Why Many More IP Disputes May End Up Being Resolved On An Online ADR Platform

When some future Yoda explains the silver linings in the COVID-19 cloud, he is bound to mention the mushrooming of online platforms. (Yoda: “online platforms - mushrooming they are”)

While the Federal Court has long had procedures in place allowing for advocacy other than by personal appearance, lawyers’ interest in using Zoom during this time of physical separation has grown in leaps and bounds. IPIC recently presented a well-attended webinar with best-practice tips on using the online opportunities available before the Federal Court. Millennials might call this a meta-phenomenon - an online teaching platform to explain online access to justice!

Meanwhile, the vast array of platforms that gather under the inelegant moniker, Alternative Dispute Resolution (ADR), has populated the online digital field for years. IPIC members are already familiar with online arbitration to settle domain name disputes. As for using mediation, which is thought of as so reliant upon personal cajoling and persuasion, it has, against expectation, found considerable success in the online world, in some areas of dispute. Which does augur well for its use in IP disputes.

To test that assertion, let’s look closely at how online ADR has worked in Quebec.

The Quebec Consumer Protection Office (QCPO)

By 2010, the QPCO had become swamped by so many calls that their “consumer support” service, which in effect amounted to lobbying on behalf of the consumer, produced disappointing results.

Of the 10,000 calls received each year, only 3,000 moved down the funnel into completed complaint forms and only about 500 of those exited as settled cases, i.e. 5%. What happened to all the rest? They ended up in Small Claims Court, where it now takes two years before the case is heard.

By 2010, the QCPO understood that “consumer support” turned the process into molasses, although at the same time those wishing to use the process grew in leaps and bounds. So, the QCPO jettisoned “consumer support” and the number of consumer calls steadily ballooned until they now average about 140,000 a year. Lower down the funnel, formal complaints swelled to 30,000 of which 15,000 involved a dispute between a consumer a merchant. A bigger change was needed.

In 2016, the QCPO changed their paradigm and took a leap into the digital world. They hired the Cyberjustice Laboratory of the University of Montreal to develop an online platform. They came up with PARLe, the Platform to Assist in the Resolution of Litigation. (The acronym is ingeniously bilingual; in French it is “plateform d’aide au règlement des litiges en ligne.”).

Note that entry to this platform is not self-service. A consumer must first speak to an agent at the QCPO, who will verify that the consumer qualifies, and send her the information needed to create an account and get up and running. At this juncture the consumer jumps with both feet into the online arena of ADR. First stage: she digitally describes the problem she has with the merchant, proposes a solution and uploads all relevant documents.

Second stage: the ball is in the participating merchant’s court and it can accept it or return service with a counter-proposal to kickstart the negotiations. At this point either party can propose that a (neutral) mediator be invited to facilitate a settlement. In any event, if no agreement is reached within 20 business days (i.e. usually 4 weeks), mediation is automatic. PARLe appoints an accredited mediator; she has access to the entire electronic file and attempts to move the parties online towards settlement. At the end, the mediator can also propose an outcome, which, of course, each party can accept, amend, or reject.

Third and final stage: If the parties arrive at an agreement, with or without escort by a mediator, a document detailing the settlement is uploaded to the file. No doubt, this platform works because: the contents of the file are confidential, a consumer who is unfamiliar with online tools can mandate someone to represent her (except a lawyer), and the mediator, who is paid by the Government, is free of charge to the parties (everyone loves free!).

So, what is the track record of this post-2010 QCPO paradigm? Has it improved upon the 5% settlement rate of the pre-2010 era? The proud parent of the paradigm, the Cyberjustice Laboratory, reported, in a press release dated December 2, 2019, that it had achieved the following outstanding results.

By November 1, 2019, 7,500 consumers had been given entry to the platform. About 2/3 of cases were settled, within an average of 26 business days. Users gave the tool an 88% satisfaction rate. Some 15 merchants are now active on PARLe. A stable of 20 mediators, lawyers or Quebec notaries, are accredited to participate in the cases.

This success has not gone unnoticed. This project won the 2018 Award of Excellence from the Institut d’administration publique du Québec in the Digital Initiatives Category. On many counts, including access, speed, popularity, cost, satisfaction and resolution this three-year-old initiative will be a bellwether for online mediation for years to come.

Protegez-vous.ca

This private non-profit entity publishes a French language magazine and operates a website, much like Consumer Reports. They also found a partner with the technical toolkit to launch them into the world of online dispute resolution, namely OnRegle, founded by two lawyers. For a fee of $50 the platform will assist a consumer in preparing a claim with supporting documents and will send it to the other party by registered mail.

Like PARLe , the electronic file is always accessible to the parties who can make offers and counter-offers to one another through the platform. Unlike PARLe, in the event of settlement, there are fees: the parties each pay 2.5% (5% in total) of the global settlement amount to Protegez-Vous. After payment of these fees, the website automatically generates a settlement agreement and sends it both parties. The website indicates that the profits from this online platform are used to finance other consumer assistance projects.

Unlike PARLe, this platform does not have a mechanism to bring a mediator into the online negotiation, voluntarily or automatically, to facilitate negotiation leading to a resolution. Tantalizingly, however, the English version, BidSettle, has a webpage that lists eight advantages of mediation, the eighth one being that online dispute resolution can be used in parallel with mediation:

“(8) Finally, mediation can be used in parallel with technological tools such as online negotiation, commonly referred to as online dispute resolution (ODR)….These tools could allow you to settle your dispute before even heading into the mediation, or after it has begun.”….

That said, OnRegle (but apparently not its English version, BidSettle) offers an arbitration platform called “Tribunal en Ligne” which costs $500 per party. Like the direct negotiation model, the parties upload all information regarding the dispute online. A videoconference before the arbitrator is then arranged and a concise decision of 15 lines maximum is sent to the parties 5  days later. OnRegle promises the whole process takes no more than 30 days.

Although online dispute resolution and mediation has not, to my knowledge, been used in Quebec for trademark and other IP disputes, it has been used internationally by WIPO for 5 years now.

WIPO eADR

The World Intellectual Property Organization provides an optional online “case management” tool developed and managed by the WIPO Center. It enables “parties and neutrals (mediators, arbitrators and experts) in WIPO ADR proceedings to share and access case-related information through a single and secure portal.” WIPO indicates that this service, introduced in 2015, has been used by parties in about 30% of arbitration cases.

As for meetings, parties and neutrals may agree to hold meetings (as well as hearings) remotely via online tools, including WIPO videoconference solutions, of which it advertises several.

The Online Future

It appears that the online ADR dispute resolution trend, described above, far from being a Covid19 flash in the pan, has already become familiar and popular. If I were a prognosticator, I would venture that it will, like a famous brand leaping tall buildings, continue apace.