A Practical Guide to Arbitrating IP Disputes

Ample legal authority upholds the right of intellectual property owners to arbitrate their differences. (See part one of this article published in April 2004.) Indeed, arbitration providers, such as WIPO and the AAA, report an increased caseload for intellectual property disputes. What should counsel and parties consider in choosing arbitration as a means of settling their intellectual property disputes? What are the considerations for drafting arbitration agreements?

Factors Favoring Arbitration

The following factors favor the use of arbitration, particularly in an intellectual property setting:

1) Confidentiality. Unlike traditional litigation, parties can keep their disputes private in arbitration. All documents, submissions, and decisions are held in confidence and are not filed publicly. Confidentiality is invaluable for protecting the underlying intellectual property (eg, trade secrets). In addition, parties to arbitrations are often small startup companies, for example, software developers, who want to preserve their reputation as team players in the business community.

2) Speed/Cost Effectiveness. Most arbitrations can be resolved in under a year. The typical patent litigation, on the other hand, may linger for upwards of 5 years. The relative speed of arbitration allows parties to plan ahead with contingencies in their business plan. Parties can allocate monies in their budgets to cover projected arbitration costs. Because the arbitration decision is only subject to limited judicial review, the parties know they will be able to move on with their businesses quickly. These advantages are crucial for software developers or patent innovators who may not have deep pockets and want to settle differences efficiently.

3) Expertise. Because the parties can hand select their neutral arbitrator and draft requirements for their neutral arbitrator's qualifications, they can guarantee that their fact-finder will be knowledgeable about their industries and intellectual properties. The arbitrator will be more likely to understand technical information presented from experts. The result is more efficient hearings with fair results.

4) Flexibility. Because arbitration arises out of a contract, intelligent counsel will plan ahead for a future dispute. They can select the governing law, procedural rules, and the arbitration's location. The time and money savings are obvious when lawyers do not have to wrangle about which jurisdiction's rules govern. In addition, parties can anticipate many other issues with intuitive drafting, such as the number of fact-finders, the arbitrator's ability to grant interim or injunctive relief, and even the scope of arbitrable issues.

In selecting an institution to govern their disputes, parties can consider whether the institution has rules tailored to their type of situation. The AAA, for example, has specialized international dispute resolution procedures and patent arbitration rules. WIPO has rules on the use of technical and experimental evidence that help in the introduction of such complicated evidence. By choosing and customizing the governing rules, the parties can tailor the process to suit their particular relationship.

5) Single, Unbiased Forum. Arbitration offers the invaluable advantage of having a single forum to resolve international disputes, rather than chasing court appearances in multiple jurisdictions. In an international dispute, because the parties can stipulate as to the country of origin for the arbitrator and the location of the arbitration, they can be assured of a neutral party who has no bias against a particular culture's way of doing business. In addition, treaties such as the New York Convention (9 U.S.C. Section 207) and the Panama Convention for members of the Organization of American States (9 U.S.C. Sections 301-307) recognize and enforce arbitral awards from any member state without review of the merits.

Factors Favoring Litigation Over Arbitration

The following factors cut against using arbitration in lieu of litigation:

1) Need for Public Legal Precedent. Parties need to consider whether their potential disputes could have implications beyond the contractual relationship at hand. If a party needs to establish a legal precedent to deter future disputes, litigation may be a better choice than arbitration. In addition, if parties want to influence public policy, arbitration cannot replace the role of a class action lawsuit.

2) Combative Party. Arbitration is essentially a consensual process. If one party is likely to be uncooperative, arbitration is less likely to result in economic efficiency. Arbitrators, particularly in large, complex cases, encourage the parties to stipulate as to facts, issues of laws, and procedural issues. Both parties have to cooperate in such endeavors.

3) Judicial Review. Because arbitration has limited judicial review and arbitrators' decisions are generally upheld absent a “manifest disregard of the law” or an extreme showing of bias, the parties should be willing to forego their rights of appeal when they arbitrate.

4) Interim/Injunctive Relief and Punitive Damages. It may be easier to obtain these kinds of equitable relief in the court setting. Parties, however, may escape this limitation through careful drafting of their arbitration clause or by choosing an institution to oversee the arbitration that gives broad authority to the arbitrators. Still, the parties face the complication of justifying their need for these types of relief to the arbitrator, who may see them as unusual.

