CASRIP Newsletter - Fall 2005, Volume 12, Issue 2
Ichitaro Case in Japan IP High Court Applied Two New Patent Provisions to Software Related Patents: Indirect Infringement and the Limitation of Exercising an Invalid Patent
By Yukio Ono
On February 1, 2005, the Tokyo District Court in Japan held that Justsystem Corp. (Justsystem) infringed a patent on a technique to display on-line help owned by Matsushita Electric Industrial Co. (Matsushita), and granted an injunction to prevent Justsystem from producing and selling its popular software products, Ichitaro word-processing software and Hanako graphics software. The Court did not declare the provisional execution of the ruling; thus, Justsystem quickly appealed and could continue to sell its products in the interim. On September 30, 2005, the Intellectual Property High Court (IP High Court) revoked the District Courts decision and dismissed all of Matsushitas claims. The decision became final because Matsushita did not appeal to the Supreme Court.
The Ichitaro case has appeared frequently in the media and sparked debates over patent protection for computer software. Some reasons for this nationwide attention are the popularity of the Ichitaro brand as one of the most widely used word-processing software programs in Japan and the well-known technology involving a user interface to show on-line help for a selected icon. Additionally, this case was the first time the IP High Court used the Grand Panel. The Panel is composed of five judges who will decide a case that contains important issues when it is appropriate to provide a unified opinion without delay. In this case, the significant impact of the District Courts decision preventing Justsystem from producing and selling its popular Ichitaro product would encourage the Grand Panel to review this case.
Furthermore, the IP High Court applied two kinds of relatively new provisions to this computer software case. One is the indirect infringement provisions introduced in 2002 and implemented January 1, 2003. The IP High Court held that producing and selling computer software constituted indirect infringement of an apparatus patent although it did not constitute indirect infringement of a method patent. The other is Article 104ter of the Japanese Patent Law regarding the limitation of exercising a patent introduced in 2004 and implemented April 1, 2005. The IP High Court held that Matsushita could not exercise its patent according to this provision because the patented invention lacked an inventive step and should be invalid. This provision provides that a patent could not be exercised when it is proved that the patent should be invalid at a trial for invalidation of a patent. Although whether a patent is valid has already been disputed in infringement lawsuits after the Kilby case in the Supreme Court, the validity of a patent will be disputed in a court according to this new provision in the future.
II. The Intellectual Property High Court
The IP High Court was established April 1, 2005, as a special branch of the Tokyo High Court for intellectual property cases. It supports the governments policy promoting the creation, protection, and use of intellectual property. The IP High Court hears appeals on patent actions from district courts in Japan, suits against appeal/trial decisions made by the Japan Patent Office (JPO), and any other cases before the Tokyo High Court relating to intellectual property. The IP High Court purports to ensure more effective and speedy trial proceedings in intellectual property cases. In this case, it took only less than eight months from its commencement for the IP High Court to render its judgment, while the average time interval from commencement to disposition in the Tokyo High Court in the 2004 fiscal year was 9 months. Because the lifecycle of computer software is generally short, the IP High Court seemed to show a respectable performance to solve this dispute.
III. The Patented Invention and the Accused Devices
Matsushita filed a patent application titled information processor and information processing method in October 1989 and obtained the registration, Japanese Patent Number 2803236 (the 236 patent), in July 1998. Two of the claims in the 236 patent are product claims and one is a process claim. The patented invention is related to a user interface that displays help texts on the computer screen explaining the function of icons on a computer system. The important element in the patented claims is displaying the functional description of the second icon on the display screen in response to the designation of the second icon subsequent to the designation of the first icon. For example, after the first selection of a help icon and the subsequent selection of another icon, e.g. a printer icon, the explanation of the second icons function will be displayed on the screen.
Justsystem produces and sells Ichitaro word-processing software and Hanako graphics software (Justsystem products). These products have a help mode button and a print button, and when first the help mode button is selected and subsequently the print button is selected, the functional explanation of the print is displayed.
Matsushita brought suit in the Tokyo District Court, alleging that Justsystems actions corresponded to indirect infringement and demanded injunctive relief and abrogation of the products.
IV. Issues in the High Court
The four issues in the IP High Court were: (1) whether PCs installed with the Justsystem products and the use of the PCs were within the technical scope of the patented invention; (2) whether indirect infringement, provided in Article 101 sub-para.2 and sub-para.4 of the Patent Law, was constituted; (3) whether the patent should not be exercised due to invalidity; and (4) whether Justsystems additional allegations and proofs in the High Court should be dismissed as a belatedly offensive and defensive method.
