It is commonly understood that an arbitration award only binds the party to the arbitration. This “inter partes” aspect of arbitration, however, can have unappreciated consequences in patent arbitration.
For a patent owner, if an asserted patent is invalidated in a national court, the patent claims at issue are invalidated erga omnes – i.e. towards everyone. Hence, it cannot be asserted against any party. However, because arbitral awards are binding only on the parties to the arbitration and, as will be discussed in an upcoming post, can be subject to strict confidentiality, arbitral invalidation of the patent may not affect the enforceability of the patent against other possible infringers.
Similarly, for the accused infringer, patent invalidation through arbitration would eliminate personal liability without providing windfall immunity to their competitors.
Thus, this feature of patent arbitration can be a significant benefit to patent holders and accused infringers alike.
Contact us for a free consultation and let us explain how we can help you successfully resolve your next patent dispute in a more timely and cost-effective manner.