ARBITRATION IN INTELLECTUAL PROPERTY DISPUTE RESOLUTION: A LEGAL INNOVATION TO ENHANCE ECONOMIC EFFICIENCY AND BUSINESS SUSTAINABILITY
Keywords:
Arbitration, Intellectual Property Rights, Alternative Dispute Resolution, Economic Efficiency, Business Sustainability.Abstract
The modern economy’s growing reliance on innovation, creativity, and technology has repositioned Intellectual Property Rights (IPR) as strategic economic assets of significant value. This shift has, in turn, intensified both the frequency and complexity of IPR disputes, particularly within business activities that demand legal certainty, efficiency, and the sustainability of commercial relationships. Against the limitations of litigation often characterized by lengthy procedures, public exposure, and high costs arbitration has emerged as a non-litigation dispute resolution mechanism that is considered more responsive to the distinctive nature of IPR disputes. This study aims to examine the role and effectiveness of arbitration as a mechanism for resolving IPR disputes in promoting economic efficiency and business sustainability in Indonesia. The research employs a normative legal method with a descriptive-analytical approach, drawing upon statutory regulations particularly Law Number 30 of 1999 on Arbitration and Alternative Dispute Resolution arbitral awards, as well as relevant literature and official reports on intellectual property. The findings indicate that arbitration offers several comparative advantages, including faster procedures, confidentiality, procedural flexibility, and final and binding awards. These characteristics enable arbitration to reduce transaction costs, safeguard the value of intellectual assets, and preserve long-term business relationships between disputing parties. Nevertheless, the effectiveness of arbitration in IPR disputes continues to face a number of challenges, such as limited awareness among business actors regarding the principle of arbitral finality, obstacles in the enforcement of arbitral awards, judicial intervention, and issues of public policy and reciprocity in the enforcement of foreign arbitral awards. Accordingly, strengthening arbitration as a legal innovation requires regulatory reform, enhanced capacity of judicial institutions, and the development of a supportive legal culture to ensure legal certainty, economic efficiency, and a sustainable business climate.
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