This country-specific Q&A provides an overview of the legal framework and key issues surrounding patent litigation law in Japan.
This Q&A is part of the global guide to Patent Litigation.
For a full list of jurisdictional Q&As visit http://www.inhouselawyer.co.uk/index.php/practice-areas/patent-litigation/
What is the forum for the conduct of patent litigation?
Patent lawsuits are under the jurisdiction of the Tokyo District Court or the Osaka District Court in the first instance. The Tokyo District Court has four intellectual property divisions, while the Osaka District Court has two intellectual property divisions. Further, the Intellectual Property High Court handles patent lawsuits in the appeal instance and lawsuits for cancellation of trial decisions (i.e., lawsuits seeking cancellation of a JPO trial decision in, for example, a patent invalidation trial). In the first instance, when both the Tokyo District Court and the Osaka District have jurisdiction over a case, the parties are allowed to select either one of the District Courts, and such selection is generally made in consideration of which District Court is geographically advantageous for such parties. In the appeal instance and lawsuits for cancellation of trial decisions, the parties are not allowed to select any court other than the Intellectual Property High Court. The judges in the first and appeal instances do not necessarily have knowledge concerning technical matters.
What is the typical timeline and form of first instance patent litigation proceedings?
A court firstly conducts proceedings concerning the presence/absence of patent infringement (the infringement issue) and then, after being satisfied that patent infringement exists, conducts proceedings concerning the calculation of compensatory damages (the damages issue). Further, in an infringement lawsuit, if the defendant argues that the patent is invalid, proceedings concerning the sufficiency issue and proceedings concerning the invalidity issue are carried out concurrently. The sufficiency-issue proceedings and the invalidity-issue proceedings are not separate from each other and are carried out together in the same infringement lawsuit. The issue of claim interpretation is also not separated from the sufficiency issue and the invalidity issue and is addressed in the same infringement lawsuit. The statistics from the Intellectual Property High Court indicate that the average period for proceedings for first instance civil cases relating to intellectual property in 2018 was 12.3 months.
Can interim and final decisions in patent cases be appealed?
An appeal may be filed against a final judgment in the first instance, and a final appeal or a petition for acceptance of a final appeal may be filed with the Supreme Court against a final judgment in the appeal instance. Appeals and final appeals, etc. may not be filed independently against an interlocutory judgment. An appeal against a first-instance final judgment should be filed within two weeks from the day following the delivery date of the original copy of the judgment. The filing of an appeal is accepted by submitting a Petition for Appeal including, for example, the object of appeal stated in a relatively simple manner; however, the appellant must submit an Appeal Brief including substantial reasons for appeal within fifty days from the day following the date of appeal. No permission is required for the filing of an appeal. The statistics from the Intellectual Property High Court indicate that the average period for proceedings for appeal instance civil cases relating to intellectual property in 2018 was 7.3 months. There is no system to stay or stop patent infringement litigation proceedings which are concurrently in progress together with the relevant invalidation trial proceedings.
Which acts constitute direct patent infringement?
An act of working a patented invention in the course of business without a license from the patentee constitutes direct infringement. The Japanese Patent Act stipulates the types of acts which constitute the act of working a patented invention with respect to each type of invention. The stipulated act of working an invention of a product is the act of producing, using, assigning, etc., exporting or importing, or offering to assign, etc. the product. Further, the stipulated act of working an invention of a process is the act of using the process. Furthermore, the stipulated acts of working an invention of a process for producing a product are the act of using the process and the act of using, assigning, etc. exporting or importing, or offering to assign, etc. a product produced by the process.
Do the concepts of indirect patent infringement or contributory infringement exist? If, so what are the elements of such forms of infringement?
Yes, provisions concerning indirect infringement exist. The Japanese Patent Act stipulates the following types of acts as acts which constitute indirect infringement: (i) as for an invention of a product or process, the act of producing, assigning, etc., importing, or offering to assign, etc., in the course of business, a product that is used only for the production of the above product or for the use of the above process; (ii) as for an invention of a product or process, the act of producing, assigning, etc. importing, or offering to assign, etc., in the course of business, any article (excluding those widely distributed in Japan) that is used for the production of the above product or for the use of the above process and that is indispensable for the resolution of the problem by the above invention while being aware that such invention is a patented invention and that the above article is used in the working of the invention; and (iii) as for an invention of a product or process for producing a product, the act of possessing the product or a product produced by the process for the purpose of assigning, etc. or exporting it in the course of business.
