Law Lectures Series

Patent Act
Third Edition

Nobuhiro Nakayama

注: これは、日本語で書かれた『特許法［第3版］』（弘文堂、2016）の英訳です。原著
者に翻訳及び公開の許可をいただき公開しております。翻訳については一般財団法人
知的財産研究教育財団 知的財産研究所が翻訳事業者に依頼して作成した英訳であり、原著者及び弊所は日本語版と英語版の間に生じ得る差異について責任を負いません。テキストに対する公式な言及、またその引用を行う場合には、オリジナルの日本語版に当たり確認してください。

Note: This is the English translation from “Patent Act [3rd ed.]” (Koubundou, 2016),
written in Japanese. The original author has given permission for translation andpublication. The translation was created by a translation company at the request ofFoundation for Intellectual Property, Institute of Intellectual Property. The original author
or Foundation for Intellectual Property, Institute of Intellectual Property is not responsible
for any discrepancies that may exist between the Japanese and English versions. Readers
are recommended to confirm the original Japanese version when formally referencing or
citing the text.

Table of Contents

Table of Contents
Chapter 1

Overview ....................................................................................................... 1§1. Introduction ............................................................................................................ 1
1.1. Significance of Industrial Property Law ............................................................ 1
1.1.2. The Term “Kōgyō Shoyūken” (Industrial Property) ................................... 3
1.2. Intellectual Property Law as a Superordinate Concept ..................................... 5
1.2.1. Reason for Existence of Intellectual Property Law .................................... 5
1.2.2. Classification of Intellectual Property Law .............................................. 11
1.2.2.1. Laws Concerning Creativity and Laws Concerning Signs .................. 11
1.2.2.2. Right-Granting Laws and Act-Regulating Laws .................................14

1.3. Internationalization of Industrial Property Rights ........................................... 17
1.4. Industrial Property System as a National Strategy .......................................... 19
1.5. Industrial Property Law and Other Legal Domains......................................... 21
1.5.1. Civil Code ................................................................................................. 21
1.5.2. Code of Civil Procedure ........................................................................... 22
1.5.3. Labor Law ................................................................................................ 22
1.5.4. Administrative Law .................................................................................. 23
1.5.5. Antitrust Law ............................................................................................ 24§2 History of Industrial Property Law ..................................................................... 27
2.1. Introduction ..................................................................................................... 27
2.2. United Kingdom .............................................................................................. 28
2.3. United States .................................................................................................... 30
2.4. France .............................................................................................................. 31
2.5. Germany .......................................................................................................... 32
2.6. Europe.............................................................................................................. 34
2.7. Japan ................................................................................................................ 36
Chapter 2 Patent Rights .................................................................................................. 42§1. Creation of Right .................................................................................................. 42
1.1. Owner of Right ................................................................................................ 42
1.1.1. Inventor and Successor in Title ................................................................ 42
1.1.1.1. Inventor System .....................................................................................421.1.1.2. Inventor...................................................................................................43
1.1.1.3. Right Granting System ..........................................................................46
1.1.1.4. First-to-File System ...............................................................................46
1.1.1.5. Successor in Title ...................................................................................47iTable of Contents

1.1.2. Joint Inventor (Article 38 of the Patent Act) ............................................ 50
1.1.3. Employee Inventions (Article 35 of the Patent Act) ................................ 52
1.1.3.1. Significance of the Employee Invention System ..................................52
1.1.3.2. History and Current Status of the Employee Invention System........58
1.1.3.3. History and Current Status of the Employee Invention System........59
1.1.3.4. Employer’s License.................................................................................66
1.1.3.5. Ownership of the Right to Obtain a Patent .........................................69

1.1.4. Foreign Nationals (Article 25 of the Patent Act) ...................................... 95
1.1.4.1. Foreign Nationals’ Eligibility to Enforce Rights ..................................95
1.1.4.2. Definition of Foreign National ..............................................................97
1.1.4.3. Nationals of Countries with which Japan Has No Diplomatic Relations................................................................................................................98
1.1.4.4. Effect of Violation of Article 25 of the Patent Act ................................99

1.2. Subject Matter of a Patent Right.................................................................... 100
1.2.1. Definition of the Subject Matter of a Patent Right ................................. 100
1.2.1.1. Definition of an Invention (Article 2, paragraph (1)) ....................... 100
1.2.1.2. Utilization of the Laws of Nature ...................................................... 101
1.2.1.3. Technical Ideas ..................................................................................... 111
1.2.1.4. Creativity .............................................................................................. 112
1.2.1.5. Advanced Art ........................................................................................ 113
1.2.1.6. Incomplete Inventions ......................................................................... 114

1.2.2. Types of Inventions (Categories of Inventions) (Article 2, paragraph 3 of
the Patent Act) ......................................................................................... 118
1.3. Requirements for Patentability ...................................................................... 121
1.3.1. Positive Requirements ............................................................................ 121
1.3.1.1. Industrial Applicability (Principal sentence of Article 29, paragraph (1)of the Patent Act) ................................................................................ 121
1.3.1.2. Novelty (Article 29, paragraph (1) of the Patent Act)....................... 127
1.3.1.3. Expanded Prior Application Status (Quasi-Publicly Known Inventions;Fictitious Publicly Known Invention) (Article 29-2 of the Patent Act)............................................................................................................. 138
1.3.1.4. Inventive Step (Article 29, paragraph (2) of the Patent Act) ........... 142

1.3.2. Unpatentable Inventions (Article 32 of the Patent Act) ......................... 152
1.3.2.1. Act of 1959 (Before the 1975 revision) ............................................... 152
1.3.2.2. Public Order and Morality / Public Health ....................................... 154

1.3.3. Inventions of which Patentability Becomes a Problem (Inventions iniiTable of Contents

Specific Fields) ........................................................................................ 160
1.3.3.1. Biological Inventions ........................................................................... 160
1.3.3.2. Computer Software-Related Inventions ............................................ 165

1.4. Legal Status before Registration ................................................................... 168
1.4.1. Nature of the Right to Obtain a Patent ................................................... 168
1.4.2. Details of the Right to Obtain a Patent ................................................... 169
1.4.2.1. Creation of a Right .............................................................................. 169
1.4.2.2. Enforcement of a Right ....................................................................... 170
1.4.2.3. Provisional Exclusive License and Provisional Non-exclusive License(Articles 34-2 and 34-3 of the Patent Act)......................................... 170
1.4.2.4. Right to File a Patent Application (Right to Obtain a Patent) (Articles
33 and 34 of the Patent Act) .............................................................. 174
1.4.2.5. Inventor’s Right to be Credited .......................................................... 179
1.4.2.6. Relationship with Third Parties ........................................................ 181

1.4.3. Requirements for Effectiveness Against Third Parties........................... 181
1.4.3.1. Before Filing ........................................................................................ 181
1.4.3.2. After Filing........................................................................................... 182

1.4.4. Joint Ownership of the Right to Obtain a Patent (Article 38 of the Patent
Act) .......................................................................................................... 183
1.4.5. Lapse of the Right to Obtain a Patent ..................................................... 184§2. Obtaining a Patent .............................................................................................. 186
2.1. Filing.............................................................................................................. 186
2.1.1. Significance of Filing ............................................................................. 186
2.1.2. Filing Documents (Article 36 of the Patent Act) .................................... 188
2.1.2.1. Introduction ......................................................................................... 188
2.1.2.2. Description ........................................................................................... 190
2.1.2.3. Scope of Claims.................................................................................... 190
2.1.2.4. Required Drawings ............................................................................. 192
2.1.2.5. Abstract (Article 36, paragraphs (2) and (7) of the Patent Act) ....... 193
2.1.2.6. Description Requirements .................................................................. 193

2.1.3. Multiple Claim System (Second Sentence of Article 36, paragraph (5) of
the Patent Act) ......................................................................................... 211
2.1.4. Unity of Application (Article 37 of the Patent Act) ............................... 212
2.1.5. Effect of Filing (Article 39 of the Patent Act) ........................................ 214
2.1.6. Division and Conversion of an Application ........................................... 215
2.1.6.1. Division of an Application (Article 44 of the Patent Act) ................. 215

