1 Legal framework
1.1 Which laws and regulations govern patent litigation in your jurisdiction?
In Japan, the Patent Act and the Code of Civil Procedure mainly govern patent litigation.
1.2 Which bilateral and multilateral agreements with relevance to patent litigation have effect in your jurisdiction?
Japan is a signatory to the Agreement on Trade-Related Aspects of Intellectual Property Rights ("TRIPS"), the Patent Cooperation Treaty, Paris Convention for the Protection of Industrial Property, the Convention on the Taking of Evidence Abroad in Civil or Commercial Matters ("Hague Evidence Convention") and the Convention on the Service Abroad of Judicial and Extrajudicial Documents in Civil or Commercial Matters ("Hague Service Convention").
Also, Japan is a signatory to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (New York, 1958), which makes arbitral awards in Japan enforceable through the courts of contracting countries; but to our knowledge, no such convention has been concluded on patent litigation.
1.3 Which courts and/or agencies are responsible for interpreting and enforcing the patent laws? What is the framework for doing so?
The following courts are responsible for interpreting and enforcing the Patent Law:
- at first instance, the Tokyo District Court or the Osaka District Court;
- at second instance, the Intellectual Property High Court; and
- finally, the Supreme Court.
2 Forum
2.1 In what forum(s) is patent litigation heard in your jurisdiction? Are patent infringement and validity decided in the same forum or separate forums?
The following courts have jurisdiction over patent infringement suits:
- at first instance, the Tokyo District Court or the Osaka District Court;
- at second instance, the IP High Court; and
- finally, the Supreme Court.
During the proceedings, both the technical scope of the patent and the validity of the patent can be determined. On the other hand, the validity of a patent can also be determined at the Japan Patent Office (JPO) in invalidation proceedings.
2.2 Who hears and decides patent disputes (eg, a judge, a panel and/or a jury)?
In Japan, patent litigation is heard by a panel of three judges.
2.3 Are there any opportunities for forum shopping in your jurisdiction? If so, where and how do those opportunities exist?
If the place of defendant's domicile, the plaintiff's domicile in the case of a claim for damages or the location of the infringing acts (eg, manufacture and sale) is within the jurisdictional district of a high court in eastern Japan (Tokyo, Nagoya, Sendai, Sapporo), the Tokyo District Court will have exclusive jurisdiction. If the place of defendant's domicile, the plaintiff's domicile in the case of a claim for damages or the location of the infringing acts is within the jurisdictional district of a high court in western Japan (Osaka, Hiroshima, Fukuoka, Takamatsu), the Osaka District Court will have exclusive jurisdiction. However, in practice, there is no particular difference in judgments between the Tokyo District Court and the Osaka District Court, and forum shopping is not very common.
3 Parties
3.1 Who has standing to file suit for patent infringement? What requirements and restrictions apply in this regard?
The patent holder or registered exclusive license holder under Article 77 of the Patent Act may seek an injunction and damages. A non-exclusive licensee cannot seek an injunction but can claim damages. However, the exclusive licensee may be able to subrogate the patentee's right to demand an injunction
3.2 Can a patent infringement suit be brought against a defendant who is a foreign entity with only a residence or place of business outside the jurisdiction?
Even if a foreign corporation does not have an office or place of business in Japan, if the defendant conducts business in Japan and the lawsuit is related to the business in Japan, it is recognised as having jurisdiction in Japan (Article 3-3, Item 5 of the Code of Civil Procedure). For example, if a party sells products to Japanese corporations or individuals by opening a website that is accessible from Japan, jurisdiction may be recognised based on factors such as:
- whether the website is written in Japanese;
- whether applications can be made from Japan; and
- whether the products can be sent to Japan.
Jurisdiction is also recognised based on the place where the tort is committed (Article 3-3, Item 8 of the Code of Civil Procedure). As patent infringement is also a type of tort, even a foreign corporation that does not have an office or place of business in Japan may be subject to jurisdiction if it manufactures or sells infringing products in Japan.
3.3 Can a single infringement action be brought against multiple defendants? What requirements and restrictions apply in this regard?
It is possible to file a single patent infringement lawsuit against multiple defendants.
Under the Code of Civil Procedure, if the rights or obligations that are the subject of the lawsuit are common or similar to those of several persons, or if they are based on the same or similar factual and legal causes, the several persons may be sued as co-defendants (Article 38 of the Code of Civil Procedure). Specifically, in a patent infringement suit, the manufacturer of an infringing product and the seller of an infringing product, or an indirect infringer and a direct infringer, may be sued as co-defendants.
