Trends Relating to Patent Infringement Litigation in JAPAN

January 27-28, 2015AIPLA Mid-Winter Institute

IP Practice in Japan Committee Pre-Meeting SeminarShimako Kato

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- Five Good Reasons to File Lawsuits in Japan -

Contents

1. Background

2. Current Status

3. Five Good Reasons to File Lawsuits

in Japan

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1. Background

Osaka Tokyo

Court system in Japan (for patent cases)

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IP High Court

Supreme Court

Tokyo/Osaka

District Court

1st instance

JPO

(Board of Appeal)

2nd instance

Final instance

Patent Infringement Lawsuit

IP High Court

Appeal/ Invalidation Trial

Final instance

Supreme Court

IP Divisions in Courts

Court Division Judge Judicial Research Official(Chosa-kan)

IP High Court 4 18 11

Tokyo District Court 4 16 7

Osaka District Court 2 6 3

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At the date of January 1, 2015

Characteristic 1 - Technical support for patent cases

 Judicial research official

(Chosa-kan)Technical adviser

Expert witness

Status Full-time court official Part-time court official Not a court official

Term of office No statutory term in general  　 Two years No term

Remuneration Salary paid for full-time official

Allowance paid for each case

Fee for an expert opinion

Nature of explanation or

opinion

Carry out research on necessary matters as ordered by the court and report the research results. The research results may not be adopted as evidence.

Provide easy-to-understand explanations on scientific matters as the court’s adviser. The explanation may not be adopted as evidence.

Provide expert opinion on specific matters as requested by the court. The opinion may be adopted as evidence and relied on in the judgment.  

6Source: http://www.ip.courts.go.jp/eng/documents/expert/index.html

Characteristic 2 – Validity ChallengeValidity Challenge is possible both before the infringementcourts and JPO (invalidation trial).

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Infringement court JPO

Invalidity defense Invalidation trial

So called “Double track system”

Characteristic 3 – Procedure (More rely on written argument)

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ComplaintFiled

Oral Hearing (1)

PreparatoryHearing (1)

30days 40days 40days 40days 50days40days

PreparatoryHearing (2)

PreparatoryHearing (3)

PreparatoryHearing (4)

40days

30days

PreparatoryHearing (7)

PreparatoryHearing (5)Technical Presentation

PreparatoryHearing (6)Judges opinion revealed

Settlement

Oral Hearing (2)

Damage Calculation Stage

Judgment

PreparatoryHearings for settlement

PreparatoryHearing (8)

Model timeline of patent infringement lawsuits (Based on the Osaka district court’s model)

Defendant-Answer

Plaintiff-Infringement argument 

Defendant-Rebuttal to Infringement-Invalidity defense

…….Plaintiff-Rebuttal to  Invalidity -Infringement arguments 

Technical Presentation

2. Current Status

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Patent litigation filings (1997-2009)

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[US]Filed 　　　

34,214Decided 　

1,269

[GERMANY]※Filed 　　　

9,200Decided 　

3,660

[JAPAN]Filed 　　　

2,789Decided 　

730

※ Estimate of invention patent infringement litigation filings.Total for 2009 estimated at 1400, including utility model and inventorship/ownership

Source :”Where to win – Patent friendly courts revealed –” Managing Intellectual Property , www. Managingip.com September 2010

How do cases end?

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Source: JPO

(2004-2013) (1995-2008) (2006-2009)

Patentee’s Winning Rate (District Court)

Judgment (43%)

Settlement (38%)

Withdrawal (13%)

Others (4%)

Trial Judgment (3.5%)

Summary Judgment (8%) Settlement (88.5%)

Japan (2013)

US (2009)

Source: JPO

3. Five Good Reasons to File Lawsuits in Japan

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1st Reason: Reliable Factual Finding on Technical Matters

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Opinion of experts,examined by jury.

Written opinion of expert,examined by Judges

Expert Opinion

Expert Opinion

Research result Judicial research official:

Full-time support

Explanation

Technical Advisor :Mostly at technical presentation

(Paper)

Judge

2nd Reason: Climate Change (1)

Judgment (a) Settlement (c)Year In favor of patetee (b) In favor of patentee (d)2006 27 5 50 27 42%2007 33 13 39 23 50%2008 25 13 49 29 57%2009 20 8 50 37 64%

Patentee's winning rate (b)+(d)/(a)+(c)

::

(1) Changes in courts • Actual winning rate of patentee (29th division of the Tokyo District Court)

• Upholding rate by the IP High Court regarding Invalidation Trial Decisions

Increasing

Pro-patent tendency

Source: JPO

Source: Hanrei Times No.1324 (2010) p.58

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2nd Reason: Climate Change (2)(2) Discussion for enhancing stability of patents

•Recent discussion in the government (Intellectual Property Strategy Headquarters)    - How to undermine effects of challenging validity of the patents?-

  Proposed ideas:

   - Introduction of “the clear and convincing evidence” standard

   - Restriction of reasons for invalidity

   - Introduction of “clarity requirement” in case of judging validity of the patents before infringement courts.

   - Abolishment of Art.104 ter of the Patent Act (Abolishment of double track system)

3rd Reason: Speed (1)

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Average duration of IP cases in district courts Average duration (month)Number of incoming cases

1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 2012

Incoming casesAverage duration

Source:”Report for study on acceleration of proceedings” Supreme Court of Japan

3rd Reason: Speed (2)

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Source:”Report for study on acceleration of proceedings” Supreme Court of Japan

1996 1998 2000 2002 2004 2006 2008 2010 2012

within 6 months from 6months to 1 year

from 1 year to 2 years

from 2 years to 3 years

from 3 years to 5 years more  than 5 years

Duration of IP cases in district courts

4th Reason: Reasonable Cost

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MEDIAN LITIGATION COSTS (Thousand)

PATENT INFRINGEMENT SUIT, ALL VARIETIES 2005 2007 2009 2011 2013

End of discovery $350 $350 $350 $350 $350Inclusive, all costs $650 $600 $650 $650 $700

End of discovery ― ― ― ― $1,000Inclusive, all costs ― ― ― ― $2,000

LESS THAN $1 MILLION at RISK

$1-$10 MILLION at RISK

Source: AIPLA “Report of the Economic Survey 2013”

Around $ 59,000 to $236,000

Source: EPO "Assessment of the impact of the European patent litigation agreement (EPLA) on litigation of European patents" February 2006

Cost for a small to medium-scale patent litigation in the 1st instance

Cost for a small to medium-scale patent litigation in the 1st instance

Around $ 80,000 to $250,000 (by supposition)

5th Reason: Attractive Market

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＄ 1,010billion

＄ 953billion

Size of the market

Pharmaceutical products (2011)Mobile communication (2012) Source: “White paper on Information and Communications in Japan 2013” , Ministry of Internal Affairs and Communications, Japan

Source : “DATABOOK 2013”, Japan Pharmaceutical Manufacturers Association

Thank you!

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Shimako KatoPatent Attorney

Abe, Ikubo & KatayamaE-mail: shimako.kato@aiklaw.co.jp