
Going to court is not the best way to resolve
sports disputes because for this type of dispute,by nature, a speedy resolution is criticallyimportant. In addition, not all sports disputes fallwithin the category of legal disputes for which
courts have the power to make decisions.
Accordingly, there is a call for arbitration as asystem that is capable of meeting the need for a
speedy resolution and that is expected to provide
a fair and equitable decision.
Sports disputes attract much public attention.
It is the same thing that people are very
interested in the results of sports games, andconsidering that the government provides large
subsidies for sports promotion, sports are a kindof national undertaking that should serve thepublic. Furthermore, an award rendered inarbitration on a non-legal dispute cannot be
enforced through compulsory execution. It is

IIP Bulletin 2011 Vol.20

therefore important to publicize such an award
and place it under the supervision of society
at-large, so as to put pressure on the obligor toperform the obligation voluntarily. From thisperspective, awards are often required to bedisclosed on the relevant websites.
The Court of Arbitration for Sport (CAS) isan international arbitration institution specializingin sports disputes. Most disputes relate to doping
sanctions, whereas the CAS also deals with the
few disputes relating to the selection of athletesof national teams. For the first decade following
its establishment, the CAS was not frequently
used. However, in the latter half of the 1990s, as
the CAS established ad hoc divisions for the
major athletic games, and more doping and othersports disputes occurred, the CAS gained highvisibility worldwide, and the number of requests
for arbitration filed with it increased accordingly.
Subsequently, since it was designated as anappellate body for disputes relating to the FIFA
games in 2000 and for doping disputes in 2004,
the number of requests for arbitration exploded19.
In Japan, the Japan Sports Arbitration Agency(JSAA) provides arbitration services, and it
rendered awards in 15 cases between 2003 and2010. Among them, the most popular disputes
were those relating to the selection of athletes ofnational teams for the Olympic Games and otherinternational competitions in eight cases, followed
by four cases on disputes over sanctions tosuspend qualifications of coaches and athletes,
two cases on doping disputes, and one case on
other type of dispute20. Some countries, such as
the United Kingdom, Canada, and New Zealand,also have sports arbitration institutions similar to
the JSAA, which handle more arbitration cases
than the JSAA does.
6

Conclusion of Part IV

The high use of arbitration occurs in thesituation where any of the following factors or the
combination thereof exists: (i) difficulty in using
court proceedings; (ii) independence andimpartiality of the person authorized to decide;(iii) speed of proceedings; (iv) specialized natureof the person authorized to decide; and (v)enforceability.
The independence and impartiality as well as
the specialized nature of the person authorized todecide are essential factors in every field ofarbitration.
The difficulty in using court proceedings isparticularly evident in the fields of international● 5 ●commercial arbitration, investment arbitration,andsportsarbitration.
Ininternationalcommercial arbitration and investment arbitration,
which are to resolve disputes between the partiesof different nationalities or between the investor
and the host country, going to a court of thecountry of either party is unacceptable to theother party. It is also difficult to use court
proceedings to resolve sports disputes because
not all of these disputes can be categorized aslegal disputes. The requirement of speed inproceedings may be another reason for suchdifficulty.
Speed in proceedings is necessary in every
field of arbitration, but its necessity is extremely
high in sports arbitration. Suppose there is adispute over the selection of a representative for
an athletic match. If it took too much time toresolve the dispute, the athletic match would end
while the case was pending, and the dispute could
never be resolved effectively.
Enforceability is emphasized particularly ininternationalcommercial
arbitrationandinvestment arbitration. While the system for theinternational recognition and enforcement ofawards has been established for internationalcommercial arbitration under international
treaties, there is no such system for court
decisions. As for investment arbitration, in which
one party is a State, there would be aconsiderable obstacle to the enforcement ofawards due to the doctrines of sovereign
immunity and state immunity from enforcement,
except for arbitration under an international
treaty in which the Contracting States are obliged
to enforce awards, such as in ICSID arbitration.