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Table of Contents

2.1.6.2. Conversion of an Application (Article 46 of the Patent Act) ............ 219
2.1.6.3. Patent Applications Based on Utility Model Applications (Article 46-2of the Patent Act) ................................................................................ 221

2.1.7. International Applications ...................................................................... 222
2.1.7.1. Significance of International Applications ........................................ 222
2.1.7.2. Application Containing a Priority Claim under the Paris Convention(Paris Route) ....................................................................................... 223
2.1.7.3. Application under the Patent Cooperation Treaty (PCT Route) ...... 225

2.1.8. Internal Priority System (Article 41 of the Patent Act) .......................... 227
2.2 Laying Open of the Application (Article 64 Onward of the Patent Act) ....... 232
2.2.1. Reasons for and Significance of Introducing the System of Laying Open the
Application .............................................................................................. 232
2.2.2. Effects of Laying Open an Application .................................................. 235
2.2.2.1. Right to Claim compensation (Article 65 of the Patent Act) ............ 236
2.2.2.2. Investigation Commissioning System (Article 194, paragraph (2) of the
Patent Act) and Information Offering System (Article 13-2 of the
Patent Act Enforcement Ordinance) ................................................. 240
2.2.2.3. Special Provisions on International Applications ............................. 241

2.3. Amendment ................................................................................................... 242
2.3.1. Introduction ............................................................................................ 242
2.3.2. Period for Amendment ........................................................................... 245
2.3.3. Admissible Scope of Amendment .......................................................... 249
2.4. Examination ................................................................................................... 256
2.4.1. Substantive Examination System and Non-substantive Examination System................................................................................................................. 256
2.4.2. Formality Examination ........................................................................... 258
2.4.3. System of Request for Examination (Deferred Examination System)(Article 48-2 of the Patent Act) ............................................................... 259
2.4.4. Examination Procedure and Registration ............................................... 262
2.4.4.1. Examiners ............................................................................................ 262
2.4.4.2. Examination Procedure ...................................................................... 262
2.4.4.3. Examiner’s Decision and Registration .............................................. 263§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a
Patented Invention ............................................................................................... 266
3.1. Opposition System......................................................................................... 266
3.1.1. Conventional Opposition System ........................................................... 266

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3.1.2. Opposition System Introduced by the 2014 Revision ............................ 267
3.2. Trials .............................................................................................................. 270
3.2.1. Purpose and Significance of the Trial System ........................................ 271
3.2.2. Legal Nature of Trials............................................................................. 272
3.2.3. Types of Trials and Their Details ........................................................... 273
3.2.3.1. Trial against Examiner’s Decision of Refusal (Article 121 of the Patent
Act)....................................................................................................... 273
3.2.3.2. Trial for Invalidation of a Patent (Article 123 of the Patent Act) .... 277
3.2.3.3. Trial for Correction (Article 126 of the Patent Act) .......................... 289
3.2.3.4. Trial for Invalidation of Registration of an Extension (Article 125-2 ofthe Patent Act) .................................................................................... 300
3.2.3.5. Trial for Invalidation of Correction and Trial Against an Examiner’s
Decision to Dismiss Amendment ....................................................... 300

3.2.4. Trial Procedure ....................................................................................... 302
3.2.4.1. Start and End of a Trial ...................................................................... 302
3.2.4.2. Trial Proceedings ................................................................................. 303
3.2.4.3. Trial Decisions ..................................................................................... 309

3.3. Retrial (Article 171 onward of the Patent Act).............................................. 313
3.4. Advisory Opinion on the Technical Scope of a Patented Invention (Article 71of the Patent Act) ............................................................................................ 315§4. Litigation for Rescinding a Trial Decision, etc. (Article 178 onward of the Patent
Act)...................................................................................................................... 319
4.1. General Remarks ........................................................................................... 319
4.2. Procedures ..................................................................................................... 320
4.2.1. Jurisdiction and Limitation of Actions (Article 178 of the Patent Act) . 320
4.2.2. Concerned Parties ................................................................................... 320
4.2.2.1. Plaintiff and Defendant (Article 178, paragraph (2) and Article 179 of
the Patent Act) .................................................................................... 320
4.2.2.2. Jointly Owned Right to Obtain a Patent and Jointly Owned Patent
Right .................................................................................................... 321

4.2.3. Court Proceedings .................................................................................. 327
4.2.4. Court Judgments ..................................................................................... 328
4.3. Relationship Between Litigation and Trials (Scope of Proceedings in Litigation
for Rescinding a Trial Decision) .................................................................... 329
4.3.1. Nature of Litigation for Rescinding a Trial Decision ............................. 329
4.3.2. Scope of Proceedings and Judgments of the Supreme Court in Prewar Japanv

Table of Contents................................................................................................................. 331
4.3.3. Problems in Limitation on the Scope of Proceedings............................. 334
4.3.4. Technical Determination Ability of Courts ............................................ 339§5. Dispute for Rescinding a Disposition by the Commissioner of the JPO, etc. .... 341§6. Nature of a Patent Right ..................................................................................... 343
6.1. Comparison with a Right of Ownership ........................................................ 343
6.2. Joint Ownership (Article 73 of the Patent Act) ............................................. 349§7. Effects of a Patent Right ..................................................................................... 360
7.1. Active Effect and Passive Effect ................................................................... 360
7.2. Working of the Invention as a Business ........................................................ 362
7.2.1. “As a Business” (Article 68 of the Patent Act) ...................................... 362
7.2.2. Working (Article 2, paragraph (3) of the Patent Act)............................. 363
7.2.2.1. Significance of Defining “Working” .................................................... 363
7.2.2.2. Working of the Invention of a Product (Article 2, paragraph (3), item(i) of the Patent Act) ........................................................................... 364
7.2.2.3. Working of an Invention of a Process (Article 2, paragraph (3), item (ii)of the Patent Act) ................................................................................ 370
7.2.2.4. Working of the Invention of a Process of Producing a Product (Article
2, paragraph (3), item (iii) of the Patent Act) ................................... 371

7.3. Restriction on Effects of a Patent Right ........................................................ 373
7.3.1. Restrictions Pertaining to the Limits of the Scope of Right ................... 373
7.3.1.1. Working for the Purposes of Experiment or Research (Article 69,
paragraph (1) of the Patent Act) ........................................................ 373
7.3.1.2. Means of Transportation Merely Passing Through Japan (Article 69,
paragraph (2), item (i) of the Patent Act) ......................................... 377
7.3.1.3. Products Existing in Japan Prior to the Filing of the Patent Application(Article 69, paragraph (2), item (ii) of the Patent Act)..................... 378
7.3.1.4. Acts of Mixing Two or More Medicines (Article 69, paragraph (3) of the
Patent Act) .......................................................................................... 378
7.3.1.5. Restriction on the Effects of a Patent Right Restored by a Retrial(Articles 175 and 176 of the Patent Act) ........................................... 379

7.3.2. Restrictions Pertaining to Relationship with Others .............................. 380
7.3.2.1. Restrictions Pertaining to Dependency on or Conflict with Another
Person’s Invention .............................................................................. 380
7.3.2.2. Restriction by a License ...................................................................... 384

7.4. True Right Holder's Right to Seek Transfer of a Patent Right (Article 74 of theviTable of Contents

Patent Act) ...................................................................................................... 386
7.4.1. Problem of Misappropriated Applications and the 2011 Revision......... 386
7.4.1.1. Circumstances before the 2011 Revision ........................................... 386
7.4.1.2. The 2011 Revision ............................................................................... 389

7.4.2. Problems with the Right to Seek the Transfer of a Patent Right ............ 393
7.4.2.1. Transfer Sought for Each Claim ........................................................ 393
7.4.2.2. Invalidity, Rescission and Cancellation of a Contract for Assignment of
a Right to Obtain a Patent ................................................................. 394
7.4.2.3. Legal Relationships of Parties Concerned before Registration ofTransfer ............................................................................................... 396
7.4.2.4. Period for Seeking the Transfer of a Patent Right ........................... 399
7.4.2.5. Whether It Is Appropriate to Recognize Retroactive Effect of Transfer
of a Patent Right................................................................................. 399
7.4.2.6. Other Problems ................................................................................... 400

