At a glance: patent enforcement proceedings in Japan

Patent enforcement proceedings

What legal or administrative proceedings are available for enforcing patent rights against an infringer? Are there specialised courts in which a patent infringement lawsuit can or must be brought?

There are two types of civil proceedings: the main lawsuit, by which a patentee may seek both a permanent injunction order and compensation for damages; and a proceeding for preliminary injunction, by which a patent owner may seek a preliminary injunction order. Which court has jurisdiction depends on the defendant’s domicile or place of manufacturing or sale. The Tokyo District Court has jurisdiction over the eastern part of Japan, and the Osaka District Court has jurisdiction over the western part of Japan. Both courts have specialised divisions dealing with cases relating to intellectual property. In addition to civil liability, the Patent Act has provisions on criminal sanctions for patent infringement; however, these provisions are rarely enforced. Moreover, a patentee can seek an injunction at a customs office against the importation of patent infringing products.

What is the format of a patent infringement trial?

The infringement proceeding begins with the filing of a complaint for a main lawsuit or petition for a preliminary injunction. Live testimonies can be used under the Civil Procedure Code, however, judges usually prefer to dispense with live testimonies and rely on documents for patent infringement cases. As for experts, affidavits of experts may be submitted to prove important technical facts. Further, for the purpose of establishing the amount of damages, a court may appoint a chartered public accountant as an expert upon the request of a patentee. The proceedings for a preliminary injunction typically take several months, and the proceedings for a main lawsuit typically take one to one-and-a-half years at the district court level and another year at the high court level.

What are the burdens of proof for establishing infringement, invalidity and unenforceability of a patent?

A patentee has the burden of proof to establish by preponderance of evidence that the accused products fall within the scope of the patent’s claims. Regarding the invalidity defence, the alleged infringer has the burden to prove by preponderance of evidence that there is a reason for the invalidity of the patent in order to make the patent unenforceable.

Who may sue for patent infringement? Under what conditions can an accused infringer bring a lawsuit to obtain a judicial ruling or declaration on the accusation?

In law, only registered owners and registered exclusive licensees of patents have the standing to file patent infringement suits in court. Exclusive licensees who are not registered with the Japan patent office (JPO) in accordance with the Patent Act do not have standing to seek injunctive relief; however, several lower court cases have admitted the standing of unregistered exclusive licensees with respect only to their claims to seek damages. Further, an accused infringer has standing to file lawsuits to seek a declaratory judgment in certain situations, for example, where it has received a cease-and-desist letter from a patentee.

To what extent can someone be liable for inducing or contributing to patent infringement? Can multiple parties be jointly liable for infringement if each practises only some of the elements of a patent claim, but together they practise all the elements?

The following acts shall be deemed to constitute patent infringement:

• the manufacturing and sale, etc, of articles to be used exclusively for manufacturing the patented product or the use of the patented process; and
• the manufacturing and sale, etc, of articles to be used for manufacturing the patented product or the use of the patented process (excluding those that are generally distributed in Japan) and that are indispensable for solving the problems through the invention concerned, knowing that the invention is patented and that the articles are to be used for the exploitation of the invention.

Can multiple parties be joined as defendants in the same lawsuit? If so, what are the requirements? Must all of the defendants be accused of infringing all of the same patents?

Multiple parties can be joined as defendants in the same lawsuit provided that they are making, using or selling substantially similar methods or products and are accused of infringing the same patents.

To what extent can activities that take place outside the jurisdiction support a charge of patent infringement?

Activities taking place outside of Japan cannot support a legal charge. However, regarding patents over a method of producing products, the importation or distribution of products produced using the patented method will constitute patent infringement even if the products are produced outside Japan.

To what extent can ‘equivalents’ of the claimed subject matter be shown to infringe?

There is no statutory provision, but a decision of the Supreme Court of Japan dated 24 February 1998 stipulated that patent infringement can be found under the doctrine of equivalents. Even if an accused product or process does not satisfy an element of a claim, patent infringement may still be found as ‘equivalents’ if the following conditions are satisfied:

• the element is not essential to the invention;
• equal function and effect can be gained, even if the element is replaced with the corresponding part of the accused product or process;
• the idea of replacement is obvious to those skilled in the art at the time of manufacturing of the accused product or use of the accused process;
• the accused product or process was not anticipated or obvious in light of prior art at the time of filling the patent; and
• the accused product or process was not intentionally excluded from the scope of the claim during prosecution.

