Friday, November 6, 2020

Tessensohn on Japanese IP High Court's Neochemir Decision

Earlier this year I blogged about a 2019 decision of Japan's Intellectual Property High Court, NeoChemir Inc. v. Medion Research Labs. Inc., Case No. 2018 (Ne) 10063, Judgment of June 7, 2019 (IP High Court),  which clarified some points regarding awards of infringer's profits and reasonable royalties under Japanese law (see post here).  John Tessensohn has published a short write-up of the case in the European Intellectual Property Review, titled Patent infringement royalty rate boosted by Grand Panel IP High Court of Japan, 42 EIPR 320 (2020).  It is available on Westlaw. Here is the abstract:


On 7 June 2019, the Grand Panel of the Intellectual Property High Court of Japan (IPHCJ) issued a landmark pro-patentee decision that provided greater clarity and flexibility on how Japanese patent infringement courts will calculate patent infringement damages on the basis of "infringer’s profits" and "reasonable royalty" under Japan’s Patent Law: NeoChemir Inc v Medion Research Laboratories Inc, Case No. Heisei 30 (Ne) 10063 (7 June 2019). This is a welcome pro-patentee decision because the IPHCJ set a flexible and pro-patentee approach in determining patent infringement damages which may result in higher damage awards, assuming the criteria is satisfied. The prospect of Japanese courts being able to award higher patent infringement damage awards in the future using the calculation rules outlined in this milestone decision will contribute to the greater protection of patent rights in Japan.


One thing Mr. Tessensohn notes in his article that I didn't note in my post is the following statement from the court's decision: "a royalty rate, which is decided with the fact that the patent was infringed, should necessarily be higher than the normal royalty rate, which the patentee would be entitled to receive for its patent right" (EIPR article at p.322; see also the English language translation of the decision available on the IP High Court's website, pp. IV, 39, where the wording is a little different but the sense is the same).  Mr. Tessensohn views this as significant, and as I understand it, it is consistent with the intent behind a 1998 amendment to Japanese patent law, which removed the word tsujono ("normally" or "ordinarily") from article 102(3) (see my book pp. 311, 321-22).

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