How is the scope of protection of patent claims construed?
The scope of a patented invention is defined by the claims, and the meanings of the terms are interpreted in consideration of the specification and the drawings (Article 70(1) and (2) of the Patent Act). Further, the theory of file wrapper estoppel exists, under which a patentee is not permitted to make arguments contrary to the arguments made by itself in the prosecution history, and, from such perspective, the arguments made by the applicant in the prosecution history may be taken into consideration when the claims are interpreted. Further, the interpretation of the claims may be made in consideration of the dictionary meanings of the terms and the common technical knowledge as of the filing of the application. In terms of the precedents, infringement under the doctrine of equivalents has been accepted in which, even if the accused product/process does not have configurations in line with the claims, the establishment of patent infringement is still admitted as long as such accused product/process satisfies the requirements under which the accused product/process is substantially equivalent to the patented invention.
What are the key defences to patent infringement?
In order to argue, concerning non-sufficiency, that a certain product sold by a defendant or a certain process used by the defendant falls outside the scope of the claims of the patent in dispute, the defendant needs to interpret the phrases of the claims and then argue that the relevant product or process does not satisfy such claims. Further, if the plaintiff makes assertions as to infringement under the doctrine of equivalents, the defendant will then argue that the product or process in question does not satisfy the requirements for the establishment of infringement under the doctrine of equivalents. Depending on the case, the defendant may argue that it has a right of prior-use (Article 79 of the Patent Act) because the defendant worked the invention by itself at the time of filing the patent application, or the defendant may argue patent exhaustion issue to the effect that the patent rights are not effective against a product which has been distributed by the valid patentee in a legitimate manner. When such argument is accepted, even if the relevant product or process satisfies the claims, the defendant’s acts will still not constitute patent infringement.
What are the key grounds of patent invalidity?
Lack of novelty or inventive step and violation of the description requirements are often asserted as major grounds for invalidity. Novelty is negated against an invention that was publicly known prior to the filing of the patent application, an invention that was publicly worked prior to the filing of the patent application, and an invention that was described in a publication or was made available through the Internet, etc. Inventive step is negated against an invention if a person of ordinary skill in the art of such invention could have easily made the invention based on a publicly known invention, etc. The description requirements, which are often disputed, include: (i) the support requirement, which stipulates that an invention according to a claim should not fall outside the scope of the matter described in the detailed description of the invention; (ii) the clarity requirement, which stipulates that an invention for which a patent is sought must be clear; and (iii) the enablement requirement, which stipulates that the detailed description of the invention should be made clearly and sufficiently for a person skilled in the art to which the invention for a patent is being sought belongs to be able to work such invention. It should be noted that violation of a formality requirement, such as the unity-of-invention requirement, will constitute a reason for rejection but will not constitute grounds for invalidity.
How is prior art considered in the context of an invalidity action?
Types of prior art references include: (i) a reference distributed, etc. prior to the priority date of the application of the relevant patent; and (ii) the specification, etc. of a prior Japanese application which was filed prior to the priority date of the application of the relevant patent and laid open after such priority date. A type (i) reference is available as providing grounds for lack of novelty, and a combination of two type (i) references is available as providing grounds for lack of inventive step. Meanwhile, a type (ii) reference is available as providing grounds for lack of novelty; however, a combination of a type (ii) specification, etc. and another reference cannot serve as grounds for lack of inventive step.
Can a patentee seek to amend a patent that is in the midst of patent litigation?