3.4 Can a third party seek a declaration of non-infringement or invalidity in your jurisdiction? If so, how?
In Japan, in order to seek a declaratory judgment, the plaintiff must have the benefit of confirmation. Specifically:
- the plaintiff's rights or legal status must be in real danger or uncertainty; and
- it must be necessary and appropriate to obtain a declaratory judgment to eliminate such danger or uncertainty.
Therefore, it is difficult for a third party which is not a party that has been warned of patent infringement or similar to seek a declaratory judgment.
4 Patent infringement
4.1 What constitutes patent infringement in your jurisdiction?
Patent infringement is the act of working a patented invention in the course of business without the permission of the patent holder. 'Working' means:
- in the case of an invention of matter, producing, using, assigning, exporting or importing, or offering for assignment, a product;
- in the case of an invention of a method, using the method; and
- in the case of an invention of a method of producing a product, using the method or using, assigning, exporting or importing, or offering for assignment a product produced by the method (Article 2, paragraph 3 of the Patent Law), offering for assignment and so on (Patent Act, Article 2(3)).
4.2 How is infringement determined?
Patent infringement is judged based on whether the accused product falls within the technical scope of the patented invention. Specifically, the claims are interpreted by considering:
- the claim language;
- the description in the patent specification; and
- the prosecution history.
It is then determined whether the configuration of the accused product meets each of the requirements of the claims. Even if the configuration of the accused product does not meet some of the claim construction requirements, it may be determined to fall within the technical scope under the doctrine of equivalents.
4.3 Does your jurisdiction apply the doctrine of equivalents?
As mentioned in question 4.2, the doctrine of equivalents has been recognised in Japan in a Supreme Court decision.
4.4 Is wilful infringement recognised? If so, what is the applicable standard?
In Japan, wilful infringement is not recognised.
5 Bringing a claim
5.1 What measures can a patent holder take to enforce its rights in your jurisdiction? Are interim measures available before receiving a ruling on the merits?
The patent holder may file a lawsuit in the Tokyo District Court or the Osaka District Court seeking an injunction and damages for patent infringement. The patent holder may also ask the court for a provisional injunction before obtaining a ruling on the merits.
However, in Japan, provisional injunction proceedings are not particularly quicker than the main proceedings, as the provisional injunction procedure is similar to the main proceedings and takes place in a careful manner. In addition, the patent holder may seek an injunction against importation or exportation from Japan Customs.
5.2 What is the limitation period for patent infringement in your jurisdiction?
With regard to claims for damages based on patent infringement, the statute of limitations is three years from the time when the party became aware of the damages and the infringer (Article 724 of the Civil Code).
5.3 Must the alleged infringer be notified in advance before a claim is brought?
No. There is no requirement to notify the alleged infringer prior to filing of an infringement action. In practice, however, warning letters are generally sent before a lawsuit is filed.
5.4 What are the procedural and substantive requirements for bringing a claim for patent infringement? How much detail must be presented in the complaint?
The complaint must state:
- the nature of the judgment sought; and
- the reasons why the claim may be sought.
When seeking an injunction, it is necessary to allege that:
- the plaintiff is the patent holder;
- the defendant is the manufacturer, seller or similar of the accused product;
- the accused product falls within the technical scope of the patented invention; and
- when seeking damages, that damages have occurred, together with their amount.
In addition, supporting evidence must be submitted along with the complaint.
5.5 Are interim remedies available in patent litigation in your jurisdiction? If so, how are they obtained and what form do they take?
As mentioned in question 5.1, the patent holder may also ask the court for a preliminary injunction before a decision is made in the main case. The court with which the petition is filed is the same as the court of the main proceedings – that is, either the Tokyo District Court or the Osaka District Court. However, in Japan, the provisional injunction procedure is similar to the main proceedings, in that it is a very careful procedure and does not necessarily result in a decision any earlier than the main proceedings.
5.6 Under what circumstances must security for costs and/or damages incurred by the other party be provided?
Before a motion for a preliminary injunction is granted and a preliminary injunction order is issued by the court, monetary security must be provided to cover any damages suffered by the alleged infringer if the preliminary injunction decision is overturned in the main proceedings. In addition, if the plaintiff prevails at first instance, a provisional execution declaration may be attached at the same time as the judgment. Security must also be provided where an alleged infringer that has lost at first instance seeks a stay of provisional execution.