Ⅴ Arbitration,
Standpoint
Enterprises

Seen fromof
PeopletheinWhat people in enterprises think ofarbitration has been studied in several surveys.
One of the results of a recent survey is a report
released by the Japan Economic Foundation in
March 2008, entitled "Research and Study Reporton How to Activate International Commercial
Arbitration in Japan." Based on this report, thepeople in enterprises’ perception of arbitration
are examined in this part.
To what extent do people in enterprises
understand arbitration? The report shows that atleast legal affairs staff in Japanese enterprises are
considerably informed with regard to arbitration,
whereas sales staff, who actually attend to anddeal with the process of concluding contracts, still
have room to improve their understanding ofarbitration.
In response to the question of what was thereason for choosing arbitration as a dispute
resolution procedure, the selected options wereranked as follows: 1. international enforceability;
2. speediness; 3. nondisclosure to the public; 4.
neutrality; 5. single instance; 6. specialized
nature; 7. low cost; 8. others. International
enforceability was ranked the highest probably
because the research mainly targeted the topic ofinternational commercial arbitration. The result
also indicates the high demand for arbitration
proceedings due to their speed and nondisclosure
to the public.
Arbitral institutions were selected based on
criterion in the following order of rank: 1.
performance/trustworthiness; 2. high recognition/internationality; 3. neutrality and impartiality; 4.
convenience/location/language; 5. location in
Japan; 6. no special criterion; 7. selection basedon the place of arbitration; 8. others. The fact that
performance/trustworthiness and high recognition/internationality were ranked high suggests thatthe lack of experience of Japanese arbitralinstitutions is the direct cause of the low use ofarbitration.
Among people who actually used arbitration,
speediness, nondisclosure, single instance,
enforceability, and specialized nature werementioned as the merits of arbitration while, atthe same time, high cost, prolonged proceedings,
no possibility of appeal, and unavailability of aperson suitable for the position of arbitrator were
the factors selected as demerits of arbitration.
Such opinions that the choice of arbitration
actually incurred more time and cost, and that aperson suitable for arbitrator was unavailable
were heard from more than a few attorneys andlegal affairs personnel who had actually usedarbitration. Consideration should be given tothese opinions.

Ⅵ Analysis of Procedural Rules
Applied by the Leading Arbitral
Institutions in Each Field
Among various fields of arbitration,international commercial arbitration has thelongest history and has been used most frequently.
Accordingly, in this field, know-how on carryingout proceedings has been accumulated, andarbitration rules have been established so as toassure speedy, low-cost, fair, and equitable● 6 ●IIP Bulletin 2011 Vol.20

proceedings.
This part reviews mainly the arbitration
rules of the ICC International Court of Arbitration,
as well as those of the WIPO Arbitration andMediation Centre, the Japan Commercial
Arbitration Association (JCAA), and the JapanIntellectual Property Arbitration Center (JIPAC),
with regard to the appointment of arbitrators, thesteps in arbitration proceedings, hearings andexamination of evidence, and awards, andexplores the important procedural factors forpromoting the use of arbitration.
As for the appointment of arbitrators, themajor arbitral institutions have rules regarding
the number of arbitrators; the procedure ofappointing
arbitrators;
theindependence,
impartiality, and quality of arbitrators; andchallenge of an arbitrator. These rules do not varymuch from one institution to another, with the
exception that the rules of the ICC International
Court of Arbitration provide for a unique step ofconfirmation in the process of appointment ofarbitrators. The arbitrator(s) nominated by theparties must be confirmed by the Court. In
confirming or appointing arbitrators, the Court
shall consider the prospective arbitrator’snationality, residence and other relationships withthe countries of which the parties or the otherarbitrators are nationals and the prospective
arbitrator’s availability and ability to conduct thearbitration in accordance with the ICC Rules ofArbitration. The Court may confirm arbitrators
basically on condition that they have filed astatement of independence (Article 9 of the ICC
Rules of Arbitration). The rules of other arbitralinstitutions also include unique provisions: theJIPAC requires that the Arbitral Tribunal include
at least one attorney-at-law and one patent
attorney as its members (Article 5 of the JIPAC
Rules for Arbitral Proceedings); both the JCAA
and the JIPAC prepare a list of arbitrator
candidates; the WIPO Arbitration and Mediation
Centre and the ICC International Court of
Arbitration require that each arbitrator makeavailable sufficient time to enable the arbitration
to be conducted and completed expeditiously(Article 23 of the WIPO Arbitration Rules, Article
7, Paragraph 5 of the ICC Rules of Arbitration);
WIPO sets rules for communications between theparties and the arbitrators (candidates forappointment of arbitrators), and between theparties and the Tribunal (Articles 21 and 45 of the
WIPO Arbitration Rules).
The critical factor for the speedy andefficient progress in arbitration proceedings is