Yes. The patentee is, in principle, eligible to file a trial for correction in order to correct the patent even while a patent lawsuit is pending. In a trial-for-correction process, no third party is permitted to file an opposition, etc. against a correction. As an exception, while an invalidation trial or a lawsuit for trial-decision cancellation is pending for the relevant patent, the patentee is ineligible to file a trial for correction; however, the patentee is permitted to file a demand for correction in order to correct the patent within a predetermined period during the invalidation trial proceedings. When filing a demand for correction, the demandant of the invalidation trial is allowed to file an opposition as to whether the correction is acceptable. In order for such correction to be accepted, it must satisfy, for example, the following requirements: the correction does not correspond to an addition of new matter; and the correction does not fall under a substantial change or expansion of the claims. When a correction is accepted, the patent application, etc. is regarded to have been filed through the corrected specification and claims.
Is some form of patent term extension available?
First, when a registration of patent rights is made after the later of the date falling five years from the filing date of the patent application and the date falling three years from the date of a request for examination of the patent application, the patent term may be extended if the patentee files for a patent term extension application. Further, if the working of a patented invention involves a period during which a person was unable to work the patented invention when such person needed to obtain permission under laws which are intended to, for example, ensure the safe working of the patented invention or to undergo any other disposition, the patent term may be extended for a maximum of five years by way of the patentee filing for a patent term extension. As for registration of a patent term extension, only an interested person may file a demand for trial for invalidation of registration of a patent term extension. The general reason given for such demand for trial is that the length of the extension period involved in the registration of the patent term extension exceeds the length of the period during which the patented invention was unable to be worked.
How are technical matters considered in patent litigation proceedings?
A party may, at its own discretion, choose to submit expert opinions as evidence items. A party is also allowed to seek examination of witnesses; however, patent lawsuits in Japan rarely involve witness examinations being conducted. The Japanese courts have Judicial Research Officials with technical backgrounds, and they help judges to understand any technical matters which may arise. The courts are also entitled to appoint third-party experts (such as professors and patent attorneys) as expert advisers when the relevant case is specialized or complicated from a technical viewpoint; however, the opinions stated by the Judicial Research Officials and expert advisers are not employed as evidence. The Judicial Research Officials, serving as court officials, are under confidentiality obligations, while the experts or expert advisors who are involved in, for example, submitting opinions, tend not to have a confidentiality obligation against the parties.
Is some form of discovery/disclosure and/or court-mandated evidence seizure/protection (e.g. saisie-contrefaçon) available, either before the commencement of or during patent litigation proceedings?
When a patentee files an application, the court is entitled to compel the defendant to produce documents required by the patentee to prove the infringing act(s) or to prove damage; provided, however, that this does not apply where the holder of such documents has reasonable grounds to refuse to produce the same. By way of the 2019 revision of the Patent Act, an inspection system will be introduced on October 1, 2020 wherein, upon a patentee filing an application, the court is entitled (when predetermined requirements are satisfied) to order an inspector (who is an expert) to enter the defendant’s factories, etc. to conduct investigations necessary for proving the existence of infringement. These procedures are carried out only while the patent lawsuit is pending.
Are there procedures available which would assist a patentee to determine infringement of a process patent?
Yes. When an invention of a process for producing a product has been granted a patent, a product identical to the above product is presumed to have been produced by such process if such product was not publicly known in Japan prior to the filing of the patent application. In this case, the court is not entitled to issue an order requiring the defendant to immediately disclose the configuration of the process; meanwhile, the defendant needs to provide arguments/proof in order to overturn the presumption. It should be noted that an order for document production may be available depending on the case, as is discussed in the above answer.
Are there established mechanisms to protect confidential information required to be disclosed/exchanged in the course of patent litigation (e.g. confidentiality clubs)?
In general, a petition for restriction of inspection, etc. is often employed. When the court makes a determination for such restriction, third parties are not permitted to have access to the part of the case record regarding which the determination for such restriction has been made. In this regard, a restriction on inspection, etc. does not impose a confidentiality obligation on the parties and therefore cannot prevent any of the parties from disclosing the case record to third parties. There is also the system of confidentiality protective orders which can be made against parties; however, it is quite rare, in the practice in Japan, for a confidentiality protective order to be issued.
Is there a system of post-grant opposition proceedings? If so, how does this system interact with the patent litigation system?
