Center for Advanced Study & Research on Intellectual Property

 

CASRIP Newsletter - Spring 2009, Volume 16, Issue 2

Japan Patent Law Updates

by C. Augustine Rakow[1]

The beginning of 2009 marked a strong run of pro-patentee decisions in Japan’s IP High Court. In January alone, the IP High Court reversed the JPO’s determinations on obviousness in favor of patentees no fewer than eight times. Five reversals were on re-examination appeals;[2] three were from prosecution appeals.[3] This trend raises the obvious question: Will 2009 be a pro-patentee year in Japan?

The Hitachi Group was the superstar of the series as the successful party in four of the eight actions. Another winner, Wei Ming Pharmaceuticals of Taiwan, was apparently the only foreign company in January to win a pro-patentee reversal.[4]

As shown below in a detailed analysis of one of these cases, these decisions seem to indicate a pro-patentee trend based on a low non-obviousness standard, or at least a very discerning judicial eye when it comes to finding differences in comparison to the prior art. Most importantly, the standard being applied in these cases is sometimes hardly distinguishable from an anticipation analysis, meaning that the court seems to be finding patents valid as non-obvious based on little more than the fact that all of the elements cannot be found in a single prior art reference. It will be interesting to see if the court uses this approach in civil litigation patent appeals throughout 2009.[5]

The obviousness analysis in an appeal involving an Internet gaming patent application demonstrates the IP High Court’s pro-patentee approach.[6] The applicant/petitioner is anonymous, referred to simply as “X” in the decision.

The patent application concerned a system for managing interactive Internet advertisementss that bestowed the viewer/user with certain game enhancements (called “game merits”) that could be used to add additional features to an online game. Claim 1 recited:

A device for providing game information utilizing a computer, comprising:

[1] STORAGE MEANS for storing advertisement information in quiz-type format;

[2] DISPLAY MEANS for, upon access from a terminal device via a network, retrieving the quiz-format ad info from the storage means, sending the quiz-format ad info to the terminal device, and causing the terminal device to display the quiz-format ad info;

[3] RECEIVING MEANS for receiving quiz response information, including the ad info, from the terminal device;

[4] TRANSMITTING MEANS for, upon receiving the response information, transmitting “game merits,” which are electronic data, to the terminal device via the network and

[5] wherein the “GAME MERITS” include incentives, items, points, characters, sounds or stories.

The primary prior art reference taught a system that sent advertisement information to an Internet user’s computer, and then upon receiving a response, transmitted an “e-chip” that enabled the user to play an online game.

The original analysis by the JPO was as follows. First, the JPO found that the only difference between the invention claimed in the patent application and the prior art disclosure of the primary reference was the “game merits” recited in Limitation 5. More specifically, it found that the “e-chips” in the cited primary reference were merely credits that permitted the user to play a game, while the “game merits” in the invention claimed in the patent application were game enhancements that would be used within the game. Next, the JPO pointed to three or four references that taught the use of virtual money to buy goods and other enhancements for life in virtual villages and the like. Based on these reference, the JPO found that the “game merits” (game enhancements) concept was known and within the level of ordinary skill in the art. Therefore, they ruled that the invention was obvious and denied the patent application.

On appeal, the applicant attacked both the JPO’s factual determinations as to Limitations 1, 4 and 5, and the JPO’s legal analysis in its treatment of the obviousness question. On the legal side, the applicant contended that the conceptual difference between “in-game” enhancements and “out-of-game” or “real world” credits is significant enough that one of skill would think of them separately, as shown in the JPO’s failure to produce a single document teaching all the relevant in-game enhancements. The JPO argued that its analysis was correct because, when conducting an obviousness analysis, there is no rule requiring that all elements be taught in a single secondary reference.

The IP High Court expressly avoided responding to the appellant’s attacks on the JPO’s legal arguments. Instead, the court stated that the JPO’s decision should be overturned because it "overlooked" a difference between the invention and the cited reference. Specifically, the IP High Court found that the reference did not teach Limitation 4, which recites transmitting the enhancement ("game merit") to the online user, because the reference taught only transmitting information about the game merits, rather than the game merits themselves. For this reason, the court held the JPO’s decision to be “contrary to law” (“ihou”). Significantly, the appellate court did not ask whether the difference between the cited reference and the application was “obvious.” It overturned the JPO’s decision because the difference was “overlooked.”

What follows is a brief translated excerpt from the decision.

<IP High Court decision>

[p.15] Judgment of this Court

. . .