IIP Bulletin 2011 Vol.20

that the outline of proceedings and the points at
issue have been identified within the initial stageof proceedings. In ICC arbitration proceedings,
the Arbitral Tribunal shall draw up its Terms ofReference and establish a provisional timetable
for arbitration procedures (Article 18 of the ICC
Rules of Arbitration). The Terms of Reference
shall include a summary of the parties' respective
claims and of the relief sought by each party, a listof issues to be determined, and other particulars,
and shall be signed by the parties and the Arbitral
Tribunal. The Arbitral Tribunal shall transmit thesigned Terms of Reference to the Court within
two months of the date on which the file of thecase was transmitted to it. The Arbitral Tribunal
shall also establish a provisional timetable andshall communicate it to the Court and the parties.
Under the JIPAC Rules for Arbitral Proceedings,
on the other hand, the Arbitral Tribunal shall"make efforts" to create a plan for the arbitralproceedings, leaving room for doubt of its
effectiveness (Article 20 of the JIPAC Rules for
Arbitral Proceedings).
With regard to hearings and examination ofevidence, the ICC Rules of Arbitration include thegeneral provisions on the establishment of thefacts of the case, as well as the provisions on
experts, measures for protecting confidential
information, hearings, and closing of theproceedings. The rules of other arbitralinstitutions have almost the same composition.
However, as institutions engaged in dealing withintellectual property arbitration, the WIPO andthe JIPAC include in their rules the provisions on"experiments" and "site visits" or "inspection,"and the WIPO also provides for "agreed primers
and models," so that they will be able to respondto circumstances peculiar to intellectual property
disputes in the course of establishing facts. These
provisions can be appreciated for contributing to a
reduction in the causes of unnecessary disputes
arising in relation to experiments and site visits,
etc. Another distinctive feature of the rules of the
WIPO and of the JIPAC is that the provisions on
confidential information are very minute.
Common provisions concerning awards areseen in the rules of the major arbitral institutions,such as those on the matters to be stated inawards and the time limit for rendering awards.
Meanwhile, the ICC International Court of
Arbitration has a system that is not seen in otherinstitutions, scrutiny of the award. Before signing
any award, the Arbitral Tribunal shall submit it indraft form to the Court, which serves as the
Secretariat, for its scrutiny. While a final decision● 7 ●is to be made by the Arbitral Tribunal, the Court
can make the Tribunal pay attention to points ofsubstance through this process. Among the 415
awards rendered in 2009, 382 were subject toeither the Court's modifications as to the form of
the award or call for attention to points ofsubstance, suggesting that considerably strict
scrutiny was implemented. Special characteristicsof the arbitration proceedings of the ICC
International Court of Arbitration are the systemof confirming arbitrators, the drawing up of theTerms of Reference, and the scrutiny of awards.
These arrangements made it possible to carry out
proceedings speedily and efficiently and to ensurethat correct and quality awards will be rendered,
thereby gaining trust from users of arbitration.
Arbitral institutions specialized in dealing
with intellectual property arbitration have special
rules for the steps that are necessary in theirproceedings, such as experiments and site
visits/inspections. Although experiments, etc. canbe implemented even without being provided in
the arbitration rules, the existence of the relevant
provisions helps prevent unnecessary disputes.
Yet, looking at the current situation of industrial
property arbitration, whether or not suchprovisions on experiments, etc. have any positive
impact on promoting the use of arbitration cannot
be evaluated.