A. Definition of Icon and Likelihood of Fulfilling Constituent Features
The IP High Court affirmed the original decision that the term icon was a graphic picture or a graphic symbol displayed on the computer screen to represent a data or a data processing function, and was not necessary to be draggable or movable or to be placed on the desktop. Additionally, the IP High Court found, in claims 1 and 3 of the invention, displaying the second icon to perform predetermined information processing function on the display screen and displaying the functional description of the second icon on the display screen meant displaying plural icons to perform a predetermined information processing function on the display screen and displaying the functional description of an arbitrarily selected icon among the plural icons on the display screen. Therefore, the IP High Court held that PCs installed with the Justsystem products and the use of the PCs not only fulfilled the constituent features of the invention, but also were within the technical scope of the patented invention because both the help mode button and the data processing button corresponded to the icon of the patented invention.
Notably, because the claims of the 236 patent are apparatuses (information processor in claims 1 and 2) and a method (information processing method in claim 3), Ichitaro and Hanako software are not within the technical scope of the 236 patent. Although Justsystem produces or sells these Justsystem products, Justsystem itself does not make and sell any infringing apparatuses such as PCs installed with the Justsystem products, nor did it use any infringing process. Therefore, Justsystem never infringed the 236 patent directly. Nonetheless, to discuss indirect infringement of the 236 patent, the IP High Court held that PCs installed with the Justsystem products and the use of the PCs was within the technical scope of the patented invention.
B. Indirect Infringement of Software Patents
Four types of indirect infringements are provided in Article 101 of the Patent Law. In this case, the Court discussed whether indirect infringement provided in Article 101 sub-para.2 and sub-para.4 of the Patent Law was constituted. The IP High Court held that although producing and selling Justsystem products constituted indirect infringement regarding product inventions in Article 101 sub-para.2 of the Patent Law, it did not constitute indirect infringement regarding a process invention provided in Article 101 sub-para.4 of the Patent Law.
In the case of a patent for a product invention, the Patent Law requires that the alleged articles are used for the manufacture of the [patented] product. The IP High Court found that installing the Justsystem products on PCs corresponded to the manufacture of the product inventions, information processor, in claims 1 and 2 of the 236 patent, and that the Justsystem products were used for the manufacture of the information processor. Based on these circumstances, the IP High Court held that producing and selling Justsystem products constituted indirect infringement. Therefore, in the case of a patent for an invention of an apparatus (not the software program itself), the software program corresponds to an article to be used for the manufacture of the patented apparatus, so producing and selling the software program constitutes indirect infringement regarding a product invention.
On the other hand, in the case of a patent for a process invention, the Patent Law requires that the alleged articles are used for the working of the [patented] process. The IP High Court found that PCs installed with the Justsystem products corresponded to articles to be used for the working of the process, so the act of producing and selling the PCs may constitute indirect infringement. However, the IP High Court construed that Article 101 sub-para.4 meant that the acts of producing or selling articles that could work the patented process by using the articles themselves constituted the patent infringement, and concluded that since the act of Justsystem was not producing or selling the PCs, but only producing or selling the Justsystem products, which was used for the manufacture of the PCs, the act of Justsystem did not constitute indirect infringements regarding a process invention. Thus, in the case of a patent for a process invention, a software program does not correspond to an article to be used for the working of the patented process, so producing and selling the software program does not constitute indirect infringement regarding a process invention.
C. Validity of the 236 Patent
The validity of the 236 patent was an important issue in this case. Because the user interface used to show that online help for a selected icon covered by the 236 patent is well-known technology, some people may think that it should be invalid based on lack of novelty or an inventive step. However, the 236 patent was filed more than 15 years ago, so it may be difficult to show good prior art to invalidate the 236 patent.
Regarding a limitation on exercising the patent, Article 104ter para.1 of the Patent Law provides: in lawsuits with respect to infringement of patent or exclusive license, when it is proved that the patent should be invalid at trial for invalidation of patent, the patent owner or exclusive licensee cannot exercise the patent against the adverse party.
In this case, Justsystem submitted English language publications distributed in a foreign country before the 236 patents filing as new evidence that was not introduced in the district court. In one of the publications, a users selecting the screen/menu help from the help pull-down menu changed the cursor to the question mark type cursor, which showed the user was in the special help mode and enabled user to obtain the help regarding his interested icon. Compared to the invention disclosed in this publication with the 236 patent, the difference was that a display means for displaying and performing the function for displaying functional description of an icon was an icon in the 236 patent instead of a screen/menu help item in the invention disclosed in this publication. Considering well-known technical matters at the time the 236 patent application was filed, it easily could have been made by a person with ordinary skill in the art to exchange a screen/menu help item to an icon as a display means for displaying and performing the function for displaying functional description of an icon. Thus, the IP High Court held that since the 236 patented invention easily could be made by a person with ordinary skill in the art, the 236 patent should be invalidated at trial for invalidation of patent, and the IP High Court allowed the limitation of exercising the 236 patent.
