AIPPI Journal, September 2006

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A Retrospective and a Prospective Look at the First Year of theIntellectual Property High Court

Shinohara Katsumi*

1. Significance and Influence of
the Established System
The Intellectual Property High Court(“IP High Court”) was established as ofApril 1, 2005 as a “special branch” of theTokyo High Court, taking over its duties
from the IP Divisions of the Tokyo High
Court which had carried its responsibility
for more than half a century. In its firstyear, I believe that the IP High Court succeeded in laying an institutional foundation for managing ordinary cases as wellas the Grand Panel cases.
The establishment of the new institution was located at the confluence of two
streams. A stream was a social tendency
that places emphasis on intellectual property rights as symbolized by the phrase“an intellectual property-based nation.”
The government pursued various measures for the creation, protection and exploitation of intellectual properties as anational strategy so that the Japanese
economy could regain its strength andcompete in a global market. The otherstream was a series of judicial reforms for* Chief Judge of the Intellectual Property High Court

nearly six years which aimed at achievinga more user-friendly and efficient judicial
service attuned to this new era. The two
streams merged into the legislation of the
Law for Establishing the IP High Court(hereinafter “the IP High Court Law”),
that is a brand new law separate from theexisting Court Organization Law.
The establishment of the IP High
Court completed only two years after the
full-scale discussions started following
the announcement of “Promotional Plans
for Intellectual Properties of 2003” inJuly 2003. Decades ago, it would havebeen difficult to imagine that a new highcourt was created in such a short period.
It was a historical and remarkable event
as Prime Minister Junichiro Koizumi described it in his policy speech of January
2004 as “an epoch-making court reform.”
The court system in Japan, from theSupreme Court to summary courts, is systematically organized in accordance with
the Court Organization Law. While someargued the IP High Court should be created in accordance with the Court Organization Law, the IP High Court was estab-196

lished by the special law. This legislative
history speaks for itself how important
the role of the IP High Court is in thefield of intellectual property law. We
should recognize that so much are implied in no more than five short articles of
the IP High Court Law.
The establishment of the IP High
Court attracted public interest. Editorialsof national newspapers played up thisnews, describing “a court having a rather
unfamiliar name is created in Japan,
whose speedy and appropriate service is
expected to contribute to the nation”(Yomiuri Shimbun of April 4, 2005), “noother courts have ever started with such ahigh reputation and expectation” (Nikkei
Shimnbun of April 6, 2005).
In addition, three symposia were heldby the Japan Federation of Bar Associations, the Nippon Keidanren and theJapan Patent Attorneys Association tocelebrate the establishment of the IP High
Court. It is not too much to say that the IP
High Court was taken up by almost all of
the media including newspapers, magazines, TV, radio and Internet inside andoutside Japan. I gave interviews to morethan ten media companies, and publicizedsome essays on the background, outline
and challenges of the IP High Court including an article entitled “Outline of theIntellectual Property High Court ofJapan,” (AIPPI Journal, Vol. 30 No.3,
131 (May 2005)). I also had an opportunity to participate in a round-table discussion with IP professors, lawyers, corporate employees entitled “establishment of
the IP High Court and the direction of theintellectual property lawsuits” (1293
Jurist 11).

AIPPI Journal, September 2006

2. Path to the Establishment of
the IP High Court
The Japanese economy, which had
run at the top of the world as “a major
manufacturing nation” in the 1980s, fell
into stagnation triggered by the collapseof the bubble economy. Under the lingering recession, intellectual property rights
began receiving public attention as aneffective tool to revive Japanese economy.
Accordingly, the government’s industrial
policy was transformed from “manufacturing goods” to “creating intelligence”
or “to the era of intelligence.” The national consensus was formed among people, that is creation, protection and exploitation of intellectual property rights
on a nationwide scale was indispensablefor our nation. The government pushedforward the policy entitled “an intellectual property-based nation.” The conceptbehind the policy was that added values
produced by intelligence could contributeto economic growth and become a sourceof national wealth.
Under these circumstances, intellectual property disputes, which used to play
only a supporting role within the judiciary, suddenly stepped into the spotlight. It
seemed to me that the judicial branchwell sensed growing importance of intellectual property rights inside and outside
Japan. The Judicial Reform Council also
recommended in its final recommendations issued in June 2001 to reinforce
intellectual property divisions of both theTokyo and Osaka District Courts. The
Council also urged the government totake necessary measures to strengthen thedispute resolution mechanism over intellectual property rights and to expedite the
IP related proceedings, describing it as
one of the most important policy matters

AIPPI Journal, September 2006

to be grappled with by the entire government.
In July 2002, creation of an organization that would substantially function as“a patent court” was proposed in theStrategic Outline of Intellectual Property.
It was not until July 2003, however, thatthe idea of the IP High Court came up asa policy idea within the Intellectual Property Policy Headquarters which proposed
to establish the IP specialized high courtin the “Promotional Plans for Intellectual
Properties of 2003.” The purpose of the
proposal was to reinforce dispute resolution function as well as to strengthen theprotection of intellectual property rights.
It also aimed at proclaiming a national
policy inside and outside Japan that theJapanese Government attached high priority to the protection of intellectual
property rights.
In April 2004, the Code of Civil
Procedure was amended so as to provide
the Tokyo High Court with nation-widejurisdiction over the enforcement of any
patent rights, utility model rights, rightsof layout-designs of integrated circuits
and rights of the author of a program
work (hereinafter “patent and other related cases”) as the second instance, andthe Tokyo and Osaka District Court withjurisdiction over patent and other relatedcases arising in Eastern and Western partof Japan respectively as the first instance.
With the amendment, building of new
court system for professional resolutionof intellectual property cases entered into
the final stage, leaving the establishmentof the IP High Court as a remaining task.
The issue of the organizational position of the IP High Court in the whole
structure of the Japanese court systemevoked nationwide discussion. This subject was principally discussed in the

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Working Group on Intellectual Policy
Property Lawsuits of the Office for Promotion of Judicial System Reform andthe Task Force on Strengthening of theFoundation of Right Protection of theIntellectual Property Policy Headquarters.
Business community and other sectors
were also involved in this discussion.
One of the ideas discussed was to establish the IP High Court as a totally
independent 9th high court in view of its
so-called “announcement effects.” Thisidea, however, was not adopted for thefollowing reasons; First, it might invite
incidental disputes over subject matter
jurisdiction. Second, relevant cases thatshould be resolved in the same court may
go to different appeal courts. Third, it
might hamper the interest of local residents especially with respect to cases related to the Copyright Law and Unfair
Competition Prevention Law since thosecases tend to have community-oriented
and local nature. Fifth, creation of a specialized court seems to be heterogeneousin the Japanese judicial system whichhave traditionally addressed new challenges by reinforcing existing courts. For
those concerns, it was finally agreed that
the IP High Court should be establishedin the Tokyo High Court as a “special
branch” with highly independent authority. The IP High Court Law was enacted
on June 11, 2004, promulgated on June
18 of the same year and came into effecton April 1, 2005.
The transition from the IP divisionsof the Tokyo High Court to the IP High
Court was smooth. This is principally because we had already increased the number of divisions and judges and improved
case management methods in order todeal with a rapid increase of intellectual
property-related cases. On April 1, 2005,

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the name of the “Intellectual Property
High Court” was carved at the front gateof the Tokyo Court Complex, and an inaugural press interview of the chief judge
and inaugural ceremony were held. At thesame time, relevant regulations wereamended, and new rules of the IP High
Court were adopted by its first judicial
conference. Infrastructure of the Courtsuch as chief judge’s chamber, secretariat
office and website was also reinforced.
All the cases then pending before IP
Divisions of the Tokyo High Court weretaken over as a whole by the IP High
Court. More precisely, 464 pending cases
consisting of 400 suits against appeal/trial
decisions made by the Japan Patent
Office (hereinafter “lawsuits against
Appeal/Trial Board decisions” 1 ) and 64
appeal cases were comprehensively transferred to the IP High Court and sequential
case number starting from No. 10,000
was assigned to each case.
It was on April 1, 2005 that the IP
High Court went into action both in nameand reality. Looking back at the path tothe establishment of the IP High Court, it
seems to me that we were at a major turning point in 2002, when Prime Minister
Koizumi made a policy speech and theStrategic Council on Intellectual Property
started. Since then, the name of the IP
High Court had gradually acquired publicawareness even under ever changing circumstances surrounding the IP High
Court. Although there was a cynical viewthat nothing would be changed by the
new institution, the IP High Court was
generally welcomed by people with
mixed feelings of excitement like leaving
ski tracks in fresh snow, enthusiasm, expectation with a faint sense of anxiety.