Ⅶ Promoting Industrial Property
Arbitration
1

Overview

This part proposes measures to promote theuse of industrial property arbitration. Before
going on to the main topic, the peculiar
circumstances seen in Japan are briefly explained
again here. The number of ordinary civil cases
received by district courts nationwide in relation
to intellectual property, including copyrights, isnot so large, and the average period of pendency
is rather short. Cases finally resolved by a court
judgment or order account only for 35% or so, andabout half of the total are disposed by settlement.
Costs for arbitration proceedings are to be totallyborne by the parties, whereas the parties have to
pay less in court proceedings in which operationalcosts are covered by tax.
In light of all these circumstances, arbitration
is currently not an attractive means of dispute
resolution, and it is extremely difficult to promote
the use of arbitration to resolve industrial
property disputes in Japan. Nevertheless, if wewere to try to promote the use of industrial
property arbitration, the approaches that we could
take would be to further speed up proceedings,
enhance information disclosure, improve thequality of arbitrators, increase the transparency oflaws, and put into practice the promotion
measures proposed thus far.
2

Speeding up of proceedings further

In order to promote the use of industrial
property arbitration, it is necessary to establish
arbitration proceedings that require less time andcost as compared to court proceedings. Of thesetwo, the cost issue is not so critical because, if
arbitration proceedings are speedier than court
proceedings, the parties to disputes would be
more willing to use the former, even where theywould have to incur comparatively more costs.
What is vital is to increase speed and efficiency ofarbitration proceedings. To achieve this, adopting
the terms of reference and a procedural schedule,
such as those used in ICC arbitration, may be aneffective solution. It is also necessary to makearbitration proceedings more predictable to theparties.
3

Enhancement of information disclosure

Information disclosure in arbitration has two
aspects; one is information disclosure in general,and the other is information disclosure relating toarbitral awards.
Information disclosure in general refers toproviding information on the arbitral institutions
and arbitration proceedings. Although people inenterprises generally understand arbitration, they
do not have sufficient information on the detailsof arbitration, which is one of reasons for the low
use of arbitration. Arbitral institutions should
disclose such information from which users will
be able to concretely know how arbitration
proceedings are carried out.
By disclosing awards to the public, trust in
the dispute resolution system will increase, and if
such disclosed awards are frequently quoted in
the subsequent arbitration proceedings anddiscussed by experts, progress will be made in
the relevant fields of law. One of the factors thatcaused the recent remarkable progress in the
study of international investment law andsports-related law was disclosure of arbitralawards. It is desirable for awards rendered inindustrial property arbitration to be disclosed aswell, with due consideration given to● 8 ●IIP Bulletin 2011 Vol.20

confidentiality of information. This movement
will bring about the development of law andincrease the trust in industrial property arbitration.
In addition, although court proceedings are
currently being operated in a less time-consuming
and efficient manner, it is doubtful whether courts
will be capable of responding to the further
increase in cases. One possible solution may be toauthorize arbitration to complement part of thefunctions of courts, but if this is to be put into
operation, arbitral awards should be disclosed.
4

Quality of arbitrators

The quality of arbitrators determines thetrustworthiness of arbitration proceedings, aswell as the appropriateness and propriety ofarbitral awards. In countries where arbitration isfrequently used, there are a number of skilledarbitrator candidates. Some people in thosecountries have a view that there is not so muchneed to provide training for arbitrators, but in thefields of arbitration where arbitrators are required
to be highly specialized, training programs are
actually being implemented, thereby guaranteeing
the quality of arbitrators.
In Japan, as arbitration has not yet beenfrequently used, there are not many persons who
have ever served as arbitrators. Although thearbitral institutions have lists of arbitrator
candidates, not all of the listed persons haveactual experience as arbitrators. It is indisputablethat arbitrators are required to have an advanced
level of knowledge on legal and factual matters in
the relevant field of disputes, and furthermore,
the ability to manage arbitration proceedings isalso very important. Since the arbitration rules
provide for the minimum required matters, in
actual arbitration cases, arbitrators have tomanage proceedings, while hearing opinions of
the parties. With this in mind, the Japan
Association of Arbitrators holds seminars forarbitrators and provides training programs
regarding the specific steps in arbitration
proceedings. It is hoped that such training will be
implemented more actively in the future.
5

Transparency of laws

As an obstacle to the frequent use ofindustrial property arbitration, the relevantJapanese laws have some problems with theirtransparency. One problem relates to unavailabilityof arbitration, depending on the type of dispute,and the other relates to Article 72 of the Attorney

