Resolving Licensing Conflicts: Lessons from Singapore’s IP Mediation Success

In present times, Intellectual Property (IP) licensing is a key profitable model for plethora of businesses. Through the use of patents, trademarks, copyright and other IP, licensing allows companies to strategize their innovation and reach out to more customers. But licensing deals are not that straight forward. Fights over royalties, performance standards, and the specific terms of granted rights often inflate into expensive lawsuits, which ultimately threatens to shatter years of established business relationships and along with destroy the very thing licensing is designed to preserve. Against this backdrop, Singapore has emerged as a pioneer in the use of mediation to resolve IP licensing disputes. With a well-structured system Singapore provides a dispute resolution setting that is confidential, speedy, and business-friendly. Mediated settlements maintain commercial relationships, protect sensitive information, and enable parties to move on quickly without the delays and adversarial harm of litigation.

This blog examines the ways in which Singapore’s IP mediation system is an exemplar of a best-practice model and how, through its holistic and proactive approach to settling licensing disputes, other jurisdictions can learn to follow its principal. Through this, it highlights why mediation is more than an option, but a forceful and indispensable one for maintaining innovation and commercial cooperation in the new economy.

Why Mediation over Litigation

IP licensing disputes usually occur when agreement cannot be reached on terms such as payments of royalties, geographic restraints, sublicensing permissions, or standards of performance, among others. Such disagreements often are extremely technical and commercially confidential, considering the high value of the intellectual assets at stake. Litigation in the traditional sense, while occasionally unavoidable, is usually not well adapted to conflicts regarding licensing. Litigation is time-consuming and costly, and carries a potential risk of publicizing confidential business information. Moreover, adversarial litigation can irreparably harm the cooperative relationship between a licensee and licensor, decreasing the long-term value of the licensed IP. In this context, effective, relationship-maintaining alternatives are needed, and mediation is an especially appealing solution.

Understanding the Evolution of Singapore’s IP Mediation Ecosystem

·       1990s - Promotion of ADR Culture

·       1997 - Singapore Mediation Centre established

·       2010 - WIPO Arbitration and Mediation Centre sets up Singapore office

·       2014 - Singapore International Mediation Centre launched

·       2017 - Singapore Mediation Act enacted

·       Ongoing - Government incentives and court support integrated

Development of Framework Overtime

Singapore’s emergence as a hub for IP dispute resolution has been neither coincidental nor incremental. It is the culmination of a planned national approach that combines visionary legislation, institutional capability development, and a dispute-avoidance culture.

TIMELINE	PARTICULARS
1990s	Singapore courts became the standard bearers for mediation as a serious and realistic alternative to litigation, which ultimately resulted in enhancing commercial relationships and release logical settlement. This initial judicial receptiveness paved the way for more profound policy investments.
1997	The establishment of the Singapore Mediation Centre gave formality to mediation services within the nation, offering an institutionalized mechanism to underpin commercial and IP-related conflicts.
2010	As time passed, supporting cooperation with international bodies such as the World Intellectual Property Organization (WIPO), Singapore opened its arms to the opening of the WIPO Arbitration and Mediation Centre’s Asia office. This can be seen as a signal of Singapore’s willingness to provide services for cross-border IP disputes and to conform to international best practices.
2014	Singapore opened the Singapore International Mediation Centre (SIMC), enhancing its interest in high-value international commercial cases.
2017	Parliament enacted the Singapore Mediation Act, providing enforceability to mediated settlement agreements and removing one of the most frequent concerns raised by companies.

All these efforts have been complemented by a facilitative government that provides subsidies and promotion schemes to persuade businesses, particularly small- and medium-sized enterprises, to approach mediation first.

Why Mediation Works for Licensing Disputes

Mediation somehow provides a unique advantage when dealing with licensing disputes when compared to other ADR Mechanisms. First, it maintains confidentiality, which is essential in a business world where royalty rates, proprietary technology, or performance of a contract are slightly competitive tools. Second, by keeping this intangible property confidential, mediation protects parties from reputational and commercial damage that are generally associated to public trial. Third, far from undermining trust through hostile processes, it provides stakeholders a cooperative platform in which to discuss grievances and resolve them positively, preserving potential future business avenues in the bargain.

Furthermore, its cost and speed benefits cannot be missed or ignored either. It allows parties to return to business operation as quickly, feasibly, and economically as possible, more often with the assistance of subsidies and experienced professionals, especially as in Singapore. Parties generally conceptualize their own agreement based on their commercial realities, and not a strict black letter making it more viable.

Trademark Dispute Resolved in Just One Day

In the WIPO-Singapore ASEAN Mediation Programme, three Singaporean optometry companies, Chew’s Optics, Chew’s Optics (Bishan), and Chew’s Optics (Kovan) settled a trademark licensing dispute within one day. The issue involved use of marks licensed since 2000 but subsequently misused without authorization by a related company. Resolved through mediation by Viviene Sandhu under the WIPO Centre, the agreement saved much time and expense relative to a possible two-year litigation. Aided by up to SGD 8,000 subsidies, the mediation-maintained business relationships while cultivating young mediation talent in Singapore, demonstrating AMP’s strength in providing commercially sound, efficient IP dispute resolution.