AIPPI Journal, September 2006

3. Framework of the IP High
Court
(1) Organization
The IP High Court is a “special
branch” of the Tokyo High Court. The IP
High Court is a court specializing in intellectual property cases established by a
new legislation rather than the conventional Court Organization Law. The
Court has the chief judge, its own judicial
conference and administrative office, andhas been given independent authority
over its administrative matters. Thosematters are decided by its own judicial
conference which is separate body fromthat of the Tokyo High Court.
These distinctive features of the IP
High Court are easily understood whencompared to ordinary branches of highcourts. Those branches, six in total acrossthe nation, are placed by the Supreme
Court within the jurisdiction of the corresponding high court to undertake a part of
judicial administration of the high court.
Such ordinary branch has a limited territorial jurisdiction and is not given any
authority over its own administrative
matters. The branch simply disposes of
judicial administrative matters entrusted
by the judicial conference of that highcourt within the scope of such entrustment.
Such independent nature of the IP
High Court, however, does not mean that
the IP High Court is outside of conventional court hierarchy. The Supreme
Court reviews the judgments of the IP
High Court and supervises its judicial administration. The judges of the IP High
Court, who belong to the Tokyo High
Court as well, are selected by theSupreme Court among judges who areappointed by the Cabinet based on a listof persons nominated by the Supreme

AIPPI Journal, September 2006

Court. It is needless to say that the IP
High Court does not fall within the definition of “extraordinary tribunal” as set
forth in Article 76(2) of the Constitutionof Japan.
Comparison of the IP High Court
with foreign judicial systems is useful tounderstand the distinctive features of the
IP High Court. The U.S. Court ofAppeals for the Federal Circuit (hereinafter “the CAFC”) founded in 1982 hasbeen frequently referred to as a model ofIP specialized court. The CAFC differsfrom the IP High Court in that the CAFC
does not have jurisdiction over copyrightcases and instead does have jurisdiction
over other categories of cases which are
not related to intellectual property rights.
About 30% of all cases handled by the
CAFC is intellectual property cases. The
CAFC has law clerks and technical assistants as supporting staff.
The Federal Patent Court ofGermany founded in 1961 and the Patent
Court of Korea founded in 1998 handle
appeals from the patent offices, which areequivalent to lawsuits against Appeal/
Trial Board decisions in Japan. The former court has so-called “technical judges
system,” in which persons with technicalbackground constitute a panel as qualified judges. The latter court has technicalofficials as supporting staff to deal withtechnical aspects involved in intellectual
property cases. Neither court has jurisdiction over infringement cases, which are
handled by ordinary civil courts with theassistance of expert opinions if necessary.
National court system is built on its
own legal system, tradition, and culture.
The IP High Court is deeply rooted in theJapanese legal system and tradition which
gives unique features to the Court compared to foreign equivalents.

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Before the establishment of the IP
High Court, the Tokyo High Court had, atthe outset, three, and subsequently, four
IP Divisions. Each IP Division had three
to five judges specializing in intellectual
property cases and the Divisions as awhole shared supporting staff called“judicial research officials” (hereinafter“research officials”). The Divisions also
jointly held a variety of workshops, training sessions and events. It may be safe to
say that the Divisions had already functioned as a single IP court and there was a“thin dotted line” metaphorically between
civil ordinary divisions and IP Divisions
then. The establishment of the IP High
Court changed the line into a “bold andsolid line.” The IP Divisions located on
the 17th floor of the Tokyo Court Complex turned into a new court specializing
in intellectual property cases with nationwide jurisdiction except for certain typesof cases. The IP High Court should beaware of the responsibility that the IP
High Court Law imposed on the judicial
branch, and make best efforts to run the
new system with energy and harmony.
The Tokyo High Court now has
twenty ordinary civil divisions, twelve
criminal divisions and four divisions of
the IP High Court (36 divisions in total).
Traditionally, each division has been independent of each other, and it has been
said that divisions of the Tokyo High
Court are divided by walls metaphorically. The IP High Court will not be able
to meet its responsibility with dividing
walls between its Divisions. Judges of the
Court need to be familiar with cases assigned to other judges especially of other
Divisions to some extent, because suchinformation is necessary to determine
which case should be heard by the Grand
Panel. Therefore, associate judges hold200

meetings on a regular basis to exchange
information with each other, and participate in ad hoc meetings to discuss issues
involved in Grand Panel cases. Due tosuch practices, a sense of unity has been
formed among judges and transparency
between divisions has been increasing.
These are note worthy by-productbrought by the establishment of the IP
High Court.
(2) Human Resources
The IP High Court has 18 judges in 4
divisions whose size is equivalent to medium-sized high court. The IP High Court
is expected to resolve intellectual property disputes in an expeditious and professional manner by making reliable andpersuasive decisions supported by scientific knowledge. Judges of the IP High
Court are supported by research officials
who are full-time officials and expert
commissioners who are part-time officials on technical aspects involved inpatent and utility model cases.
Generally speaking, Japanese judges
are trained to be “generalists” who candeal with wide range of litigations.
Judges usually start handling intellectual
property cases simply because he or she
is assigned to the intellectual property
division as a result of regular rotation.
Apart from judges who have had experiences in intellectual property cases before,
judges usually have little experience andexpertise in the field of intellectual property law. Moreover, ordinary judges do
not major in scientific or technical subject
in universities. Thus, it is not easy forordinary judges to acquire the same levelof scientific knowledge as persons skilledin the art with respect to highly advanced,
specialized and the cutting-edge technicalfields.

AIPPI Journal, September 2006

Intellectual property cases are “legal”
disputes, however, and the Patent Law
and other relevant laws share basic principles with the Civil Code and other general laws. Like other civil cases, factfinding, legal interpretation and logicalreasoning is the core of judicial duty inintellectual property cases. Judges candevelopment their expertise by way of
diligent work on individual case before
them on a daily basis. IP High Court
judge make every effort to deepen theirunderstanding of technical matters involved in highly specialized cases and to
identify technical issues decisive for legal
interpretation with appropriate support
and through arguments/evidence presented by parties. As the result of such
efforts, judges can reach the same level aspersons skilled in the art by the time of
judgment.
IP High Court judges take advantage
of opportunities to develop their expertise.
They attend various seminars, workshops,
symposium and training sessions, andvisit laboratories and factories of technology-oriented private sectors. Judges areoften invited to international conferences
and foreign institutions, which are usefulfor them to learn recent developments offoreign intellectual property laws and to
see things from global perspective. In addition, some judges had an opportunity toparticipate in the course of the Management of Science Technology, Tokyo
University of Science (MOT), which iscalled as “business school for engineers.”
They discussed theory, practice and strategy to utilize technology for managementof private sectors with other graduate students. Those students include corporate
employees from technology, business andlegal departments who have more thanten years experience in the field of intel-

AIPPI Journal, September 2006lectual property. I have heard that it isvery helpful for our judges to learn how
research and development takes place andnew technologies are actually created inbusiness sectors.
The IP High Court has 11 research
officials. 10 of them have experience inthe fields of machinery, chemistry orelectricity as an examiner or appeal examiner of the Japan Patent Office (hereinafter “JPO”) and the other one has experience as a patent attorney. They will returnto the JPO or his patent firm after spending a certain period at the IP High Court.
A research official is assigned to any lawsuit against Appeal/Trial Board decision
as far as it is patent and utility model case,
except for cases in which only legal issues are disputed. A research official is
not attached to a particular judge but
work together with a judge who is incharge of a lawsuit against Appeal/Trialdecision to which the research official isassigned. With respect to appeals fromthe district courts, it is determined on acase-by-case basis whether a research official is to be assigned to the case.
Because all research officials sit in asingle room, they can easily exchange
information with each other and can deal
with technical matters outside his or her
field of expertise. Research officials may
ask questions to parties and deepen theirunderstandings in “hearings preparatory
for oral arguments” which are hearings
held in advance of oral arguments(“Benron junbi tetsuzuki” in Japanese,
hereinafter “preparatory hearings”) whenparties’ allegations need to be clarified.
Once preparatory hearings complete, research officials prepare their opinions forjudges in a written form or orally. The
form of opinion used to be rather uniform,
but its style and content become more

