Intellectual Property and Arbitration in Pakistan

Aleezay Saeed / August, 2022

Intellectual Property Law is rapidly gaining credence in Pakistan as businesses are increasingly becoming aware of the laws that protect their unique trade secrets, copyrights, patents and trademarks. Although the Intellectual Property Organization (IPO) was set up as an autonomous body in 2005, the administrative control was passed on from the Cabinet division to the Commerce division in 2016. Since then, under, IPO Act 2012, IPO has been empowered to administer, manage, monitor and control all functionaries relevant to the proceedings of intellectual property cases in Pakistan. The Organization is empowered to plan, devise, develop a network to disseminate information regarding the existence and significance of intellectual property rights in Pakistan. Since its establishment, IPO is striving to register the IP rights of parties and settle disputes at its multiple offices and tribunals set up in Islamabad, Karachi, Peshawar and Lahore.

Traditionally, cases of IP rights are commonly heard by national courts in the conventional manner. However, recently, there has been a shift towards arbitration. This idea gained traction due to the setting up of the World Intellectual Property Organization (WIPO) Arbitration and Mediation Centre in 2012. The center is equipped to offer specialist legal advice in International and IP disputes. Since 2012, WIPO has witnessed an upward trend in the number of cases from 31 to 263 in 2021. The settlement rate of mediation in 2021 was 75%.

Taking inspiration from this new development in law, many countries under common law jurisdictions like Pakistan, have also made amendments in their arbitration laws to include provisions for IP cases. For instance, Singapore passed the Intellectual Property (Dispute Resolution) Act which amended the Singapore Arbitration Act and International Arbitration Act and now specifically deals with IP rights. Under part 9A of the Act, any dispute is permitted to be adjugated through arbitration regardless if IP rights are the main or incidental issue of the dispute. However, it limits the application of arbitration to IP cases where the agreement mentions a specific entity to be the jurisdiction. Although in America and Canada, there are no designated statutes for the enforcement of abirritation principles in the field of IP law, courts have generally allowed the awards in patent disputes. The courts have also been liberal in awarding parties with the autonomy to opt for arbitration in copyright disputes. In a recent development, the Silicon Valley Arbitration and Mediation Centre with a team of highly qualified arbitrators falling in the “Tech List” have also started resolving IP disputes through its forum.

In a similar vein, Hong Kong has also been a pioneer in advancing for arbitration in IP cases. In 2017, Hong Kong also promulgated a similar law for the enforcement of arbitration laws in IP address, but it only allows awards to be granted which are not contrary to the public policy. Moreover, Australia has also propagated this advancement by allowing arbitrators to resolve IP disputes, however, arbitrators are refrained from passing declarations regarding IP rights to parties. In the UK, most close to home, the UK Patents Act 1977 also allows for arbitration in IP in some cases whereas trademark and copyright disputes are completely arbitrable in the country.

If these countries can make these changes, why cannot Pakistan? Understandably there would be some reservations over this novel idea: IP cases are best decided in court settings, arbitration is only effective in limited cases, it may be impossible to control, it would be no less expensive or time consuming, there would be no interim relief and above all, lack of  resources and change of mindset in Pakistan. Both arbitration and IP law are flourishing in Pakistan and a partnership amongst the two could be promising.

To address the reservations against this new change,  American Arbitration Association (AAA) and WIPO have conducted several studies. Statistics show that to date, 29% patent, 24% copyright and 20% trademark disputes have been resolved by WIPO. Moreover, it has been proven that arbitration is most suitable for such cases as the proceedings are confidential, and less adversarial than litigation. As the decisions are made in private, the impact of the decision is borne by the parties confidentially, which saves them from bad publicity and compulsion to follow binding precedents. Further, in arbitration parties are allowed to select their own arbitrators which are then vetted by the WIPO and AAA and the national courts in the case of internal disputes. In addition to this, any procedural irregularities can be avoided and accountability can be ensured if pre-dispute clauses are included in IP agreements. Also, arbitration laws around the world allow arbitrators to allow interim relief, even in Pakistan.

Judges in Pakistan are already overburdened with cases. CJP at a recent arbitration conference remarked that there are 4000 judges in the country and every judge has approximately 1800 cases to decide. Considering this, alternate dispute resolution in wider fields of law is recommended. Alternate dispute resolution has gained traction in the country with the CJP recently recognizing its need for boosting investor confidence and there are also steps taken to initiate an international abirritation law regime into the country in the wake of the Orient v SNGPL judgement discussed in one of our blogs. Arbitration is also the need of the hour because the country is opening up to trade. Projects like CPEC are opening the approach of the country to the world and so keeping up with advancements in law is the right way forward. At the time being, the intersection of IP law and arbitration would be fruitful as IP cases are almost always cross borders so the issues become international. Pakistan is already a signatory of the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958, so implementing awards would be convenient and uniform to other signatories. Hence, Pakistan is in dire need of modernization of its arbitration law.

As for the resource allocation is concerned, there is already a standing infrastructure in the form of IPO tribunals to facilitate this merger in Pakistan. The IPO has been empowered in the Act to propose and initiate legislation for intellectual property rights of Pakistan. Hence, either the legislation can be alerted to expand existing tribunals to facilitate IP disputes or the IPO can advise the Federal Government, depending on the feasibility to make separate tribunals for IP. To equip the arbitrators in the field of IP law, a prospective partnership between the CIICA and the IPO can be formed to conduct mandatory trainings. CIICA can also collaborate with the IPO to disseminate information about the new idea, and also offer guidance to interested arbitrators through their helplines. The two organizations can also join hands to host conferences inviting IP law arbitrators from other countries who can impart their expertise in the field.

Now Pakistan has three options: alter its domestic arbitration law and at a pilot level introduce arbitration in IP cases locally, allow cases to be sent to WIPO or incorporate IP cases in its proposed international arbitration law regime. Whichever option is taken forward, the law should be tailor made to the socio-economic milieu of the country and not a slightly altered imitation of India or UK’s laws!