Singapore as a Guiding Model for Other Jurisdictions

Singapore’s IP mediation system is remarkable not only for how well it is done, but also for how clearly it illustrates gaps within other jurisdictions’ strategies for resolving licensing disputes. Singapore’s approach when compared to procedures elsewhere, the benefits become even more persuasive as well as implementable due to various factors discussed below.

Expertise in Specialists

One pinnacle that differentiates Singapore from other jurisdictions is that it invested early in specialist mediation centres, for e.g., the SIMC and the in-country office of the WIPO Arbitration and Mediation Centre, with IP experienced mediators. Compared with many other jurisdictions that continue to use general commercial mediation panels with no idea of licensing complexity, parties in other jurisdictions can be reluctant to mediate because their case can be poorly handled by non-specialists. Singapore demonstrates the worth of developing extensive IP experience in mediation services.

Artful use of Mediation’s “Soft Image”

One of Singapore’s signature reforms, the Mediation Act 2017, rendered mediated agreements as enforceable as court judgments. No other jurisdiction has such legislation, and parties are anxious that a settlement will fail without the support of a court. Such protections against non-enforcement discourage companies from using mediation. Singapore’s legal framework show how solid enforcement can make mediation a reliable, mainstream option. Moreover, judges in Singapore consistently nudge parties towards mediation, integrating ADR into the litigation process itself. In most countries, courts continue to regard mediation as an adjunct, voluntary add-on, which does not make it common practice.

Luring through Financial Incentives

Subsidies for mediation, including the IPOS Mediation Promotion Scheme, have reduced the cost burden on parties to attempt mediation, particularly SMEs. In contrast, other jurisdictions rarely subsidize mediation, and parties pay for the entire process themselves, making mediation seem risky and expensive. Singapore’s strategy demonstrates that even pity money can make the tipping point in favour of quicker, more equitable outcomes.

Preservation of Relationships

Lastly, Singapore’s model is structured to maintain business relations, an essential component for licensing relationships based on long-term collaboration. Most jurisdictions continue to drive parties towards hostile litigation and if not deliberate action, their inaction leads to litigation, endangering commercial irreparable harm. Singapore’s experience indicates that mediation should be a preferred mechanism whenever it is a matter of relationships, instead of a last-resort solution when courtroom wars fail. Briefly put, this system casts an even greater glow when compared against typical global vulnerabilities.

Challenges and Considerations

Firstly, a notable challenge within Singapore’s IP mediation system (meditation as a system) is unequal bargaining power. Smaller licensees might be coerced to settle in mediation when dealing with large, well-funded licensors. To address this, Singapore has encouraged the utilization of trained and impartial mediators who can actively balance the negotiating table and ensure fairness in the process.

Secondly, there are still those who perceive mediation as a “show of weakness or only a second-best option”. To counter this, Singapore has made a smart move by constant efforts in education, in order to gain confidence in mediation as a strong tool for resolving conflict.

Lastly, with the growing popularity of mediation, it is crucial to ensure that mediators themselves maintain some high standards of competence as well as ethics. Singapore has done a great job maintaining this through well-crafted certification schemes and stringent appointments to panels, thus ultimately ensuring confidence in the process.

Conclusion

Singapore’s IP mediation system can be termed as a “compelling model” for the resolution of licensing disputes in the current times. Through the integration of professional skills, real results, court incorporation, and monetary encouragements, Singapore has developed a grounded system that is speedy, confidential, and commercially realistic. This system helps in achieving the protection of sensitive business data without losing valuable relationships, results that traditional litigation system cannot imagine. Laudably, Singapore has actively managed issues of fairness with inbuilt public trust through stringent regulation and training, showcasing confidence in the process. Such aspects demonstrate that mediation is not merely an afterthought but a deliberate option that enhances and secures both commercial relationships as well as the overall IP ecosystem.

Author: Aditya Jain, in case of any queries please contact/write back to us via email to chhavi@khuranaandkhurana.com or at  Khurana & Khurana, Advocates and IP Attorney.

References

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2.     Intellectual Property Office of Singapore (IPOS), First Successful Mediation Under WIPO-Singapore ASEAN Mediation Programme, November 9, 2023, https://www.ipos.gov.sg/news/news-collection/first-successful-mediation-wipo-sg.

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7.     Singapore International Mediation Centre (SIMC), New Scheme Will Subsidise Cost of IP Mediation Disputes, March 22, 2016, https://simc.com.sg/news/new-scheme-will-subsidise-cost-ip-mediation-disputes.

8.     Singapore International Mediation Centre (SIMC), Press Release: Singapore International Mediation Centre Officially Launched, November 5, 2014, https://simc.com.sg/news/press-release-singapore-international-mediation-centre-officially-launched.

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