7 - Mediation

Background

In 2000 R.T., the sales manager, left the company Xanadis. In 2003 F.R. and J.J., two engineers in product development, also left. In 2004, R.T., F.R. and J.J. set up the company Xanadu to make products very similar to those of Xanadis. One of their reasons for leaving Xanadis was that they felt frustrated in that their ideas were not accepted by the management of Xanadis. By setting up the company Xanadu, they intend to implement those ideas that had been ignored by Xanadis. In 2006 Xanadu began to offer product and to make sales in the same sales territory as Xanadis.

The problem

In 2006 Xanadis started court cases against Xanadu for:

  1. infringement of their trademark “Xanadis” by the use of the name “Xanadu”,
  2. unfair business practice because Xanadu was making use of information gained from Xanadis via the employees that had left, and 
  3. infringement of a Belgian patent owned by Xanadis.

Xanadis carried out a saisie descriptive based on the Belgian patent. During the saisie the appointed expert came across a patent application filed by F.R., J.J, and R.T. Based on this evidence, Xanadis started another court case for inventorship, claiming that F.R., and J.J. had actually made the invention while they were at Xanadis and had gained insight into their invention based on information and equipment to which they had access when they were at Xanadis. Accordingly, they argued, the invention belonged to Xanadis and the patent application should be transferred to them.

Both Xanadis and Xanadu have banks as investors. When the banks saw the patent application filed by F.R., J.J, and R.T., they realised that the new design was far superior to those of Xanadis. Neither bank had much interest in spending money on court cases. They therefore recommended stopping the four court cases and resolving the issue in a win-win way for both parties.

The challenge

  • Is mediation the correct approach in this case?
  • Is there anything to mediate about – or is the situation so clear that mediation is not possible?
  • What steps should Xanadu take to improve its position?

The solution

If these are the kind of problems that you have, please contact BIRD GOËN by email (ipadmin@birdgoen.com) and refer to “case study 7” to arrange for consultation.