What mechanisms are available for obtaining evidence from an opponent, from third parties or from outside the country for proving infringement, damages or invalidity?

Unlike the United States, there is no ‘discovery’ system in Japan and each party has to collect its own evidence. However, article 104-2 of the Patent Act stipulates that an alleged infringer must disclose relevant information of the accused product or process when the alleged infringer denies the patentee’s allegation. Further, under the Civil Procedure Code and the Patent Act, each party may file a court petition for an order of document production against an adverse party or a third party if:

• the requesting party can, to certain extent, identify the document to be produced;
• there is a necessity to obtain an order for document production; and
• the adverse party or the third party has no statutory grounds of immunity from or justifiable reason to refuse production.

In order to obtain evidence from third parties outside the country, a party should request a foreign court through a Japanese court to provide judicial assistance and obtain evidence in accordance with the Convention Relating to Civil Procedure or bilateral international agreements.

What is the typical timetable for a patent infringement lawsuit in the trial and appellate courts?

The proceedings for a preliminary injunction typically take several months, and the proceedings for a main lawsuit typically take one to one-and-a-half years at the district court level and another year at the high court level.

What is the typical range of costs of a patent infringement lawsuit before trial, during trial and for an appeal? Are contingency fees permitted?

The fee to be paid to a court upon filing depends on the economical scale of the case. For example, if a patentee seeks ¥100 million as damages, it has to pay approximately ¥400,000 to the district court and, if it appeals, ¥600,000 to the high court. To determine the fees to be paid to the court in a claim for a permanent injunction, the claim must have a certain economic value when calculated in accordance with rules of a court. As for attorney fees, there is no legally binding standard in Japan. Usually, attorneys representing foreign clients charge on an hourly basis and their rates vary from ¥25,000 to ¥70,000 per hour, although some attorneys charge certain amounts as initial and contingent fees. There is no legal provision or public policy prohibiting contingent fee agreements in patent infringement cases.

What avenues of appeal are available following an adverse decision in a patent infringement lawsuit? Is new evidence allowed at the appellate stage?

Judgments of the Tokyo District Court and the Osaka District Court can be appealed to the Intellectual Property High Court (IP High Court). Errors in a factual finding or in the application of law by the first judge are grounds for appeal to the IP High Court. The Supreme Court will hear appeals from the IP High Court only in cases involving an error in the interpretation and other violations of the constitution. In addition, violations of civil procedure rules such as an error in jurisdiction, lack of reasoning, etc, will also give rise to a right of appeal to the Supreme Court. Further, a system of petitions to the Supreme Court has been introduced that gives the Supreme Court discretion to accept cases if the judgment being appealed is contrary to precedent or contains significant matters concerning the interpretation of laws and ordinances.

New evidence is allowed at the appellate stage with respect to infringement litigation; provided, however, that the judges have discretion to dismiss new evidence that is not introduced in a timely manner and may delay the proceeding. As for litigation for revocation of the JPO decision on a trial for invalidation, the IP High Court takes a restrictive approach to new evidence. New evidence may not be allowed to bring new arguments to the IP High Court, and is only allowed to support the previous arguments made in the JPO.

To what extent can enforcement of a patent expose the patent owner to liability for a competition violation, unfair competition, or a business-related tort?

In practice, the risk is not substantial at the moment, although this may change in the future. On 21 January 2016, the Japan Fair Trade Commission revised its Guidelines for the Use of Intellectual Property under the Antimonopoly Act and stipulated certain guidelines regarding enforcement of the standard essential patents for which fair, reasonable and non-discriminatory (FRAND) declarations were made.

To what extent are alternative dispute resolution techniques available to resolve patent disputes?

Arbitration is available in Japan if both parties agree to arbitrate disputes in writing. The Japan Commercial Arbitration Association (www.jcaa.or.jp) and Japan Intellectual Property Arbitration Centre (www.ip-adr.gr.jp) administrate arbitration proceedings regarding disputes related to intellectual property. However, the number of arbitration cases relating to intellectual property is small (except for domain name disputes) and is far smaller than the number of litigated cases. The benefits of arbitration are that the parties may agree to conduct proceedings in English, confidentiality can be preserved, and the decision is easier to enforce in foreign countries, etc. The risk of arbitration is that no appeal is available. Further, mediation is also available if both parties agree. The benefit of mediation is that the proceedings are not necessarily adversarial, but the risks are that it is very difficult to locate good and experienced mediators and the proceedings may become redundant as the mediation is not binding.

Law stated date

Give the date on which the information above is accurate.

24 March 2020.