5) Discovery. While some discovery is typically allowed in arbitration, particularly in complex cases (for the AAA this means cases with a demand for relief that exceeds $500,000), certainly the extent of discovery granted tends not to be as great as in litigation. If resolution of the dispute depends on extensive discovery, arbitration may not be the appropriate method of dispute resolution.

Drafting Considerations

While major providers of arbitration offer sample generic clauses for inclusion in contracts, in the case of many intellectual property disputes, counsel will want to tailor these clauses to meet their clients' needs. Even if a contract does not provide for arbitration, the parties can draft an arbitration agreement post-contract to govern any dispute that has already arisen. Whether drafting an arbitration agreement before the dispute arises or after, counsel should consider all of the following issues.

Creating the Structure of the Arbitration

Most importantly, the scope of the arbitration clause will determine which disputes can be the subject of arbitration. The clause may refer broadly to “any disputes, controversies, and claims arising out of or in connection with this contract.” On the other hand, the drafters may limit the jurisdiction by using language such as “all claims arising under this contract” or “all claims arising during the term of this contract.”

Under the latter clause, a claim of intellectual property validity would probably go to court, not arbitration. If the intellectual property owner wants the option of setting a precedent for how it deals with wayward licensees, it may choose a narrowly constructed arbitration clause so that validity issues would be decided in open court. The arbitration clause may also exclude certain issues from the jurisdiction of the arbitration, such as intellectual property validity or even infringement of rights.

The parties should also decide which institution's rules will govern the proceedings. Of course, the parties can choose to conduct the arbitration ad hoc, but choosing an accredited institution guarantees that there are procedures in place to govern most contingencies. The institutional ADR providers have copious rules designed to prevent disputes concerning administration of the arbitration. In addition, the parties should look to see whether the institution they have chosen has any specialized rules, such as the AAA's Patent Rules or Large Complex Rules. Parties can also modify any set of rules based on their particular needs. The arbitration agreement can also direct the parties to use some hybrid form of ADR, such as going to mediation governed by institutional rules before commencing arbitration.

The parties should consider the number and type of arbitrators they wish to hear their case. (The administering institution may have criteria to assist in this consideration, based, for example, on the amount in controversy.) While a panel of three arbitrators provides for different types of expertise, it also increases expenses and scheduling difficulties. Do the parties want the arbitrators to have any specific qualifications? Should the panel come from a neutral country? Should the arbitrators on the panel have certain unique experience?

If the dispute arises from an international agreement, the arbitration clause might anticipate the following questions: Where will the arbitration be conducted? What neutral venue? What language will be used? In which currency will the award be satisfied? What law will govern? (Governing law is obviously an issue domestically as well.) Will the applicable law govern the contract or a broader category of all disputes arising out of or related to the contract?

Confidentiality

One of the main advantages of arbitration over litigation is confidentiality of the proceedings. Under AAA rules, the arbitrators must “maintain the privacy of the hearings unless the law provides to the contrary.” The arbitrators meet this mandate by using their discretion to “exclude any witness, other than a party or other essential person, during the testimony of any other witness,” and by determining “the propriety” of allowing any other third-party attendees. See Rule 23 of the AAA's Commercial Rules.

Parties can rely on institutional rules like the AAA's Rule 23 to protect their confidentiality, but they can also do more when they draft their arbitration agreements. They can require the arbitrator and witnesses to sign confidentiality agreements. The agreements can require the sequestering of witnesses. During testimony about trade secrets, the arbitrator can limit inspection and copying of documents, prohibit note taking by party representatives, and have the testimony transcribed separately. The agreements may also require that documentation be destroyed after the arbitrator renders the award.

Arbitrator Powers

The contract drafters should think carefully about the arbitrator's powers. With regard to injunctive relief or interim relief, counsel may adopt the AAA's Optional Rules for Emergency Measures of Protection (or some form of these if not before the AAA). These rules must be adopted in the arbitration clause or by special agreement to apply to the dispute. The standard for emergency relief under these rules, as in court, is “immediate and irreparable loss or damage.”

In the alternative, counsel can preserve the right to go to court for emergency relief, even with an arbitration pending. The contract would state that that the agreement to arbitrate is without prejudice to a party's right to seek interim relief in court. Parties should also consider whether to grant the arbitrator power to adapt the contract to changed circumstances. Counsel should research whether such a clause is enforceable.