6 Disclosure and privilege
6.1 What rules on disclosure apply in your jurisdiction? Do any exceptions apply?
In Japan, there is no discovery system similar to that in the United States. Instead, the court can be requested for an order to produce documents.
At the request of a party, the court may order the opposing party to produce documents that are necessary to prove infringement or to assess damages caused by the infringement, provided that the opposing party does not have a legitimate reason for refusing to produce them (Article 105(1) of the Patent Law).
Generally speaking, in determining whether a legitimate reason exists, the damages that the disclosing party would suffer due to disclosure of the documents are compared with the disadvantages that the applicant would suffer without production of the documents. For example, if the court thinks that it is clear that the documents show that the accused product is not covered by the claims of the invention, it will probably decide that there is a legitimate reason.
6.2 What rules on third-party disclosure apply in your jurisdiction? Do any exceptions apply?
Under the Code of Civil Procedure, an order to produce documents may be issued against a third party. In such cases, the third party must be interrogated before the order is issued. However, there is no obligation to produce:
- documents relating to matters that may result in criminal prosecution and conviction;
- documents relating to the confidentiality of public officials;
- documents relating to the confidentiality of doctors, lawyers and similar professionals;
- documents intended exclusively for the use of the holder of the documents; and
- criminal case records.
The same exception applies to orders to produce documents against a party.
6.3 What rules on privilege apply in your jurisdiction? Do any exceptions apply?
In Japan, there is no attorney-client privilege as in common law countries; but there are some provisions which protect the confidentiality of communications between a client and an attorney. A Japanese attorney generally has the right and obligation to protect the confidentiality of the client; violation of this obligation can lead to liability in civil, criminal and disciplinary procedures under Article 134 of the Criminal Code and Article 23 of the Attorney Act. Also, a Japanese attorney has the right to refuse to testify on confidential facts obtained in the course of the duties under Article 197 of the Code of Civil Procedure and Article 149 of the Code of Criminal Procedure.
7 Evidence
7.1 What procedure(s) exist for collecting and presenting evidence in patent infringement litigation?
As there are no thorough discovery procedures in Japan, the plaintiff's burden of proof is quite heavy.
The main measures for collecting evidence are as follows:
- Denial of the allegation with reason: If the defendant denies the plaintiff's description of the accused product or process, it must clarify the relevant product or process in a concrete manner (Article 104-2 of the Patent Law).
- Party inquiries: A party, without the involvement of the court, may request that the other party produce information needed to prepare for its claim or prove the claim in writing. The other party has a duty to answer, but there is no sanction for rejecting the request or delaying the response (Article 163 of the Code of Civil Procedure).
- Orders to produce documents: see question 6.1.
- On-site inspection: On 1 October 2020, the on-site inspection was introduced as a new means of collecting evidence (Article 105-2 of the Patent Law). Under the amended law, neutral technological experts conduct on-site inspections of plants and other premises of the suspected infringers. The court may order an inspector to conduct an on-site inspection based on the petition of a party in patent infringement litigation.
- Third-party opinion solicitation system: On 1 April 2022, a Japanese version of the amicus curiae brief was introduced (Article 105-2-11). Under this system, the court may, upon the motion of a party, request the submission of a written opinion on the application of laws concerning the case and other necessary matters to the public, specifying a reasonable timeframe. These opinions can be used as evidence.
7.2 What types of evidence are permissible in your jurisdiction? Is expert evidence accepted?
In Japanese patent litigation, most evidence is documentary. Experts are rarely examined in the courtroom; instead, each party produces a written expert opinion.
7.3 What are the applicable standards of proof?
In Japanese civil litigation, unlike in criminal litigation, there are no strict rules regarding evidentiary capacity; evidence is admissible if it is found to be relevant to the matters in evidence.
7.4 On whom does the burden of proof rest?
In patent infringement suits, the plaintiff bears the burden of proof. However, the defendant bears the burden of proof for defences such as:
- the defence of invalidity;
- the defence of prior use; and
- the defence of exhaustion.
8 Claim construction
8.1 Is there a procedure for construing claims during a patent infringement action? If so, when and how is it performed?
In Japan, there is no special procedure for claim interpretation, such as the Markman hearing in the United States.
Japan has no jury trial or thorough discovery procedures similar to those in the United States, and the entire procedure is presided over by judges. The trial is not concentrated into one day or a few consecutive days, as in most US trials. Instead, a series of hearings or preliminary hearings are usually held at approximately one-month intervals until the end of deliberation. Each party usually submits a brief and evidence at each hearing.
The judge will interpret the claims and find facts based on the arguments and proofs presented by each party.