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flexible as case management method has
been improved.
One of frequently asked questions byforeign visitors who are not familiar withthe research officials system in Japan is
how a court can ensure fairness if judges
are supported by staff who comes froman office which appear as a party. It is our
tradition, however, that research officials
faithfully accomplish their duty as a court
official by strictly reviewing the Board
decisions and submitting a fair and precise report to judges. This tradition has
been formed by research officials for generations continued from the era of IP
Divisions of the Tokyo High Court,
which we are very proud of.
The public confidence in the systemearned by the long-term achievement led
to the amendments of the Code of Civil
Procedure. Article 92-8 added by the
Amendment of 2004 stipulates the authority of research officials in intellectual
property cases. The authorized actions
listed in the article can be categorized
into three; those which have been considered as legal and have already been carried out in practice (asking questions toparties in preparatory hearings); those
whose legality has been contentious before the amendment (participating in settlement conferences); and those whichhave not been allowed until the amendment (asking questions to witnesses intrial).
The degree to which research officials of the IP High Court are involved ina case seems to be substantially different
from those of the district courts. In caseof the district courts, research officials do
not attend any proceeding other than thefirst oral argument. Research officials of
the IP High Court, on the other hand, participate in preparatory hearings of patent202

and utility model cases as well. It may besafe to say that the amendment of theCode of Civil Procedure recognized theimportant role of research officials andclosely knit them into dispute resolution
mechanism of intellectual property cases.
Expert commissioners system will be
discussed in detail below.
(3) Jurisdiction
The amendment of the Code of Civil
Procedure in 2003 (enforced on April 1,
2004) provides the Tokyo High Court
with a nationwide exclusive jurisdiction
over appeal cases from the district courts
with respect to patent and other relatedcases (technical type of cases). Since allcases under the jurisdiction of the Tokyo
High Court can be heard by the IP High
Court as far as their nature and content
are related to intellectual properties, the
IP High Court now has a nation-wide exclusive jurisdiction over appeals from the
district courts regarding patent and otherrelated cases as well as any lawsuit
against Appeal/Trial decision.
As a result of the amendment, the IP
High Court now exercises jurisdiction
over appeals even from a district court
located outside the territorial jurisdictionof the Tokyo High Court in accordancewith Article 6(3) of the Code of Civil
Procedure, as far as they are related topatent and other related rights. The
amended article, however, is not applied
to cases pending before a district court asof March 31, 2004. For instance, appealsof patent cases pending before the Osaka
District Court as of March 31, 2004, remain under the jurisdiction of the Osaka
High Court, while appeals of patent cases
filed to the Osaka District Court after
April 1, 2004 are subject to exclusive
jurisdiction of the IP High Court.

AIPPI Journal, September 2006

As mentioned above, the amended
article (Article 6(3)) is not applied to
non-technical cases such as design rights,
trademark rights, copyrights and unfair
competition prevention law. Appeals of
those cases from the Osaka District Court,
for instance, are heard by the Osaka High
Court in accordance with Article 6-2 of
the Code of Civil Procedure. Therefore,
disputes may arise over jurisdiction of theTokyo High Court in which the main issue will be distinction of technical/nontechnical nature, i.e., whether the case is“an appeal from a final judgment of acase which is with respect to patent rights,
utility model rights, rights of layout-designs of integrated circuits and rights of
the author of a program work,” as set
forth in Article 6(3) of the Code of Civil
Procedure.
For example, suppose a plaintiff
brings an action to the Osaka District
Court seeking for compensation of damages in accordance with Article 4 of the
Unfair Competition Prevention Law inwhich the plaintiff alleges that the defendant distributed warning letters whichcontained groundless facts that the plaintiff infringed his or her patent. If you pay
your attention to the name attached to thecourt record such as “Claim for compensation against unfair competition,” youwould determine that this case is “an action with respect to infringement of commercial interest by way of unfair competition” set forth in Article 6-2 of theCode of Civil Procedure. That means thatappeal of this non-technical case is subject to jurisdiction of the Osaka High
Court.
On the contrary, if you pay attention
to the facts alleged by the plaintiff, you
can point out that genuine issue of thiscase is whether the facts stated in the

AIPPI Journal, September 2006

warning letters are false or not, i.e.
whether the patent is infringed by the defendant or not. Therefore, you can argue
that this case should be tried by judges
who have skills or expertise to resolve
disputes of highly advanced technical nature. If this argument is supported, appealof this case would be subject to jurisdiction of the Tokyo High Court, actually
the IP High Court, in accordance with orin view of legislative purpose of Article
6(3) of the Code of Civil Procedure andArticle 2 of the IP High Court Law.
Another difficult question over jurisdiction of intellectual property disputes
may arise in the following situation;(i) The Osaka District Court finds infringement of a patent right and issues an order of provisioal disposition (equivalent to prelim-inary injunction order, “kari shobun meirei”
in Japanese) which prohibits defendant from manufacturing and selling
goods. Then, motion for reconsideration (“hozen igi” in Japanese) is denied by the same court, and the caseis appealed to a high court (“hozen
kokoku” in Japanese).
(ii) The District Court denies the motion
for preliminary injunction and thecase is appealed to a high court(“sokuji kokoku” in Japanese).
(iii) Motion for production of document
order is denied in patent infringement litigation, and the decision isappealed to a high court.
The issue of any situation above iswhether the competent appeal court is the
IP High Court or the Osaka High Court,
which is not clearly stipulated in any law.
Since the jurisdiction of the Tokyo High
Court given by Article 6(3) of the Codeof Civil Procedure is exclusive one,erroneous determination could be serious.

203

At the same time, we should avoid causing confusion for the interest of parties
who are our clients. In any event, above
mentioned issues are matters to be decided by a court, therefore rules will beformed sooner or later.
(4) Access to judicial information
Today, the use of the Internet isspreading and the globalization of corporate activities is advancing. Science andtechnology is progressing and diffusing
on a transnational level. It is becoming
more and more important in the area ofintellectual property law not only to create reliable rules but also to promptly
make accurate case information available
within and beyond the jurisdiction. In thisrespect, courts are required to fulfill the
duty of accountability. To achieve thesegoals, judges of the IP High Court participate in various national and international
conferences and the Court also provides
Japanese and foreign visitors with information on the outline of the IP High
Court and the current situations surrounding intellectual property litigation.
Upon the establishment of the IP
High Court, we also opened our own
website (http://www.ip.courts.jp) independent from the Supreme Court website
and have been upgrading it. Currently,
information on the court’s outline andstatistical data are available in Japanese
as well as English, German, French,
Chinese, and Korean. Major events that
occurred recently at the Court, including
the status of Grand Panel cases, holdingof workshops, and visits from foreigncountries, are also presented as Topics inJapanese and English.
We also provide the whole text andsummary of the judgments handed downby the Grand Panel and a list of other dis-204

posed cases, with main issues and resultof appeals to the Supreme Court. Other
helpful information on proceedings at the
IP High Court, e.g. the Guidelines for
Parties of Suits against Appeal/Trial
Decisions Made by JPO, relevant document formats, introduction of thesis, andadmission ticket are also available on thewebsite. We have updated information
once a month so far, and will continue
our efforts to upgrade the website as appropriate to make it more user-friendly. I
would deeply appreciate for your interestin our website.
(5) Hub of intellectual property judiciary
The IP High Court is expected to bea hub of the intellectual property judiciary and to lead the nation in the field ofintellectual property law. The IP High
Court is a new institution specializing in
intellectual property cases with nationwide jurisdiction. The Court is also thefinal fact-finding instance with respect toappeals of technical cases from the district courts and lawsuits against Appeal/
Trial Board decisions. Its human resources have been strengthened as well.
The IP High Court has been involvedin various activities. The Court invites
judges of both the Tokyo and Osaka District Courts to judges’ conferences to discuss procedural and substantial issues related to intellectual property lawsuits.
The Court also holds regular workshopswith the attendance of research officials
in which distinguished scholars or researchers often make a speech, andjudges share their experience of participating international conferences, training
sessions and so on. In addition, the Court
dispatches judges to various training sessions held by the JPO or the Japan Institute of Invention and Innovation. During

AIPPI Journal, September 2006

the first year, the Court received 528
Japanese and foreign visitors, and among
them, foreign visitors amount to 271 from25 countries.