IIP Bulletin 2011 Vol.20

Act. Here, these problems are not discussed indetail but just pointed out, so as not to deviate
from the main purpose of this study.
Arbitration is available only for disputes
which the parties may settle by agreement. It is
not suitable for deciding on infringement disputes,
such as disputes on the validity of patent rights,
etc., for which settlement by agreement is notallowed. The Supreme Court judgment on the
Kilby Case led to the creation of Article 104-3 ofthe Patent Act, which allows the defendant in apatent infringement suit to allege invalidity of thepatent as defense, although the court decision ofinvalidation is only effective between the parties.
However, the relationship between this newprovision and arbitration has not yet beenclarified or discussed.
Article 72 of the Attorney Act poses issues
as to the qualifications of an arbitrator and of arepresentative in arbitration. When a person not
qualified as an attorney serves as an arbitrator,
whether or not his/her service as an arbitrator
constitutes violation of the Attorney Act becomesa problem. Although such service is not treated as
violation in interpretative terms, it is not
permitted under any explicit provisions of the
Arbitration
Act
or
any
other
statute.
Representation in arbitration is basically subject
to regulation under Article 72 of the Attorney Act.
In cases relating to intellectual property, however,the Patent Attorney Act permits patent attorneys
who meet the predetermined requirements toserve as representatives in arbitration. Foreign
lawyers are also permitted to engage in the
representation service in arbitration under the
special law. However, viewed in the context ofinternational arbitration, a question arises as towhether the Attorney Act of Japan is applicable
only in the case where Japan is chosen as theplace of arbitration, or also applicable in the casewhere the dispute has something to do with Japan.
Thus, the laws relevant to arbitration have someuncertain points that need to be discussed in the
future.
6

Putting into practice the promotion
measures proposed thus far

To date, how to promote the use ofarbitration has been discussed in a number ofstudies. The measures to promote the use ofindustrial property arbitration mentioned above
are nothing new. Still, in view of the current low
use of arbitration in this field, this study has
proposed those measures. What is truly● 9 ●necessary now is to put into practice thesemeasures already proposed, one by one.
7

Qualities and capabilities required of
persons engaged in resolving industrial
property disputes

Forthedisputeresolution
system,speediness, low cost, and trustworthiness arepresumed to be the factors that users would
significantly demand. On the other hand, persons
engaged in handling the dispute resolution
system are required to be correctly informed ofarbitration, and be well versed in the procedural
rules of the respective arbitral institutions so thatthey can choose the best institution depending on
the type of dispute.
The last question is what capabilities are
required of legal professions engaged in dealing
with industrial property disputes. It is
indisputable that they must be well versed in thelaws and procedures that apply to the respective
fields of dispute, and they must also haveadvanced knowledge of the technologies andother subjects meant to be protected by industrial
property rights. However, with regard to thecapabilities required particularly for the purposeof dealing with industrial property, this study has
been unable to draw any definitive conclusion bymaking an analysis of the resolutions of industrial
property disputes by arbitration alone.
1

For statistics on intellectual property litigation cases inJapan, refer to the data compiled by the Supreme Court,
General Secretariat, Administrative Affairs Bureau:"Heisei 19 Nendo Chitekizaisanken Kankei Minji Gyōsei
Jiken no Gaikyō" (Overview of the Civil and
Administrative Cases Relating to Intellectual Property
in FY2007), Hosojiho Vol. 60, No. 12, p. 3841 (2008);"Heisei 20 Nendo Chitekizaisanken Kankei Minji Gyōsei
Jiken no Gaikyō" (Overview of the Civil and
Administrative Cases Relating to Intellectual Property
in FY2008), Hosojiho Vol. 61, No. 12, p. 3677 (2009);
and "Heisei 21 Nendo Chitekizaisanken Kankei Minji
Gyōsei Jiken no Gaikyō" (Overview of the Civil and
Administrative Cases Relating to Intellectual Property
in FY2009), Hosojiho Vol. 62, No. 12, p. 3179 (2010).
2
Ditto.
3
Ditto.
4
Statistical data on the cases handled by the Tokyo
District Court, Intellectual Property Division, areindicated in: Misao Shimizu and Takafumi Kokubu,"Tokyo Chiho Saibansho Chitekizaisan Senmonbu to
Nihon Bengoshi Rengokai Chitekizaisan Seido Iinkai to
no Iken Kōkankai no Kyōgijikō ni Kansuru Shomondai ni
tsuite"(Issues on the Agenda of the Meeting for Opinion
Exchange between the Tokyo District Court,
Intellectual Property Division, and the Japan