Yes. Any person may file an opposition to a granted patent with the Commissioner of the Japan Patent Office no later than six months after the publication date of the Gazette for such patent. In practice, this system proceeds separately and independently from the patent litigation system.
To what extent are decisions from other fora/jurisdictions relevant or influential, and if so, are there any particularly influential fora/jurisdictions?
In theory, decisions from other fora/jurisdictions are irrelevant to patent actions in Japan and have no influence on patent actions in Japan; however, from a practical viewpoint, for example, when the claims of a patent in another forum/jurisdiction corresponding to a Japanese patent are substantially the same as the claims of such Japanese patent, the relevant decision from the other forum/jurisdiction essentially may exert an influence on the relevant patent action in Japan. Therefore, the content of such decisions from other fora/jurisdictions may be submitted as evidence in Japanese litigation proceedings.
How does a court determine whether it has jurisdiction to hear a patent action?
Japanese courts have jurisdiction over actions relating to patent infringement, including actions relating to foreign patent infringement, as long as such actions relating to patent infringement each satisfy the requirements set forth in the Code of Civil Procedure. More specifically, the jurisdiction of Japanese courts is accepted in the following circumstances: (i) where the general venue for an action against the defendant is located in Japan; (ii) in a claim for damages, where seizable property of the defendant is located in Japan; (iii) where the defendant has an office or business office in Japan, and the action relates to the business conducted at such office or business office; (iv) where the defendant is conducting business in Japan, and the action relates to the business conducted in Japan; (v) where it is determined that a tort occurred in Japan; (vi) where agreed jurisdiction is accepted; and (vii) where jurisdiction by appearance is accepted. Requirement (iv) may involve, for example, consideration of the following issues: whether the website is in Japanese; and whether applications from Japan are available through the website.
What are the options for alternative dispute resolution (ADR) in patent cases? Are they commonly used? Are there any mandatory ADR provisions in patent cases?
The Japan Intellectual Property Arbitration Center (https://www.ip-adr.gr.jp/eng/), a private organization for resolving disputes in the field of intellectual property, provides mediation and arbitration services concerning intellectual property. It is rare for arbitration to be employed for a dispute between domestic Japanese corporations, whereas arbitration may be employed for international disputes. Further, intellectual property mediation proceedings by the intellectual property divisions of the Tokyo District Court and the Osaka District Court are also available. For such proceedings, new operations came into effect in October 2019, which involved utilizing television conferences with the aim of, for example, settling disputes within a minimum period of around three months by way of closed discussions facilitated by judges, etc.
What are the key procedural steps that must be satisfied before a patent action can be commenced? Are there any limitation periods for commencing an action?
No particular steps are required. It often happens in practice that a warning letter is sent before a lawsuit is filed and the parties have negotiations therebefore; however, it is possible for a party to proceed by directly filing a lawsuit without sending a warning letter. There exists a general statute of limitations relating to claims for damages, but there are no particular limitation periods for commencing an action. There are also no rules corresponding to the common-law equitable doctrine of laches. It should be noted, however, that a Complaint basically needs to specify the allegedly infringing product(s) and to clarify the specific configuration(s).
Which parties have standing to bring a patent infringement action? Under which circumstances will a patent licensee have standing to bring an action?
Under the Patent Act, a patentee or registered exclusive licensee is eligible to file a patent lawsuit. Meanwhile, there are divergent opinions as to whether a non-registered exclusive licensee is eligible to represent the rights to file an injunction of the patentee. Many precedents have been developed in which a non-registered exclusive licensee was found to be eligible to file a claim for damages.
Who has standing to bring an invalidity action against a patent? Is any particular connection to the patentee or patent required?
Invalidity actions at the JPO mainly include patent oppositions and patent invalidation trials. A patent opposition may be filed by any person no later than six months from the publication date of the Gazette for the patent. A demand for a patent invalidation trial may only be filed by an interested party any time after the grant of the patent (which also covers the time period after the expiration of the patent term). From a practical viewpoint, not only the party which has actually been sued for patent infringement but also parties holding patents similar to the relevant patent and parties who manufacture the same type of product as the patented invention are deemed to be interested parties.
Are interim injunctions available in patent litigation proceedings?
