114

AIPPI Journal, March 2019

Report on the “Judicial Symposium on Intellectual Property
Advanced Seminar for ASEAN+3 2018”
Yasufumi SHIROYAMA*
Yuriko SAGARA**
Yukari KOTANI***

1. Overview of the symposium
On November 30, 2018, the symposium was held at the Bar Association
Building by inviting judges from seven
ASEAN countries, China, and South
Korea.
The symposium started with inspiring greetings offered by Minister ofJustice, Takashi Yamashita. Before noon,a panel discussion was conducted by thejudges from Japan, China, and South
Korea after the keynote speeches given
by Makiko Takabe, Chief Judge, Intellectual Property High Court, and Reeko
Imamura, Director General, Trial andAppeal Department, Japan Patent Office.
In the afternoon, another panel discussion
was conducted on the same example caseby the judges from the ASEAN countries.
In both panel discussions, Shiroyama andSagara served as moderators and tookturns to ask questions to the panelists.
The judges from the participating
countries who participated in the panel
discussions held in the morning and in
the afternoon are as follows.
In the morning:
People’s Republic of China:
Supreme People’s Court, Judge Assistant Ma Yungpeng
Republic of Korea: Patent Court of
Korea, Judge Lee Jejeong
Japan: Intellectual Property High
Court, Judge Kenichi Furukawa
In the afternoon:
Brunei Darussalam: Supreme Court,
Judge Rostaina Duraman
Supreme Court, Judge Harnita Zelda
Skinner* JFBA Committee on Intellectual Property Rights** JFBA Committee on Intellectual Property Rights*** Instructor, International Cooperation Department, Research and Training Institute, Ministry of JusticeAIPPI Journal, March 2019

Kingdom of Cambodia: Court ofFirst Instance in Phnom Penh, Judge
Ly Sophana
Republic of Indonesia: Court of theMakassar District, Judicial Court of
the Makassar District, Judge Tito
Suhud (Director)
Lao People’s Democratic Republic:
People’s Central High Court, Judge
Somsack Taybounlack
Malaysia: The 13th and 15th Courtsof Malaysia, Judge Mahd Aizuddin
Bin Zolkeply
Republic of the Union of Myanmar:
Supreme Court, Judge Tha Htay
Kingdom of Thailand: Supreme
Court, Judge Watchanra Neitivanich
Central Intellectual Property andInternational Trade Court, Judge
Worranwong Atcharawongchai
The symposium ended with passionate closing remarks from Wataru
Sueyoshi, Director, Intellectual Property
Lawyers Network Japan.

115

2. Example case and questions
used in the panel discussions
The example case and questions usedin the panel discussions are as follows.
The preparations for the panel discussions were made in the same manneras the one adopted in the previous year.
First, the description of the example caseand the questions scheduled to be asked
were sent to the ASEAN countries inadvance. Each country was requested tosend their answers to the question in writing. One day before the symposium, thejudges from the participating countries
got together and conducted prior consultation (no prior consultation was conducted with the judges from China andSouth Korea).
On the day of the symposium, copiesof the written answers were distributed tothe participants as referential materials.
During the panel discussions, the moderators orally summarized the written
answer already submitted by each coun-

116

AIPPI Journal, March 2019

try prior to the symposium and asked further questions.
Company A is a foreign company
engaged in the business of manufacturing
and selling automobile parts. Company B
is a company founded in your homecountry engaged in the business of manufacturing and selling automobile parts.
Company A and Company B concluded alicense agreement (the “Agreement”) on
April 1, 2010, under which both companies agreed that Company A licensed
Company B to use Patent Right α, which
Company A registered in your country,
and Trade Secret β (collectively referred
to as the “intellectual property of Company A”) on the following conditions.

Steps taken after the termination of theAgreement:
Return of Trade Secret βProhibition of the use of the invention protected by Patent Right α(“Invention α”) (only during the termof Patent Right α)Possible reason for cancellation of theAgreement:
Violation of the Agreement by Company B
Governing law:
Law of your country
Dispute settlement:
Court of your country having jurisdiction over the location of Company
B

Product subject to the Agreement:
X (Note: Product X falls within thescope of Patent Right α. Trade Secret
β is used to produce Product X.)
Permitted acts:
Production, assignment, export (onlyto the ASEAN region)
Prohibited acts:
User of the intellectual property ofCompany A for any product otherthan Product X
Export of Product X to any country
other than the ASEAN countries
Disclosure of Trade Secret β to athird party or the use thereof for any
purpose other than the original purpose
Term: 10 years
Royalties:
100,000 USD at the time of theconclusion of the Agreement
5% of the sales during the term ofPatent Right α and 2% of the sales
after the expiration of Patent Right α

