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Arbitrability of IP disputes in Singapore – recent amendments to the AA and the IAA

30 December 2019

This article is produced by CMS Holborn Asia, a Formal Law Alliance between CMS Singapore and Holborn Law LLC.

Pursuant to the passing of the Intellectual Property (Dispute Resolution) Bill in August 2019, amendments have been made to, amongst others, the Singapore Arbitration Act (“AA”) and the International Arbitration Act (“IAA”) to clarify the arbitrability of intellectual property rights (“IPR”) disputes in Singapore. These changes came into effect on 21 November 2019.

The Key Amendments

By way of section 52B of the AA and section 26B of the IAA, both statutes now expressly stipulate that the subject matter of an IPR dispute is capable of settlement by arbitration.

Under the newly amended AA and IAA, “IPR” is defined to cover various IP-related rights, including patents, trade marks, registered designs and copyrights, amongst others. The list was deliberately kept non-exhaustive so as to allow for the flexibility of including new kinds of IPRs that may arise in future.

An IPR dispute is defined to include:

  • a dispute over the enforceability, infringement, subsistence, validity, ownership, scope, duration or any other aspect of an IPR;
  • a dispute over a transaction in respect of an IPR; and
  • a dispute over any compensation payable for an IPR.

Significantly, the arbitrability of IPR disputes under the amended AA and IAA will not be forfeited simply because a law of Singapore or elsewhere: (i) gives jurisdiction to a specific entity to decide the IPR dispute; and (ii) does not mention possible settlement by arbitration.

In relation to enforcement of arbitral awards, however, the amended AA and IAA do not consider a third-party licensee or third-party holder of a security interest in respect of the IPR (or any person claiming through or under the same) as a party to the arbitral proceedings. Therefore, such parties are not entitled to rely on the judgment enforcing the award and only the parties themselves or any persons claiming through or under them would be able to rely on the same. In other words, the judgment only has effect on the parties (in personam), and is not enforceable against the whole world (in rem).

Impact of the Amendments

With the amendments to the AA and IAA, the arbitrability of IPR disputes is now statutorily recognised in Singapore. This is a notable shift away from the past misconception that IPR disputes can only be adjudicated by national authorities or national courts. This serves to make arbitration a more attractive option for IP disputes users and will invariably enhance Singapore’s reputation as an arbitration hub of choice for savvy users.

Notwithstanding the statutory amendments, however, there still exists a limitation to the arbitrability of IPR disputes – namely, that arbitral awards obtained under the same will remain binding only on parties, and not third parties.

Despite the aforesaid limitations, the clarifications made to the arbitrability of IPR disputes are a welcome development. In particular, the amendments to the AA and IAA will provide the flexibility to accommodate different types of IPRs in various jurisdictions and new types of IPRs / IP-related disputes that may arise in the future.

Authors

Dami Cha
Associate
Singapore
Wei Ming Tan
Senior Associate
Singapore
Lakshanthi Fernando, Partner
Lakshanthi Fernando
Managing Director
Singapore