Monday, July 27, 2015

Hinkelmann on Japanese Patent Damages Cases

Dr. Klaus Hinckelmann, author of Gewerblicher Rechtsschutz in Japan: Patente, Marken, Gebrauchsmuster, Geschmacksmuster, Know-how (Cologne, Germany : Carl Heymanns Verlag 2d ed. 2008) ("Industrial Property Rights in Japan:  Patents, Trademarks, Utility Models, Design Patents, Know-How"), has published an article titled Aktuelle Rechtsprechung auf dem Gebiet des japanischen Patentrechts ("Current Case Law in the Area of Japanese Patent Law") in the June 2015 issue of Mitteilungen der deutschen Patentanwälten (pp. 260-65).  The abstract (in my translation from the German) reads as follows:
Recent years have seen several important patent law judgments of the Japanese courts, especially the IP High Court.  This article discusses some important decisions of the last three years.  These decisions concern patentability (novelty, inventive step, enablement), the commencement of the national Japanese phase of international patent applications, the filing of an appeal, and patent infringement (damages, indirect infringement, claim construction, use in Japan).  The decisions illustrate, for example, the strict operation of the rules for commencing the national Japanese phase as well as a strict interpretation of the protective scope of product-by-process claims, but also an improved protection against patent infringement, insofar as the recognition of certain transactions as uses of a patent in Japan were improved and also the recovery of damages was made easier.
The two damages cases discussed are (1) Judgment of the IP High Court of Dec. 12, 2011, Case No. 2010 (Ne) 10091, and (2) Judgment of the IP High Court (Grand Panel) of Feb. 1, 2013, Case No. Hei-24 (Ne) 10015.  According to Dr. Hinkelmann, the first case (which I don't think I had come across before) holds that a patent owner cannot recover both lost profits and a reasonable royalty, but rather must choose one or the other.  This sounds reasonable, until you consider the case in which the plaintiff is able to prove that, say, the defendant sold 100 infringing goods, of which only 10 deprived the plaintiff of sales the plaintiff  would have made.  (Perhaps the plaintiff wouldn't have been able to compete for the other 90.)  From an economic standpoint, it would make sense for the plaintiff to recover lost profits on those 10 lost sales, and a reasonable royalty for the other 90.  Nevertheless, the case is consistent with an earlier Japanese case (Toei Tec K.K. v. Family K.K. (Massage Chair), Hei 17(ne) 10047 (IP High Ct. Sept. 25, 2006)) that I discuss in my book at pp. 315-18, and I believe that the same principle is applied in some other countries' laws as well (an issue I've been meaning to research for some time, but haven't).  The second case is one I have blogged about before (here, here, and here) and for which an English-language summary is available on the IP High Court's website (here).  The court awarded the plaintiff the defendant's profits under Japan Patent Act article 102(2), even though such awards are viewed in Japan as a proxy for the plaintiff's own lost profits and the plaintiff here did not itself practice the invention in Japan.  Its exclusive licensee sold products that embodied the patented technology, however, and the court was satisfied that the patentee lost profits as a result of the defendant's sales, so that was enough to invoke article 102(2).

On the product-by-process case referred to in the abstract, note that the Japanese Supreme Court reversed on June 5, 2015 (after Dr. Hinkelmann's article went to press), according to this blog post.

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