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Double Track in Invalidity Defense & Section 104 ter of JP Patent Law

Double Track in Invalidity Defense & Section 104 ter of JP Patent Law. AIPLA IP Practice in Japan Committee 2007 MWI Pre-Meeting, at New Orleans Jan. 23, 2007 Hirokazu Honda, Attorney-at-Law Abe, Ikubo & Katayama. Who Judges Invalidation?.

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Double Track in Invalidity Defense & Section 104 ter of JP Patent Law

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  1. Double Track in Invalidity Defense & Section 104ter of JP Patent Law AIPLA IP Practice in Japan Committee 2007 MWI Pre-Meeting, at New Orleans Jan. 23, 2007 Hirokazu Honda, Attorney-at-Law Abe, Ikubo & Katayama

  2. Who Judges Invalidation? • JPO determines validity of a patent in an invalidation trial. • Court does not invalidate a patent in an infringement suit. • IP High Court reviews the JPO decision. • It does not decide on validity but review legality of the decision. • If the Court reverses the JPO decision, it remands the decision so that JPO reconsiders the validity of the patent. Abe, Ikubo & Katayama

  3. Defendant’s Defense Before 2000 • When an invalidation trial was filed with JPO an infringement suit might be suspended at court’s discretion to wait for JPO decision. • Defendant could assert limiting the claim scope based on prior art reference(s) that should have invalidate the claim. Abe, Ikubo & Katayama

  4. Inconsistent Double Track Invalidity • Osteoporosis Drug Case (Shizuoka District Court) • Mar. ’94: Court Order for Damages JPY728 mil.・・・Valid & Infringement • Apr. ’94: JPO Decision “Invalid” 3.5 yrs after Filing an Invalidation Trial • Anti-allergic Drug Case (Tokyo District Court) • Oct. ’92: Court Order for Injunction・・・Valid & Infringement • Mar. ’94: JPO Decision “Invalid” • If a patent is enforced and then later invalidated, the patentee is basically liable for damages incurred to the accused infringer; but irreparable damages left. Abe, Ikubo & Katayama

  5. Kilby Case • A court in an infringement case can determine whether or not sufficient grounds to invalidate the patent exist, even before the JPO decision invalidating the patent becomes final. • If the court finds a sufficient ground to invalidate the patent, enforcement of the patent would be an abuse of rights and should not be allowed. • Judgment of the Sup. Ct., the Third Party Bench, Apr. 11, 2000 (Case No. 1998(O)No.364) Abe, Ikubo & Katayama

  6. Continuing Inconsistent Double Track • Slot Machine Case • Mar. ’02: Dist. Court Ordered JPY7.4 bil.+0.9 bil. • Same Day, JPO sent Notice of Cause for Invalidation ⇒ In Jan. ’03, Invalidation Decision ⇒ High Court Affirmed the JPO Decision • Filtering Device Case • First, JPO upheld the patent in an invalidation trial. • Then, the Dist. Court in an infringement suit found the patent invalid due to lack of an inventive step. Abe, Ikubo & Katayama

  7. JP Patent Law § 104ter • Kilby Case requires “sufficient ground” of invalidity; Subsequent court decisions did not very much address the sufficiency requirement ⇒ abandoned the requirement • §104ter, para. 1 • In a patent infringement litigation, if the patent is found to be invalidated by an invalidation trial, the patent shall not be enforced against the adverse party. Abe, Ikubo & Katayama

  8. JP Patent Law § 104ter • No need to wait for an invalidation trial ⇒The Court judges whether it is likely that a patent is invalidated if JPO holds a trial. • If an allegation or defense is presented for unreasonably delaying the proceedings, the court may dismiss it. Abe, Ikubo & Katayama

  9. Another Reform of Patent Law • Exchange of Information b/w Court & JPO Court (Infringement Suit) Presence/Absence & Conclusion of an Invalidation Trial Request for Docket of the Infringement Lawsuit Filing and Completion of Infringement Suit Invalidity Defense made by Alleged Infringer JPO (Invalidation Trial) Abe, Ikubo & Katayama

  10. Aggressive Judgment on Invalidity • Infringement Suits in Tokyo & Osaka Dist. Courts from Apr. 2000 to 2005 • Patentees Lost in 80% Cases [Grounds] • Non-Infringing: 68% • Invalidity: 19% • Both: 13% • Among the Cases with Invalidity Defense: • The validity issue was addressed in more than 50% cases. • The patent was found Invalid in 40% cases. Abe, Ikubo & Katayama

  11. More Aggressive Judgment on Invalidity after 104ter Introduced? • Infringement Suits in Tokyo & Osaka Dist. Courts & IP High Court from Apr. 2005 to 2006 Abe, Ikubo & Katayama

  12. More Aggressive Judgment on Invalidity after 104ter Introduced? Abe, Ikubo & Katayama

  13. Summary • The courts now judge validity without hesitation and find a patent invalid in most cases. • The ground to find invalidity is lack of an inventive step in many cases. Patentees should be prepared for arguments on an inventive step (obviousness) in infringement suit. • Patentees need to be prepared to convince the judges, lay persons on technology. Abe, Ikubo & Katayama

  14. Thank you for your attention! Hirokazu Honda, Attorney-at-Law Abe, Ikubo & Katayama E-mail: honda@aiklaw.co.jp URL: http://www.aiklaw.co.jp Phone: +81-3-3273-2600 Fax: +81-3-3273-2033

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