In view of recent intellectual property litigation cases, the IP High Court seems to be issuing an increasing number of favorable judgments to patentees. In this article, we introduce a recent IP High Court case in which the court (appeal court) accepted the argument that the product of the defendant infringes the plaintiff’s patent right, contrary to the decision in the Tokyo District Court judgment in which the patentee (plaintiff) lost the case.

Plaintiff: Echigo Seika Co., Ltd.

Defendant: Sato Foods Industries Co., Ltd.

Case No.: Hei 23 (Ne) 10002

Overview: Patent infringement litigation regarding notches on rice cake to prevent the visual appearance from being ruined

Progress of the Case

November 2010: The Tokyo District Court found that Sato Foods did not infringe the plaintiff’s product and dismissed the appeal by Echigo Seika.

September 2011: The IP High Court handed down an interlocutory judgment which overturned the decision of the Tokyo District Court and accepted the argument that Sato Foods’ product infringes Echigo Seika’s patent right.

October 2012: The Supreme Court dismissed an appeal from Sato Foods.

Thus, the IP High Court judgment was finalized and Sato Foods was ordered to stop production of infringing products related to rice cakes and pay 800 million Japanese yen to Echigo Seika as damages.

Overview of the Case

In this litigation case, Echigo Seika, ranked second among rice cake producers, filed a complaint against Sato Foods, the leader in the field, claiming infringement of their patent right (Japanese Patent No. 4111382).

Echigo Seika’s “revolutionary” technology is famous for producing exceptional rice cakes, in which not only is it possible to prevent, through the provision of notches or grooves in the rice cakes, boiling over of the contents of the rice cakes when cooking, but also uniform roasting can be facilitated and the rice cakes can be easily eaten without the visual appearance being ruined.

Rice cakes are one of Japan’s traditional New Year’s foods. To make rice cakes, rice is heated in water and kneaded until it becomes very sticky. Rice cakes can be prepared and eaten in various ways, such as roasting, adding them to traditional New Year’s dishes such as oshiruko (a sweet red-bean beverage or soup) or ozoni (rice cakes in a vegetable soup), etc. Some people make rice cakes themselves using an automatic rice cake maker, and others buy premade rice cakes at supermarkets.

Click here to view pictures.

Notches on Rice Cakes

Drawing of Sato Foods’ product

(Source: Interlocutory judgment of the IP High Court)

Click here to view drawing.

The main point at issue is whether or not the description of the claim of the Echigo Seika patent (see below) includes the case where notches are formed on the flat top surface or the bottom placement surface of the rice cake.

The Japanese description of claim 1 can be interpreted in two ways as shown by the following two English translations.

Interpretation 1

A rice cake …, constituted by forming one or more notch parts or groove parts on a side surface which is not a flat top surface or a bottom placement surface but is a top surface of an upper surface part of a small rice cake body, ….

Interpretation 2

A rice cake …, constituted by forming one or more notch parts or groove parts not on a flat top surface or a bottom placement surface but on a side surface which is a top surface of an upper surface part of a small rice cake body, ….

Overview of the Trial at the IP High Court

The IP High Court handed down an interlocutory judgment on September 7, 2011, that accepted the argument that Sato Foods’ product infringes Echigo Seika’s patent right. The Chief Judge, Toshiaki Iimura, stated that “the notches on Sato Foods’ product are within the technical scope of Echigo Seika’s patented invention”.

Judge Iimura pointed out that, in view of the claims, the specification, and the prosecution history, “the technical scope of Echigo Seika’s patented invention is not limited to the notches or grooves being formed only on the side surface of the rice cake”.

The court concluded that Sato Foods’ rice cakes “are within the technical scope of Echigo Seika’s patented invention”, taking into consideration the characteristic feature of the notches on the side surface of Sato Foods’ rice cakes. The IP High Court made a final decision as described above after deliberating compensation and injunctions.

An overview of the judgment regarding the main point at issue at the IP High Court is as follows.

