The Japan Patent Office (JPO) last week unveiled a new service that will see it weigh in on the standing of Japanese patents declared standards essential. When it was first announced last November, this system was perceived as offering a defensive tool to implementers. But the draft guidelines for the scheme, helpfully translated in part here by Satoshi Watanabe of Watanabe Research and Consulting, have foreclosed that possibility.
The essentiality checks fall under an existing programme called Hantei, in which the JPO provides non-binding advisory opinions on whether a particular patent covers a particular product. The service costs just around $400 and issued 97 decisions in 2016. Currently, this review can be requested by either a product manufacturer or a patent owner.
There will be three basic requirements for initiating a Hantei case relating to an SEP, Watanabe reports:
- Existence of dispute about standard essentiality of a patent between the parties is required.
- A demander is required to identify a virtual subject matter in dispute consisting only of integral components specified in a document developed by a standards body or the like.
- The demander is only permitted to claim that the virtual subject matter in dispute is within the technical scope of the patent, but not permitted to claim that it is out of the technical scope.
So it sounds like demands for a Hantei review of any given SEP will be asked to make a case that the patent in question covers an integral component of a published standard. While the JPO can opine that patents are essential or non-essential, in practice these reviews will be initiated by SEP owners, who will also have discretion identify which subject matter of the standard the patent covers.
So implementers, it seems, will not have a tool which they can use in parallel with validity challenges to attack key parts of an SEP licensor’s portfolio. Instead, an SEP owner may choose to initiate a number of Hantei cases on key rights in order to demonstrate the essentiality of its portfolio to prospective licensees.
While the low price point is attractive, the decisions are not binding and of course only apply to Japanese rights in a global portfolio, so it is open to question whether the new system will attract much interest among patent owners. That is especially true since Hantei decisions can’t be appealed – you could imagine the outcome backfiring on SEP owners.
As detailed in a recent IAM feature article on altermative dispute resolution, Japan is not the only place where independent essentiality checks are being explored; the European Commission has called for greater scrutiny on SEP essentiality and suggested that patent offices were the natural candidates to do this work in its recent communication on SEPs. If the EPO and other bodies adopt a similar model in the future, it shouldn’t prove much of a concern to SEP owners.