Q1. Are Company A and Company B
required to register the Agreement inyour country? Or, can they register
the Agreement if they want to? If theregistration is required, would thefailure to register the Agreement
affect the effect of the Agreement?
Would the failure be punished insome way? If they can register theagreement on a voluntary basis, what
would be the effect of the registration? If the registration is required or
possible, what is the registration
organization? Would the registration
organization check the contractual
conditions specified in the Agreement?
Q2. Imagine the case as follows. Company B stops paying royalties without any legitimate reasons. Company
A wants to receive royalties (or damages) from Company B. What legal
procedures (such as a civil lawsuit,criminal lawsuit, administrative procedure, and ADR) would Company

AIPPI Journal, March 2019

A be able to carry out with whichorganization (such as a court, administrative agency)? What determination would such organization make?
Would there be any difference interms of the required procedure or
the method to calculate royalties, etc.
between the case where Company A
requests payment of royalties basedon the Agreement without cancelingthe Agreement and the case where
Company A requests payment ofdamages after the cancellation of theAgreement?
Q3. Imagine the case as follows. Company A detected the following acts ofCompany B. Company A wants tostop such acts.
(1) Production of Product Y (which
is different from Product X although
Product Y falls within the scope ofPatent Right α)(2) Export of Product X to North
America
What legal procedures (such as acivil lawsuit, criminal lawsuit, administrative procedure, and ADR)
would Company A be able to carryout with which organization (such asa court, administrative agency)?
What determination would such organization make? Would there be
any difference in terms of the required procedure or the expected
results between the case where Company A requests discontinuation of
the acts specified in (1) or (2) basedon the Agreement without cancelingthe Agreement and the case where
Company A requests discontinuationof the acts specified in (1) or (2)based on Patent Right α after the cancellation of the Agreement?

117

Q4. Imagine the case as follows. The
term of Patent Right α expired on
December 1, 2018. The agreement
was terminated on March 31, 2020.
Company B continued producing andexporting Product X even on andafter April 1, 2020, but stopped paying royalties. Company A wants
Company B to stop producing Product X (by use of Trade Secret β).
What legal procedures (such as acivil lawsuit, criminal lawsuit, administrative procedure, and ADR)
would Company A be able to carryout with which organization (such asa court, administrative agency)?
What determination would suchorganization make? (on the assumption that the current law of yourcountry has not been amended.)
Q5. Imagine the case as follows. Company B came to the conclusion that
Patent Right α is invalid. Company B
wants to have Patent Right α invalidated in order to reduce the royalties.
What legal procedures (such as acivil lawsuit, criminal lawsuit, administrative procedure, and ADR)
would Company B be able to carryout with which organization (such asa court, administrative agency)? If
the agreement prohibits Company B
from disputing the validity of Patent
Right α, would the agreement affectthe possibility of having Patent Right
α invalidated? Can Company A or
Company B file a complaint withregard to the determination made by
the aforementioned organization?
Q6. Imagine the case as follows. Company B received a request for payment of damages from one of its

118

AIPPI Journal, March 2019

clients, Company C, which allegedthat Product X was defective. Basedon the results of court proceedings,
Company B paid 50,000 USD asdamages. Company B thought that
Product X was defective because theintellectual property of Company A
was incomplete. Company B wants
to demand that Company A should
pay Company B 50,000 USD tocompensate the amount paid to Company C and that Company A should
return the royalties already paid from
Company B. What legal procedures(such as a civil lawsuit, criminal lawsuit, administrative procedure, andADR) would Company B be able tocarry out with which organization(such as a court, administrative
agency)? What determination wouldsuch organization make?

3. Panel discussion conductedby Japan, China, and South
Korea
Regarding the panel discussion conducted by Japan, China, and South Korea
in the morning of the day of the symposium, the answers to each question aresummarized below.