[Description of the Claims]

In the Japanese claim, the description “not [on] a flat top surface or a bottom placement surface” is immediately followed by the description “a top surface of an upper surface part of a small rice cake body” with no comma in between. This sentence structure in Japanese leads to the two conflicting alternative interpretations described above.

[Description of the Specification]

It is common to use the largest surface as the bottom placement surface when heating a rectangular rice cake. However, depending on the orientation, it is not always possible to clearly and uniquely define every surface of a rice cake (see Figures 1 to 3). Therefore, it is important to add the description “not on the flat top surface or a bottom placement surface” in order to more clearly identify the side surface of the upper surface part of a small rice cake body.

Reference drawing submitted by the plaintiff (IP High Court Reference Material)

Click here to view the drawing.

[Prosecution History]

The patentee submitted amendments once during prosecution in order to overcome reasons for rejection issued by the Examiner and, based on the gist of the amended invention, argued that in this invention, notches or grooves should be formed only on the side surface of the upper surface part of a small rice cake body, but not on the flat top surface or the bottom placement surface. However, since the Examiner decided that the amendments added new matter, the patentee (applicant) submitted other amendments and withdrew the former arguments. Therefore, when interpreting the meaning of the description “not on a flat top surface or a bottom placement surface”, judging from the complete prosecution history except for the statement concerning the withdrawn amendments, the patentee argued that it doesn’t matter whether notches or grooves are formed on the flat top surface and the bottom placement surface, which are the top and bottom surfaces of the rice cake, i.e., not the side surfaces.

We will now introduce the judgment on the main point at issue at the Tokyo District Court – the lower court which heard the case prior to the IP High Court trial.

Overview of the Trial at the Tokyo District Court

Tokyo District Court Case No. Hei 21 (wa) 7718

Date of Judgment: November 30, 2010

The Tokyo District Court made the following judgment in view of the claims, the specification, and the prosecution history of Echigo Seika’s patent.

[Description of the Claims]

If a part where the notches or grooves are formed is specified as a “side surface”, which is different from a “flat top surface or bottom placement surface”, then it is appropriate to describe this part in the claims as “on a side surface of an upper surface part of a small rice cake body, the side surface being different from a flat top surface or a bottom placement surface”, for example.

[Description of the Specification]

There is an explanation in the specification of the effect of forming notches or grooves on a “side surface” of a rice cake, wherein after roasting a rice cake in a low-temperature oven, the notch parts or groove parts of the rice cake will not take on an unattractive appearance like a scar on human skin. Therefore, based on the description in the specification, it can be understood that the feature of the notches or grooves being formed on the “side surface” had been emphasized in the application from the beginning of its prosecution.

[Prosecution History]

During the prosecution of this patent, Echigo Seika actively argued that the notches or grooves are formed “only on the side surface, and not on the flat top surface or the bottom placement surface (of a small rice cake body)”. However, the Examiner did not accept this argument and issued another Office Action on September 21, 2005. It seems that Echigo Seika then withdrew the former arguments and submitted new arguments to the effect that notches or grooves can be formed not only “on a flat top surface or a bottom placement surface”, but also “on a side surface”. The Japanese Patent Office (JPO) issued an Appeal Decision to Grant a Patent in the appeal stage overturning the Decision of Rejection which was issued in the examination stage; however, the basis for the Appeal Decision to Grant a Patent was not Echigo Seika’s argument that they actively indicated that it doesn’t matter whether notches and grooves are formed on the flat top surface and the bottom placement surface, i.e., on surfaces other than the side surfaces.

The Tokyo District Court concluded the trial by not accepting the argument that Sato Foods’ product infringes the plaintiff’s patent right since the phrase “A rice cake constituted by forming one or more notch parts or groove parts ... not on a flat top surface or a bottom placement surface but on a side surface of an upper surface part of a small rice cake body” in the claims should be interpreted to mean that the notches or grooves are NOT formed “on a flat top surface or a bottom placement surface” BUT RATHER “on a side surface” after taking the interpretation of the main point at issue into consideration.