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Instead of invoking The Beatles’ famous line “you say you want a revolution,” when it comes to information technology and intellectual property disputes, a more apt statement is “you say you want a resolution.” The costly and burdensome nature of these disputes once they land in court can adversely impact a company’s bottom line, and if nothing else, distract from a company’s core mission. So as early as possible, creative methods should be considered to resolve disputes before the cost of litigation warfare eats up any value that could potentially have been gained from going forward with the litigation. TYPES OF DISPUTES There are many types of disputes that can and do arise in the IT and IP arenas — trademark, copyright or patent infringement, trade secret violations, privacy invasions, business interruption, identity theft, unauthorized computer use, computer crashes and network problems, failure of network security, online defamation, network attacks, computer viruses and worms, cyber extortion, Internet terrorism, computer crimes, and loss, corruption, misuse and theft of data. Because the law is still evolving in this arena, and because technology matters tend to be complicated as a matter of fact, litigation of IT and IP issues tends to be very intensive and expensive. Written, document and deposition discovery can be extensive, and the retention of experts and discovery as to expert opinions usually is a must. Thus, even before an IT or IP case gets to trial, legal fees can be significant. And, of course, trial itself really gets the meter going, as attorneys generally are working around the clock at that stage of a case. Even when a trial has concluded, fees still can mount with appeals. Accordingly, before throwing down the gauntlet and telling the other party in a dispute that you will fight to the death, it does make abundant sense to figure out at the beginning whether there is a fair chance of settling and how best to obtain a resolution of claims or potential claims. PRINCIPAL TO PRINCIPAL At times, the parties should try dealing with each other principal-to-principal up front to try to resolve a dispute. This can work when the parties communicate well with each other, when the issues are relatively straightforward, or the amount at issue does not warrant bringing in anyone from the outside to help achieve resolution. One downside to this approach is that without the advice of counsel, it is possible that some issues that could help the negotiation or assist in striking a better deal could be left off the table. However, the parties could obtain the advice of counsel in the background while the principals try to hammer out the deal themselves directly. MEDIATION WITHOUT LAWYERS Mediation can be accomplished without or with counsel. If the mediation proceeds without counsel for the parties, the mediator works with the parties to drive them toward the middle so that they can see each other’s point of view and come to an agreement. This approach does necessitate paying the hourly or set fee of a mediator. Good mediators can be expensive, but they are less expensive than the cost of active litigation over time. MEDIATION WITH LAWYERS Generally speaking, most mediated disputes that involve more than a small amount include attorneys representing the parties during the mediation process. While it is true that the parties will have to bear the cost of not only the mediator but also their counsel, the good news is that most cases handled by skilled mediators settle during the mediation process, at a substantial savings over active litigation. NON-BINDING ARBITRATION Another method is to jointly retain an arbitrator who hears arguments of the parties to the dispute and then renders a decision. The decision can be non-binding or binding. Counsel usually are involved in the arbitration process, but they do not have to be. Non-binding arbitration is educational, as the parties can see how at least one “neutral” person to the dispute comes down on the issues. However, the parties are still free to litigate, and often the losing party to the arbitration simply feels that the arbitrator got it wrong and chooses to march toward trial. Thus, non-binding arbitration can actually increase legal fees, as the parties first go through arbitration and then also litigation, not to mention paying for the cost of the arbitrator. Of course, once in a while, the non-binding arbitration result can be illuminating enough to both sides to encourage them to work together to settle their case. BINDING ARBITRATION Binding arbitration empowers the arbitrator, or panel of arbitrators, to receive legal and factual arguments of the parties and render a binding decision. The hoped-for advantage is that the arbitration process will be more streamlined and efficient, and hence less costly, then litigation, and it will lead to a final result. Unfortunately, some arbitrations can include as much burdensome discovery and other legal tasks as true litigation, and some parties are not willing to waive their appellate rights. LITIGATION Of course, when the amounts at stake are huge, when one party views delay as an ally, or when a party or the parties want a complete vetting of the issues at trial and possibly on appeal, then alternative dispute resolution may not be the cure, and the public court system for litigation is available. OPEN EYES EARLY It’s worthwhile early on to at least consider methods for resolving IT and IP disputes early before they spin out of control. I strongly encourage mediation, and have settled every case I’ve taken to mediation — to the substantial savings of happy clients. Eric Sinrod is a partner in the San Francisco office of Duane Morris ( www.duanemorris.com), where he focuses on litigation matters of various types, including information technology disputes. Mr. Sinrod’s Web site is www.sinrodlaw.com, and he can be reached at [email protected] . To receive a weekly e-mail link to Mr. Sinrod’s columns, please type Subscribe in the subject line of an e-mail to be sent to [email protected] .

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