Discovery

The parties may draft specific rules regarding discovery or subpoenas, otherwise the arbitrator uses his or her own discretion. If parties can anticipate the issues in advance, they can avoid having to justify their requests to the arbitrator. Arbitrators rarely grant interrogatories, but frequently grant document requests if they are specific and limited depositions.

The Federal Arbitration Act authorizes arbitrators to issue subpoenas of third-party witnesses. In common practice, however, the parties will have to convince the arbitrator why a subpoena is necessary. In addition, the arbitrator has no authority to enforce the subpoena. Instead, enforcement is sought through the courts.

Different Types of Relief

Counsel should consider providing for attorneys' fees in the arbitration agreement. If the contract is silent, the arbitrators may view such fees as outside their authority to grant, unless both parties ask for attorneys' fees in their papers filed in connection with the arbitration. If there is authority for such relief under applicable statutes and common law, counsel should refer to it in the contract to avoid ambiguity and specifically empower the arbitrator to award attorneys' fees incurred as a result of the arbitration (as opposed to litigation or settlement attempts).

Likewise, in the case of multiplied damages or punitive awards, counsel should cite in the contract authority for granting such relief, or such relief might not be available. Many intellectual property statutes provide for treble damages with a showing of willfulness. Without specific contractual authorization, however, these types of relief are not the norm, particularly in international arbitration. In the absence of authority for punitive damages, choice of law provisions may be the deciding factor.

Revised Uniform Arbitration Act

The Revised Uniform Arbitration Act (RUAA), approved by the National Conference of Commissioners on Uniform State Laws in August 2000, solidifies the arbitrator's powers to act more like a judge. The following states have adopted the RUAA in some form: Hawaii, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon and Utah.

The RUAA expands the original 1955 Uniform Arbitration Act's provisions to allow arbitrators to make summary dispositions of claims or issues with certain procedures, to hold pre-arbitration proceeding meetings, to issue interim awards, and to use any other discovery process that results in relevant evidence for the proceeding, including subpoenas. The RUAA also provides that arbitrators may award punitive damages “if such an award is authorized by law in a civil action involving the same claim.” Similarly, arbitrators, under the RUAA, may award attorneys' fees.

Particulars of the Award

Regarding the award, what time frames should govern the panel's decision making? The arbitration clause can bind the arbitrator to render a decision in a predetermined time frame either set by institutional rules or by the parties themselves.

Will the award be reasoned? A reasoned award is more expensive, but it requires the arbitrators to think analytically and justify their award in writing. While it would be difficult to overturn an award without a showing of manifest disregard for the law, a reasoned award helps to avoid a “splitting the baby” approach to decision making. A reasoned award also affords parties the benefit of understanding how the panel reached a decision.

What form should the award take? Parties do not have to allow the arbitrator total freedom in drafting an award. In “baseball” arbitration, both parties propose an award, in its entirety, and the neutral must select one of the parties' model awards, without modification. Another format is “Hi-Lo” arbitration where the parties predetermine a range for the award.

Award Enforcement and Judicial Review

If the case is a domestic American case, the parties should state that a court of competent jurisdiction may enforce the award. In international cases, parties should refer to any applicable treaties, such as the New York or Panama Conventions. Parties should also consider a clause providing for judicial review, but should first research such a clause's enforceability. If unenforceable, an alternative is review by another panel of arbitrators.

Conclusion

The ultimate advantage of arbitration is its flexibility. By careful and thoughtful drafting, parties can create their own proceedings and rules. In addition, if they omitted a point or did not include an arbitration clause initially, the parties can always modify their agreement. Arbitration is a process that belongs to the parties. It can be their invention.

The result is not only a flexible process, but also flexible solutions to disputes. Arbitration is therefore particularly suitable for intellectual property owners.

In IBM & Fujistu Ltd., No. 13-T-117-0636-85, Amer Arb Ass'n Comm, Arb. Trib. 4 (1987), the arbitrator in a software dispute ordered the respondent to buy a license from the complainant. This kind of creative solution is more likely to occur in arbitration than in litigation. It also underscores arbitration's unique advantage of allowing parties to continue to do business together after the dispute over one aspect of their business has been resolved.