Petitioner contends the [JPO’s] determinations with respect to Limitations 1, 4 and 5 are erroneous. For efficiency of judgment, however, we turn directly to Limitation 4.

[p.24] Limitation 4

. . .

The foregoing [excerpts from the cited reference] show that when the e-chip is issued in the cited reference, what gets transmitted to the user’s terminal is information about the chips, such as the number of chips remaining, their expiration date, their exchange rate and the like, but the e-chips themselves are not transmitted to the user’s terminal, as shown in claim 1 [of the reference], which recites, “providing the user with e-chip information, being information about the user’s e-chips.” Nothing in the reference contradicts this, nor even suggests that the e-chips themselves get transmitted.

Summary

In the determination below, [the JPO] found that the e-chips in the cited reference correspond to the “game merits” in the present invention (Limitation 5), and then determined that the cited reference and the present invention are also similar with respect to teaching “transmitting means for . . . transmitting game merits . . . to the terminal device via the network” [Limitation 4]. However, as explained above . . . , the present invention teaches transmitting the game merits over the internet to the terminal, while the cited reference does not teach transmitting the e-chips to the terminal device. Therefore, although it is disputed whether the e-chips in the cited reference correspond to the game merits in the present invention, even if we were to concede this point [about Limitation 5], the determination below would still be in error for determining that the cited reference teaches “transmitting means . . . for transmitting game merits . . . to the terminal device via the network” [Limitation 4].

With respect to this point [about Limitation 4], Respondent [the JPO] contends that in the cited reference, the transmitting of the e-chip information to the client device causes the client device to calculate and display the number of chips as the game progresses, whereby enabling the user to consume the e-chips and change the number of e-chips as the game progresses, and therefore the providing of the e-chip information is essentially equivalent to transmitting and providing the e-chips to the client device so that they can be used.

However, even if we concede that the cited reference teaches the user using the client device to confirm information about her e-chips, to use her e-chips, etc., there is more than one particular construction that could be used to achieve those types of functions [described by Respondent JPO]. Since the particular constructions that are used to achieve the same function in the cited reference and the present application are different from each other, we cannot view the two constructions as identical simply because the function they achieve [of being used as the game progresses] may be identical.

. . .

As stated above, the determination [of the JPO] misapprehended the cited reference, and therefore misapprehended the points of comparison between the present invention and the cited reference. As a result, the determination below overlooked a point of difference, and this error clearly affects the conclusion reached in the determination. Thus, there is no reason to consider whether additional differences were overlooked . . .

According to the above, the determination below is contrary to law . . . Even without passing judgment on the additional [asserted] reasons, the determination below must be vacated.”

</IP High Court decision> (emphasis added)

For reference, below are some citations to additional important IP High Court cases from January 2009.

Re-examination appeals where the IP High Court reversed the JPO on obviousness in favor of patentee: Hei-19(ke)10258, Hei-20(ke)10140, Hei-20(ke)10214, Hei-20(ke)10196, Hei-19(ke)10386.

Prosecution appeals where the IP High Court reversed the JPO on obviousness in favor of patentee: Hei-20(ke)10096, Hei-20(ke)10176, Hei-20(ke)10166.

None of the civil litigation appeals in January involved obviousness, but there were some interesting appeals nevertheless. For example, in Hei-18(ne)10008, plaintiff had originally won a �300 million judgment (˜USD$3.2 million) against the JPO for negligence for (not) registering the hypothecation of a patent, but on remand from the Supreme Court the award was reduced to �20 million (˜USD$218,000) on a finding of contributory negligence.

In another decision, Hei-20(ne)10061, which addressed a jurisdictional question, the IP High Court transferred a case concerning a patent licensing dispute from Saitama District Court to Tokyo District Court. At the district court level, Tokyo and Osaka have exclusive jurisdiction over patent matters.

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Endnotes

  • [1] Mr. Rakow works for the Patent Litigation Group of Alston + Bird, LLP in Silicon Valley.
  • [2] Hei-19(ke)10258, Hei-20(ke)10140, Hei-20(ke)10214, Hei-20(ke)10196, Hei-19(ke)10386.
  • [3] Hei-20(ke)10096, Hei-20(ke)10176, Hei-20(ke)10166.
  • [4] Hei-20(ke)10166.
  • [5] There were five civil litigation patent appeals in January, but none dealt with obviousness.
  • [6] The original decision at Hei-20(ke)10176 is available at: http://www.courts.go.jp/hanrei/pdf/20090129170723.pdf.

Last updated 4/27/2012