4. Statistics(1) Trend of cases
The number of commenced lawsuits
against Appeal/Trial Board decisions had
been steadily increasing as a whole until
it reached a peak and exceeded 600 in
2002. Thereafter the number has gradually decreased, but there were still morethan 500 commenced cases in 2005.
Along with the considerable increase in
the number of the disposed cases, thenumber of pending cases is down to thelevel of 400 now, which is fewer thanthat of ten years ago. The rate of patentand utility model cases has been increasing for several years and accounts for approximately 80% of pending cases.
The number of appeals in connection
with infringement had rapidly increased
since 1997 until reaching a peak in 2000.
The number had remained at the samelevel of 100 for a while, but fell below
100 in 2005. As the number of the disposed cases has increased, the number ofpending cases is now at the level of 50,
which is nearly the same as that of ten
years ago. Among them, cases relating topatent rights exceeded 30%. When jurisdiction of the Tokyo High Court was expanded with respect to patent and utility
model cases and Article 104-3 of the
Patent Law was created, many predictedthat the number of appeal cases in connection with infringement would increase
both in quality and quantity. However,apart from quality, such prediction seems
to miss the mark as far as the number ofcommenced case is concerned.

AIPPI Journal, September 2006

Several reasons are conceivablefor the decrease of appeal cases. After the
judgment of Blue LED case by the Tokyo
District Court in January 2004, employee
invention cases increased. The number of
those cases, however, fell off after January 2005 when Blue LED case was settled
at the Tokyo High Court. In addition,companies have been getting more cautious about bringing patent disputes to thecourts partly because they are concernedthat their patent rights might be foundinvalid by the courts. Another possible
reason for the decrease of appeal cases
would be the rate of settlement at theTokyo District Court, which is nearly
60% of the intellectual property cases.
Having said that, the number ofcommenced case in total is still at a highlevel of 300, a little fewer than that in2004 when the largest number of cases
were commenced. It may be necessary toclosely look at the future developments.
(2) Average time intervals from commencement to disposition
In 1997, the average time intervals
from commencement to disposition were
18.6 months as to lawsuits against
Appeal/Trial Board decisions and 18.5
months as to appeal cases in connection
with infringement. But in 2004, the average time intervals of lawsuits against
Appeal/Trial Board decisions were reduced to 12.6 months and those of appeal
cases in connection with infringement
were reduced to as short as 9.0 months.
Compared to the average time intervals
from commencement to disposition in
1995, which were 19.8 months as to lawsuits against Appeal/Trial Board decisions and 23.7 months as to infringementcases, the average time intervals fromcommencement to disposition were short-

205

ened nearly by half in ten years.
There is a limit, however, on our efforts to minimize average time intervals,
since parties need a certain period to prepare briefs and gather evidence (especially, foreign parties need time for translation). Moreover it is obvious that speed
is not the sole purpose of the judicial service. We should not lose sight of otherpurposes; e.g., to take enough time forimportant cases, to provide parties withenough opportunities to exhaust theirarguments, and to make fair and persuasive judgments. Nevertheless, there will
still be a room for improvement in termsof intervals from commencement to disposition, for instance, as to the Grand
Panel cases.
(3) Reverse rate
According to the JPO, the reverse
rate of lawsuits against Appeal/Trial
Board decisions as to patent and utility
model has been reducing since 2000. In
particular, the reverse rate as to the
Appeal/Trial Board decisions which sustained rejection of patent applications fell
below 10% in 2004. On the other hand,
the reverse rate as to the Board decisions
which affirmed validity of patent rights
was more than 50%.
Reviewing the result, the JPO analyzed that appeal examiners were a little
too generous to examiners’ determinationof granting patents, and recommended
examiners to consider whether appliedinventions were really worth exclusive
rights in light of common technicalknowledge of a person skilled in the art
when they decide patentability of the inventions.
Critics of the recent trends of the
JPO insist that the JPO has recently beenreluctant to find inventive step and this206

trend is clearly indicated in the statistics
that the rate of success in challenging
examiner’s decision of rejecting patentapplication has sharply dropped in thepast decade. Also they complain that recent decisions by the IP High Court on
lawsuits against Appeal/Trial Board decisions are tough for patentees and not inline with pro-patent policy.
Decisions of the IP High Court are
no more than a gathering of case-by-casedeterminations. Therefore, the criticizedtrend, if any, is far from the intended result by judges. I personally believe thatjudges should be humble and openminded about voices of users or outsidecommunities. It is also true that publicattention tends to center on so-called “reversed invalidity case” where the IP High
Court or the JPO Boards invalidate a patent through invalidation hearing after a
judgment of a district court awards hugeamount of damages to the patentee in theinfringement litigation. However, determination on validity of a patent needs
serious consideration to what is real valueof an invention and whether the invention
is worth monopoly power. We should
continue our efforts to make careful andfair decisions on a case-by-case basis.

5. Improved Case Management(1) Intensified and scheduled proceeding
Efforts to improve management of
lawsuits against Appeal/Trial decisions
related to patent and utility model had
already started during the era of the IP
Divisions of the Tokyo High Court. Dueto the highly technical nature of thoselawsuits, it is not efficient for all of thejudges comprising a panel to make full
preparation, such as reading throughspecifications and other scientific publi-

AIPPI Journal, September 2006

cations submitted by parties as evidence,from the early stage of appeal procedure.
Therefore, one of the judges comprisingof a panel is usually designated to holdpreparatory hearings. Parties are encouraged to exhaust their arguments and submit all evidence through the preparatory
hearings, and the designated judge clarifies main points of their arguments andnarrows down issues. After the preparatory hearings are completed, the panel ofthree judges hears the case in oral argument based on the result of the preparatory hearings. In contrast, the lawsuits
against Appeal/Trial Board decisions related to trademark and design are heard,like other ordinary appeal cases, by apanel of three judges through oral argument proceedings from the beginning.
In 2002, the number of lawsuits
against Appeal/Trial Board decisions
reached to the level of more than twice as
many as that of a few years before. In
order to address this situation, a project
team of judges was established. Afterthey studied case management method
and style of judgment, they proposed
more intensified case management intheir published report. Those proposals
were adopted into practice by each division in 2003. The gist of the proposals is
as such; first, the court should encourage
parties to submit briefs and evidence by
the date of a preparatory hearing agreed
upon; second, judges and parties shouldmake intensive discussion in the hearing
on factual and legal issues; third, parties
should be given enough time to make explanations on technological or scientificaspects involved in the case before thedesignated judge in the hearing.
New provisions were established in2003 with respect to scheduled case management by the amendment of the CodeAIPPI Journal, September 2006of Civil Procedure (Article 147-2 and 3).
Generally speaking, lawsuits against
Appeal/Trial Board decisions are relatively suitable for scheduled casemanagement. In those lawsuits, parties
identify errors of Board decisions alongwith the reasoning of the written decision
other than procedural errors by the Board,and the IP High Court reviews and decides all of the alleged errors one by one.
In addition, scope of review by the IP
High Court is limited to grounds discussed and decided in hearings before theBoard and parties have no chance to allege new grounds for invalidation or submit evidence to prove them as a rule.
Therefore, the lawsuits against Appeal/
Trial Board decisions are one of the mostsuitable lawsuits for scheduled casemanagement.
(2) Further improvement
The establishment of the IP High
Court triggered further efforts by judges
across divisions to improve our case management, which ended up with the Guidelines for Parties of Lawsuits against
Appeal/Trial Board Decisions.
The Guidelines includes following
subjects; (i) submission of briefs in advance of preparatory hearings which
identify errors of Board decisions; (ii)setting deadline for submission of briefs
for rebuttal; (iii) submission of summaryof briefs; (iv) clarification of issues in
preparatory hearings; (v) estimated datesof delivering judgment; (vi) utilization of
intensified case management.
The Guidelines also describe twodifferent methods of preparatory hearing(A-model and B-model) currently taken
by divisions of the IP High Court while
details of actual practice vary among
judges. Both methods aim at completing207