7.4.3. Transfer of Right during the Pendency of a Patent Application............. 400§8. Infringement ....................................................................................................... 403
8.1. General Remarks ........................................................................................... 403
8.2. Civil Remedies .............................................................................................. 406
8.2.1. Right to Seek an Injunction (Article 100 of the Patent Act) .................. 406
8.2.2. Border Measures (Customs Act) ............................................................ 414
8.2.3. Right to Claim Compensation for Damage ............................................ 421
8.2.3.1. Introduction ......................................................................................... 421
8.2.3.2. Presumption of Negligence (Article 103 of the Patent Act) ............. 422
8.2.3.3. Calculation of the Amount of Damages (Article 102 of the Patent Act)............................................................................................................. 424
8.2.3.4. Facilitation of Proof............................................................................. 450

8.2.4. Right to Claim Return with Regard to Unjust Enrichment or Quasi
Benevolent Intervention in Another's Affairs ......................................... 463
8.2.4.1. Unjust Enrichment (Article 703 of the Civil Code) .......................... 463
8.2.4.2. Quasi Benevolent Intervention in Another's Affairs (Article 697 of the
Civil Code) ........................................................................................... 464

8.2.5. Measures to Restore Credibility (Article 106 of the Patent Act) ........... 465
8.2.6. Exhaustion of Right ................................................................................ 467
8.2.6.1. Exhaustion Theory .............................................................................. 467
8.2.6.2. Exhaustion of a Patent Right and Parallel Imports (International
Exhaustion of a Patent Right) ........................................................... 476

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8.3. Indirect Infringements (Acts Deemed to Be Infringement) (Article 101 of the
Patent Act) ...................................................................................................... 489
8.4. Defense of Invalidity ..................................................................................... 500
8.4.1. Background ............................................................................................. 500
8.4.2. Legislative Solution (Article 104-3 of the Patent Act) ........................... 505
8.5 Retrial (Article 104-4 of the Patent Act) ........................................................ 511
8.6. Penal Provisions (Crime of Infringement) .................................................... 516
8.7. Scope of Protection ........................................................................................ 519
8.7.1. Technical Scope of a Patented Invention ............................................... 520
8.7.2. Doctrine of Equivalents .......................................................................... 528
8.7.2.1. Basic Concept of the Doctrine of Equivalents ................................... 528
8.7.2.2. Changes in the Circumstances Surrounding the Doctrine ofEquivalents ......................................................................................... 530
8.7.2.3. Requirements of the Doctrine of Equivalents ................................... 535
8.7.2.4. Positioning of the Doctrine of Equivalents in the Patent System ... 546

8.7.3. Product-by-Process Claim (PBP Claim)................................................. 549§9. Patent Right as the Subject of a Transaction ...................................................... 557
9.1. Transfer of Right ........................................................................................... 557
9.2. Security Rights .............................................................................................. 559
9.2.1. Right of Pledge (Articles 95 and 96 of the Patent Act) .......................... 559
9.3.2. Transfer of Title for Security Purposes .................................................. 561
9.3.3. Foundation Mortgage and Enterprise Mortgage ..................................... 562
9.3. Compulsory Execution .................................................................................. 562
9.4. Licenses ......................................................................................................... 562
9.4.1. Significance of a License ........................................................................ 562
9.4.2. Exclusive License (Article 77 of the Patent Act) ................................... 565
9.4.2.1. Nature of an Exclusive License .......................................................... 565
9.4.2.2. Establishment and Extinguishment of an Exclusive License ......... 565
9.4.2.3. Content of an Exclusive License ........................................................ 567

9.4.3. Non-Exclusive License (Article 78 of the Patent Act) ........................... 575
9.4.3.1. Nature of a Non-Exclusive License .................................................... 575
9.4.3.2. Types of Non-Exclusive Licenses ....................................................... 576
9.4.3.3. Establishment and Extinguishment of a Non-exclusive License .... 577
9.4.3.4. Content of a Non-Exclusive License .................................................. 578
9.4.3.5. Comprehensive Cross License ............................................................ 593

9.4.4. Compulsory License ............................................................................... 595

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9.4.4.1. Compulsory License Where Invention Is Not Worked (Article 83 of the
Patent Act) .......................................................................................... 595
9.4.4.2. Compulsory License in the Case of a Dependent Invention (Article 92of the Patent Act) ................................................................................ 600
9.4.4.3. Compulsory License Required in the Public Interest (Article 93 of the
Patent Act) .......................................................................................... 604

9.4.5. Statutory Non-Exclusive License ........................................................... 607
9.4.5.1. Statutory Non-Exclusive License for an Employee invention (Article 35of the Patent Act) ................................................................................ 607
9.4.5.2. Statutory Non-Exclusive License based on Prior Use (Prior User’s
Right) (Article 79 of the Patent Act).................................................. 607
9.4.5.3. Statutory Non-Exclusive License Due to the Working of the Invention
Prior to the Registration of the Request for a Trial for Patent
Invalidation (Chūyōken [intervening right]) (Article 80 of the Patent
Act)....................................................................................................... 615
9.4.5.4. Statutory Non-Exclusive License After Expiration of Duration of
Design Right (Articles 81 and 82 of the Patent Act) ........................ 618
9.4.5.5. Statutory Non-Exclusive License Due to the Working of the Invention
Prior to Registration of Demand for Retrial (Article 176 of the Patent
Act)....................................................................................................... 619
9.4.5.6. Statutory non-exclusive License Due to the Working of an Invention
Prior to Registration of Transfer of a Patent Right (Article 79-2 of the
Patent Act) .......................................................................................... 620§10. Obligations Pertaining to a Patent Right .......................................................... 624§11. Duration and Extinguishment of Patent Rights ................................................ 626
11.1 Duration of Patent Rights (Article 67, paragraph (1) of the Patent Act) ...... 626
11.2. Extension of Duration(Article 67, paragraph (2) of the Patent Act) ........... 627
11.3. Lapse of Patent Rights ................................................................................. 637§12. Criminal Penalties ............................................................................................ 640

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Notes[xx]

