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5.2. Dispute Resolution Needs and Experience. Panelist:. Mr. Michael Gross Fraunhofer-Gesellschaft Munich, Germany. 1. Fraunhofer Gesellschaft. - - - -. German non profit R&D organisation applied research/worldwide 58 Institutes staff: 12,500. 2. - - - -.

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Panelist:

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  1. 5.2 Dispute ResolutionNeeds and Experience Panelist: Mr. Michael GrossFraunhofer-GesellschaftMunich, Germany 1

  2. Fraunhofer Gesellschaft - - - - German non profit R&D organisation applied research/worldwide 58 Institutes staff: 12,500 2

  3. - - - - turnover 2004: 1,000,000,000 € (> 900,000,000 € contract research) 2500 R&D-Agreements/year 240 License Agreements/year most popular Licensing Product: MP3 3

  4. • R&D - Dispute Resolution by an Arbitrator/Mediator/ Conciliator or negotiations by the R&D-partners? • Two Cases - Case 1: - Case 2: Arbitration betweentwo European R&D-partners Mediation between a German inventor and an US License partner 4

  5. Case 1: Arbitration between 2 European R&D-partners "Acoustic Construction of a Concert Hall" I. THE PARTIES German Research Institute - Ministry of a European Country (contractor) 5

  6. II. THE ARBITRATION AGREEMENT R&D Agreement of January 1995 Art. 11 = Standard ICC Arbitration Clause 6

  7. R&D Agreement was established in > 2 versions: Art. 12: English and another European language (contractor's language) in case of disputes the text of the version of the other European language shall prevail 7

  8. The parties did not agree on - the place of Arbitration was fixed by the Court: Paris - the language of the arbitration the Arbitrator ordered: English (written submissions in English accompanied by a version in the language of the contractor) 8

  9. - the applicable law the Arbitrator ordered: UNIDROIT Principles of International Commercial Contracts shall be applicable 9

  10. III. THE RELIEF REQUESTED Claimant: € 191000 + interest at the rate of 5 % above the German base rate + costs of Arbitration 10

  11. Respondent: "Although Art. 11 of the R&D Agreement provides for arbitration as a means of resolving all disputes arising out of the ontract, we also object to the jurisdiction of the Court of Arbitration, as such a general provision regarding arbitration cannot be valid." 11

  12. IV. THE ARBITRATION PROCEEDINGS - Request for arbitration: 20 Dec. 2002 - Sole arbitrator - No request for an oral hearing by the parties 12

  13. V. AWARD 6 October 2004: € 191000 + interest + legal fees and expenses (of Claimant) + costs of arbitration (US $ 22000) 13

  14. VI. PROBLEMS 1. ~ 2 years 2. Enforcement of the award in the country of the contractor pending! 14

  15. Case 2: Mediation between a German inventor and an US Licensee "Monorail or rapid exchange catheter" (angioplasty procedures) I. THE PARTIES German Inventor - US Global Player (Licensor) (Lisensee) 15

  16. II. THE AGREEMENT Patent License Agreement of June 1986 (3 Amendments) Art. XVI: Applicable Law = German law NO DISPUTE RESOLUTION CLAUSE 16

  17. Licensee of 1986 sold its facilities to a competitor for $ 2,16 billion: 1998 New Licensee enforced the licensed patent several times in the US, e.g. by award against a competitor: July 2001 17

  18. III. THE RELIEF REQUESTED Under payment of royalties: $ 16 million 18

  19. IV. THE MEDIATION - Request for mediation: 24 July 2001 - Mediation: 16 August 2001 in Minneapolis, USA Start: 10:00 a.m. (16 August) Settlement: 1:00 a.m. (17 August) Result: ??? 19

  20. Licensee purchased the licensed patent: US $ 80 million 20

  21. V. PROBLEMS NO PROBLEMS! applause for the inventor!!! 21

  22. • R&D - Dispute Resolution by an Arbitrator/Mediator/ Conciliator or negotiations by the R&D-partners? 22

  23. It depends! 23

  24. Wild applause for the panelist!! 24

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