discussions on basic technical matters,
factual issues and legal issues in one or
two hearings as a rule.
A-model proceedings taken by theFirst, Second and Third Divisions are assuch; the first preparatory hearing is held
after a plaintiffs submits evidence and thefirst brief, in which the plaintiff discusses
its allegations in detail; in the first hearing, a judge discusses with parties about
the first brief of the plaintiff and sets
deadline for defendant’s evidence and thefirst brief; in the second preparatory hearing, the judge and parties intensively discuss issues of the case.
B-model proceedings taken by theForth Division are as such; the court sets
the deadlines for the first brief by a plaintiff, the first brief by a defendant, the second brief by the plaintiff, and the preparatory hearing date via telephone or fax;
then the court holds the first preparatory
hearing in which a judge and parties intensively discuss issues of the case.
Intermittent proceeding is a thing of
the past. We would continue pursuingscheduled and intensified case management from now on with cooperation andunderstanding from the parties.
(3) Double tracks of invalidation hearing
and infringement proceedings
There are quite a few cases where invalidation hearing and infringement litigation
with respect to the same patent are pursued at the same time in different courts
or Appeal/Trial Boards of the JPO. In
those cases, a defendant of infringement
litigation often alleges as a defense thatthe patent is invalid based on Kilby decision of the Supreme Court 2 or Article104-3 of the Patent Law as well aslaunching invalidation hearing before an
Appeal/Trial Board or filing a lawsuit

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against Appeal/Trial Board decision to
the IP High Court. As a result, there aresituations where a lawsuit against an
Appeal/Trial Board decision is pending
before the IP High Court while infringement litigation or its appeal with respect
to the same patent is pending before a
district court or the IP High.
When a lawsuit against the Board decision and an appeal from a district court
involving the same patent are concurrently pending before the IP High Court,
it is a general practice of the Court thatthe same panel hears both cases as muchas possible depending on the parties’
willingness and the progress of the cases.
Generally speaking, it would relatively
easy for the panel to handle both cases if
the cases take the same direction, in otherwords, (i) both the Board decision whichinvalidates the patent and the judgmentby the district court which rules in favorof invalidation defense would probably
be affirmed, or (ii) both the Board decision which finds the patent valid and thejudgment by the district court which denies invalidation defense would probably
be affirmed. However, if the two cases
are not heading to the same direction, thepanel would face difficult decision andsometimes have to stay one of them.
The district courts face a situation
where an infringement litigation is pending before the district court while a lawsuit against Appeal/Trial Board decision
regarding the same patent is concurrently
pending before the IP High Court. Some
district judges may think that they should
proceed the case without taking into consideration the invalidation hearings because the infringement track is independent from the invalidation track and current system allows different decisions bydifferent courts with respect to validity of

AIPPI Journal, September 2006

the same patent. On the other hand, otherjudges may think that they should take
into consideration the progress of the invalidation hearings and decision by the IP
High Court.
The actual practice varies among district courts. As far as I understand, judgesof the Osaka District Court tend to stay
infringement lawsuit awaiting the decision of the IP High Court on validity of apatent concerned if the district court has
different views from the Appeal/Trial
Board regarding validity of the patent. On
the contrary, judges of the Tokyo District
Court rarely stay infringement proceedings. When they consider that they should
wait for the decision of the IP High Court,
they set the next date of oral argument or
preparatory hearing at longer intervals
with consent of parties.
Anyway, courts should pay carefulattention to both invalidation hearings
and infringement lawsuits. If courts andparties are able to share information in atimely and appropriately manner, thatwould be helpful for total and efficient
resolution of disputes over the same
patent.
(4) Scope of review
Scope of review in lawsuits against
Appeal/Trial Board decisions has been
discussed for a long time, but is still upto-date theme for parties as well as courts
which handle the lawsuits. The Supreme
Court placed limitation on the scope ofreview in Stocking Machine case 3 byholding that parties are prohibited from
submitting new publicly known references other than those already submitted
and discussed before the Appeal/Trial
Board. This decision has ruled our court
practice for nearly thirty years, and situations have not basically changed since

AIPPI Journal, September 2006

then. This decision basically said that the
courts and the JPO bear different functions so that the JPO as the specialized
agency should decide technical matters
first, and role of the judiciary should be
limited to review of the JPO decisions.
The philosophy behind this decision isthat adversary system adopted for court
procedures is not appropriate way to decide validity of patent which gives an inventor exclusive right that can be claimed
to anyone.
There is a powerful criticism of theSupreme Court decision. Critics urge theSupreme Court to reconsider the decisionreferring to recent circumstantial changes
including concentration of jurisdiction ofpatent and other related cases to the IP
High Court, measures to reinforce judicial resources (e.g., reinforcement of research officials system, introduction ofexpert commissioners system), developments of legislation and Supreme Court
decisions (e.g., the decision on February
24, 1998 regarding doctrine of equivalents, the Kilby decision on April 11,2000 which authorized courts to rule on
the validity of patents in infringement
litigations under a certain conditions, establishment of Article 104-3 of the Patent
Law which remove those conditions imposed by Kilby decision). It seems to me
that judges share views that scope of review should not be rigidly restrained but
should be flexibly decided on a case-bycase basis for total and single-round resolution.
I personally think that the scope ofreview is one of the most important issues the IP High Court has to resolve in
the near future. In other words, the Court
will be up against a wall of the 1976
Supreme Court decision. The IP High
Court might find a way to resolve this209

issue, e.g., by way of relaxing the restraints imposed by the 1976 decision by
narrowly interpreting its holdings asmuch as possible in a appropriate case, orby way of finding different route to resolve the issue. This is a serious issue because scope of review may bring influence on the scope of binding effect ofprior judgment in the same case (law of
the case) and res judicata of lawsuits
against Appeal/Trial Board decisions. It
also raise a question of permissibility of
new references, i.e., whether the IP High
Court may permit submission of new references in a lawsuit against Appeal/Trial
Board decision to affirm the Board decision that approves rejection of a patentapplication, even though the applicant is
not given a chance to amend claims andspecifications in response to the newreferences.

6. The Grand Panel System(1) Purposes
In addition to the four divisions, the
IP High Court has a special division (theGrand Panel Division) in its organization
to handle the Grand Panel cases heard by
five judges. Although the IP High Court
is the second instance and the Supreme
Court is the last instance in terms of legal
interpretation, business communities haverequested the judiciary to form reliable
rules and standards at an appeal stage sothat they do not have to wait for decisions
by the Supreme Court. For those reasons,the Grand Panel system was introduced
from April 2004 by the amendment of theCode of Civil Procedure in order to provide with unified opinions at the second
instance level. This system applies toboth lawsuits against Appeal/Trial Board
decisions relating to patent and utility

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model and appeals from district courts
regarding patent and other related rights.
The Grand Panel hears cases where critical legal questions are involved or whose
outcome might have significant impact
on corporate activities.
A Grand Panel consists of fivejudges instead of three judges for ordinary appeal cases. This system is an addition to existing five-judge procedures
such as the Antimonopoly Law-relatedcases, rebellion-related cases and disciplinary trials of judges. The amended law isapplied only to patent and other relatedcases filed after April 1, 2004. Non-technical type of cases such as trademark, design, copyright (excluding program copyright), unfair competition can not beheard by the Grand Panel, since thosecases are not subject to exclusive jurisdiction of the Tokyo High Court.
(2) Management
The special division of the IP High
Court has all eighteen judges as its members and the chief judge as its head. A
Grand Panel consists of five judges: four
presiding judges or equivalents thereof
from each of four divisions, and an associate judge whom the case is originallyassigned. Obviously, this system is different from en banc of the CAFC which
consists of all judges.
The reason for selecting at least one
judge from each division for the Grand
Panel is to reflect opinions of judges
across the divisions in a Grand Panel decision as much as possible. Moreover,judges including members of the Grand
Panel hold internal study meetings, sometimes joined by research officials, to exchange opinions over issues involved in
the Grand Panel case. Of course, the final
decision is made by a panel of five judges,

