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ACID CEO shares ACID mediation model with leading experts in Alicante

At an EU mediation conference, Dids Macdonald, OBE, CEO of ACID, joined experts from national and international institutions, academia and from the European Union Intellectual Property Office (EUIPO) to share intelligence and address a wide range of topics in the field of intellectual property mediation. The EUIPO Boards of Appeal, together with the EUIPO Academy and the International Cooperation and Legal Affairs Department of EUIPO organised the second IP Mediation Conference, at which she spoke.

Mediation is a growing trend in intellectual property, and an increasingly sought-after method of dispute resolution. Through panel discussions, audience interaction and real-world examples of IP mediation in practice, the conference will explore the benefits and added value of mediation for all parties.

ACID Mediation, an alternative model.

Dids Macdonald shared her ACID experiences with delegates, “Imitation isn’t flattery if it costs you your business. As a designer, over 20 years ago, it nearly cost me mine. Badly. As a small design-led business I decided to use every means available to beat the Goliaths, most of whom had deep legal pockets.

Promoting Mediation seemed an obvious solution as I couldn’t afford litigation because of the time and cost.

So, when I co-founded ACID we created two mediation models – both fairly informal and both successful.

We have carried out around 4000 informal grass roots mediations/interventions at exhibitions as part of an ACID Accredited exhibition model to mediate when knock offs are discovered.

We launched this model at Heimtextil in 1998 and 20 years later I think it is still called Messe Frankfurt Against Copying.

All joining members sign and agree our Code of Conduct – which demonstrates ethics, compliance and respect for IP. If there is a dispute between two members, members agree to attend a three-hour timed mediation WITHOUT LAWYERS.

There is a limited pre-correspondence exchange to try and resolve the matter without the need to mediate. If this fails an experienced IP mediator is selected, usually an IP lawyer and an assistant mediator, often me as I am qualified CEDR mediator.

An IP dispute is rarely about a point of law only but examining the commercial issues to craft an agreement that both parties can accept and no-one loses face.

  • Talking informally is good and for parties to realise that mediation is about finding accord rather than a judge making a decision based on a point of law with lawyer involvement. ACID mediation models work in certain disputes.

To put a context around cost & time issues it is important to understand some facts and figures.

In the UK 1.5 million are involved in design or design skills, 80% of companies have less than 10 employees, 67% have less than 4 employees.

Average hourly earnings are £16.42 per hour. When compared to an IP lawyers hourly charging rates of between £175 and £500  litigation is cost prohibitive for SMEs.

Legal letter ping pong, taking months or years and costing litigation, together with what can be a debilitating court process means that litigation is the luxury of the few and mediation should be promoted more.

  • It’s good for parties to talk with an experienced mediator who understands small business and the creative sector. Its quicker and cheaper than litigation – allowing SMEs time to focus on their business and not be distracted by lengthy and costly litigation proceedings

Generally, there appears to be a lack of awareness about mediation.

There’s a reluctance to talk about mediation by lawyers until both parties are too entrenched in their positions and too far down the line financially.

Clearly lawyers must establish the legal facts but, generally, we have found the legal profession do not bring up the subject of mediation early enough in legal correspondence to make a difference.

There is also a lack of understanding by parties about what mediation means, many thinking a mediator makes a judgment.

In the UK, whilst there has been some willingness to talk about alternative dispute resolution, it is not a national IP priority and whilst our Intellectual Property office in the UK does have a service, it is not used as much as it should be.

A large percentage of key stakeholders in any national IP office are lawyers and customers   – could this be an influencing factor? Are the two models compatible?

In our campaigning talks with Government and Policy makers, we try to influence declared CSR respect compliance and ethics by major retail and manufacturing organisations (some of whom are the worst culprits). We would like to see a national mediation scheme developed.

The strategy by the culprits is to perpetuate litigation and stonewall any legal challenge pushing the little guy out of the water because of costs and time issues.

  • Over decades through campaigning, CSR standards have risen on major issues – climate change, sustainability, product safety and slave labour et al, so IP infringement, as a national and global issue, should be a must have within acceptable, expected and communicated CSR.

Does the current legal model support mediation?

Legal Correspondence takes time and is expensive, talking is much quicker and can be more effective.

Making a legal point is often very adversarial whereas with mediation, through dialogue, encourages movement of positions from a conciliatory perspective.

Trying to craft and broker an agreement to which both parties can work within is paramount. Lawyers, we have found, tend to complicate this model.

The legal process can take years versus, in the ACID model, 3 hours to resolve a dispute – it’s a no brainer.

In protracted litigation, sales can be lost, eyes taken off the ball, angst, heartache, lack of money and stress. Basically, creatives want to get on with what they do well – design and create. SMEs haven’t got the resources either financially, emotionally nor are they time rich.

  • Mediation is also confidential – whatever the outcome, it will remain private (preserving business reputations) unlike a court hearing which is open to the public

I’d like to share a case study with you.

We became aware of 2 large furniture companies, competitors, in dispute who had, against our ACID Code of Conduct become entangled in the legal process both to the tune of roughly £20,000. Neither had realised mediation between members was compulsory under the ACID Code of Conduct.

When the parties met, the atmosphere was ice cold, rude, aggressive and, on the face of it, both parties were entrenched their legal positions.

From pre-mediation correspondence we could see a couple of commercial solutions and identified one possible alleged infringement issue.

The mediator advised them we would try and help BOTH parties reach agreement through compromise. Both had thought, wrongly, that there would be some sort of judgement.

Gradually they started to understand and buy in.

The atmosphere shifted from aggressive to possible acceptance of the proceeding but nevertheless, the body language was negative and the language accusatory and non-conciliatory. They continued to be rude to each.

The mediator talked to one party while I went in the room with the other party. This happened three times.

We met between sessions and exchanged our observations.

Gradually we established what would be acceptable to both to walk away that day.

In the end, Party A agreed to pay Party B a sum of money and agreed not to produce a product which was “remarkably similar” to the other party.

Party B agreed they would discontinue a product which, although we did not think was an actual copy could have been legally challengeable. It transpired, B was not actually that bothered because they were not selling it in great numbers. By delving deep into what the bottom line was for each we could start negotiating.

Also, by reminding both parties that they would probably have to spend a further £20k to resolve this, taking further time and all that this entailed, reality checks started to emerge.

After 3 and a half hours, an agreement which had been drafted beforehand was signed by both parties  and they left having agreed to share a taxi together to go back to the North of England on the same train.

Both parties saved “face” – there was really no winner or loser. But both thought they had “won”.

A couple of months later the two companies were on adjacent stands at a major furniture exhibition. Party A said, what we do now if there is an issue we telephone each other and sort it out. If this doesn’t work, we have both agreed to contact ACID directly.

  • It was a cost and time effective exercise but also relationship building that will hopefully mean they can work in the same sector at least at peace with each other through a positive framework
  • Mediation also offers the opportunity to maintain existing commercial relationships, as well as the chance to forge new ones

I am passionate about mediation. Our Mediation model is certainly not the solution to all IP disputes by any means. However, it is a positive alternative to a legal route.

My mantra for small design led micro and SME creatives is mediate don’t litigate and for Governments/policy makers to encourage a commitment to mediate first within CSR.”

View the EUIPO IP Mediation Conference presentation  here.

View more detail about the EUIPO IP Mediation Conference here.

 

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