Q1. Registration of a license
In Japan, an exclusive license(Senyo-Jisshi-ken) takes effect only if it
is registered with the Japan Patent Office(JPO). If a patentee agrees to grant an exclusive license, the patentee is obliged toregister the license. The JPO does not examine the content of the license agreement.
The system of South Korea is similar
to that of Japan. An exclusive license
takes effect only if it is registered with
the Korean Intellectual Property Office(KIPO). However, unless the obligationof registration is specified in the agreement, the patentee is not obliged to register the license. The KIPO does not examine the content of the agreement.
On the other hand, in China, it ispossible, but not mandatory, to register alicense with the State Intellectual Property Office of China (SIPO). The SIPO
only conducts a formality check on theagreement. When an additional question
was asked with regard to the merits ofregistration, China replied that the registration of a license could serve as
evidence to prove the authorization of thelicensor in a lawsuit or customs procedure.
Q2. Request for payment of outstanding royalties
All the countries said that it is possible to select either a civil lawsuit or ADR
such as conciliation and arbitration andthat a civil lawsuit could be a better
option because the consensus of both parties is required to resolve a dispute.
Regarding the issue of whether it ispossible to demand payment of damages
after canceling the agreement, South
Korea replied that, while it is possible, if
additional damage is made after the

AIPPI Journal, March 2019cancellation, there might be a difference
between the case where payment of damages is requested after canceling theagreement and the case where payment ofdamages is requested without cancelingthe agreement.
China also replied that, while it ispossible to cancel the agreement, the payment of damages can be demanded.
China also explained that, since theamount of damage would be the same
regardless of whether the agreement iscanceled or not, it would be better if arequest for payment of royalties is madewithout canceling the agreement.
Japan replied that it is possible todemand payment of damages for an act of
tort after canceling the agreement andexplained that, in such case, the provisions of the Patent Act concerning thepresumption of negligence (Article 103of the Patent Act) and the presumption of
the amount of damage (Article 102 of
said Act) would apply. Japan said that,since the amount equivalent to the reasonable royalties would be calculated
under Article 102 (3) of the Patent Act ofJapan, the estimated amount of damage
would be the same regardless of whether
the agreement is canceled or not.
Q3. Violation of the license agreement
South Korea replied that both the
production of Product Y and the export of
Product X to North America would notconstitute patent infringement, but would
merely violate the agreement. Unless theagreement is canceled, an injunction
against such acts cannot be sought. Onlya request for payment of damages can be
made.
China replied that the production of
Product Y constitutes patent infringement,
while the export of Product X to America

119

would not constitute patent infringement
and would merely constitute violation of
the agreement. China further explained
that, unless the agreement is canceled, an
injunction against such export cannot besought.
On the other hand, Japan replied that,while the production of Product Y constitutes patent infringement, the export of
Product X constitutes patent infringement
as well because exporting such productcan be regarded as an act of working thepatent right. Japan further explained thatthe patentee can seek an injunction
against such acts without cancelling theagreement and can also request customs
control.
Q4. Request for an injunction based ona license agreement concerning a
trade secret
All of the participating countries
replied that they have a law that permits
the filing of a request for an injunction
against the unauthorized use of a trade
secret and that, by providing proof for thesatisfaction of the subjective requirements, it will be possible to investigate
the criminal responsibility.
China and Japan replied that it ispossible to request the return of the trade
secret under a provision included in theagreement.
Q5. No-contest obligation of the licensee
In South Korea, only an interested
party or a KIPO examiner is entitled torequest an invalidation trial. When a decision is made by the IP Trial and Appeal
Board (IPTAB), if the demandant of thetrial or the patentee is dissatisfied withthe decision, the demandant or thepatentee can file a lawsuit with the patent120

court. The IPTAB will not be involved asa party to the lawsuit. It is also possible todispute the validity of a patent in an
infringement lawsuit.
In Japan, only an interested party isentitled to request an invalidation trial (itis widely believed that a licensee is entitled to request an invalidation trial as aninterested party). Any interested party
who is dissatisfied with the JPO decision
can file a lawsuit with the Intellectual
Property High Court in order to seek
rescission of the JPO decision. Japan has
a legal provision explicitly specifyingthat a dispute over patent validity can beraised in a patent infringement lawsuit. A
provision that imposes a no-contest obligation on the licensee can be considered
to be valid. Thus, it is widely believed
that, if such provision is established, thelicensee would lose eligibility to request
an invalidation trial.
In China, no limitations are imposedon the range of people who are entitled torequest an invalidation trial. Any person
is entitled to file a request for an invalidation trial to the Patent Reexamination
Board of the SIPO (A licensee is, ofcourse, entitled to request an invalidation
trial). If the person who requested suchtrial is dissatisfied with the decision of
the Board, that person can file a lawsuitwith the Beijing Intellectual Property
Court (“Beijing IP Court”) against the
Patent Reexamination Board. From
January 1, 2019, if a party to the lawsuit
is dissatisfied with the judgment of the
Beijing IP Court, the party is able to filean appeal in the Supreme People’s Court
while the High People’s Court used to be
the court of appeal.