Notes
Abbreviations(1) Laws and Regulations
Patent Act Enforcement Order: Order for Enforcement of the Patent Act
Patent Act Enforcement Ordinance: Ordinance for Enforcement of the Patent Act
Patent Registration Order Enforcement Ordinance: Ordinance for Enforcement of the
Patent Registration Order
Semiconductor Chip Act: Act on the Circuit Layout of Semiconductor Integrated Circuits
Pharmaceuticals and Medical Devices Act: Act on Securing Quality, Efficacy and Safetyof Products Including Pharmaceuticals and Medical Devices
Paris Convention: Paris Convention for the Protection of Industrial Property
PCT: Patent Cooperation Treaty
TRIPS Agreement: Agreement on Trade-Related Aspects of Intellectual Property Rights
Anti-Monopoly Act: Act on Prohibition of Private Monopolization and Maintenance ofFair Trade(2) Law Reports
Mutai Saishū: Mutai Zaisanken Kankei Minji/Gyōsei Saibanreishū (Intangible Property
Law Cases Reports [Civil and Administrative Cases]) (up to year 1990)
Chiteki Saishū: Chiteki Zaisanken Kankei Minji/Gyōsei Saibanreishū (Intellectual
Property Law Cases Reports [Civil and Administrative Cases]) (year 1991 onward)iNotesMinshū: Saikō Saibansho (Daishin’in) Minji Hanreishū (Supreme Court [Prewar
Supreme Court] Reports [Civil Cases])
Minroku: Daishin’in Minji Hanketsuroku (Prewar Supreme Court Case Records [Civil
Cases])Gyōshū: Gyōsei Jiken Saibanreishū (Administrative Law Cases Reports)
Kamin: Kakyū Saibansho Minji Saibanreishū (Lower Courts Reports [Civil Cases])
Kakei: Kakyū Saibansho Keiji Saibanreishū (Lower Courts Reports [Criminal Cases])
Rōmin: Rōdō Kankei Minji Saibanreishū (Labor Law Reports [Civil Cases])
Kōmin: Kōtō Saibansho Minji Hanreishū (High Courts Reports [Criminal Cases])
Hanji: Hanrei Jihō (Law Cases Reports)
Hanta: Hanrei Taimuzu (Law Times Reports)
Shinkeshishū: Shinketsu Torikeshi Soshō Hanketsushū (Law Reports of Actions for
Revocation of Trial Decisions)(3) Journals
Gakkai Nenpō: Nihon Kōgyō Shoyūken Hō Gakkai Nenpō (Annual of Industrial Property
Law, Japan Association of Industrial Property Law)
Jurist: Jurisuto [*Only in the English version of this book]
Shōhan: Shōji Hanrei Kenkyū (Study on Commercial Law Cases)
Hōkyō: Hōgaku Kyōkai Zasshi (Tōkyō Daigaku) (Journal of the Jurisprudence
Association, the University of Tokyo)iiNotes(4) Literature
Hidetaka Aizawa, Baiotekunorojī To Tokkyo Hō: Hidetaka Aizawa, Baiotekunorojī To
Tokkyo Hō (Biotechnology and Patent Law) (Koubundou, 1994)
Yasushi Aoki and Tsuneteru Aragaki, Shinpan Tokkyo Tetsuzuki Hō: Yasushi Aoki andTsuneteru Aragaki, Shinpan Tokkyo Tetsuzuki Hō (Patent Procedural Law, New ed.)(Koubundou, 1981)
Hirokazu Aoyama, Tokkyo Hō [Dai 12 Han]: Hirokazu Aoyama, Tokkyo Hō [Dai 12Han] (Patent Law [12th ed.]) (Hougaku Shoin, 2010)
Shōzō Adachi, Tokkyo Hō: Shōzō Adachi, Tokkyo Hō (Patent Law), (Nippon Hyoron Sha,
1930)
Ishiguro Junpei and Umase Fumio Kanreki Kinen: Ishiguro Junpei and Umase Fumio
Sensei Kanreki Kinen, Kōgyō Shoyūken Hō No Shomondai (Essays in Honor of the
Sixtieth Birthday of Professor Junpei Ishiguro and Professor Fumio Umase: Various
Problems in Industrial Property Law) (Horitsu Bunka Sha, 1972)
Ishiguro Junpei Tsuitō Kinen: Ishiguro Junpei Sensei Tsuitō Ronshū, Mutai Zaisanken
Hō No Shomondai (Essays in Memory of Professor Junpei Ishiguro: Various Problems in
Intangible Property Law) (Horitsu Bunka Sha, 1980)
Uchida Osamu Koki Kinen: Uchida Osamu Sensei Koki Kinen, Hanrei Tokkyo Soshō Hō(Essays in Honor of the Seventieth Birthday of Professor Osamu Uchida: Case Law on
Patent Litigation), (Japan Institute of Invention and Innovation, 1986)
Uchida Osamu Sanju Kinen: Uchida Osamu Sensei Sanju Kinen, Hanrei Tokkyo Shingai
Hō II (Essays in Honor of the Eightieth Birthday of Professor Osamu Uchida: Case Law
on Patent Infringements II) (Japan Institute of Invention and Innovation, 1996)
Umase Fumio Kanreki Kinen: Umase Fumio Sensei Kanreki Kinen, Kōgyō Shoyūken
Hō/Minji Hō No Kadai (Essays in Honor of the Sixtieth Birthday of Professor Fumio
Umase: Challenges of Industrial Property Law and Civil Law) (Hōsei Shobō, 1971)

iii

NotesFumio Umase Koki Kinen: Umase Fumio Sensei Koki Kinen, Hanrei Tokkyo Shingai Hō(Essays in Honor of the Seventieth Birthday of Professor Fumio Umase: Case Law on
Patent Infringements) (Japan Institute of Invention and Innovation, 1983)
Hiroshi Enatsu, Waga Kuni Ni Okeru Hiyōsha Hatsumei Seido No Enkaku To Sono HōtekiKaishaku—Kakkoku To No Hikaku Hō Teki Kōsatsu: Hiroshi Enatsu, Waga Kuni Ni
Okeru Hiyōsha Hatsumei Seido No Enkaku To Sono Hōteki Kaishaku: Kakkoku To No
Hikaku Hō Teki Kōsatsu (History of Employee Invention System in Japan and Its Legal
Interpretation—International Comparative Study) (Dai-ichi Hoki, 1990)
Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai: Sueaki Oda and Yoshio
Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act, Rev. ed.)(Nihon Hatsumei Shimbunsha, 1972)
Ono Shōen Kanreki Kinen: Ono Shōen Sensei Kanreki Kinen, Hanrei Fusei Kyōgyō Hō(Essays in Honor of the Sixtieth Birthday of Professor Shōen Ono: Case Law on Unfair
Competition) (Japan Institute of Invention and Innovation, 1992)
Hajime Kaneko and Yoshinobu Someno, Tokkyo/Shōhyō: Hajime Kaneko and Yoshinobu
Someno, Tokkyo/Shōhyō (Patents and Trademarks) (Seirin Shoin, 1955)
Hajime Kaneko and Yoshinobu Someno, Kōgyō Shoyūken Hō: Hajime Kaneko andYoshinobu Someno, Kōgyō Shoyūken Hō (Industrial Property Law) (Nippon Hyoron Sha,
1969)
Hiroya Kawaguchi, Tokkyo Hō No Kōzō To Kadai: Hiroya Kawaguchi, Tokkyo Hō No
Kōzō To Kadai (The Structure and Problems in Patent Law) (Mitsumine Shobō, 1983)
Hiroya Kawaguchi, Tokkyo Hō Kōgi: Hiroya Kawaguchi, Tokkyo Hō Kōgi (Lecture on
Patent Law) (Keiso Shobo, 1995)
Ichirō Kiyose, Tokkyo Hō Genri: Ichirō Kiyose, Tokkyo Hō Genri (Principles of Patent
Law) (Ganshodo, 1929)
Toshisuke Kiyonaga and Ryūichi Shitara, Gendai Saiban Hō Taikei 26 Chiteki
Zaisanken: Toshisuke Kiyonaga and Ryūichi Shitara, Gendai Saiban Hō Taikei 26

iv

NotesChiteki Zaisanken (Outline of Modern Law of Judicial Proceedings: Intellectual Property
Rights) (Shinnippon Hoki Publishing, 1999)
Ken’ichi Kumagai, Chikujō Kaisetsu Kaisei Tokkyo Hō: Ken’ichi Kumagai, Chikujō
Kaisetsu Kaisei Tokkyo Hō (Clause-by-Clause Explanation of the Revised Patent Act)
(Yuhikaku, 1995)
Haruo Gotō, Kaisei Tokkyo Hō No Kaisetsu: Haruo Gotō, Kaisei Tokkyo Hō No Kaisetsu(Explanation of the Revised Patent Act) (Research Institute of International Trade andIndustry, 1974)
Haruo Gotō, Kokusai Shutsugan To Kokunai Yūsenken: Haruo Gotō, Kokusai Shutsugan
To Kokunai Yūsenken (International Applications and Internal Priority) (Japan Instituteof Invention and Innovation, 1986)
Haruo Gotō, Pari Jōyaku Kōwa [Dai 13 Han]: Haruo Gotō, Pari Jōyaku Kōwa [Dai 13
Han] (Lecture on the Paris Convention [13th ed.]) (Japan Institute of Invention andInnovation, 2007)
Administrative Affairs Bureau, General Secretariat, Supreme Court, Chiteki Zaisanken
Kankei Minji Gyōsei Hanrei Gaikan: Supervised by the Administrative Affairs Bureau,
General Secretariat, Supreme Court, Chiteki Zaisanken Kankei Minji Gyōsei Hanrei
Gaikan (Overview of Intellectual Property Law Cases [Civil and Administrative Cases])(Lawyers Association, 1993)
Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han]: Tatsuki Shibuya, Chiteki Zaisan
Hō Kōgi I [Dai 2 Han] (Lecture on Intellectual Property Law [2nd ed.]) (Yuhikaku, 2006)
Izutarō Suehiro, Kōgyō Shoyūken Hō: Izutarō Suehiro, Kōgyō Shoyūken Hō (Industrial
Property Law) (Nippon Hyoron Sha, 1942)
Sugibayashi Nobuyoshi Koki Kinen: Sugibayashi Nobuyoshi Sensei Koki Kinen Ronbun
Shū, Chiteki Shoyūken Ronkō (Essays in Honor of the Seventieth Birthday of Professor
Nobuyoshi Sugibayashi: Study on Intellectual Property) (Fuzanbo, 1985)
Ryūichirō Sengen, Tokkyo Hō Kōgi [Dai 4 Han]: Ryūichirō Sengen, Tokkyo Hō Kōgiv

