CASRIP Newsletter - Autumn 1999, Volume 6, Issue 2
Quick and Effective IP Enforcement in Japanese Courts
by Toshiko Takenaka
Responding to the needs of domestic and foreign patent owners, the Supreme Court of Japan has focused its efforts on quick and effective intellectual property enforcement in the last two years. One such attempt is to send judges abroad for study of judicial systems dealing with intellectual property.1 The Supreme Court made an announcement to dispatch five judges to study patent systems and litigation proceedings in research institutions in the United States and Japan. CASRIP was selected as one of such institutions. Judge Ishihara, High Court Judge of the Tokyo High Court, participated in the 1999 Summer Institute last July and Judge Yamada, High Court Judge of the Osaka High Court, visited us in late November. Judge Yamada attended IP related courses and met with local judges and patent litigators.
Another attempt by the Supreme Court was the creation of a special project team for accelerating patent litigation proceedings.2 The goal of this attempt was to reduce the period necessary to examine and dispose of intellectual property disputes. A survey conducted by the Court revealed that Japanese courts spend two times longer than courts in other highly industrialized countries such as the United States, United Kingdom and Germany.3 The project team will focus on three aspects aimed at reducing the period: (1) reduction of time for preparing a decision after the conclusion of hearings; (2) enhancement of the ability of judges in the IP specialized divisions in Tokyo and Osaka District Courts; and (3) creation of a centralized system through transfer of IP cases to these special divisions. The project team will also consider the possibility of adopting the judicial systems of the U.S. and European countries, which enhance the expertise of judges dealing with intellectual property disputes.
One reason for the inability of the Japanese courts to give quick relief is that Japanese judges lack the expertise necessary for examining patent and other intellectual property disputes. Unlike federal court judges in the United States, who are appointed for life and free from bureaucracy, Japanese court judges need to move from one court to another every two to three years. The Supreme Court of Japan imposes this rotation system on all Japanese judges to protect them from local bias. However, through the creation of special divisions, the Court began to extend the period of appointment and let judges appointed to special divisions return to other special divisions to enable them to expand their expertise. The Court recently increased the number of IP special divisions significantly. This will enhance the number of Japanese judges who have IP experience.
Another reason for the inefficient enforcement is the lack of attorneys who specialize in IP cases. Despite a significant increase in IP related actions brought to Japanese courts,4 cases are presented by only a handful of lawyers who are willing to develop expertise in the complex technology and legal issues in IP cases. This results in lawyers representing several clients whose proceedings are going on at the same time. Further, unlike the U.S. discovery system, Japanese civil procedure lacks effective measures to require parties to disclose their evidence in the early stage of proceedings, which inevitably requires more time for collecting evidence. Thus, lawyers often require a two to three month interval between hearings to avoid scheduling conflicts and to set aside time for producing evidence.
The Supreme Court of Japan will consult with litigators (bengoshi) and patent attorneys (benrishi) to consider the possibility of revising provisions in civil procedure to limit the period between hearings and to change the jurisdiction of infringement actions. However, the Court will also implement whatever measures are possible under the current civil procedure. For example, Japanese judges can exercise their right to manage proceedings to set the date of hearing in order to avoid a lengthy delay. Such measures resulted in a quick grant of a preliminary injunction against the "e-One" computer, sold by Sotech, based on Apple Computer's unfair competition claim.5 It took less than one month for the Tokyo District Court to grant the preliminary injunction. Apple Computer filed the case against Sotech on August 24, 1999 and the court issued the order on September 20 after one hearing held on September 14.6
In the e-One Computer case, Apple Computer filed an action requesting a preliminary injunction against Sotech to stop manufacturing and selling its e-One computers. Apple claimed that Sotech engaged in unfair competition by adopting a design similar to Apple's I-Mac computer in order to lead consumer confusion between e-One and I-Mac computers. The Tokyo District Court agreed with Apple, holding that the distinguishing design features of I-Mac had acquired a secondary meaning and had become widely recognized by consumers. The court found the features included: (1) its curvy appearance, (2) the adoption of a two-tone color combination consisting of a half transparent white and half blue plastic material; (3) the gently sloped triangle shape of its top and side surfaces; and (4) a half transparent white handle attached to the top surface. It agreed that such features were very unique and had a great originality as no products had adopted such a design. The evidence was sufficient to support the prima facie fact that Apple's advertisement focused on the unique design of the computers, which led to a great commercial success.