In the original decision at the Tokyo District Court, Justsystem asserted that, according to the Kilby case, since there was clear and convincing evidence that the patent was invalid, an injunction based on such patent was beyond the scope of the rights intended by the law. In the IP High Court, however, Justsystem amended the assertion to a limitation of exercising the patent provided in Article 104ter para.1 of the Patent Law, instead of an abuse of the rights. At issue was Article 104ter, which was introduced in 2004 and implemented on April 1, 2005. Article 104ter of the Patent Law has an affect only on parties in a case. It does not allow courts to invalidate the patent right itself. Therefore, if the third party wants to invalidate a patent right, it needs to demand a trial for invalidation of the patent.
D. Belatedly Offensive and Defensive Method
In this case, Matsushita alleged that Justsystems additional allegations and proofs regarding fulfillment of the constituent features and reasons of invalidity of the 236 patent, which were newly submitted in the High Court, should be dismissed as a belatedly offensive and defensive method. However, the hearing in the court below was promptly conducted in an extremely short period, and Justsystems allegations and proofs regarding fulfillment of the constituent features and reasons of invalidity of the 236 patent, which were newly submitted in the High Court, were basically submitted at the threshold of the hearing in the IP High Court. Additionally, the allegations and proofs only restated the allegations in the district court from a slightly different angle. Furthermore, although the allegations and proofs with relation to the reasons of invalidity of the 236 patent were based on newly introduced documents, these documents were in English and distributed in a foreign country a long time ago, so it could not be helped that to investigate and search these documents took extensive time. Accordingly, the IP High Court rejected the contention that Justsystems additional allegations and proofs in the High Court were a belatedly offensive and defensive method.
V. Recent Movement of Computer Software Patent in Japan
The claims of the 236 patent are directed only to apparatuses, information processors, and a process, information processing method, because neither a computer program itself (program claim) nor a medium storing a computer program (medium claim) were allowed to be claimed as an invention of a product at the time the 236 patent was filed. However, under the current practice and laws in Japan, either a program claim or a medium claim can be claimed as an invention of a product. Although, in this case, the IP High Court did not argue the pros and cons of computer software patents, the following movements proceeded in the view of the balance between patent protection for computer software, promotion of the innovation, and disclosure to the public.
Intellectual Property Strategic Program 2005, which integrated the governments measures and policies with respect to intellectual property, mentioned that for the purpose of promoting innovation in the software field, the [government of Japan] will examine problems and take measures as appropriate, aiming to facilitate the use and trade of intellectual property rights relating to software. This Intellectual Property Strategic Program was developed in 2003 for the first time and has been revised annually to make Japan an intellectual property-based nation in which the international competitiveness of industry is strengthened by focusing on intellectual property, thereby increasing national wealth.
Meanwhile, the Ministry of Economy, Trade and Industry established the Study Group on the Legal Protection of Software and Promotion of Innovation from the standpoint of promotion of innovation in the software sector. The Study Group has examined what intellectual property rights in the software sector should be and what actions could be taken by the industry. On October 11, 2005, the Interim Report of the Study Group on Actions to Promote Software Innovation was compiled. This Interim Report mentioned that in the software sector, which is multilayered, communication-enabled, and has a tendency toward a locked-in effect on users, granting patents may create unduly powerful exclusive rights, which may generate adverse effects on innovation because they could inhibit competition.
The decision of the Tokyo District Court has provoked various controversies: the skepticism with respect to the validity of the 236 patent; the effect of an actual injunction against popular software, Ichitaro and Hanako; the effectiveness of new indirect infringement provisions; and the balance between patent protection for computer software, promotion of the innovation, and disclosure to the public.
In this case, the IP High Court applied two kinds of relatively new provisions to this computer software case and held that producing and selling computer software constituted indirect infringement of an apparatus patent, although it did not constitute indirect infringement of a method patent. It also held that Matsushita could not exercise its patent according to the new provision, Article 104ter, with respect to the limitation of exercising the patent involving invalidity because the patented invention lacked an inventive step and should be invalid. The decision became final because Matsushita did not appeal to the Supreme Court.
Eventually, the skepticism with respect to the validity of the 236 patent came true with the introduction of additional documents. Fortunately, the actual injunction against the popular software, Ichitaro and Hanako, was not realized. Regarding the new indirect infringement provisions, as mentioned above, indirect infringement of an apparatus patent regarding computer software was allowed while those of a method patent was not.
Nevertheless, the decision of the IP High Court did not settle the controversy of the essential balance between patent protection for computer software, promotion of innovation, and disclosure to the public. It may be a good opportunity for both the patent community and the software industry to discuss what protection for computer software is best in the light of this balance.