Ample legal authority upholds the right of intellectual property owners to arbitrate their differences. (See part one of this article published in April 2004.) Indeed, arbitration providers, such as WIPO and the AAA, report an increased caseload for intellectual property disputes. What should counsel and parties consider in choosing arbitration as a means of settling their intellectual property disputes? What are the considerations for drafting arbitration agreements?

Factors Favoring Arbitration

The following factors favor the use of arbitration, particularly in an intellectual property setting:

1) Confidentiality. Unlike traditional litigation, parties can keep their disputes private in arbitration. All documents, submissions, and decisions are held in confidence and are not filed publicly. Confidentiality is invaluable for protecting the underlying intellectual property (eg, trade secrets). In addition, parties to arbitrations are often small startup companies, for example, software developers, who want to preserve their reputation as team players in the business community.

2) Speed/Cost Effectiveness. Most arbitrations can be resolved in under a year. The typical patent litigation, on the other hand, may linger for upwards of 5 years. The relative speed of arbitration allows parties to plan ahead with contingencies in their business plan. Parties can allocate monies in their budgets to cover projected arbitration costs. Because the arbitration decision is only subject to limited judicial review, the parties know they will be able to move on with their businesses quickly. These advantages are crucial for software developers or patent innovators who may not have deep pockets and want to settle differences efficiently.

3) Expertise. Because the parties can hand select their neutral arbitrator and draft requirements for their neutral arbitrator's qualifications, they can guarantee that their fact-finder will be knowledgeable about their industries and intellectual properties. The arbitrator will be more likely to understand technical information presented from experts. The result is more efficient hearings with fair results.

4) Flexibility. Because arbitration arises out of a contract, intelligent counsel will plan ahead for a future dispute. They can select the governing law, procedural rules, and the arbitration's location. The time and money savings are obvious when lawyers do not have to wrangle about which jurisdiction's rules govern. In addition, parties can anticipate many other issues with intuitive drafting, such as the number of fact-finders, the arbitrator's ability to grant interim or injunctive relief, and even the scope of arbitrable issues.

In selecting an institution to govern their disputes, parties can consider whether the institution has rules tailored to their type of situation. The AAA, for example, has specialized international dispute resolution procedures and patent arbitration rules. WIPO has rules on the use of technical and experimental evidence that help in the introduction of such complicated evidence. By choosing and customizing the governing rules, the parties can tailor the process to suit their particular relationship.

5) Single, Unbiased Forum. Arbitration offers the invaluable advantage of having a single forum to resolve international disputes, rather than chasing court appearances in multiple jurisdictions. In an international dispute, because the parties can stipulate as to the country of origin for the arbitrator and the location of the arbitration, they can be assured of a neutral party who has no bias against a particular culture's way of doing business. In addition, treaties such as the New York Convention (9 U.S.C. Section 207) and the Panama Convention for members of the Organization of American States (9 U.S.C. Sections 301-307) recognize and enforce arbitral awards from any member state without review of the merits.

Factors Favoring Litigation Over Arbitration

The following factors cut against using arbitration in lieu of litigation:

1) Need for Public Legal Precedent. Parties need to consider whether their potential disputes could have implications beyond the contractual relationship at hand. If a party needs to establish a legal precedent to deter future disputes, litigation may be a better choice than arbitration. In addition, if parties want to influence public policy, arbitration cannot replace the role of a class action lawsuit.

2) Combative Party. Arbitration is essentially a consensual process. If one party is likely to be uncooperative, arbitration is less likely to result in economic efficiency. Arbitrators, particularly in large, complex cases, encourage the parties to stipulate as to facts, issues of laws, and procedural issues. Both parties have to cooperate in such endeavors.

3) Judicial Review. Because arbitration has limited judicial review and arbitrators' decisions are generally upheld absent a “manifest disregard of the law” or an extreme showing of bias, the parties should be willing to forego their rights of appeal when they arbitrate.

4) Interim/Injunctive Relief and Punitive Damages. It may be easier to obtain these kinds of equitable relief in the court setting. Parties, however, may escape this limitation through careful drafting of their arbitration clause or by choosing an institution to oversee the arbitration that gives broad authority to the arbitrators. Still, the parties face the complication of justifying their need for these types of relief to the arbitrator, who may see them as unusual.

