There are many patent infringement litigation cases in Japan in which protective orders are issued.  However, it appears that there are few cases in which the protective orders were imposed only on the counsels.  We introduce a case where the Intellectual Property (IP) High Court accepted the plaintiff’s proof of the defendant’s infringement as reasonable despite a protective order imposed only on the counsels.

Plaintiff: Synova S.A.

Defendant: Sugino Machine Limited

Case No.: Tokyo District Court Case No. H22 (wa)-12409

Patent No.: Japanese Patent No. 3680864

Overview of the Case

  1. In this lawsuit, the plaintiff, Synova, brought an action to the Tokyo District Court against the defendant, Sugino, for the prohibition of sales of Sugino’s Product X.  Sugino asserted at the Tokyo District Court that their Product X did not infringe Synova’s patent and filed a request for a patent invalidation trial at the Japanese Patent Office (JPO).  In addition, Sugino filed a motion for a protective order to protect the design drawings of Product X.  The attorneys-at-law and patent attorneys representing Synova were the only persons who were required to comply with the protective order for the design drawings of Product X (in other words, the only persons who were permitted to see the design drawings).  However, the protective order was not imposed on the presidents of Synova Japan and Synova S.A. (hereinafter referred to as “persons from Synova”), i.e., they were not permitted to see the design drawings.  Synova argued that although they accepted the protective order, it should have been issued not only to the counsels but also to the persons from Synova otherwise the activities necessary for establishing proof of infringement would be restricted.  However, the judge issued the protective order only to Synova’s counsels as the parties who were to comply with the protective order.  Despite being under the protective order, Synova asserted that Sugino infringes their patent and provided proof thereof.  Sugino, in turn, counterargued that they do not infringe Synova’s patent.
  2. The Tokyo District Court decided against Synova due to a failure to provide sufficient proof.
  3. In response, Synova appealed to the Intellectual Property (IP) High Court where it was judged that Synova did provide sufficient proof of infringement, thereby reversing the Tokyo District Court’s decision.
  4. Sugino appealed to the Supreme Court and withdrew their motion for the protective order since they no longer found it necessary to protect the design drawings.  As of this writing, the Supreme Court has not yet made a ruling.

Protective Orders in Japan

In accordance with Japanese Patent Law, Articles 105-4 to 105-6, a protective order is issued against a party or the party’s counsel when a trade secret is stated in documents submitted to the court during patent infringement litigation.  A person to which a protective order has been issued must not disclose the protected content to persons to whom the order has not been issued nor use the protected content for purposes other than the litigation in question.  A person who is in violation of such an order will be subjected to criminal punishment.

Progress of this Lawsuit under the Protective Order

  1. In this particular case, the presidents of Synova Japan and Synova S.A. (i.e., the persons from Synova) were excluded, thus leaving only the attorneys-at-law and patent attorneys for Synova as the persons who received the protective order.  Therefore, Synova’s counsels strongly argued that the protective order should also be issued to the persons from Synova, thus resulting in complications in the suit concerning the issue of the protective order.  In the end, the Tokyo District Court rejected Synova’s argument.  As a result, the legal provision stating that a person who is in violation of the protective order will be subjected to criminal punishment greatly restricted Synova’s activities for establishing proof of infringement including communicating with the persons from Synova and conducting experiments and simulations to prove the act of infringement.  In fact, since dialogue between Synova’s counsels and the persons from Synova was under the strain of the protective order, it was difficult to set the conditions for the experiments and simulations.  The means for submitting briefs was also, in practice, extremely limited.
  2. Synova also filed a request for a trial for correction as a countermeasure against Sugino’s request for a trial for invalidation.  In order to file this trial for correction, Synova had to appoint another patent attorney, other than Synova’s initial counsels, in order to avoid the suspicions that the secrets which were protected by the protective order would be revealed to persons from Synova by Synova’s counsels.
  3. Synova struggled under such circumstances to prove the act of infringement through experiments and simulations.  However, the Tokyo District Court decided against Synova due to failure to provide sufficient proof of infringement.
  4. Synova immediately appealed to the IP High Court.  Synova conducted additional experiments under the protective order, but had to anticipate that they would lose the case.  However, the IP High Court accepted all of the proof that Synova submitted to the Tokyo District Court as reasonable and handed down a decision in favor of Synova, thus reversing the decision of the Tokyo District Court.
  5. In response to this ruling, Sugino appealed to the Supreme Court and withdrew the motion for the protective order during the process of the final appeal.  The reason given for the withdrawal was that the invention for which Sugino had filed a patent application at the JPO had already been patented at this point and the design drawings protected by the protective order were no longer secret.

Comments

  1. If it can be said the invention which Sugino had filed at the JPO was patented and therefore the design drawings protected by the protective order were no longer secret, then the need for the protective order had been eliminated at the time of publication of the unexamined application.  Since Sugino’s application was published during the above infringement litigation at the Tokyo District Court, there is no reason for Sugino to withdraw the motion for the protective order during the final appeal at the Supreme Court.  Sugino filed the motion for the protective order in order to protect the design drawings which were no longer secret.  Such an action which restricted Synova’s activities to prove the act of infringement should be criticized.
  2. In addition, the Tokyo District Court issued the protective order “only” to Synova’s counsels but not to the persons from Synova.  The motion for the protective order from Sugino disrupted the relationships between Synova’s counsels and Synova and restricted their communication.  It is clear that Sugino’s intention was to disturb Synova’s activities.  It does not make sense that the protective order was not issued to the persons from Synova which blocked their access to the design drawings.