8.2 What is the legal standard used to define disputed claim terms?
Article 70 of the Patent Law provides that:
- "The technical scope of a patented invention shall be determined on the basis of the description of the claims attached to the application"; and
- "In the case of the preceding paragraph, the meaning of the terms in the claims shall be interpreted in consideration of the description and drawings attached to the application."
8.3 What evidence does the court consider in defining the claim terms?
This includes:
- the claim language;
- the patent specification description;
- the application history; and
- known technology.
8.4 Can the claims of a patent be amended in the course of the proceedings?
It is possible to file a trial for correction with the JPO while a patent infringement lawsuit is in progress.
If a trial for correction is filed with the JPO, the court can issue a judgment on the validity of the corrected claim and whether the accused product falls within the technical scope of the corrected claim.
However, the effect of the amendment of the claims occurs only in the proceedings before the JPO.
9 Defences and counterclaims
9.1 What defences are typically available in patent litigation?
The most typical objections are non-infringement and invalidity claims. Other defences include the prior use, exhaustion, and test and research defences.
9.2 Can the defendant counterclaim for revocation or invalidation of the patent? If so, on what grounds and what is the process for doing so?
Yes. The reasons for invalidation include:
- lack of novelty;
- lack of inventive step;
- violation of enablement requirements;
- violation of support requirements;
- violation of clarity requirements; and
- blasphemy.
A defendant may argue invalidity in an infringement court or request a trial for invalidation at the JPO.
However, even if the court finds the patent to be invalid, the invalidation is only between the parties and does not invalidate the patent right itself.
9.3 Are there any grounds on which an otherwise valid patent may be deemed unenforceable against a defendant?
If the exercise of a patent right is found to be in violation of the Act on Prohibition of Private Monopolisation and Maintenance of Fair Trade, this may be denied as an abuse of the right.
10 Settlement
10.1 Are mediation and/or other forms of settlement discussions required by the court in your jurisdiction or merely optional to the parties?
In many patent infringement cases, the court will offer to settle the case through a judge who handles infringement cases, but the parties will not be required to sit in on the discussions.
Settlements are used quite aggressively and about half of all patent infringement cases end in settlement.
10.2 Can the proceedings be stayed or discontinued in view of settlement discussions?
The settlement date will be set while the infringement lawsuit is ongoing, so the infringement proceedings will not be stayed or discontinued.
10.3 Is it necessary to report the results of settlement discussions to the court? If so, how; and what are the implications?
During an infringement action, a settlement is recommended through the judge handling the infringement action, so there is no need to report to the court.
11 Court proceedings for infringement and validity
11.1 Are court proceedings in your jurisdiction public or private? If public, are any options available to the parties to keep the proceedings or related information confidential?
Although oral argument dates are open to the public, patent infringement lawsuits are usually heard in preparatory hearings which are not open to the public, except for the first and final hearings.
11.2 Procedurally, what are the main steps in patent infringement proceedings in your jurisdiction? Is patent validity handled in the same proceedings as infringement or is it handled separately? If separate validity proceedings are available, what are the main steps in those proceedings?
In an infringement suit, whether the accused product falls within the technical scope and whether the patent is valid are examined in the same infringement proceeding. If an invalidation trial is filed with the JPO, the case is also heard by the JPO in addition to the court proceedings.
11.3 What is the typical timeframe for patent infringement proceedings? If separate patent validity proceedings are available, with is the typical timeframe for those proceedings?
The trial period for a patent infringement suit at first instance ranges from about one year and several months to one and a half years. The trial period for a request for invalidation trial at the JPO is approximately one year.
The following is a sample timeline for Japanese patent litigation.
11.4 To what extent do the decisions of national or foreign courts or bodies influence the court's decision?
Judges are not bound by each other's decisions, but decisions of the Supreme Court and the IP High Court will be considered; and foreign decisions may also be considered if the issues are relevant.
12 Remedies
12.1 What remedies for infringement are available to a patent holder in your jurisdiction?
Injunctions and damages.
12.2 Are punitive or enhanced damages available in your jurisdiction? If so, how are they determined?
No.
12.3 What factors will the courts consider when deciding on the quantum of damages?
There are three ways to compute damages in patent infringement litigation under the Patent Law:
- based on the number of infringing products and the patent holder's profit;
- based on the infringer's profit; and
- based on the licence royalty.