AIPPI Journal, September 2006

but the Grand Panel cases are managed insuch a way that the IP High Court as awhole racks its brains. Final decisions of
the Grand Panel cases have to be unanimous, since judges of lower courts,
unlike the justices of the Supreme Court,
are not permitted to write dissenting or
concurring opinions in a judgment.
A case is referred to the Grand Panelthrough certain procedure if the case involves important legal questions or sharesissues with other cases pending before
different divisions, or other circumstances make it appropriate for the Grand
Panel to hear the case. Cases whose outcome might bring significant influence
over corporate activities or which willdraw wide range of public attention may
be eligible for the Grand Panel.
The Grand Panels have already rendered three decisions in total, two infringement appeals (Ichitaro case and Ink
Cartridge case) and a lawsuit against
Appeal/Trial Board decision (Parametercase).
Ichitaro case4 is an appeal from theTokyo District Court in which plaintiff
sought injunction to prevent manufactureand sale of famous word processing andgraphics software in Japan alleging thatthe products infringed the plaintiff’s patent. The IP High Court reversed a decision of the Tokyo District Court and dismissed plaintiff’s claims by holding thatthe invention lacked inventive step andtherefore should be invalidated were its
validity decided by an Appeal/Trial
Board of the JPO. This is a case where
the Court applied Article 104-3 of theAmended Patent Law of 2004 for the firsttime, which explicitly allowed a court
may decide validity of a patent in infringement lawsuit.
Ink Cartridge case5 grappled with the

AIPPI Journal, September 2006

issue of “exhaustion” of a patent. This
principle has already been formulated by
the Supreme Court in the BBS case6. The
Supreme Court held in the BBS case thata person who purchases a patented product from the patentee or someone who isauthorized to sell the product by the patentee can use or sell the product without
infringing the patent. In Ink Cartridge
case, a plaintiff sought injunction order toprevent import and sale of so-called recycled products which are made by refillingink into used ink cartridges for printers.
The Tokyo District Court denied finding
infringement and accordingly rejected the
injunction. The IP High Court reversed
the decision for the plaintiff. This casedrew wide range of public attention overthe issue of permissible recycling and exhaustion of patent.
Parameter case7 is an lawsuit against
a decision of an Appeal/Trial Board of
the JPO. The Board revoked a patent
regarding manufacturing method ofpolarizing films, and a lawsuit is filed by
the patentee to the IP High Court seeking
reverse of the Board decision. The Court
affirmed the Board decision and dismissed the claims by holding that specification of the patent failed to meet disclosure requirements imposed by the Patent
Law since the claimed method that was
specified by a form of parameter was notsupported enough by detailed explanationof the specification. This decision is considered to have practical influence on examination of patent applications anddetermination by Trial/Appeal Boards.
(3) Remaining challenges and prospects
As the legislative history of the IP
High Court Law suggests, the IP High
Court is expected to utilize the Grand
Panel system actively so as to form reli-

211

able rules, unify judgments at an appeal
level, to accumulate precedents in leadingcases, although there is a limitation on theachievement of the Grand Panel inherent
in the adversary system and due to availability of appropriate cases. There are different opinions, however, that the IP High
Court should take more cautious approach toward use of the Grand Panel.
According to them, the Grand Panel ofthe IP High Court, like the Supreme
Court, should take a case in which issues
involved have been thoroughly discussed
by scholars or lower courts decisions.
They stress the importance and strong
influence of the Grand Panel decisions.
In any event, we will not be able to
avoid facing unexplored challenges suchas how to understand legislative purposesof jurisdictional concentration and introduction of the Grand Panel System forpatent and other related cases, how to reduce the purpose to actual practice, or
how to draw a line between roles of theSupreme Court and the Grand Panel ofthe IP High Court. Going through experiences, the IP High Court will appropriately address those issues in suitablecases in which I hope parties make precise arguments.
As a procedural issue associated with
the Grand Panel system, some have proposed that we should introduce amicus
curie system like in the US so that we caninvite public opinions in the Grand Panelcases. Such system would certainly help
the IP High Court especially when the
Court needs to articulate general standards in its decisions which would havesignificant impact on the society. But the
problem is whether a court can invite
public comments as the JPO seeks publiccomments when they revise examination
guidelines under current framework of212

Code of Civil Procedure.
A court may request public authorities, schools, chamber of commerce andindustry, exchanges and other entities tomake necessary research pursuant to Article 186 of the Code of Civil Procedure.
The court can make such request voluntarily as well as upon request by parties.
The subjects of research are limited tofacts, laws and regulations, or rules of
thumb. It is doubtful that the said provision authorizes a court to invite publiccomments like amicus briefs on legal interpretation in a lawsuit. This topic isbroad issue beyond the territory of intellectual property laws and may be legislative matter, although it is worth consideration.
Accountability has long been stressedin any public entities in Japan and the
judiciary is not an exception. At the sametime, revitalization of oral proceedings
has been sought for many years, and theGrand Panel cases attract so much publicattention that public observer tickets areusually necessary to observe the proceedings. Taking the above into account, I
have, as the presiding judge of the Grand
Panel, requested the parties to make presentations by using visual materials in oral
arguments of the Grand Panel cases andread summarized reasoning as well as themain text in a courtroom when rendering
a decision. We are willing to listen to
public opinions and to utilize the Grand
Panel system as actively as possible.

7. Introduction of New Systems(1) Expert commissioners system
The expert commissioners system isa unique system from comparative law
standpoint. This system was introduced in
April 2004 in order to offer highly pro-AIPPI Journal, September 2006

fessional judicial service responding tostate-of-art technology which is rapidly
developed, highly specialized and advanced.
Expert commissioners are appointed
by the Supreme Court as part-time court
staff, whose term of office is two years as
stipulated in the Rules of Expert Commissioners. They are chosen from amongleading experts of various technical fields,
including university professors, researchers of public organizations or privatecompanies and patent attorneys. The
number of expert commissioners appointed so far is 128 belonging to the IP
High Court as well as the Tokyo District
Court, and 51 belonging to the Osaka
District Court and Osaka High Court.
Additional expert commissioners may be
appointed from time to time if necessary.
Article 92-2 of the Code of Civil
Procedure lists three types of proceedings
in which expert commissioners are able
to get involved; preparatory hearings, examination of evidence, and settlement
conferences. A court is required to provide parties with an opportunity to raise
objection for the former two involvements, and to have the parties’ consent
for the third. In practice, expert commissioners usually participate only in preparatory hearings.
When a patent or other related caseinvolves highly technical issues and apanel of judges need explanation by experts on such issues, the panel considers
designating expert commissioners who
are most suitable for the particular casefrom among those appointed. The designated expert commissioners serve as neutral and fair advisors to the court in theproceedings they participate in, explaining background or significance of the invention based on evidence and arguments

AIPPI Journal, September 2006

submitted by parties to the court.
Although explanations given by expert
commissioners in the proceedings are notcompetent as evidence in principle,
unlike expert opinions (“kantei” in Japanese,) they are very helpful for the court
to deepen its understanding of the invention and other references involved in thecase and to make a decision based on evidence. A combination of research
officials’ daily support and expert commissioners’ case-by-case assistance will
give the IP High Court even higher expertise to resolve highly technical cases.
Statistics indicate active involvementof expert commissioners. According to a
general survey of three major courts, the
IP High Court, the Tokyo District Court
and the Osaka District Court, more than150 expert commissioners got involved in
more than 90 cases with total appearances
exceeding 220 as of the end of 2005.
Nearly 80% thereof are handled by the IP
High Court. Involvement of expert commissioners is less often in district courts
than in the IP High Court. The possible
reason is that it is more difficult to identify technical issues at an early stage of
infringement proceedings and accordingly less often to hold a preparatory
hearing for technical explanation on thefirst or second date compared to lawsuits
against Appeal/Trial Board decisions.
According to some district court judges,
40% of the total cases can be candidates
for expert commissioners’ participation,
but in half of those cases judges canunderstand technical matters without difficulties by referring to specification anddrawings. Therefore, they feel expert
commissioners are necessary in approximately 20% of all cases.
The IP High Court usually designates
more than one, and three if possible, ex-213