Federations of Bar Association, Intellectual Property
System Committee), Hanrei Times No. 1301, p. 84(2009); and Misao Shimizu, "Tōkeisūjitō ni Motozuku
Tokyo Chisai Chizaibu no Jitsujō ni tsuite" (Reality of
the Tokyo District Court, Intellectual Property Division,
Based on statistical data), Hanrei Times No. 1324, p. 52(2010).
5
The Japan Intellectual Property Arbitration Center
website: http://www.ip-adr.gr.jp/case-ctatistics/ (as ofMarch 1, 2011)
6
The WIPO website:
http://www.wipo.int/amc/en/center/caseload.html (as ofMarch 1, 2011)7
The Japan Machinery Federation and Institute ofIntellectual
Property,ed.,"Heisei
9
Nendo
Chitekizaisan no Funsōshori ni Kansuru Chōsa Kenkyū
Hōkokusho: Saibangai Funsōshori Seido no Chōsa
Kenkyū" (FY1997 Research and Study Report on
Dispute Resolution in Intellectual property: Researchand Study on the Alternative Dispute Resolution
System) (1998); Copyright Research and Information
Center, Japan Copyright Institute, ed., "Chosakukentō
wo Meguru Saibangai Funsōshori Seido no Kenkyū,
ADR Iinkai Hōkokusho" (Research and Study on the
Alternative Dispute Resolution System for Copyrights,
etc., Report by the ADR Committee) (2001); The Japan
Machinery Federation and Institute of Intellectual
Property, ed., "Chitekizaisanken Funsō kara Mita
Chūsaiseido ni Kansuru Chōsa hōkokusho: Heisei 2
Nendo Chitekizaisanken no Enfōsumento ni Kansuru
Chōsa Kenkyū Jigyō" (Research and Study Report on
the Arbitration System from the Perspective ofIntellectual Property Disputes: FY1990 Research andStudy Project on Enforcement of Intellectual Property
Rights) (1991); Institute of Intellectual Property, ed.,"Chitekizaisan ni Kansuru Saibangai Funshōshori no
Arikata" (Ideal Form of Alternative Dispute Resolution
in Intellectual Property) (1992); The Japan Machinery
Federation and Institute of Intellectual Property, ed.,"Heisei 6 Nendo Chitekizaisan no Saibangai Funsōshorini Kansuru Chōsa Kenkyū Hōkokusho I: WTO TRIPS
Kyōtei ni Kansuru Chōsa Kenkyū" (FY1994 Researchand Study Report on Alternative Dispute Resolution inIntellectual Property I: Research and Study on the WTO
TRIPS Agreement) (1995); The Japan Machinery
Federation and Institute of Intellectual Property, ed.,"Heisei 6 Nendo Chitekizaisan no Saibangai Funsōshorini Kansuru Chōsa Kenkyū Hōkokusho II: WIPO Chūsai
Sentā ni Kansuru Chōsa Kenkyū" (FY1994 Researchand Study Report on Alternative Dispute Resolution inIntellectual Property II: Research and Study on the
WIPO Arbitration and Mediation Center) (1995); The
Japan Machinery Federation and Institute of Intellectual
Property, ed., "Chitekizaisan no Funsōshori ni Kansuru
Chōsa Kenkyū Hōkokusho" (Research and Study Reporton Dispute Resolution in Intellectual Property) (1998);
Institute of Intellectual Property, ed., "Chitekizaisan
Bunya ni okeru Saibangai Funsōshori no Arikata ni
tsuite no Chōsa Kenkyū Hōkokusho" (Research andStudy Report on the Ideal Form of Alternative Dispute
Resolution in the Field of Intellectual Property), Heisei