Yes. Proceedings are conducted inter partes and may address an issue regarding patent validity, and thus, the time period taken to issue an interim injunction order is generally not so different from the time period taken for the proceedings of the lawsuit on the merit (at a practical level, there have been many precedents in which an interim injunction case and the lawsuit case on the merit are pending before the same court and the proceedings for the two cases progress concurrently, and it may take one year or more to reach the issuance of an interim injunction order). In order to have such order issued, it is necessary to verify: (i) the existence of a right to demand an injunction based on the patent rights (infringement); and (ii) the necessity for provisional remedies. In practice, point (ii), i.e., the necessity for provisional remedies, is often verified in a relatively relaxed manner, for example, when prima facie evidence is sufficiently provided with respect to an infringement relating to point (i), or when a patented-invention product by the patentee and the relevant infringing product are competing in the market. As opposed to a permanent injunction, when an interim injunction order is issued, the patentee is generally required to provide security (in the amount equivalent to the profits which could have been gained by the debtor but for the interim injunction). Upon receiving an interim injunction order, the patentee is then in a position where it can readily file an application for the execution of such order. As opposed to a permanent injunction, a stay of such execution usually will not be permitted even if the alleged infringer files an appeal.
What final remedies, both monetary and non-monetary, are available for patent infringement? Of these, which are most commonly sought and which are typically ordered?
On what basis are damages for patent infringement calculated? Is it possible to obtain additional or exemplary damages?
The acceptable amount of damage for patent infringement is the amount calculated as the amount of damage suffered due to patent infringement, and additional or exemplary damages are not granted. Considering the difficulty to prove the amount of damage suffered due to patent infringement, the Patent Act stipulates the following three methods with regard to the calculation of damages:
(i) The lost profits which could be attained by the patentee through sale without the infringing act(s) is assumed as the amount of damage; the amount of damage is calculated using the following formula: “the quantity of articles assigned by the infringer” x “the amount of the patentee’s profit per unit quantity of articles” (provided, however, that such amount to be calculated shall not exceed “the amount according to the working capacity of the patentee”).
(ii) The amount of the infringer’s profit is assumed as the amount of damage; the amount of damage is calculated using the following formula: “the quantity of articles assigned by the infringer” x “the amount of the profit per unit quantity of the infringing products.”
(iii) The amount equivalent to the license fee is assumed as the amount of damage.
In this respect, the most recent revision to the Patent Act (promulgated in May 2019) will come into effect on April 1, 2020. The revised provisions state as follows:
- As for (i) above, the patentee is eligible to make a claim against the infringer for compensatory damages including damages for an amount equivalent to the license fee so as to also cover the portion (from among the sales quantity for the infringing products) regarding which the claim for compensation has been rejected because it exceeds the patentee’s production/sales capacity.
- When calculating an amount equivalent to the license fee, the court may take into consideration the amount of damage which would otherwise be determined if the parties conducted negotiations under the premise of patent infringement having been established.
How readily are final injunctions granted in patent litigation proceedings?
In a lawsuit in which a claim for an injunction has been filed, if the existence of patent infringement (the existence of possible patent infringement when talking about a claim for the prevention of infringement) is admitted as of the end of the oral proceedings, the court will automatically allow the injunction to take effect.
Are there provisions for obtaining declaratory relief, and if so, what are the legal and procedural requirements for obtaining such relief?
It is possible to file a lawsuit for declaration of, for example, the non-existence of a right to claim for damages or a right to seek an injunction based on infringement, or to file a lawsuit for declaration of the existence of a right of prior-use. Standing to sue is required in order for the above lawsuits to be found legitimate, and there needs to be an actual situation where, with regard to a specific allegedly infringing product, the plaintiff (serving as the alleged infringer) and the defendant involve the risk of a conflict about infringement upon specific patent rights.
For example, standing to sue is not permitted for a lawsuit for a declaration concerning a patent application which has not been granted a patent or for a lawsuit aiming only for a declaration of patent invalidity.
What are the costs typically incurred by each party to patent litigation proceedings at first instance? What are the typical costs of an appeal at each appellate level?