pert commissioners in one case. This
practice is to take pressure from shoulders of expert commissioners and to encourage them to accept a request by the
Court. An expert commissioner specializing in a field can be combined with others
specializing in the neighboring fields, andan experienced expert commissioner canwork with other experts who serve as expert commissioner for the first time.
Furthermore, an expert commissioner
familiar with patent practice can be combined with others who are not familiar
with patent prosecution. Such collaboration would contribute to higher quality oftechnical explanation and smoother casemanagement.
The expert commissioner system hasbrought a variety of positive impacts on
the judiciary. First, explanation by an expert commissioner to a judge leads tohigher quality decisions. The explanationis helpful for judges to deepen theirunderstanding of background and total
picture of an invention, which is not aneasy task for them to do based on thepieces of submitted evidence. It also
clears up their questions and doubts, andgives them confidence. Second, with assistance of expert commissioners, judges
can identify genuine issues among various allegations, request parties to voluntarily withdraw unnecessary arguments,and focus their arguments and case on
narrowed issues, which contributes to expeditious proceedings. Third, parties now
recognize the significance of proceedings
in which expert commissioners attend,
pour more energy in preparation for theproceedings, and present better arguments on technical matters, which generate good tension in the proceedings. Forth,
the system itself in which courts proceed
cases with assistance of leading experts

214

increases reliability and confidence ofparties in the judiciary. Fifth, doors ofcourt proceedings are now open for experts who tend to stay away from thejudiciary.
Every system has the flip side. Somepoint out that attendance of expert sometimes puts pressure on both parties, andas a result they tend to take more time for
their presentations. It is true that judges
sometimes spend nearly half a day on one
case in which expert commissioners are
involved. However, this seems to be necessary cost for higher quality of judicial
service. Selection process of suitable expert commissioners is not always besmooth. That process sometimes causedelay due to excessive reaction by parties
who are too nervous about the involvement of expert commissioners.
Before the establishment of the IP
High Court, the IP Divisions of theTokyo High Court then and the Tokyo
District Court jointly held explanation
meetings for expert commissioners twice,where expert commissioners received explanation about their responsibility andethics as a court official and some expert
commissioners who had already served asa expert commissioner shared their experience with other colleagues. They also
observed court proceedings. After the IP
High Court was established, the IP High
Court, the Tokyo District Court andOsaka District Court jointly held a workshop for expert commissioners in December last year, in which more than 100 experts as well as judges joined. They weredivided into eight groups and frankly exchanged opinions among them on thetheme of inventive step using disposedcases as a material. Expert commissioners
have a variety of backgrounds and someof them are not very familiar with the

AIPPI Journal, September 2006

Patent Law. I felt this workshop was
fruitful for expert commissioners to share
understanding on their roles and responsibility.
Expert commissioners’ first term ofoffice expired in April this year. We hopethat this system takes deep root in our
judicial tradition, develop further as ascheme for higher quality of judicial service and earn reliance and confidence ofparties. We will make most efforts to actively utilize and improve the expert commissioners system to achieve the abovegoal.
(2) Creation of Article 104-3 of the
Patent Law
In Kilby case, the Supreme Court
held that exercise of a patent right is not
permissible as “abuse of a right” if invalidity of the patent is clear and convincing. Following this decision, Article 1043 was created by the 2004 Amendment of
the Patent Law, which came into force on
April 1, 2005. This provision takes a further step by removing “clear and convincing” requirement imposed by the Kilby
decision. The new provision gives a court
statutory basis instead of general principle of “abuse of right.” As aforementioned, Ichitaro case decided by theGrand Panel is the first case in which
Article 104-3(1) is applied.
This amendment, however, would
have little impact on practice of district
courts in infringement litigations, because
the district courts had already decided
validity of a patent relying on the Kilby
decision without waiting for decisions by
Appeal/Trial Boards in invalidation
hearings.
The provision was created to reconcile infringement proceedings with invalidation hearings while preserving double

AIPPI Journal, September 2006

tracks system. It authorized a court to decide validity of a patent in infringement
lawsuits for total and single-round resolution of patent disputes. But it does not go
as far as requiring pendency of invalidation hearings before an Appeal/Trial
Board as a prerequisite for application of
Article 104-3(1). Actually, in Ichitaro
case, invalidation hearing was not pending before an Appeal/Trial Board. There
are divided opinions among district court
judges, though, whether judges shouldsuggest accused infringer to commence
invalidation hearing before the Board.
Another difficult question related toapplication of Article 104-3(1) arises
where an accused infringer alleges invalidity of a patent for a certain grounds in
an infringement litigation while an
Appeal/Trial Board had decided that thepatent should not be invalidated based on
the alleged grounds and the decision had
become conclusive and final by then.
This problem would be more complicated
if the invalidation hearing was pursued by
the third party. In this case, the issue iswhether a court can apply Article 1043(1) despite Article 167 of the Patent
Law, which prohibits anyone from repeating invalidation hearing before
Appeal/Trial Boards based on the samegrounds and evidence.
According to the JPO, allegation of“abuse of a patent right” has been raised
as a defense more frequently in infringement litigations after the Kilby decision.
In 2004, the defense was alleged in as
many as 80% of infringement lawsuits,
and as to 60% thereof, invalidation hearings are simultaneously pending before
Appeal/Trial Boards. The creation of
Article 104-3(1) will not change the significance of invalidation decisions by
Appeal/Trial Boards since they can de-

215

prive a patent right itself from the patentee. It is anticipated that the role of invalidation hearing in infringement litigations would be even more important
after the creation of Article 104-3(1)According to Kilby decision, even if
invalidation of a patent is clear and convincing, exercise of a paten right is permissible if there are extraordinary circumstances which justify the exercise of
the patent. One of the examples for thosecircumstances is pendency of correction
hearing before an Appeal/Trial Board.
When a party asserts invalidation of apatent, the patentee often responds to it
by commencing correction hearing before
an Appeal/Trial Board (“teisei shinpan”
in Japanese) or make a petition of correction of claims within invalidation hearing(“teisei seikyu” in Japanese). Even if ancorrection hearing is commenced or apetition of correction is made within theinvalidation hearing, claims remain same
until the Appeal/Trial Board permits thecorrection through correction hearing orfinds corrected claims valid through invalidation hearing. However, if it is almost certain that the correction sought
will address deficiencies of original
claims and the accused product will still
fall within a scope of the corrected claims,
a widely supported view is exercise of thepatent right should not be regarded as“abuse of a right.”
Now the question is whether theabove view is applicable after creation of
Article 104-3(1), in other words, its
phrase the new provision should be interpreted in the same way as before and acourt can consider possible success ofcorrection by a patentee in applying Article 104-3(1). Legislators seem to be affirmative to this question. This is one of
the issues to be decided along with other216

issues such as whether a court should
proceed an infringement lawsuit whensuccess of correction is uncertain.
Article 104-3(2) is a provision added
along with Article 104-3(1) to the Patent
Law in order to prevent an abuse of Article 104-3(1). This provision is similar to
Article 157 of the Code of Civil Procedure, but is written with different words.
The former says “for the purpose of causing undue delay in the proceedings” andthe other says “with intention or grossnegligence” and “submit untimely late in
the proceedings.” A plaintiff of an infringement lawsuit may rely on either
provision. In Ichitaro case, the plaintiff
relied on Article 157 of the Code of Civil
Procedure in vain. Needless to say, newgrounds for invalidation are not always
allowed in an appeal process of infringement lawsuit. In Ichitaro case, as the decision explained, the Grand Panel considered the following facts; the district court
completed the proceedings for a very
short term; publications additionallysubmitted in the appeal were written in
English and distributed abroad; and thefiling of patent application was made along time ago.
When Article 104-3(1) was established, legislators were concerned thatparties abuse the provision by listing
grounds for invalidation as many as possible. So far, such situation has not happened, and no case has been reported inwhich allegation or evidence for invalidation was dismissed pursuant to Article104-3(2). In the future, though, a court
might face such cases where a party submits a large amount of unsorted references as evidence of prior art and insiststhat the court should find the patent invalid by adopting any combination thereof.
In such situations, the court may instruct

