Update - Patents - Patent Litigation In Japan.
Legal News & Analysis - Asia Pacific - Japan - Intellectual Property
6 February, 2019
In Japan, the Intellectual Property High Court (IPHC) established in 2005 has jurisdiction to handle intellectual property cases as second instance, and registered IP cases appealed against trial decisions of the Japan Patent Office (JPO) as first instance. Any lawsuits at first instance related to patents, utility models, rights to circuit design, and copyright for computer programmes must be filed with the Tokyo District Court or the Osaka District Court. A "pro-patent" trend has developed and the duration of intellectual property proceedings before District Courts in 2016 was 13.3 months, and 8.3 months for those before the IPHC.
Besides litigation before courts, the JPO provides the system of invalidation trial for determining whether a patent is valid. An invalidation trial may be filed by a person or an entity who has interest in determining whether a patent shall be invalidated, and discussions in the trial are implemented orally between the claimant and the patent holder. A final trial decision shall be rendered by the JPO, and it may be reviewed by the court (in this case, the IPHC shall examine the case at first instance). In addition to them, post-grant objection proceedings before the JPO are introduced by the amendment of the Patent Act in 2014. Any person or entity may request objection proceedings to the JPO within 6 months after the date of publication of a grant of patent. In this procedure, the discussion shall be exchanged in writing mainly between the patent holder and the JPO. A final objection decision shall be rendered by the JPO, and it may be reviewed by the court (Also in this case, the IPHC shall examine the case as first instance).
FREQUENTLY ASKED QUESTIONS
-Are there any restrictions on pre-action correspondence?
A patent holder may send a warning letter to an infringer after finding good evidence of infringement. A warning letter also functions to provide evidence that an infringer knowingly infringes at the time of receipt of the warning letter at the latest.
Sending a warning letter to a person other than the primary infringer risks the recipient launching an action in unfair competition or tort if it turns out not to infringe or the patent is found invalid. Legal advice should be sought before sending any letter to avoid such a risk.
-How do courts approach claim construction?
Article 70(1) of the Patent Act provides that the technical scope of a patented invention shall be determined based upon the scope of the claims of the application. This means that only devices or processes which satisfy all of the constituent components of at least one of the claims of a patent shall be regarded as falling within scope of the claims. The meaning of terms used in the claims and the scope of protection is determined taking into account the specification and drawings attached to the application (Article 70 (2)).
A patent holder may not seek a broader interpretation of the claims in conflict with any limitation of the claims argued and acknowledged during the application process ("file wrapper estoppel" or "prosecution history estoppel").
The Supreme Court has provided guidelines in applying the doctrine of equivalents. The following five requirements must be satisfied to assert the doctrine:
- The part replaced is an insubstantial part of the claimed invention;
- The devices or processes after replacement of the part may achieve the object of the claimed invention, and produces the same effect as that of the claimed invention.
- The replacement of the part would have been obvious to those skilled in the art upon the date of infringement;
- The allegedly infringing product was not the same as prior art upon the application of the patent, or may have been easily conceived by those skilled in the art based on prior art upon the application of the patent; and
- There is no evidence that the applicant (i.e., current patent holder) intentionally excluded the allegedly infringing product from the claimed invention during the prosecution.
Claim interpretation also plays a vital role in judging validity. According to case law, the scope of the claimed invention shall be determined solely based on the description of claims unless it is impossible to determine unambiguously the technical meaning of the claims or it is clear that the description of the claims are erroneous taking into consideration the detailed explanation of the invention specified in the application. Thus, in contrast to claim interpretation when judging patent infringement, when determining validity consideration of the specification and drawings attached to the application is ONLY permitted in very limited circumstances.
How do courts approach inventive step?
In Japan, the Court generally applies the following steps when assessing obviousness.
- Determination of the patented invention
- Determination of the cited invention (prior art);
- Determination of common aspects and points of difference;
- Consideration of points of difference; and
How can evidence be obtained?
Discovery is not available in Japan. Most of the evidence used in patent infringement litigation is composed of documents (including photograph, videotapes and DVD). Examination of witness is rarely implemented.
Article 105 of the Patent Act provides that the court may, upon request by a party, order the other party to provide the court with documents required to prove the alleged infringement or to calculate the damages caused by the infringement. The court will not make such an order if there are reasonable grounds for a person or an entity who holds the relevant documents to refuse to provide the court with the documents. In practice, this order is often used to calculate damages but not to prove infringement.
How is the case presented at trial?
Infringement litigation begins when a complaint is submitted to the Court by a claimant. There are three stages of proceedings in an infringement lawsuit:
- Examination of whether the alleged infringement may be proven, or whether the patent at issue is valid; and
- Calculation of damages, if applicable.
Japanese proceedings are conducted primarily through exchanging written argument between the parties. Oral hearings are limited to a hearing at the beginning of the proceedings and a final hearing which functions primarily to allow the parties to confirm their written arguments. These hearings are brief, generally lasting less than an hour. Expert advice may be requested and is generally submitted in the form of a written report although, in practice, expert evidence is rarely used. Instead, a technology explanation hearing is generally held for parties to give a presentation on the relevant technologies before court.
Once the parties have concluded their arguments on infringement and validity, the Court determines whether to proceed to calculation of damages. If the Court finds no infringement and determines not to calculate damages, the Court will conclude oral proceedings and give judgment or offer to the parties an opportunity to settle the dispute. If the court finds infringement, the court enters into calculation of damages, or offers the parties an opportunity to settle the dispute. Many cases end in settlement.
What remedies are available?
Under the Patent Act, a patent holder or an exclusive licensee may demand an infringer or potential infringer to stop or not commence such infringement as well as taking measures necessary for the prevention of such infringement. This can include disposal of infringing products (including products produced by infringing use of a patented process) and the removal of facilities used for the infringement.
A patent holder or an exclusive licensee is also permitted to apply for an interim injunction to restrain the patent infringer from carrying out the allegedly infringing act until the end of the main action. However, proceedings for interim injunctions in patent infringement cases progress rather slowly because the Court hears the defendant who is likely to argue non- infringement and invalidity of the patent.
The Patent Act sets out presumptions regarding the level of damages. The amount of damage sustained by the patent holder or the exclusive licensee may be presumed to be:
- the profit per unit of products which would have been sold by the patent holder or the exclusive licensee if there had been no act of infringement, multiplied by the quantity of products sold by the infringer, the maximum of which shall be the amount attainable by the patent holder or the exclusive licensee in light of the capability of the patent holder or the exclusive licensee to work the patent. If any circumstances exist under which the patent holder or the exclusive licensee would have been unable to sell the quantity sold by the infringer in whole or in part, the amount calculated as the number of products not able to be sold due to such circumstances shall be deducted;
- the profits made by the infringer (an account of profits); and
- the amount the patent holder or exclusive licensee would have been entitled to receive for working the patented invention.
Before provision of 1) was established, there was criticism that the Courts rarely awarded high levels of damages. However, following amendment of the Patent Act in 1999, there are instances where the Courts have awarded damages of over 1 billion JPY (10 million USD).