AIPPI Journal, March 2019

Q6. Obligation of the licensor to assume defect liability
South Korea replied that, on the presumption that a product defect can berarely attributable solely to the incompleteness of intellectual property, if thepatentee has intentionally concealed adefect and concluded a license agreement,
the licensee would be entitled to request
payment for damages equivalent to thedamages that the licensee paid to a third
party and also entitled to request thereturn of the royalties.
China replied that, while it is possible to request the payment of damages
and the return of the royalties as long as
the causation can be proven, the amountof damages, etc. would be determinedbased on the agreement. China explained
that, if the agreement has a special provision to the effect that no defect liability is
assumed by the licensor, a request for
payment of damages cannot be made.
Japan replied that, if the incompleteness of intellectual property can be
regarded as “hidden defect,” it would bepossible to cancel the agreement anddemand payment of damages and that, if
the agreement has a special provision to
the effect that the licensor does notassume defect liability, such provision
would be considered to be effective andwould exempt the licensor from defectliability unless the licensor has intentionally hidden the defect as is the case inSouth Korea.

4. Panel discussion conducted
by ASEAN countries
This section is a brief report of thepanel discussion conducted by ASEAN
countries in the afternoon. Their answers
to each question are summarized below.

AIPPI Journal, March 2019

Q1. Registration of a license
Malaysia, Brunei, Laos, and Cambodia replied that no registration obligation
is imposed and that, while registration ispossible on a voluntary basis, no registration or a very small number of registrations have been actually made.
On the other hand, Thailand, Myanmar, and Indonesia replied that they
impose a registration obligation.
Thailand is unique in that all the
documents must be accompanied by Thai
translations and must undergo a substantive examination (in accordance withguidelines) conducted by a legal officer

121

in order to ensure the agreement’s
compliance with laws and regulations andalso in that a patent might be invalidated
without registration.
Myanmar replied that a technology
transfer agreement would not take effectwithout registration, while the failure to
register the agreement would not be punished and that a registration officer willconduct substantive examination (without
any guidelines, etc.) to check whether theagreement complies with the current lawsof Myanmar and also with the directives
issued by the Council of Myanmar
Science, Technology and Innovation.
Myanmar explained that the patent billcurrently under legislative proceedings
also imposes a registration obligation (alicense will not take effect unless registered) and requires substantive examination by the Intellectual Property Office.
Indonesia replied that all the documents must be accompanied by Indonesian translations and that a license for apatent would not take effect without
registration, while the failure to register
the license would not be punished.
Indonesia explained that, while substantive examination is conducted to ensure
the agreement’s compliance with laws
and regulations, the registration of alicense for a trade secret is not mandatory,
but can be made on a voluntary basis.

122

Q2. Request for payment of outstanding royalties
All the countries replied that, while acivil lawsuit is the most preferred option
as the first step (however, Laos,
Myanmar, and Brunei replied that it ispossible to settle the case through ADR),
the court that has the jurisdiction oversuch case is different from one country toanother.
Brunei, Cambodia, and Myanmar
replied that, since no special court had
been established, such case would be
handled by an ordinary court. Laos replied that such case would be handled bya special division called “commercial
division” of an ordinary court.
On the other hand, Indonesia repliedthat such case would be handled by aCommercial Court, which exists in fivedifferent locations throughout the country.
Malaysia replied that such case would be
handled by the IP High Court, which specializes in IP-related cases. Thailand replied that such case would be handled by
the Central Intellectual Property andInternational Trade Court (CIPIC), which
consists of the special judges appointed
from among ordinary judges and specializes in IP-related cases.
Q3. Violation of the license agreement
In none of the participating countries,
an act of exporting the goods to North
America constitutes patent infringement(however, Myanmar is currently considering preparing a patent bill). Each country replied that it is possible to seek an
injunction based on the agreement.
Cambodia replied that it is possible
to file a criminal lawsuit concerning a
violation of the agreement if the intentionof the violating party provides grounds

AIPPI Journal, March 2019

for commencement of criminal proceedings.
Thailand also replied that it is possible to file a civil lawsuit with the CIPIC,
while it is also possible to file a criminal
lawsuit. However, the plaintiff’s claims
might be considered to be unacceptable if
the provision of the agreement thatprohibits the export of the goods to North
America is unreasonably anti-competitive(a determination as to whether such provision is anti-competitive or not will bemade in accordance with guidelines. An
act of export cannot be restricted inprinciple, while export restrictions might
be possible if a licensee exists in thedestination country).
Malaysia replied that, while it ispossible to file a civil lawsuit with the IP
High Court, the prohibition of an act ofexport might be considered to be anticompetitive.
Q4. Request for an injunction based on
the license agreement concerning
the trade secret
All of the countries replied that it ispossible to request payment of royalties
based on the agreement. However, only
one country has a special law to protect
trade secrets.