Notes[Dai 4 Han] (Lecture on Patent Law [4th ed.]) (Yuyusha, 2003)
Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 4 Han]: Ryū Takabayashi, Hyōjun Tokkyo Hō[Dai 4 Han] (Patent Law from the Ground Up [4th ed.]) (Yuhikaku, 2011)
Eiichi Takigawa, Tokkyo Soshō Tetsuzuki Ronkō: Eiichi Takigawa, Tokkyo Soshō
Tetsuzuki Ronkō (Study on Patent Litigation Procedures) (Shinzansha, 1991)
Bunzō Takino, Shin Kōgyō Shoyūken Hō Kōgi [Kaitei Zōho Ban]: Bunzō Takino, Shin
Kōgyō Shoyūken Hō Kōgi [Kaitei Zōho Ban] (Lecture on New Industrial Property Law[Revised and Expanded ed.]) (Chuo University Press, 1967)
Takura Osamu Koki Kinen: Takura Osamu Sensei Koki Kinen, Chiteki Zaisan Wo
Meguru Sho Mondai (Essays in Honor of the Seventieth Birthday of Professor Osamu
Takura: Various Problems Surrounding Intellectual Property) (Japan Institute ofInvention and Innovation, 1996)
Kakuji Takeuchi, Tokkyo Hō: Kakuji Takeuchi, Tokkyo Hō (Patent Law) (Ganshodo,
1938)
Minoru Takeda, Chiteki Zaisanken Shingai Yōron (Tokkyo/Ishō/Shōhyō Hen) [Dai 5
Han]: Minoru Takeda, Chiteki Zaisanken Shingai Yōron (Tokkyo/Ishō/Shōhyō Hen) [Dai5 Han] (Summary of Intellectual Property Infringements [Patents/Designs/Trademarks][5th ed.]) (Japan Institute of Invention and Innovation, 2007)
Minoru Takeda, Tokkyo Shinsa/Shinpan No Hōri To Kadai: Supervised by Minoru
Takeda, Tokkyo Shinsa/Shinpan No Hōri To Kadai (Legal Principles and Challenges ofPatent Examination and Trials) (Japan Institute of Invention and Innovation, 2002)
Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han]: Kazuhiko Takeda, Tokkyo No
Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]) (Diamond, 2006)
Taniguchi Tomohei Kanreki Kinen (1)-(3): Taniguchi Tomohei Kyōju Kanreki Kinen,
Futō Ritoku/Jimu Kanri No Kenkyū (1)-(3) (Essays in Honor of the Sixtieth Birthday ofProfessor Tomohei Taniguchi: Study on Unjust Enrichment/Management Without
Mandate), (Yuhikaku, 1970, 1971, 1972)vi

NotesYoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan]: Yoshiyuki Tamura,
Chiteki Zaisanken To Songai Baishō [Shinpan] (Intellectual Property and Compensationof Damages [New ed.]) (Koubundou, 2004)
Yoshiyuki Tamura and Keizō Yamamoto, Shokumu Hatsumei: Yoshiyuki Tamura andKeizō Yamamoto, Shokumu Hatsumei (Employee Inventions) (Yuhikaku, 2005)
Yoshiyuki Tamura, Chiteki Zaisan Hō [Dai 5 Han]: Yoshiyuki Tamura, Chiteki Zaisan
Hō [Dai 5 Han] (Intellectual Property Law [5th ed.]) (Yuhikaku, 2010)
Chiteki Zaisan Kenkyūjo Goshūnen Kinen Ronbun Shū, Chiteki Zaisan No Chōryū:Chiteki Zaisan Kenkyūjo Goshūnen Kinen Ronbun Shū, Chiteki Zaisan No Chōryū(Essays in Honor of the 5th Anniversary of the Institute of Intellectual Property, Trend ofIntellectual Property) (Institute of Intellectual Property, 1995)
Japan Patent Office, Kōgyō Shoyūken Seido Hyakunen Shi Jō/Ge/Bekkan: Japan Patent
Office, Kōgyō Shoyūken Seido Hyakunen Shi Jō/Ge/Bekkan (100 Years of the Industrial
Property System Vol. 1/Vol. 2/Special Volume) (Japan Institute of Invention andInnovation, 1984–1985)
Japan Patent Office, Kaisei Tokkyo Hō Jitsuyō Shin’an Hō Kaisetsu: Legislative Affairs
Office, General Affairs Division, General Affairs Department, Japan Patent Office,Kaisei Tokkyo Hō Jitsuyō Shin’an Hō Kaisetsu (Explanation of the Revised Patent Act
and Utility Model Act) (Yuhikaku, 1993)
Japan Patent Office, Heisei 6 Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu: Legislative
Affairs Office, General Affairs Division, General Affairs Department, Japan Patent
Office, Heisei 6 Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu (Explanation of the 1994
Revision of Industrial Property Acts) (Japan Institute of Invention and Innovation, 1995)
Japan Patent Office, Heisei 8 Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu: Legislative
Affairs Office, General Affairs Division, General Affairs Department, Japan Patent
Office, Heisei 8 Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu (Explanation of the 1996
Revision of Industrial Property Acts) (Japan Institute of Invention and Innovation, 1997)
Japan Patent Office, Kōgyō Shoyūken Hō Chikujō Kaisetsu [Dai 18 Han]: Japan Patentvii

Notes

Office, Kōgyō Shoyūken Hō Chikujō Kaisetsu [Dai 18 Han] (Clause-by-Clause
Explanation of Industrial Property Acts [18th ed.]) (Japan Institute of Invention andInnovation, 2010)
Tokkyo Hō Seminā (1) Hatsumei: Tokkyo Hō Seminā (1) Hatsumei (Patent Law Seminar(1) Invention) (Yuhikaku, 1969)
Tokkyo Hō Seminā (2) Shutsugan/Shinsa/Shinpan/Soshō: Tokkyo Hō Seminā (2)Shutsugan/Shinsa/Shinpan/Soshō(Patent

Law

Seminar(2)

Application/Examination/Trial/Lawsuit) (Yuhikaku, 1970)
Kazufumi Dohi, Chiteki Zaisan Hō Nyūmon [Dai 13 Han]: Kazufumi Dohi, Chiteki
Zaisan Hō Nyūmon [Dai 13 Han] (Introductory Guide to Intellectual Property Law [13thed.]) (Chuokeizai-Sha, 2012)
Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho]: Mitsue Toyosaki, Kōgyō
Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law [New and Expanded ed.])(Yuhikaku, 1980)
Mitsue Toyosaki and Nobuhiro Nakayama, Radasu Kokusai Kōgyō Shoyūken Hō: Mitsue
Toyosaki and Nobuhiro Nakayama, Radasu Kokusai Kōgyō Shoyūken Hō (Ladas
International Industrial Property Law) (AIPPI Japan, 1980)
Toyosaki Mitsue Tsuitō Kinen: Toyosaki Mitsue Sensei Tsuitō Kinen Ronbun Shū, Mutai
Zaisan Hō To Shōji Hō No Sho Mondai (Essays in Memory of Professor Mitsue Toyosaki:
Various Problems Relating to Intangible Property Law and Business Law) (Yuhikaku,
1981)
Zennosuke Nakagawa and Mitsue Toyosaki, Jitsuyō Hōritsu Jiten (8) Tokkyo: Zennosuke
Nakagawa and Mitsue Toyosaki, Jitsuyō Hōritsu Jiten (8) Tokkyo (Practical Law
Dictionary (8) Patent) (Dai-ichi Hoki, 1972)
Zennosuke Nakagawa and Hajime Kaneko, Tokkyo/Shōhyō/Chosakuken (Jitsumu Hōritsu
Taikei10):SupervisedbyZennosuke