In contrast, Sotech's arguments, which attempted to show that the features in question resulted from the function of computers and to negate the secondary meaning, were very weak as being supported only by poor evidence. Thus, the court rejected the arguments and found that the e-One was sufficiently similar to the I-Mac that it would create confusion because Sotech not only adopted the distinctive features by adopting the curvy appearance, two-tone color combination and plastic material, but also adopted similar design with respect to other details of the design of computers. The court also included a brief description about the proceedings. According to the court, Sotech did not file in advance a response, a brief, or evidence of prima facie fact to support its position at the oral hearing set by the court. At the hearing, the court took an unusual step and concluded examination by refusing to set another hearing. Thus, the court emphasized that it examined oral arguments from Sotech, even if Sotech did not produce any documents and thus gave sufficient opportunity to present a defense.
The e-One case is a good example of how effectively Japanese courts can implement the direction shown by the Supreme Court of Japan without going through lengthy negotiations to revise provisions in civil procedure. The case may be seen as an exceptional case involving an extremely high likelihood of success on the merit. However, once a direction is given, Japanese, particularly highly trained and educated people, tend to quickly implement such direction. Judges are not exceptions. However, one may worry that the drive for efficiency may go to the extreme, which could lead to unfair results for those who defend in IP litigation in Japan.
Method Claims Extend To Use of the Method Only
On July 16, 1999, the Supreme Court reversed a decision made by the Osaka High Court and emphasized that a method claim does not extend to products even if the method is incorporated into steps of manufacturing the products.7 In this judgement, the claims at issue related to a method for testing the ability to generate kallikrein. Thus, the claims were not for a process but for a testing method.
The accused infringer adopted the testing method as a part of its manufacturing method for producing medical products, extracted medicament and prepared medicament. However, the patentee filed an action and requested that the accused infringer: (1) stop manufacturing and selling both products, and advertising the prepared medicament; (2) dispose of the products; and (3) stop activities to obtain the approvals required for marketing the medical product. The Osaka High Court found that (1) the manufacturing process of the medical products infringed the method claims; and (2) the patented claims were directed to methods in form but could be interpreted as processes in substance because the method was incorporated as part of the manufacturing process of the accused products and inseparable from other steps in that process. This interpretation led the court to conclude that the claims were entitled to an injunction against the products resulting from the method.
On jokoku appeal, the Supreme Court affirmed the finding of infringement but reversed the award of injunction against the medical products. The Court's analysis focused on the statutory distinction of three categories of inventions provided in Article 2, Paragraph 3. Although the patentee has an exclusive right to exploit the patented invention under Article 68, the exploitation of a simple non-manufacturing method invention includes only the act of using the method. In contrast, a manufacturing process, resulting in a product, includes not only the act of using the process, but also acts of using, assigning, leasing, displaying for the purpose of assignment or lease, or importing the product resulting from the process. The Court emphasized that courts cannot ignore the statutory distinction and interpret a method invention as equivalent to a process invention.
In the kallikrein measurement method case, the description of the claims clearly indicated that the invention was directed to a method, not a process resulting in a product. The accused infringer's incorporation of the method as part of a manufacturing process did not change the category of the invention identified in the claims. Interpreting the scope of the patentee's right to request measures necessary to prevent infringement under Article 100, Paragraph 2, the Court concluded that the disposal of the medical products and the termination of approval activities associated with the marketing of the products did not fall into the necessary measures. Therefore, the Court concluded that the patentee was entitled to an injunction against an act of using the method only.
The Supreme Court properly interpreted a non-manufacturing method claim to extend its exclusivity only to the use of the method. The patent statute clearly limits the exploitation of a non-manufacturing method to cover only an act of using the method. The patentee could have drafted claims for a manufacturing process. The patentee should pay the cost of failing to do so.
1. Tokkyo Saiban, Kaigai ni Manabu (Patent Litigation, Learn from Systems in Foreign Countries), Asahi Shinbun, July 10, 1999.
2. Tokkyo Shoshou wo Jinsokuka (Accelerating Patent Litigation Proceeding), Nihon Keizai Shinbun, October 24, 1999.
3. Id. The current average period necessary for disposal of IP cases in the first instance (district courts) is 25.7 months.
4. Id. The number of actions brought to courts in 1998 has increased 70% compared with the number in 1989.
5. Order from Tokyo District Court, September 20, 1999, posted on the Supreme Court of Japan's website at http://www.courts.go.jp/index.htm (11/21/99)
6. Shoichi Okuyama, IP News from Japan, Nov. 1, 1999.
7. Judgement of Supreme Court of Japan, July 16, 1999. posted on the Supreme Court of Japan's website at http://www.courts.go.jp/index.htm (11/21/99)