How Japanese IP Litigation Really Works – Event Review

by Olumayowa O. Adesanya

On the 19th of February 2014, the University College of London (UCL) hosted a special Institute of Brand and Innovation Law (IBIL) lecture titled ‘How Japanese IP Litigation Really Works’. Prof Sir Robin Jacob chaired this event with Chief Judge Toshiaki Iimura of the IP High Court, Tokyo as the speaker.

While introducing the speaker, Prof Sir Robin Jacob stated that Japan has arguably the best patent litigation system in the world. Toshiaki was appointed as the Chief Judge of the IP Court in 2012 after he joined the Court in 2006. He has been in active IP practice since 1983.

The lecture commenced on a light note with Toshiaki reeling off the long list [see here and here] he was expected to cover and mentioned it was practically impossible to cover it all given the time constraint. Nonetheless, the lecture provided a clear and detailed insight into the present situation of IP disputes in Japan.

Japan unlike a number of legal systems worldwide has a specialised IP Court, which deals with purely civil cases. Established on the 1st of April 2005, the Court hears appeals from the District Courts and suits against appeal/trial decisions by the Japan Patent Office (JPO). The shortcoming of the extant legal regime is that it produces parallel routes of patent invalidity judgment known as ‘double track’. The District Courts on the one hand are concerned with infringement cases while the JPO Appeal Board on the other hand holds trials for invalidation of patents. Toshiaki noted that so far, there has been no case of conflicting judgments from pursuing both options and in the event of such, the IP High Court aims to provide some form of uniformity by harmonising the double track system. The Supreme Court is the final arbiter of law as is the common practise and IP cases are no exceptions. The Japanese court hears cases that involve the exercise of a Japanese patent in Japan including manufacturing and sales.

With the aid of a diagram, the hierarchy of the courts was explained. IP Cases are grouped into two major categories: Technical cases (Patents/Utility Models) and Non-technical cases (Copyright, Design rights, Trademarks, Unfair Competition and other IPRs). In any given case, the District Court is the court of first instance. Of the 15 divisions, technical cases are the exclusive preserve of the Tokyo and Osaka divisions whilst any division including those of Tokyo and Osaka can hear non-technical cases.

This division is reflected at the appellate level as only non-technical cases handled by the District Courts under the jurisdiction of the Tokyo High Court proceed on appeal to the IP High Court including technical cases. Other non-technical cases heard by other divisions are on appeal heard by relevant High Courts with jurisdiction. It would thus seem that the concentration of the IP High Court is largely on patents when compared to other IPRs. This is reflected in the 2012 statistics of cases heard at the IP High Court. Of the total 146 infringement cases heard, 39.7% were on patents followed by cases on copyright and unfair competition. From the JPO, a total number of 457 cases were heard on appeal at the IP High Court with 74.8% on patent matters. The IP High Court has four divisions with 18 judges who are expected to have a legal background and are assisted on technical matters by the 11 Research officials of the Court. The Court also has an Expert Adviser System in place as well as an Expert Witness System. Where the Court so determines, it may set up a Grand Panel System consisting of five Judges to hear cases that contain important legal issues as is currently in place for the Apple and Samsung case. So far, the Grand Panel has heard nine cases.

The defendant is at liberty to raise the invalidity defence in infringement cases, which the District Court has jurisdiction to determine. Prior to 2005, before the Patent Act was revised, the plaintiff could not ask the defendant for any information under the principle of discovery as is practised in the United States. However, the revision introduced a Disclosure and Protective Order System. The two orders serve to balance each other, as the latter is likely to cause irreparable harm to the defendant by the revelation of his technological secrets.

The ultimate result of any legal action is remedies. This is provided in the form of Preliminary Injunctions and Damages. Preliminary injunctions are geared towards providing a speedy solution for the parties involved and are not heard in open court with separate hearings for the parties. To forestall any great harm a non-infringement finding would wreck on the defendant, the standard of proof required is the same as that in actual litigation. Damages are calculated under either the Code of Civil Procedure or the Patent Act. The Code of Civil Procedure calculation provided for in Article 709 is based on lost profit using the ‘but for …’ test. There must be at least a casual relationship between the defendant’s infringing act and the plaintiff’s damages. The Patent Act provides for three options: presumption of damages [Article 102(2)], based on the defendant’s profit [Article 102(3)] and the amount equivalent of royalty [Article 102(1)].

The Chief Judge went on to state that the average time between filing and decision of a patent infringement case is a year with low costs when compared to other jurisdictions. The filing fee is about 0.3% of the amount claimed and the attorney’s fee is largely reduced in the absence of discovery. Other fees such as investigation and expert fees are dependent on the nature of the case.

Depending on what the judge considers the likely outcome of the case, he may suggest settlement discussions between the parties at Preliminary Injunction hearings or during court proceedings. Settlement at either stage is largely similar and the judge is involved from the onset of the matter until a decision is reached. Working in concert with judicial proceedings is the Arbitration Centre, which handles ADRs related to IPRs. Mediation is the preferred mechanism where a minor infringement has occurred with the possibility of major damages as well as when there is a high requirement for confidentiality. Although mediators are expected to have high IP/Technical knowledge, they often cannot handle complex cases. The court is efficient, however, and recourse is not often had to mediation.

The lecture concluded with a question and answer session. Most importantly, Toshiaki noted that regarding the Apple and Samsung dispute, this was the first time Japan had requested for amicus briefs [see here] giving the global nature of the case and drawing from France and Germany. He also noted the possibility of its application to future pharmaceutical cases.

Olumayowa O. Adesanya is an LLM (IP) Candidate at Queen Mary, University of London and an Assistant Editor of the Queen Mary Journal of Intellectual Property Law.