AIPPI Journal, September 2006

the party to narrow down the grounds forinvalidation at first, and then dismiss theallegation pursuant to Article 104-3(2) if
the party rejects to follow the instruction,although it may be exceptional. The dismissal, however, does not prevent the
party from launching separate invalidation hearing before an Appeal/Trial
Board based on the said grounds. Therefore, the court should carefully consider
merits of the grounds before dismissing
the allegation since otherwise the dismissal will delay total resolution of the
dispute.
As long as infringement litigations
and invalidation hearings coexist andgiven a difference of the style of proceedings between them (i.e., adversary nature
in infringement litigation and mixture ofadversary and non-adversary nature ininvalidation hearings), it is inevitable thata court in infringement litigation and an
Appeal/ Trial Board in invalidation hearing sometimes reach different conclusion
on validity of the same patent. In order tocoordinate both proceedings and to facilitate expeditious proceedings of invalidation hearing pending at the same time as
infringement litigation, Article 168(3)–(6) were created by the 2004 amendmentof the Patent Law which allowed an
Appeal/Trial Board to request the court ofinfringement litigation to send relevantmaterials (e.g. those related to invalidation defense pursuant to Article 104-3)
submitted to the court.
Those provisions will reinforce fundamental basis of invalidation hearing.
Gathering evidence voluntarily by using
those provisions as well as instructing
parties to exhaust arguments and casethrough oral proceedings, Appeal/Trial
Boards will be able to make more precise,flawless and well-reasoned decisions

AIPPI Journal, September 2006

enough to be affirmed by the IP High
Court in lawsuits against Appeal/Trial
Board decisions. It is remarkable that
average time intervals from commencement to disposition of invalidation hearing concurrently pending with infringement litigation has been decreasing year
by year, and finally is now under one
year.
(3) Remand order under Article 181(2) ofthe Patent Law
In the past, if a lawsuit against an
Appeal/Trial Board decision is pending
before the Tokyo High Court and subsequently correction hearing is launched
before the Board to limit the scope of thesame patent, the Court used to wait forthe decision of the petition of correction
unless such correction was apparently
groundless. Once a Board decision allowing such correction became conclusiveand final, the court automatically vacatedthe original Board decision without determining merits of the lawsuit based on theSupreme Court decision on March 9,
1999 in Large-Diameter And SquareShaped Steel Tube case8.
Article 181(2) of the Amended
Patent Law of 2003 introduced a “remandorder,” which is applied to the appeal/
trial procedures of the JPO commenced
on or after January 1, 2004. This provision was established to address so-called“playing catch” phenomenon, i.e. wasteful back and forth of a patent disputeinvolving the same patent between the
Patent Office and courts. Due to theSupreme Court decision in LargeDiameter And Square-Shaped Steel Tubecase, a court handling a lawsuits against
Appeal/Trial Board has to vacate theBoard decision once correction of thepatent is allowed, even though the lawsuit

217

is near the end of the proceedings orwhile the case is appealed to the Supreme
Court.
The new provision allows a court toexpeditiously and flexibly remand thecase in a form of an “order” to an Appeal/
Trial Board without determining the merits of the case on condition that the patentee whose patent has been found invalid by the Board is about to launchcorrection hearing. After remanded, theBoard has to resume correction hearing
and to provide the patentee with an opportunity to correct the claims within theinvalidation hearing. Since the launchedcorrection hearing is deemed to be withdrawn when the petition of correction ismade within the invalidation hearing, thepermissibility of correction is decided
through inter partes invalidation hearing
rather than ex parte correction hearing.
This provision is paired with Article
126(2) of the Patent Law that prohibits,
as a rule, a patentee from launching acorrection hearing after invalidation hearing is commenced until its board decision
becomes conclusive and final, except for
90 days after filing a lawsuit against
Appeal/Trial Board decision.
Article 181(2) stipulates that “where
the court finds it appropriate for the
Appeal/Trial Board to further proceed aninvalidation hearing to decide validity ofthe patent concerned.” A question is whatkind of circumstances this provision refers to as “appropriate” and how courts
should apply this provision. Some pointout that if a court automatically remands
a case to the Appeal/Trial Board, it will
worsen the “playing catch” phenomenon
contrary to the purpose of the Article
181(2). While correction narrowing thescope of claims might often end up withremand orders, it does not mean that the218

court automatically allows request for theremand order. The court will not remand
the case, for instance, when the court
considers the correction is not likely to bepermitted by the Board, though such prediction is not always easy. When a request for the remand order is made by aparty, the court is required to hear an
opinion of the other party/parties. Therefore, party’s view will be one of factors
to be considered.
(4) Order to keep confidentiality
Order to keep confidentiality is established by the Amended Patent Law of2004 to make it easier for parties to prove
infringement. It is anticipated that a defendant requests this order when he or
she submits briefs or evidence containing
trade secrets. The Design Law, the Trademark Law, the Unfair Competition Prevention Law and Copyright Law have
similar provisions. I have heard that no
motion has been filed to the Tokyo District Court so far. Little use of this order
may be attributable to parties’ reluctanceto use this system. Parties seem to be cautious of requesting an order to keep confidentiality, because the order imposes aheavy and broad obligation on a party
receiving the order which is applied beyond the particular case and is ensured
with a threat of criminal sanction. Someregard this system as problematic because
it does not apply to employee invention
litigation. In order to avoid unnecessary
disputes over this order and undue delay
thereby, a court needs thoroughly discuss
the scope of trade secret to be protected
and the scope of persons receiving theorder with attorneys for both parties before the court issues this order. Both theTokyo District Court and Osaka District
Court have held study meetings and dis-

AIPPI Journal, September 2006

cussed practical issues regarding the protective order including prior consultation
with attorneys, procedure for filing a
motion, and procedure for issuing theorder.

8. Challenges Ahead
The IP High Court has entered thesecond year and the expectations on us
are getting higher and higher. As a hub
for intellectual property judiciary, we willcontinue our effort to offer better judicial
service through highly professional andreliable proceedings and decisions supported by expertise.
In the course of the legislation of the
IP High Court Law, legislators discussed
incidental effects of the establishment of
the Court, one of which was its possible
deterrent effect on illegal flow of pirated
goods. Now illegal flow of pirated goods
into Japan has threatened sound developments of intellectual properties. The establishment of the IP High Court aims at
sending to such violators a strong message that Japanese judiciary plays leadingrole to protect intellectual properties.
In the network and digital society
brought by globalization of the economy
and development of information technology, it has been getting more and more
important to utilize unlimited resourcesof human intellectual creativity. Intellectual properties will contribute to the progress of human society and the developments of the world economy, which
will bring us bright future. I hope thatpeople around the world recognize thevalue of intellectual properties.
The IP High Court has played an
educational role to develop respect for
intellectual properties among people andto create so-called IP culture. The Court

AIPPI Journal, September 2006

is expected to contribute to personnel
training at law schools or the Judicial
Research and Training Institute. Youngjudges take general training at the IP
High Court, and trainees at the above
Institute visit to the Court.
The public has recently been moreinterested in protection of intellectual
properties and accordingly the IP High
Court is drawing more public attention.
The flip side of high expectations on the
IP High Court, however, is relentless
public scrutiny of our performance. We
will make constant efforts to provide better judicial services while facing to challenges before us, bearing in mind theoriginal goal of the judiciary, that is toresolve each case in an appropriate andfair manner.
We would greatly appreciate yourcontinued understanding and cooperation.

219(Notes)1 A lawsuit against Appeal/Trial Board decision
is an administrative lawsuit appealed from
Appeal/Trial Board of the Japan Patent Office.
2 Sup. Ct (3rd. Petit Bench) Apr. 11, 2000,
Minshu 54-4-1368
3 Sup. Ct. (Grand Bench) March. 10, 1976,
Minshu 30-2-79
4 IP High Court Sep. 30, 2005, 2005 (Ne) 10040,
Sup. Ct. Website
5 IP High Court Jan. 31, 2006, 2005 (ne) 10021,
Sup. Ct. Website
6 Sup. Ct. (3rd Petite Bench) July 1, 1997,
Minshu 51-6-2299
7 IP High Court Nov. 11, 2005, 2005 (Gyoke)10042, Sup. Ct. Website
8 Sup. Ct. (3rd Petit Bench) March 9,1999,
Minshu 53-3-303