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The arbitrability of IPR related disputes are decided by the nature and language of the
contract. Indian Courts have time and again affirmed the arbitrability of IPR disputes.
In Eros International vs Telemax Link1 Bombay High Court has held that trademark
and copyright infringements arising out of a contract containing an arbitration clause
is an arbitrable dispute, which must be referred to the decision of the arbitrator, and
civil courts will not entertain such disputes. The Bombay High Court has upheld the
arbitrability of trademark and copyright infringement claims arising out of contracts
containing an arbitration clause. The reason being that determination of infringement
or non-infringement would be an action “in personam” and would be binding only
on the concerned parties. However, very often as and by way of a counter, the
registration of the trademark or the entitlement to the copyright itself is challenged.
Such a challenge would entail a determination “in rem” which can only be
undertaken by the forums constituted by the intellectual property statutes and not by
an arbitrator. Hence, arbitrability of infringement issues can be frustrated by
challenging the registration of the trademark or entitlement to the copyrights itself
which would then make the entire dispute as a whole non-arbitrable.
In a landmark judgment in the case of Bawa Masala Co. vs. Bawa Masala Co. Pvt.
Ltd. and Anr.4, where a number of legal disputes were resolved through a process of
alternate dispute resolution, the Delhi High Court passed orders for adoption of a
process known as early neutral evaluation, in an intellectual property based litigation
suit. The Court in this case, under the umbrella of section 89 of the Civil Procedure
Code, 1908 mooted for the inclusion of such procedures for amicable settlement of
disputes. The Court further said that the early neutral evaluation procedure shares the
same features as a mediation process…the difference is that in case of mediation the
solutions normally emerge from the parties and the mediator makes an endeavor to
find the most acceptable solution whereas in case of early neutral evaluation, the
evaluator acts as a neutral person to assess the strengths and weaknesses of each of
the parties. The Court further made a distinction between early neutral evaluation and
arbitration by stating that in early neutral evaluation there is no testimony or oath, or
examination and such neutral evaluation is not recorded. The Court held that early
neutral evaluation is confidential and cannot be used by any of the parties against the
other. There is no award or result filed. This stands as a seminal case, where, Indian
Courts have tried to bring alternative dispute resolution machinery for solving
intellectual property infringement related matters. This case also highlights the
inclination, which Indian Courts have started sharing, towards involvement of
alternate dispute resolution measures in resolution of such disputes.