The amount of damages may be determined by multiplying the number of infringing products sold by the profit per unit that the plaintiff would have earned without the infringing activities, within a limit not exceeding the potential production capacity of the patent holder (Article 102(1) of the Patent Law). However, if circumstances prevented the patent holder from selling part or all of the infringing products, a sum equivalent to the amount subject to that circumstance will be deducted. The burden of proving the existence of the circumstance rests with the infringer.
The amount of damages is presumed to be equal to the profits gained by the infringer through the infringement (Article 102(2) of the Patent Law).
In February 2013, the Grand Panel of the IP High Court held that:
- Article 102(2) of the Patent Law applies as long as the patent holder could have gained profit without the patent infringement by the infringer; and
- it is not necessary for the patent holder to exercise the invention.
A patent holder may demand compensation for damages in the amount it would have been entitled to receive under a licence for the working of the patented invention (Article 102(3) of the Patent Law).
13 Appeals
13.1 Can the decision of a first instance court or body be appealed? If so, on what grounds and what is the process for doing so? Please also describe the availability and process for additional levels of appeal.
Yes. A party which is dissatisfied with the judgment of the first-instance court may appeal to the IP High Court. In Japan, proceedings at the IP High Court are a continuation of the trial court proceedings; new evidence can be submitted to the appeal court and it is possible to dispute both the factual findings and the legal interpretation of the first-instance trial decision.
A party which is dissatisfied with the judgment of the IP High Court may file an appeal or petition for acceptance of the appeal to the Supreme Court.
13.2 What is the average time for each level of appeal in your jurisdiction?
The average trial period is:
- about seven to nine months at the IP High Court; and
- about three to six months at the Supreme Court (seven to 10 months from filing of the appeal or acceptance of the appeal).
14 Costs, fees and funding
14.1 What costs and fees are incurred when litigating in your jurisdiction? Can the winning party recover its costs?
The main costs are attorneys' fees and the cost of stamps to be paid to the court by the plaintiff.
The prevailing party may claim the stamp fee paid to the court against the defendant.
Attorneys' fees are not included in the litigation costs that the prevailing party can claim; but in patent infringement suits, the patent holder can claim attorneys' fees as part of the damages.
14.2 Are contingency fee and/or other alternative fee arrangements permitted in your jurisdiction?
Attorneys' fees based on economic value are common in Japan. Japanese lawyers usually charge an initial retainer and a success fee for winning or achieving a favourable settlement:
- The retainer is calculated based on the economic value sought in the complaint; and
- The success fee is calculated based on the economic value actually obtained.
Recently, Japanese lawyers have increasingly been calculating their fees according to the amount of time spent on the case, especially in matters involving foreign clients.
14.3 Is third-party litigation funding permitted in your jurisdiction?
Although third-party litigation funding is not common in Japan, there are some cases in which crowdfunding has been used to raise funds for litigation in the area of problem-solving litigation other than patent litigation.
15 Trends and predictions
15.1 How would you describe the current patent litigation landscape and prevailing trends in your jurisdiction? Are any new developments anticipated in the next 12 months, including any proposed legislative reforms?
In patent litigation in Japan, both the first and second-instance proceedings are handled by judges who specialise in intellectual property, with technical support provided by technical experts typically coming from the JPO. This typically results in speedy proceedings and highly predictable judgments. In addition, the Grand Panel decisions of the IP High Court have increased the predictability of judgments. In terms of evidence collection, there is no discovery system as in the United States; but on-site inspection and a third-party opinion solicitation system have been introduced. Furthermore, the amount of damages awarded is also increasing – between 2014 and 2022:
- 35 judgments were issued in which damages of JPY 100 million or more were awarded; and
- 29 settlements were entered into requiring payment of JPY 100 million or more.
No specific legislation on patent infringement lawsuits is planned for the coming year, but discussions are ongoing regarding a punitive damages system.
16 Tips and traps
16.1 What would be your recommendations to parties facing patent litigation in your jurisdiction and what potential pitfalls would you highlight?
Patent lawsuits in Japan result in highly predictable decisions from judges who specialise in IP litigation. In addition, the trial process is relatively quick and attorneys' fees are much lower than those in the United States, so there are significant advantages to filing patent infringement lawsuits in Japan. One option is to obtain a favourable settlement by taking advantage of a settlement offer made by the judge in charge of the infringement lawsuit himself or herself.
On the other hand, as Japanese patent litigation is relatively fast paced and evidence must be submitted at the time of filing a lawsuit, preparation prior to filing a lawsuit is important. In particular, as invalidity is often claimed by the defendant, it is necessary to fully examine the validity of the patent before filing the lawsuit.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.