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28 September 2017

Tech companies want speedy and private dispute resolution

Arbitration is a better solution for tech companies than litigation but it needs to be faster.

The road back to private practice

Technology companies would prefer arbitration over litigation when dealing with disputes. Respondents identified the top three problems with litigation as cost (64 per cent), time to resolution (57 per cent), and inexperienced or unqualified judges (46 per cent). More than 20 per cent of tech companies said that their main concerns included overly intrusive discovery practice, random jury verdicts, or an inability to implement enforcement internationally. Three in four favoured arbitration for its specialised expertise whilst one in two (54 per cent) valued the time it took to resolve the issue and 40 per cent supported it for the increased privacy it offered. These were closely followed by streamlined processes and flexible procedures.

Critical concerns

The research was carried out by Silicon Valley Arbitration & Mediation Center (SVAMC), a leading not-for-profit that advances the use of arbitration and mediation in technology-related business disputes around the world in association with the  Global Technology Dispute Resolution Council. 'Industry experts have confirmed that cost, time to resolution, and decision-makers with specialised expertise are critical concerns in technology company disputes,' said Gary Benton, chairman of SVAMC.

High-stake battles

'Technology companies in Silicon Valley and beyond struggle with expensive, high-stakes court battles that leave them with less-than-satisfying results,' Mr Benton said. 'Arbitration offers an attractive alternative, particularly when the confidentiality of trade secrets or other business information is critical to one or both parties. The ability to enforce international awards is particularly attractive to the growing number of technology companies that operate globally.'

Shorter time

The survey showed that improvements could be made to the arbitration process with more than 62 per cent of survey respondents seeking even shorter time to arbitral resolution. Respondents also called for lower arbitration costs, and identified a need for more qualified or specialised arbitrators. 

Patent disputes

Major technology companies often spend $3-5 million on legal fees for patent disputes, which typically take three to five years to resolve through the courts. Commenting, Mr Benton said: 'We at SVAMC encourage technology companies to consider arbitration; take advantage of the opportunity to craft a flexible process fit to the dispute; choose experienced counsel; and to select arbitrators with specialised expertise and strong backgrounds in technology industry law and practice.'  

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