Monday, July 30, 2018

Two Recent Japanese Decisions on Damages

These are both discussed in an article by Yasufumi Shiroyama in volume 43, No. 3 of A.I.P.P.I.:  Bimonthly Journal of International Association for the Protection of Intellectual Property of Japan (AIPPI-JAPAN), titled The Overview of IP-Related Judgments Handed down by Japanese Courts in the Second Half of 2017.  English translations of the decisions themselves do not appear to be available yet on the IP High Court's website, but I will continue to check from time to time to see if any such translations are posted (or if anyone is aware of any other source for a translation, please let me know).  For now, I will rely on Mr. Shiroyama's description.

1.  The first of the two cases is the Judgment of the Tokyo District Court of July 27, 2017, 2015 (Wa) 22491.  The defendant was found liable for infringing the plaintiff's patent by making and selling a generic drug.  The court awarded damages consisting of (1) the number of infringing products multiplied by the plaintiff's profit margin, pursuant to article 102(1) of the Japanese Patent Act; and (2) damages for price erosion, that is, the loss the plaintiff suffered as a result of having to lower its price to compete with the generic drug prior to the entry of judgment.  Mr. Shiroyama concludes his description of this case by stating that the court also imposed a "consumption tax" on the damages for the patent infringement, which (if I understand correctly) is intended to compensate the plaintiff for a tax it will have to pay on the damages.

2.  The other case is the Judgment of the Tokyo District Court of Dec. 25, 2017, 2016 (Wa) 13003.  A little background here--as I mention in my 2013 book (p.301):
Under the Japanese Utility Model Act, “[a] creator of a device that relates to the shape or structure of an article or combination of articles and is industrially applicable may be entitled to obtain a utility model registration,” as long as the device is novel and “a person ordinarily skilled in the art of the device would have been exceedingly easy [sic] to create the device” based on the prior art. As in Germany, there is no substantive examination prior to registration, but before exercising his rights, the owner of a utility model registration must obtain an opinion from the Commissioner of the Patent Office on whether the utility model registration complies with the statutory requirements. Moreover, any third party may request such an opinion, may file an action to invalidate a utility model registration, or may assert invalidity in an action for infringement. The term of protection is ten years.
In this case, the plaintiff had obtained a utility model right, informed the defendant that the latter was infringing that right, and then obtained the requisite opinion (referred to in Shiroyama's article as a Technical Evaluation Report).  The court found that the defendant had infringed, and awarded (1) an injunction, (2) damages, and (3) unjust enrichment damages for the period of time preceding the presentation of the Technical Evaluation Report, "equivalent to the royalties for the suspected infringer's act of using the utility model prior to" that date, holding that the lack of such a report "does not mean that the utility model right did not exist in substance until a request for the issuance of a Technical Evaluation Report is filed."  The article does not specify the amount of the award

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