In the first instance, the plaintiff is required to prepare, as a filing fee for a lawsuit, the fees for the revenue stamps which are to be attached to the Complaint. In the appeal instance, the appellant is required to prepare the relevant filing fee for the appeal. These fees are calculated using a predetermined formula according to the amount in question.
Can the successful party to a patent litigation action recover its costs?
At the time of filing a lawsuit, the plaintiff is eligible to incorporate, into the claims, a claim to the effect that the court costs shall be borne by the defendant, and if such claim is accepted in the judgment, the plaintiff is then allowed to require the opposing party to bear the court costs within a legally defined range. The court has the discretion to determine the respective shares of the court costs to be borne; however, in principle, the losing party often bears the court costs. The court costs here include the filing fees for the lawsuit and the appeal (i.e., revenue stamp fees), expenses for delivering documents, daily allowances for witnesses (if any), etc. but does not include attorneys’ fees.
When a lawsuit ends with a settlement, a shared burden of the court costs will also be negotiated.
What are the biggest patent litigation growth areas in your jurisdiction in terms of industry sector?
No specific industrial field presents a noticeable growth among such patent lawsuits.
What do you predict will be the most contentious patent litigation issues in your jurisdiction over the next twelve months?
The inspection system (see question 32 below) which is to be introduced on October 1, 2020 as a result of the recent revision to the Patent Act is attracting significant attention as to the ways in which infringement lawsuits may, in practice, use and operate the inspection system in an effective manner.
A recent patent-related Supreme Court judgment (August 27, 2019) involved a dispute about inventive step and an unexpected, prominent effect. The Supreme Court stated that the judgment rendered in the original instance was illegitimate in that such original judgement denied an unexpected, prominent effect of the invention immediately, merely because of the fact that, with having it as the premise that a person skilled in the art could have easily thought of applying the compound in question of the invention to the use of the invention, the existence of other compounds having the same effect as the compound in question of the invention was known on the priority date, without sufficiently discussing the following issues: whether the effect of each invention could not be expected by a person skilled in the art from the configuration of each invention on the priority date; and whether the effect of each invention was a prominent effect which went beyond the expectations of a person skilled in the art from the above configuration. The influence of this Supreme Court judgment on the positioning of a prominent effect in future determinations concerning inventive step is receiving attention.
Which aspects of patent litigation, either substantive or procedural, are most in need of reform in your jurisdiction?
In recent years, the need for reform has been most heavily discussed regarding the introduction of the procedures for facilitating the collection of patent infringement evidence items which unevenly exist on the alleged infringer’s side. The recently promulgated revision to the Patent Act (2019 May) involves establishing an inspection system under which, if patent infringement is suspected, neutral technical experts (designated by the court) enter the alleged infringer’s factories, etc., conduct investigations of such factories, etc. which are required to prove the existence of infringement upon the patent rights, and file an inspection report with the court. This system is due to come into effect on October 1, 2020 and will be available during patent infringement proceedings (i.e., after the filing of a lawsuit), and, upon the patentee’s filing of an application for inspection, the court is entitled to issue an order for inspection if the following aspects are admitted: (i) the need for evidence collection; (ii) the probability of infringement; (iii) the difficulty of collecting evidence items through other means; and (iv) the appropriateness of such means.
The above revision to the Patent Act also involves revising the provisions concerning the presumption of compensatory damages, as mentioned in question 25 above.
What are the biggest challenges and opportunities confronting the international patent system?
There has been a dispute as to what theoretical construction may render the Japanese Patent Act effective when part (e.g. a server) of the elements configuring a patented invention (e.g., a system) is located overseas, and whether such theoretical construction is applicable. In the situation where further growth in cross-border business activities which are conducted overseas or in outer space is expected to occur, it is predicted that numerous discussions and determinations concerning such cross-border infringements will further arise from now on based on the individual cases, or in more general trends with an eye toward legislative revisions.
Further, with respect to establishing an international justice division in the Intellectual Property High Court which permits the use of the English language in intellectual property litigation proceedings, consultations have already started among the judicial community, the Ministry of Justice and the concerned parties of the industry.