Panelist:

Mr. Michael GrossFraunhofer-GesellschaftMunich, Germany

5.2 Dispute ResolutionDispute ResolutionNeeds and Needs and ExperienceExperience

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Fraunhofer GesellschaftFraunhofer Gesellschaft

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German non profit R&D organisation

applied research/worldwide

58 Institutes

staff: 12,500

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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

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• 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-partnersMediation between aGerman inventor and anUS License partner 4

Case 1: Arbitration Case 1: Arbitration betweenbetween 2 European 2 European

R&D-partners R&D-partners "Acoustic Construction of a Concert Hall"I. THE PARTIES

German Research Institute -Ministry of a European Country (contractor)

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II. THE ARBITRATION AGREEMENT

R&D Agreement of January 1995 Art. 11 = Standard ICC Arbitration

Clause

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R&D Agreement was established in > 2 versions:

Art. 12:

English and anotherEuropean language(contractor's language)

in case of disputes the text of the version of the other European language shall prevail

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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 Englishaccompanied by a version in thelanguage of the contractor) 8

- the applicable law the Arbitrator ordered:

UNIDROIT Principles of International Commercial Contracts shall be applicable

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III. THE RELIEF REQUESTED

Claimant:

€ 191000 + interest at the rate of 5 % above the German base rate+ costs of Arbitration

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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."

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IV. THE ARBITRATION PROCEEDINGS

- Request for arbitration: 20 Dec. 2002

- Sole arbitrator

- No request for an oral hearing by the parties

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V. AWARD

6 October 2004:

€ 191000+ interest+ legal fees and expenses (of Claimant)+ costs of arbitration (US $ 22000)

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VI. PROBLEMS

1. ~ 2 years

2. Enforcement of the award in the country of the contractor pending!

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Case 2: Mediation Case 2: Mediation betweenbetween

a German a German inventor inventor

and an US and an US LicenseeLicensee "Monorail or rapid exchange

catheter" (angioplasty procedures)I. THE PARTIES

German Inventor - US Global Player (Licensor) (Lisensee)

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II. THE AGREEMENT

Patent License Agreement of June 1986 (3 Amendments) Art. XVI: Applicable Law =

German law NO DISPUTE RESOLUTION CLAUSE

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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

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III. THE RELIEF REQUESTED

Under payment of royalties: $ 16 million

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IV. THE MEDIATION

- Request for mediation: 24 July 2001

- Mediation: 16 August 2001in Minneapolis, USAStart: 10:00 a.m. (16

August)Settlement: 1:00 a.m. (17 August)Result: ??? 19

Licensee purchased the licensed patent:

US $ 80 million

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V. PROBLEMS

NO PROBLEMS!

applause for the inventor!!!

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• R&D - Dispute Resolution by an Arbitrator/Mediator/ Conciliator or

negotiations by the R&D-partners?

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It depends!

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Wild applause for the panelist!!

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