Nakagawa

andHajimeKaneko,Tokkyo/Shōhyō/Chosakuken (Jitsumu Hōritsu Taikei 10) (Patent/Trademark/Copyright[Outline of Practical Law 10]) (Seirin Shoin Shinsha, 1972)

viii

NotesJun Nakagawa and Yoshitsugu Harima, ed., Hanrei Kenkyū Kōgyō Shoyūken Hō: Jun
Nakagawa and Yoshitsugu Harima ed., Hanrei Kenkyū Kōgyō Shoyūken Hō (Law Case
Study of Industrial Property Law) (Yushindo Kobun-Sha Publishing, 1997)
Kikushirō Nagata, Kōgyō Shoyūken Hō: Kikushirō Nagata, Kōgyō Shoyūken Hō(Industrial Property Law) (Yushindo, 1957)
Nakamatsu Junnosuke Tsuitō: Nakamatsu Junnosuke Sensei Tsuitō Ronbun Shū, Kokusai
Kōgyō Shoyūken Hō No Sho Mondai (Essays in Memory of Professor Junnosuke
Nakamatsu: Various Problems Relating to International Industrial Property Laws) (AIPPI
Japan, 1976)
Nobuhiro Nakayama, Tokkyo Hōshiki Mondai Eno Apurōchi: Nobuhiro Nakayama,
Tokkyo Hōshiki Mondai Eno Apurōchi (Approach to Patent Formality Issues) (ResearchInstitute of International Trade and Industry, 1982)
Nobuhiro

Nakayama,

Hatsumeishaken

No

Kenkyū:Nobuhiro

Nakayama,

Hatsumeishaken No Kenkyū (Study on Rights of the Inventor) (University of Tokyo Press,
1987)
Nobuhiro Nakayama, Sofutowea No Hōteki Hogo [Shinpan]: Nobuhiro Nakayama,
Sofutowea No Hōteki Hogo [Shinpan] (Legal Protection of Software [New ed.])(Yuhikaku, 1988)
Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō/Ge [Dai 3 Han]: Nobuhiro Nakayama,ed., Chūkai Tokkyo Hō Jō/Ge [Dai 3 Han] (Explanatory Notes on the Patent Act Vols. 1
and 2 [3rd ed.]) (Seirin Shoin, 2000)
Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō/Ge: Nobuhiro
Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō/Ge (New Explanatory
Notes on the Patent Act Vols. 1 and 2) (Seirin Shoin, 2011)
Nobuhiro

Nakayama,

Maruchimedia

To

Chosakuken:

Nobuhiro

Nakayama,

Maruchimedia To Chosakuken (Multimedia and Copyright) (Iwanami Shinsho, 1996)
Nakayama Nobuhiro Kanreki Kinen: Nakayama Nobuhiro Sensei Kanreki Kinen Ronbunix

NotesShū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai (Essays in Honor of the Sixtieth
Birthday of Professor Nobuhiro Nakayama: Theories of Intellectual Property Law andModern Issues) (Koubundou, 2005)
Nobuhiro Nakayama, Chosakuken Hō: Nobuhiro Nakayama, Chosaskuken Hō(Copyright Law) (Yuhikaku, 2007)
Hiroaki Niihara, Kaisei Tokkyo Hō Kaisetsu: Hiroaki Niihara, Kaisei Tokkyo Hō Kaisetsu(Commentary on the Revised Patent Act) (Yuhikaku, 1987)
Yoshirō Hashimoto, Tokkyo Kankei Jōyaku [Dai 4 Han]: Yoshirō Hashimoto, Tokkyo
Kankei Jōyaku [Dai 4 Han] (Patent Related Treaties [4th ed.]) (Japan Institute ofInvention and Innovation, 2005)
Yoshirō Hashimoto, Tokkyo Hō [Dai 3 Han]: Yoshirō Hashimoto, Tokkyo Hō [Dai 3Han] (Patent Law [3rd ed.]) (Japan Institute of Invention and Innovation, 2006)
Toshio Hattori, Tokkyo Hō Yōsetsu: Toshio Hattori, Tokkyo Hō Yōsetsu (Introduction to
Patent Law) (Gihodo Shuppan, 1966)
Hara Masuji Taikan Kinen Jō/Ge: Hara Masuji Hanji Taikan Kinen, Kōgyō Shoyūken No
Kihonteki Kadai Jō/Ge (Essays in Honor of Retirement of Judge Masuji Hara: Basic
Issues of Industrial Property Rights Vols.1 and 2) (Yuhikaku, 1971, 1972)
Masatarō Fujie, Kaisei Tokkyo Hō Yōron: Masatarō Fujie, Kaisei Tokkyo Hō Yōron(Summary of the Revised Patent Act) (Ganshodo, 1922)
Georg Bodenhausen, Chūkai Pari Jōyaku: Georg Bodenhausen, Chūkai Pari Jōyaku
(Guide to the Application of the Paris Convention for the Protection of Industrial Property
as Revised at Stockholm in 1967) (AIPPI Japan, 1968)
Honma Takashi Kanreki Kinen: Honma Takashi Sensei Kanreki Kinen, Chiteki
Zaisanken No Gendaiteki Kadai (Essays in Honor of the Sixtieth Birthday of Professor
Takashi Honma: Modern Issues of Intellectual Property Rights) (Shinzansha, 1995)
Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō: ToshiakixNotesMakino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō (Outline of Court
Practices 9: Industrial Property Litigation Law) (Seirin Shoin, 1985)
Toshiaki Makino and Hiroshi Saitō, eds., Saiban Jitsumu Taikei 27, Chiteki Zaisan
Kankei Soshō Hō: Toshiaki Makino and Hiroshi Saitō, eds., Saiban Jitsumu Taikei 27,
Chiteki Zaisan Kankei Soshō Hō (Outline of Court Practices 27: Intellectual Property
Related Litigation Law) (Seirin Shoin, 1997)
Toshiaki Makino and Toshiaki Iimura, eds., Shin Saiban Jitsumu Taikei 4, Chiteki Zaisan
Kankei Soshō Hō: Toshiaki Makino and Toshiaki Iimura, eds., Shin Saiban Jitsumu
Taikei 4, Chiteki Zaisan Kankei Soshō Hō (New Outline of Court Practices 4: Intellectual
Property Related Litigation Law) (Seirin Shoin, 2001)
Kazuo Masui and Yoshiyuki Tamura, Tokkyo Hanrei Gaido [Dai 4 Han]: Kazuo Masui
and Yoshiyuki Tamura, Tokkyo Hanrei Gaido [Dai 4 Han] (Guide to Patent-related Law
Cases [4th ed.]) (Yuhikaku, 2012)
Shigetoshi Matsumoto, Tokkyo Hatsumei No Hogo Han’i [Shinpan]: Shigetoshi
Matsumoto, Tokkyo Hatsumei No Hogo Han’i [Shinpan] (Scope of Protection of a
Patented Invention [New ed.]) (Yuhikaku, 2000)
Seishi Matsumoto, Kaisei Tokkyo Hō Yōron: Seishi Matsumoto, Kaisei Tokkyo Hō Yōron(Summary of the Revised Patent Act) (Ganshodo, 1911)
Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan]: Shirō Mitsuishi, Tokkyo Hō Shōsetsu[Shinpan] (Detailed Explanation of Patent Law [New ed.]) (Gyosei, 1976)
Miyake Masao Kiju Kinen: Miyake Masao Sensei Kiju Kinen, Tokkyo Sōshō No Sho
Mondai (Essays in Honor of the Seventy-Seventh Birthday of Professor Masao Miyake:
Various Problems Related to Patent Disputes) (Japan Institute of Invention andInnovation, 1986)
Kazuo Morioka, Kōgyō Shoyūken Hō Gaisetsu [Dai 4 Han]: Kazuo Morioka, Kōgyō
Shoyūken Hō Gaisetsu [Dai 4 Han] (Outline of Industrial Property Law [4th ed.]),(Hougaku Shoin, 2000)
Nobuo Mon'ya, Chiteki Zaisanken Hō Gairon [Dai 3 Han]: Nobuo Mon'ya, ChitekixiNotesZaisanken Hō Gairon [Dai 3 Han] (Elements of Intellectual Property Law [3rd ed.])(Yuhikaku, 2012)
Nobuo Mon'ya, ed., Chūshaku Tokkyo Hō: Nobuo Mon'ya, ed., Chūshaku Tokkyo Hō(Annotated Patent Act) (Yuhikaku, 1986)
Shin'ya Yoshii, Tokkyoken Shingai Soshō Taiyō: Shin'ya Yoshii, Tokkyoken ShingaiSoshō Taiyō (Overview of Patent Infringement Litigation) (Japan Institute of Invention
and Innovation, 1990)
Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han]: Kōsaku Yoshifuji, Tokkyo HōGaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]) (Yuhikaku, 1998)
Sōtarō Watanabe, Kōgyō Shoyūken Hō Yōsetsu: Sōtarō Watanabe, Kōgyō Shoyūken HōYōsetsu (Summary of Industrial Property Law) (Yuhikaku, 1963)
1. The laws and regulations are those as of April 2012.
2. Unless otherwise specified, article numbers of laws in this book are those of theJapanese Patent Act.
3. Document names in italics indicate books and periodicals, while those enclosed inquotation marks indicate essays.
4. Number in square brackets indicate original pages.