5) Discovery. While some discovery is typically allowed in arbitration, particularly in complex cases (for the AAA this means cases with a demand for relief that exceeds $500,000), certainly the extent of discovery granted tends not to be as great as in litigation. If resolution of the dispute depends on extensive discovery, arbitration may not be the appropriate method of dispute resolution.

Drafting Considerations

While major providers of arbitration offer sample generic clauses for inclusion in contracts, in the case of many intellectual property disputes, counsel will want to tailor these clauses to meet their clients' needs. Even if a contract does not provide for arbitration, the parties can draft an arbitration agreement post-contract to govern any dispute that has already arisen. Whether drafting an arbitration agreement before the dispute arises or after, counsel should consider all of the following issues.

Creating the Structure of the Arbitration

Most importantly, the scope of the arbitration clause will determine which disputes can be the subject of arbitration. The clause may refer broadly to “any disputes, controversies, and claims arising out of or in connection with this contract.” On the other hand, the drafters may limit the jurisdiction by using language such as “all claims arising under this contract” or “all claims arising during the term of this contract.”

Under the latter clause, a claim of intellectual property validity would probably go to court, not arbitration. If the intellectual property owner wants the option of setting a precedent for how it deals with wayward licensees, it may choose a narrowly constructed arbitration clause so that validity issues would be decided in open court. The arbitration clause may also exclude certain issues from the jurisdiction of the arbitration, such as intellectual property validity or even infringement of rights.

The parties should also decide which institution's rules will govern the proceedings. Of course, the parties can choose to conduct the arbitration ad hoc, but choosing an accredited institution guarantees that there are procedures in place to govern most contingencies. The institutional ADR providers have copious rules designed to prevent disputes concerning administration of the arbitration. In addition, the parties should look to see whether the institution they have chosen has any specialized rules, such as the AAA's Patent Rules or Large Complex Rules. Parties can also modify any set of rules based on their particular needs. The arbitration agreement can also direct the parties to use some hybrid form of ADR, such as going to mediation governed by institutional rules before commencing arbitration.

The parties should consider the number and type of arbitrators they wish to hear their case. (The administering institution may have criteria to assist in this consideration, based, for example, on the amount in controversy.) While a panel of three arbitrators provides for different types of expertise, it also increases expenses and scheduling difficulties. Do the parties want the arbitrators to have any specific qualifications? Should the panel come from a neutral country? Should the arbitrators on the panel have certain unique experience?

If the dispute arises from an international agreement, the arbitration clause might anticipate the following questions: Where will the arbitration be conducted? What neutral venue? What language will be used? In which currency will the award be satisfied? What law will govern? (Governing law is obviously an issue domestically as well.) Will the applicable law govern the contract or a broader category of all disputes arising out of or related to the contract?

Confidentiality

One of the main advantages of arbitration over litigation is confidentiality of the proceedings. Under AAA rules, the arbitrators must “maintain the privacy of the hearings unless the law provides to the contrary.” The arbitrators meet this mandate by using their discretion to “exclude any witness, other than a party or other essential person, during the testimony of any other witness,” and by determining “the propriety” of allowing any other third-party attendees. See Rule 23 of the AAA's Commercial Rules.

Parties can rely on institutional rules like the AAA's Rule 23 to protect their confidentiality, but they can also do more when they draft their arbitration agreements. They can require the arbitrator and witnesses to sign confidentiality agreements. The agreements can require the sequestering of witnesses. During testimony about trade secrets, the arbitrator can limit inspection and copying of documents, prohibit note taking by party representatives, and have the testimony transcribed separately. The agreements may also require that documentation be destroyed after the arbitrator renders the award.

Arbitrator Powers

The contract drafters should think carefully about the arbitrator's powers. With regard to injunctive relief or interim relief, counsel may adopt the AAA's Optional Rules for Emergency Measures of Protection (or some form of these if not before the AAA). These rules must be adopted in the arbitration clause or by special agreement to apply to the dispute. The standard for emergency relief under these rules, as in court, is “immediate and irreparable loss or damage.”

In the alternative, counsel can preserve the right to go to court for emergency relief, even with an arbitration pending. The contract would state that that the agreement to arbitrate is without prejudice to a party's right to seek interim relief in court. Parties should also consider whether to grant the arbitrator power to adapt the contract to changed circumstances. Counsel should research whether such a clause is enforceable.

