Organic Law 1/2025, of 2 January 2025, on efficiency measures for the public justice service, promotes the use of alternative dispute resolution mechanisms in intellectual property disputes by introducing prior negotiation between the parties as a new procedural admissibility requirement.
Avoiding the judicialization of conflicts is the primary goal of the lawyer. However, the use of mechanisms that facilitate reaching out-of-court agreements in matters of intellectual and industrial property (IP) remains limited.
To address this situation, through Organic Law 1/2025 the legislator has imposed a prerequisite to admit a claim for consideration: before filing the claim, the parties must try to resolve their disputes through an alternative dispute resolution (ADR) mechanism, such as mediation, private conciliation or direct negotiation.
The law justifies this imposition on the need to reduce social conflict and avoid overloading the courts, as well as to try to filter the so-called “abuses of the public justice system”. But what specific benefits can this requirement offer in IP disputes?
In the matter at hand, ADR mechanisms provide a framework that not only fosters consensus in conflict situations and optimizes the traditional concerns of time and cost efficiency, but also offers solutions to specific challenges inherent in IP disputes:
- Protection of confidentiality: IP disputes often involve confidential information or even trade secrets which, although they can be protected under court proceedings, are effectively protected within ADR frameworks. Confidentiality is ensured, even with regard to the court, in cases where no agreement is reached.
- Encouragement ad hoc agreements: in IP disputes, the optimal outcome often involves preserving the rights of both parties. This is not easily achievable in court but can be realized in a negotiation setting, which encourages solutions such as coexistence agreements, cross-licensing, and collaboration agreements, etc.
- Promotion of innovation and artistic creation or, at least, the mitigation of obstacles posed by the potential litigation during the innovation and creation process. Requiring prior negotiation reduces the so-called chilling effect, which in IP translates to the discouragement and stagnation caused by costly litigation or uncertain legal repercussions.
- Reduction of legal uncertainty: IP legislation is generally complex and often fails to address all the scenarios that can arise in such a dynamic field, leaving outcomes to judicial interpretation that generates significant legal uncertainty. ADR mechanisms allow the parties to negotiate agreements without risking unpredictable outcomes.
- Reduction of low-value disputes: recurrent, low-value disputes in the field, such as royalty claims by collective management organizations, can be solved in during pre-litigation negotiations. This spares both parties the costs of a trial while simultaneously reducing the workload of commercial courts.
- Harmonized resolution of cross-border disputes: in IP matters, it is common to encounter disputes affecting multiple jurisdictions. ADR mechanisms allow the parties to reach an agreement that resolves the cross-border dispute and avoids proceedings being filed in multiple jurisdictions.
- Reduction of abusive proceedings: IP litigation has witnessed a proliferation of claims aimed at obtaining revenues by leveraging the deterrent effect of high litigation costs. A notable example is the so-called patent trolls: entities that acquire patents solely for the purpose of generating revenue through infringement claims. Imposing a pre-litigation negotiation phase can prove to be an effective mechanism to deter such practices.
The requirement for prior negotiation in IP disputes thus represents an opportunity to enhance the efficiency, flexibility, and confidentiality of conflict resolution processes.
We conclude this article by echoing the words of the preamble to Organic Law 1/2025: “Before entering the temple of Justice, one must pass through the temple of concord” – and would add – for the benefit of both the disputing parties and the development of key sectors of the economy and culture.
María Simón