xii§1. Introduction[2]

Chapter 1 Overview§1. Introduction
1.1. Significance of Industrial Property Law
1.1.1. Concept of Industrial Property Law
The term “kōgyō shoyūken” which is used as the equivalent of industrial property
in English and propriété industrielle in French, is not always used to mean the same kindsof rights. With respect to treaties and laws, the Paris Convention for the Protection ofIndustrial Property (hereinafter referred to as the “Paris Convention”) stipulates that
“industrial property shall be understood in the broadest sense” (Article 1, paragraph (3)of the Paris Convention), even including the prohibition of acts of unfair competition(Article 10bis). On the other hand, under the Act for Establishment of the Ministry of
Economy Trade and Industry (Article 4, item (vi) and Articles 22 and 23), the term isused in a more limited sense to refer only to the rights protected under the Patent Act,
Utility Model Act, Design Act, and Trademark Act. In this manner, the meaning of theterm differs according to the legislative purpose of each law or treaty. In addition to theabove, kōgyō shoyūken is used as a legal term in other laws and regulations, including theJapan-U.K. Treaty of Commerce and Navigation of 1894, the official translation of theParis Convention, laws and regulations related to the necessary procedures after WorldWar II, the Factory Mortgage Act (Article 11, item (v)), and the Income Tax Act (Article
161, item (vii), (a)).
Incidentally, the term “kōgyō shoyūken” was revised to “sangyō shoyūken” in theIntellectual Property Policy Outline formulated by the Strategic Council on Intellectual
Property 1 in 2002. Although “sangyō shoyūken” is considered to express the actual
meaning of the term more precisely, this book uses the term “kōgyō shoyūken” forconvenience since it is still a more well-known term (but note that this English version of
the book uses the English term, intellectual property).
1 The Strategic Council on Intellectual Property is the Prime Minister’s advisory body established in the Cabinet
Secretariat in order to enhance the international competitiveness of Japanese industries, revitalize the economy,
establish a national strategy for intellectual property, and to powerfully advance the necessary policies. In responseto the recommendations made by the council in its Intellectual Property Policy Outline published in 2002, theIntellectual Property Basic Act was created, and based on the provisions of Articles 24 onward of said Act, theIntellectual Property Strategy Headquarters was established, consisting of all members of the Cabinet and 10 experts
with the Prime Minister serving as the Director-General. In 2003, the headquarters published the first Intellectual
Property Strategic Program, which serves as the basis of Japan’s intellectual property strategy. Ever since, theheadquarters has released an Intellectual Property Strategic Program every year. For details, see the website of thePrime Minister of Japan and His Cabinet (http://www.kantei.go.jp/jp/singi/titeki2/).

1§1. Introduction

The term “kōgyō shoyūken” (industrial property) is not rigidly defined, but it isoften used with a broad meaning in studies. Leaving the concept of intellectual property
rights for later discussion, this textbook will first examine the difference between
industrial property rights and copyright.
[3]
While the purpose of copyright law is to contribute to the development of culture(Article 1 of the Copyright Act), that of industrial property law is to contribute to thedevelopment of industry (Article 1 of the Patent Act, Article 1 of the Utility Model Act,
Article 1 of the Design Act, Article 1 of the Trademark Act, Article 1 of the
Semiconductor Chip Act, and Article 1 of the Plant Variety Protection and Seed Act).
The concepts of culture and industry may be subject to varied ideas, but the target
domains of the respective laws are different, and this difference causes divergence in thesubject matter and modes of protection under the respective laws. The subject matter ofindustrial property law and that of copyright law have become largely differentiated,2although some conflicts have occurred between design rights and copyright concerning
applied art.
Nevertheless, the changes to the situation surrounding copyright in recent years aremaking it difficult to clearly differentiate between the two legal domains. 3 A drasticchange occurred when computer programs were incorporated into the Copyright Act by
the 1985 revision and also databases by the 1986 revision. As a result, it became apparent
that computer programs are protectable under copyright law. However, computer
programs also became patentable depending on how the claims are written and can evenbe protected under unfair competition prevention law as a trade secret, if it is kept
confidential, while a certain aspect of computer programs can also be protected under
trademark law. As typically exemplified by computer programs, copyright law isfunctioning as a de-facto technology protection law for some types of works, and many
copyrighted works have become important industrial assets. Today, copyright law isdeeply involved in the domains of industry and technology, causing a situation wherein
it is difficult to discriminate between copyright law and industrial property law merely by
the difference between their legal purposes: the development of culture versus thedevelopment of industry. Accordingly, while a definition stating that industrial property
rights are intellectual property rights excluding copyright may reflect the history of thelaw, such definition does not seem to have any substantial significance today. Rather, an
2 For the issue of the differentiation between the subject matter of industrial property law and that of copyright law,see Nobuhiro Nakayama, “Chosakuken Hō No Sekai To Tokkyo Hō No Sekai” (The World of Copyright and theWorld of Patent), Tokugikon (Journal of the Patent Office Society), No. 208 (1999), p. 40; and Nobuhiro Nakayama,
Chosakuken Hō (2 Han) (Copyright Law [2nd ed.]), p. 23.
3 See Nobuhiro Nakayama, Chosakuken Hō (2 Han) (Copyright Law [2nd ed.]), p. 22.

2§1. Introduction

attempt to make a clear distinction between the two legal domains has the risk of blurring
the overall picture of the actual situation.4[4]While this book deals with patent law, which is the centerpiece of industrial
property law, it is difficult to positively define the concept of industrial property today,
and at the same time, it is actually more appropriate to discuss it together with copyrightin some respects. Therefore, in discussing the legal purposes and protection methods as
an overview, it is essential to give some consideration to the significance of intellectual
property law, which is a superordinate concept of industrial property law.
1.1.2. The Term “Kōgyō Shoyūken” (Industrial Property)
The term “kōgyō” (industry) in “kōgyō shoyūken” is used to refer to not only the
manufacturing industry, but to all kinds of businesses. Article 1, paragraph (3) of the Paris
Convention stipulates that “industrial property shall be understood in the broadest sense
and shall apply not only to industry and commerce proper, but likewise to agriculturaland extractive industries and to all manufactured or natural products, for example, wines,
grain, tobacco leaf, fruit, cattle, minerals, mineral waters, beer, flowers, and flour.” In thatsense, it is inappropriate to have translated “industry” as kōgyō, which primarily means
the manufacturing industry; rather, the term sangyō would be more appropriate.5
Another cause of misunderstanding is the translation of “property” as shoyūken(ownership).6 While shoyūken is the absolute and conceptual controlling title to a thing(defined to mean a “tangible thing” under Article 85 of the Civil Code), the term “property”
here is a concept referring more broadly to property in general. 7 Although a patent rightis designed to be similar to ownership (real right), the two kinds of rights are different interms of the historical background, the objectives, the nature of the subject matter, and4 Although this book does not deal with copyright, the importance of copyright is worthy of mention. While thesignificance of copyright is naturally in its function as a technology protection law, its importance as an information
protection law will increase without doubt in the advanced information era (i.e. the network era or digital era). Thismeans that copyright will come to serve as an important economic asset along with patent rights. Although
intellectual property issues arising in business have mainly involved patents in the past, enterprises will also need togive sufficient consideration to copyright in the future. However, copyright is very different in nature from a patentand lacks flexibility as an economic asset, so it is not necessarily a useful right in that sense. This point is expected
to become a great issue under copyright law. See Nobuhiro Nakayama, Maruchimedia To Chosakuken, p. 40; andNobuhiro Nakayama, Kōgyō Shoyūken To Chosakuken No Hōteki Kiso (Legal Fundamentals of Industrial Property
and Copyright), Tokkyo Kenkyū (Patent Study), No. 1, (1986), p. 17.
5 This point has already been indicated in Izutarō Suehiro, Kōgyō Shoyūken Hō, p. 1.
6 Kiyose, Tokkyo Hō (Patent Act), p. 20 explains that the term “kōgyō shoyūken” was used for the sake of convenience,and the term does not have the meaning of “property” but is merely a collective noun for patent rights, design rights,
trademark rights and utility model rights.
7 Regarding the historical background of the concept of shoyūken, see Shirō Ishii, “Zaisan To Hō” (Property and Law),
Iwanami Kōza Kihon Hōgaku 3 - Zaisan (Iwanami Lecture Series Basic Law 3: Property), (Iwanami Shoten, 1983),
p. 3.

