In the first two articles in this series we explored the types of patent cases most likely to be amenable to arbitration, whether to opt for administrated or ad hoc arbitration, and whether to provide for a panel or a single arbitrator. The next decision to make is what the qualifications of the arbitrator or arbitrators should be in a patent case.
Of course, one of the prime advantages of arbitration is the ability to choose a decision-maker who has expertise in the subject matter of the dispute. In fact, because arbitration is governed by contract, you can provide for a particular background right in the arbitration clause.
So, what kind of expertise are you seeking in an arbitrator in a patent case? Given the need for subject matter expertise, you will want an arbitrator who is very familiar with all aspects of a patent case. I still remember years ago when I asked a federal judge at a pretrial in California what kind of Markman/claim construction procedures he typically used. He told me he didn’t use any. That told me we were in for a difficult educational process with someone who probably wasn’t all that interested in mastering the intricacies of patent law in any event. You can avoid that in arbitration – and should.
Of course, if you have a panel of three arbitrators you could, as suggested in an earlier article in this series, require that one arbitrator have a technical background, another a financial background, and a third experience in the arbitration process itself. But you may not have the luxury of a full panel, so you may well want to seek an arbitrator with a background in all the important aspects of patent issues.
Subject matter expertise in patent law is, of course, a must. You don’t want to spend a great deal of time educating an arbitrator about the intricacies of patent validity, enforceability, claim construction, infringement and the like. You need an arbitrator who has dealt with those issues for years of his or her professional life. Thus, your arbitration clause may provide that the arbitrator(s) must have a minimum of ten or even twenty years of patent litigation practice and experience.
But knowledge of patent law alone is not enough. Given that your case likely will arise from a license, development, or employment agreement, you will also want to see some familiarity with those issues, which will often turn on issues of contract interpretation.
Technical familiarity is also important. While it may be too much to ask to have and expert in the specific technology in your case, familiarity with the industry and subject matter in general is something you probably can expect. Your arbitrator may not, for example, actually be a programmer, but he or she ought to be generally familiar with software issues in a case involving a software patent.
The financial aspects of patent cases can also be complex. Experience with patent royalties and other forms of damages will be a plus in knowing your decision-maker can easily follow the points you are making concerning the financial aspects of the case.
Don’t overlook the need for some familiarity with the discovery process, particularly electronic discovery. Discovery in arbitration is typically more focused. But that means you want an arbitrator with more experience in that area rather than less. That will allow the arbitrator to make informed judgments about the need for particular types of discovery and balancing the cost against the likely importance of the information to the case. Because electronic discovery can be extremely expensive, it will need to be carefully managed by an arbitrator who knows the issues and can weigh costs and benefits.
Perhaps the easiest thing to overlook is the need for considerable experience and expertise in managing the arbitration process itself. Good arbitrators make this look easy. But in a typical arbitration, procedural, evidentiary, and process issues arise that require careful management by an arbitrator who has “seen it all,” or at least most of the tough issues that can arise. How will the arbitrator deal with a witness that won’t answer the question directly? The lawyer who won’t quit leading the witness? The lawyer who objects to every piece of evidence the other side seeks to present as “unfair?” The party that keeps stalling in providing information? The party that insists on presenting previously undisclosed evidence and witnesses? Claims of and attacks on alleged attorney-client privileged information? None of these issues are unusual in an arbitration. And each must be dealt with by an experienced arbitrator to obtain the necessary information to decide the matter, but in an efficient way that remains fair to all parties.
As noted in an earlier article in this series, one of the advantages of an administrated arbitration is access to panels of experienced arbitrators and provision of detailed resumes for those arbitrators. In some circumstances, there are even opportunities for providing questionnaires to arbitrators or even a chance for interviews of potential arbitrators – with both counsel present.
Of course, you don’t get to choose your arbitrator yourself. Your opponent is also involved in the process. For example, in a typical AAA process, the parties discuss with the case manager the qualifications they think the arbitrator(s) should have. The case manager then provides a list of candidates. The parties then can strike or rank each arbitrator on the list. The arbitrator or arbitrators with the best rankings from both parties is appointed. Thus, each party has plenty of input into the choice of arbitrator, and careful consideration of what qualities you want the arbitrator to have is critical.
In short, subject matter, legal, and procedural expertise are all things you will want in an arbitrator in a patent case. And because you have quite a bit to say about who the arbitrator will be, are all qualities you can expect your arbitrator to have if you are careful about it.