AIPPI Journal, March 2019

It is Thailand that has a special law
to protect trade secrets. Thailand explained that any trade secret protected bymeans of secrecy protection is protectedunder the Trade Secrets Act and that said
Act allows a request for an injunction andalso provides criminal protection.
Malaysia replied that, while a decision as to whether to protect a trade secretor not is made based not on a special law
but on the common law, only civil protection is provided in principle.
On the other hand, Brunei repliedthat a trade secret cannot be protected unless the agreement contains a provision
requiring such protection.
Cambodia replied that it is currently
considering the establishment of a new
system to protect trade secrets.
Q5. No-contest obligation of the licensee
The participating countries were divided in their answers to the question as
to whether a dispute over patent validity
should be subject to court proceedings or
a procedure at the Patent Office.
Brunei replied that, while patentvalidity must be determined by a registration officer of the Patent Office in principle, it is possible to subsequently conduct
court proceedings.
Laos also replied that, while patentvalidity must be determined by the Patent

123

Office in principle, it is possible to subsequently conduct court proceedings.
In any other countries, court proceedings are conducted to determine patentvalidity in principle.
Thailand replied that a patent can beinvalidated in a lawsuit filed with the
CIPIC without any involvement by the
Patent Office. Thailand explained that,since they do not have a system of judicial research officials unlike Japan, adetermination will be made based on thetestimony of the expert witnesses
appointed by the parties to the lawsuit
and that, in some cases, a technical expert
support the two judges presiding over thecase.
Malaysia replied that a patent can beinvalidated in a lawsuit filed with the IP
High Court against the patentee as thedefendant and that the Patent Office will
not get involved at all.
Indonesia also replied that the patentcan be invalidated in a lawsuit filed with
the Commercial Court against thepatentee as the defendant.
Malaysia, which was one of thecountries that answered to the question
with regard to the validity of a provision
concerning a no-contest obligation,
replied that such provision can be considered to be valid, but could be disputed insome cases depending on how the validity is alleged or how the relevant provision is interpreted. On the other hand,
Thailand and Myanmar replied that theestablishment of a provision concerning a
no-contest obligation would not beapproved. In particular, Thailand repliedthat such provision would be considered
to be unreasonably anti-competitive andtherefore highly likely to be considered to
be unenforceable. Thailand explained thata request for license registration would be124

rejected due to the existence of suchprovision in the first place.
Q6. Obligation of the licensor to assume defect liability
This question cannot be considered
to have been sufficiently discussed. All
the participating countries replied that,
under such circumstances, if the licensee
files a civil lawsuit to claim payment ofdamages that is equivalent to the damages
paid by the licensee and to claim the return of the royalties, those claims would
be accepted as long as the incompletenessof the patent can be proven.
Thailand replied that, if the incompleteness of the patent was unpredictableby the patentee, the responsibilities of thepatentee would be limited.
Malaysia replied that, if a patent isfound to have a defect, the patent as awhole can be invalidated.

5. Conclusion
Following the symposium held in theprevious year, Shiroyama and Sagara
served as moderators in this symposium
once again, strongly feeling the difficultyin leading a panel discussion conducted
in English. The example case used in this
symposium was about a license agreement concerning a patent right and a
trade secret, which is a very difficult
topic for some countries to talk about.

AIPPI Journal, March 2019

Despite such difficulty, the judges of theparticipating countries actively participated in a discussion and learned fromeach other about the legal systems of
their home countries. It can be said that
this symposium provided a great opportunity for the participants to review thelegal systems of their home countries
with newly acquired insights.
Having learned from our experience
gained last year, we held a prior consultation and invited everyone so that thescheduled panel discussion among
the ASEAN countries would proceedsmoothly. This consultation was extremely beneficial for both moderatorsand the participants. One day before thesymposium, we held a non-official party.
This was also beneficial not only to promote the mutual understanding among
the participants, but also to cultivate solidarity and friendship. We believe thatsuch solidarity and friendship significantly contributed to the success of thepanel discussion on the day of symposium and also to the future developmentof the cooperation among Asian countries
in conducting IP-related activities.
We hope that this symposium, which
was conducted last year and this year,
will be recognized by the international
community as a platform to share IPrelated information about Asian countries
and to promote active opinion exchange
and face-to-face communication.