The Arbitration Clause

• Author: David A. Allgeyer
• Pages: 29-39

29

CHAPTER 6

The Arbitration Clause

Let’s assume you have determined that a patent arbitration is a

good idea in your agreement. It’s now time to consider drafting

the arbitration clause for a possible patent arbitration.

WHAT TO AVOID

Let’s begin with what not to do. The easiest approach to draft-

ing an arbitration clause is to simply copy one out of the last

agreement with an arbitration clause someone in your office did.

I have seen some pretty strange and even contradictory arbi-

tration clauses. I am convinced fairly mindless copying explains

how they came into being. Let me give you an example:

Any disputes between these parties about this con-

tract shall be subject to binding arbitration under the

Federal Arbitration Act and the Minnesota Revised

Uniform Arbitration Act. Before arbitrating, the par-

ties agree that they will try to settle the case through

mediation. If they cannot so settle this matter, they

will each pick an arbitrator and the arbitrators they

pick will pick a third arbitrator. The prevailing party

will be awarded its attorneys’ fees and costs.

Right away, you are set up to possibly have to litigate over this

clause. First, the federal act is different than the state act, so