Discovery

The parties may draft specific rules regarding discovery or subpoenas, otherwise the arbitrator uses his or her own discretion. If parties can anticipate the issues in advance, they can avoid having to justify their requests to the arbitrator. Arbitrators rarely grant interrogatories, but frequently grant document requests if they are specific and limited depositions.

The Federal Arbitration Act authorizes arbitrators to issue subpoenas of third-party witnesses. In common practice, however, the parties will have to convince the arbitrator why a subpoena is necessary. In addition, the arbitrator has no authority to enforce the subpoena. Instead, enforcement is sought through the courts.

Different Types of Relief

Counsel should consider providing for attorneys' fees in the arbitration agreement. If the contract is silent, the arbitrators may view such fees as outside their authority to grant, unless both parties ask for attorneys' fees in their papers filed in connection with the arbitration. If there is authority for such relief under applicable statutes and common law, counsel should refer to it in the contract to avoid ambiguity and specifically empower the arbitrator to award attorneys' fees incurred as a result of the arbitration (as opposed to litigation or settlement attempts).

Likewise, in the case of multiplied damages or punitive awards, counsel should cite in the contract authority for granting such relief, or such relief might not be available. Many intellectual property statutes provide for treble damages with a showing of willfulness. Without specific contractual authorization, however, these types of relief are not the norm, particularly in international arbitration. In the absence of authority for punitive damages, choice of law provisions may be the deciding factor.

Revised Uniform Arbitration Act

The Revised Uniform Arbitration Act (RUAA), approved by the National Conference of Commissioners on Uniform State Laws in August 2000, solidifies the arbitrator's powers to act more like a judge. The following states have adopted the RUAA in some form: Hawaii, Nevada, New Jersey, New Mexico, North Carolina, North Dakota, Oregon and Utah.

The RUAA expands the original 1955 Uniform Arbitration Act's provisions to allow arbitrators to make summary dispositions of claims or issues with certain procedures, to hold pre-arbitration proceeding meetings, to issue interim awards, and to use any other discovery process that results in relevant evidence for the proceeding, including subpoenas. The RUAA also provides that arbitrators may award punitive damages “if such an award is authorized by law in a civil action involving the same claim.” Similarly, arbitrators, under the RUAA, may award attorneys' fees.

Particulars of the Award

Regarding the award, what time frames should govern the panel's decision making? The arbitration clause can bind the arbitrator to render a decision in a predetermined time frame either set by institutional rules or by the parties themselves.

Will the award be reasoned? A reasoned award is more expensive, but it requires the arbitrators to think analytically and justify their award in writing. While it would be difficult to overturn an award without a showing of manifest disregard for the law, a reasoned award helps to avoid a “splitting the baby” approach to decision making. A reasoned award also affords parties the benefit of understanding how the panel reached a decision.

What form should the award take? Parties do not have to allow the arbitrator total freedom in drafting an award. In “baseball” arbitration, both parties propose an award, in its entirety, and the neutral must select one of the parties' model awards, without modification. Another format is “Hi-Lo” arbitration where the parties predetermine a range for the award.

Award Enforcement and Judicial Review

If the case is a domestic American case, the parties should state that a court of competent jurisdiction may enforce the award. In international cases, parties should refer to any applicable treaties, such as the New York or Panama Conventions. Parties should also consider a clause providing for judicial review, but should first research such a clause's enforceability. If unenforceable, an alternative is review by another panel of arbitrators.

Conclusion

The ultimate advantage of arbitration is its flexibility. By careful and thoughtful drafting, parties can create their own proceedings and rules. In addition, if they omitted a point or did not include an arbitration clause initially, the parties can always modify their agreement. Arbitration is a process that belongs to the parties. It can be their invention.

The result is not only a flexible process, but also flexible solutions to disputes. Arbitration is therefore particularly suitable for intellectual property owners.

In IBM & Fujistu Ltd., No. 13-T-117-0636-85, Amer Arb Ass'n Comm, Arb. Trib. 4 (1987), the arbitrator in a software dispute ordered the respondent to buy a license from the complainant. This kind of creative solution is more likely to occur in arbitration than in litigation. It also underscores arbitration's unique advantage of allowing parties to continue to do business together after the dispute over one aspect of their business has been resolved.