10
Nendo
Tokkyochō
Kōgyōshoyūkenmondai
Hōkokusho (FY1998 Japan Patent Office Study Reporton the Issues of the Intellectual Property System)● 10 ●IIP Bulletin 2011 Vol.20

(1999); and Institute of Intellectual Property, ed.,"Chitekizaisan Funsō no Jinsoku katsu Jikkōsei Aru
Kaiketsu ni Muketa ADR no Seibi ni Kansuru Chōsa
Kenkyū Hōkokusho" (Research and Study Report on theDevelopment of ADR for Expeditious and Effective
Resolution of Intellectual Property Disputes), Heisei 12

Nendo Tokkyochō Kōgyōshoyūkenmondai Hōkokusho(FY2000 Japan Patent Office Study Report on the Issuesof the Intellectual Property System) (2001).
8
Yoshimitsu Aoyama, "Kokusai Shōji Chūsai ni Kansuru
UNCITRAL Moderuhō ni tsuite (ge)" (UNCITRAL
Modal Law on International Commercial Arbitration(2nd)), JCA Journal Vol. 31, No. 6 (1984), p. 12;
Shinichiro Michida, "Kokusai Shōji Chūsai Moderu
Hōan to Nishi kara no Hihan (1)" (Draft of the
UNCITRAL Modal Law on International Commercial
Arbitration, and Criticisms from the West (1)), JCA
Journal Vol. 32, No. 5 (1985), p. 2. Also refer to "Kokusai
Shōji Chūsai Shisutemu Kōdoka Kenkyūkai Hōkokusho"(Report of the Study Group for International
Commercial Arbitration System Enhancement), JCA
Journal, Special Issue, Vol. 43, No. 8 (1996), p. 3
(hereinafter referred to as the "System Enhancement
Report"); for the Study Group for International
Commercial Arbitration System Enhancement, also
refer to Yasuhei Taniguchi, "Kokusai Shōji Chūsai
Shisutemu Kōdoka no Tame ni" (For International
Commercial Arbitration System Enhancement), Jurist
No. 1108, pp. 81–85)). According to this report, sincearound 1976, some scholars of law of civil procedure andthose of international law have been aware of the
difficulty in arbitration in Japan. However, it was not
until the 1990s that the "outdatedness of the Arbitration
Act of Japan" was discussed and regarded as a problem(ex. Seido Agawa, "Chūsai Seido no Fukyū Hattatsu wo
Nozomu" (Hoping for the Diffusion and Development of
the Arbitration System), Jurist No. 161 (1958), pp.
40–45, Mamoru Kamiya, et al., "Shinshun Zadankai:
Kokusai Shōji Chūsai Seido ni Tsuite Jitsumuka wa
Kataru" (New Year's Round-Table Talk: Practitioners
Discuss the International Commercial Arbitration
System), JCA Journal Vol. 27, No. 1 (1980) p. 4
(hereinafter referred to as the "New Year's Round-Table
Talk"), Akira Mikazuki, Tetsuzukihōteki ni Mita Kokusai
Chūsai no Mondaiten" (Problems with International
Arbitration from the Perspective of Procedural Law),
JCA Journal Vol. 27, No. 5 (1980), p. 2). The
outdatedness of the Arbitration Act was also pointed out
around 2000 on: International Arbitration Study Group,"Kokusai Chūsai Kenkyūkai Hōkokusho" (Report of theInternational Arbitration Study Group, JCA Journal Vol.
46, No. 5 (1999), p. 23, and Jiyu to Seigi Vol. 50, No. 7(2002), p. 187) (hereinafter referred to as the "Report of
the International Arbitration Study Group," using thepage numbers on JCA Journal).
9
New Year's Round-Table Talk, op. cit., (8), p. 9; System
Enhancement Report, op. cit., (8), p. 14; Report of theInternational Arbitration Study Group, op. cit., (8), pp.
24–25; Kazutake Okuma, "Wagakuni ni okeru ADR no
Kasseika no Tame no Oboegaki" (Memorandum for theInvigoration of ADR in Japan), JCA Journal Vol. 49, No. 6(2002), pp. 2 and 4; Hanamizu, Matsumoto, andYamamoto, "Teidan: Kokusai Chūsai no Shinkōsaku wo
Kataru" (Tripartite talk: Discussing How to Develop

IIP Bulletin 2011 Vol.20

International Arbitration), JCA Journal Vol. 49, No. 7(2002), pp. 2, and 6 ff.; Eastman, Neumann, andKashiwagi, " Teidan: - JCAA no Hatten no Tame ni Socchoku katsu Jissenteki na Hōhō wo Saguru"(Tripartite talk: Exploring Straightforward and PracticalWays - For the Development of JCAA), JCA Journal Vol.
50, No. 1 (2003), pp. 12 and 15; Yukukazu Hanamizu,"Chūsainin Kenshū no Hitsuyōsei" (Necessity ofTraining for Arbitrators), JCA Journal Vol. 50, No. 3(2003), p. 28; Naoki Idei, "Minji Funsō Kaiketsu Shudan
to shite no Chūsai no Ichizuke to Kanōsei" (Status andPotential of Arbitration as a Means for Civil Dispute
Resolution), Takeshi Kojima, ed., Nihon Hōsei no
Kaikaku: Rippō to Jitsumu no Saizensen (Reform ofJapanese Law: The Frontline of Lawmaking and Legal
Practices), Chuo University Press (2007), pp. 95 and106.
10
System Enhancement Report, op. cit., (8), p. 7, Okuma,
op. cit., (9), pp. 2 and 3.
11
Takeshi Kojima, "Chūsai Keiyaku, Chūsaihō noKaikaku" (Reform of Arbitration Agreements andArbitration Law), Hogakushinpo Vol. 100, No. 1 (1994),
pp. 143 and 164.
12
Okuma, op. cit., (9), p. 5; Hanamizu, Matsumoto, andYamamoto, op.cit, (9), pp. 2 and 3 (comments by
Matsumoto); Eastman, et al., op. cit., (9), p. 15; Toshio
Matsumoto, "Kaiji Chūsai no Genjō to Shōrai Tenbō"(Current Status and Future Outlook of Maritime
Arbitration), Kakeshi Kojima, ed., Nihon Hōsei no
Kaikaku: Rippō to Jitsumu no Saizensen (Reform ofJapanese Law: The Frontline of Lawmaking and Legal
Practices), Chuo University Press (2007), pp. 172, 174,
and 184; Yoshihisa Hayakawa, "Kokusai Chūsai ni okeru
Nihon no Hōseido no Katsuyō" (Use of Japanese Legal
Systems in International Arbitration), Horitsu no Hiroba,
2006 August Issue, pp. 44 and 49.
13
New Year's Round-Table Talk, op. cit., (8), p. 15.
14
The Hong Kong International Arbitration Centre
website:http://www.hkiac.org/show_content.php?article_id=9
For JCAA, data obtained by email survey.
15
Data sources: for the data for 2005, “2005 Statistical
Report,” ICC International Court of Arbitration BulletinVol. 17 No.1 (2006), pp.5 ff.; for the data for 2006, “2006
Statistical Report,” ICC International Court of
Arbitration Bulletin Vol. 18 No.1 (2007), pp.5 ff.; for thedata for 2007, “2007 Statistical Report,” ICC
International Court of Arbitration Bulletin Vol. 19 No.1
(2008), pp.5 ff.; for the data for 2008, “2008 Statistical
Report,” ICC International Court of Arbitration BulletinVol. 20 No.1 (2009), pp.5 ff.; and for the data for 2009,“2009 Statistical Report,” ICC International Court of
Arbitration Bulletin Vol. 21 No.1 (2010), pp.5 ff.
16
Ditto.
17
Ditto.
18
The Japan Network Information Center website:
http://www.nic.ad.jp/ja/drp/list/index.html (as of March 1,
2011)
19
Statistical data available on the Court of Arbitration forSport (CAS) website:
http://www.tas-cas.org/d2wfiles/document/437/5048/0/st
at2009.pdf (as of March 1, 2011)20
Japan Sports Arbitration Agency website:www.jsaa.jp/award/● 11 ●