3

§1. Introduction

the contents of the right. Meanwhile, a trade secret protected under the Unfair
Competition Prevention Act is not designed to be similar to ownership, and it does not
become subject to absolute and conceptual control as in the case of ownership. However,a trade secret is theoretically considered to be property, constituting one kind of kōgyō
shoyūken. The use of the term kōgyō “shoyūken” as a generic term for all of these rights
is misleading and causes confusion among users. It may even be more proper to avoid
using the term “kōgyō shoyūken” at all.8 This is a problem of the definition of the word,
which can be solved by simply defining the term precisely, but it is a fact that the term“shoyūken” often causes confusion in reality.
[5]
As discussed above, the use of the term “kōgyō shoyūken” may not necessarily bedesirable, but since it is already used widely and has been used officially, 9 this textbook
will abide by the conventional terminology, recognizing that the term “kōgyō shoyūken”
is different in concept from “shoyūken” used under the Civil Code. Unlike the case ofinterpreting specific legal provisions, there is no reason to limit the scope of the term“kōgyō shoyūken” to a narrow meaning in theoretical discussion, so this book will use theterm in the broadest sense possible.

8 “Industrial property” in English, “propriété industrielle” in French, and “gewerblicher Rechtsschutz” in German are
all different in concept from shoyūken in the sense used in Japan. Also, expressions such as “own a patent,” “own aninvention” or even “own a trade secret” are sometimes used, but nonetheless, these are different in the strict sensefrom the concept of shoyūken (ownership) under the Civil Code. Although “intellectual property” is sometimes
translated as chiteki shoyūken (intellectual ownership), this is likely to cause a misunderstanding in the same manner.
A more appropriate term to use would be chiteki zaisan (intellectual property). Since the term “intellectual property”
in the name of the organization, World Intellectual Property Organization (WIPO), of which Japan is a member, isofficially translated as chiteki shoyūken, it would not be impossible to translate “property” as shoyūken from such astandpoint. However, the term “chiteki zaisanken” has taken root among the public, with the establishment of chiteki
zaisan seisaku shitsu (Intellectual Property Policy Office) in the Industrial Policy Bureau (currently the Economic
and Industrial Policy Bureau) of the Ministry of International Trade and Industry (currently the Ministry of Economy,
Trade and Industry), a drastic increase in the number of companies establishing a chiteki zaisan bu (an Intellectual
Property Division) instead of a tokkyo bu (a Patent Division), the enactment of chiteki zaisan kihon hō (Intellectual
Property Basic Act) in 2002, and the establishment of chiteki zaisan senryaku honbu (Intellectual Property Strategy
Headquarters) within the Cabinet.
9 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 4 points out that “the word ‘kōgyō shoyūken’ was first
officially used when agreeing to accede to the Paris Convention in the Japan-U.K. Treaty of Commerce andNavigation of 1894.” A similar description is found in Ichirō Kiyose, Tokkyo Hō Genri, p. 19. Nevertheless, thisterm had been used even before that in official documents relating to the repeated objections by foreign companies
to the misappropriation of trademarks by Japanese companies. The translated word “kōgyō shoyūken” seems to havebeen settled at quite an early stage in the Meiji Period and has been used ever since.

4§1. Introduction[6]
1.2. Intellectual Property Law as a Superordinate Concept
1.2.1. Reason for Existence of Intellectual Property Law
Intellectual property consists of industrial property and copyright. First, how can wecharacterize intellectual property, which is the subordinate concept? Today, an extensive
range of legal domains are categorized under the name of intellectual property law, and an
aspect common to them is that they protect proprietary information. Generally, the Unfair
Competition Prevention Act is also considered to be included in intellectual property law.
The Act was regarded as being categorized under the domain of intellectual property law
since it had mainly protected signs at the time it was legislated, but at present, it also covers
the prohibition of the commercial use of foreign national flags and marks of internationalorganizations, prohibition of making or circulating false allegations, and prohibition of theprovision of illicit profit to foreign public officials. The scope of the Act is likely to expand
even further in the future, and the portion that cannot be covered by the concept ofintellectual property is expected to increase. If all the provisions of the Unfair Competition
Prevention Act are to be construed as falling within the framework of intellectual property
law, intellectual property law would have a significance beyond information protection law,and could possibly be considered part of economic law for maintaining competitive order.
In that case, however, it would be difficult to consider it as property law, and there would
be a problem regarding its relation to the Anti-Monopoly Act and other competition law.
Information is also protected under tort law, contract law, and criminal law, among
others. Therefore, intellectual property law is not the only law for protecting proprietary
information. At any rate, intellectual property law can be regarded as a legal system forprotecting certain types of information by granting rights for it, which encompasses
peripheral legal domains. Since a clear concept of intellectual property law is difficult todetermine at this time of dramatic social and economic change, we must wait for thedevelopment of future theories in that respect.
Meanwhile, the protection of information that focuses on privacy is outside thedomain of intellectual property law, because by its nature it is not property law. Also, there
are calls for certain types of administrative information to be published, and this topic has
been debated as an issue of information disclosure law, but this again is outside the domain
of intellectual property law. It may be possible to establish a new legal genre called the“study of information law” covering all such information-related issues, but this textbook
will only deal with the legal protection of information as property.

5§1. Introduction[7]
Apart from the issue of immoral abuse, as a generality, information can be freely
used, in principle, and can be regarded as public property. Mankind, be it individuals,
enterprises, or nations, has developed through imitating. However excellent a scholar or an
artist may be, his/her achievements are made by adding his/her own creation to theachievements of his/her predecessors. Therefore, the prohibition of imitation in general isneither permissible nor possible, for it would lock in place the existing order of society andobstruct social development.
Despite the fact that the free use of information is indispensable for social
development, if all uses of information go totally unregulated, there will be adverse effects.
For example, if the free use of inventions and other R&D results were allowed, themotivation to create something new or to invest in new development could be lost, resulting
in an underproduction of information. Also, in such a situation, technological information
on research results would be kept secret without being passed on to society, and society
would not be able to accumulate information easily, having a negative effect on thedevelopment of industry and culture. Conventionally, the only way to prevent imitation byothers was to keep the information secret, and such information had been kept by, forexample, writing it down on a hand scroll and handing it down through the family.
Nevertheless, it was often difficult to keep information concerning marketed products asecret, so the creators of information had been extremely disadvantaged in the days whenno law existed to protect information. Before intellectual property law was established,inventors were extremely vulnerable to imitations, and their research and development
when carried out as economic activities was often delayed.
Thus, in line with industrial development, there was a growing demand for theprotection of property value of certain types of information. As a result, intellectual
property law was established with the aim of creating a system for eliminating others fromusing, without prior consent, information in certain ways when that information satisfies
statutory requirements, and information protected by such law is intellectual property.
Intellectual property is not limited to creations resulting from mental activities andbusiness signs. Specifically, the subject matter currently protected under the current law
includes inventions and copyright works, which result from human intellectual/mental
creative activities, signs such as trademarks and trade names, which represent business
reputation (goodwill), as well as trade secrets and the configuration of goods. By
amplifying the purpose of intellectual property law, which is to eliminate the abusive useof information by others, it would be possible to protect, under intellectual property law,
not only intellectual creations but also information that involves a substantial amount of6§1. Introduction

investment and is vulnerable to imitation, if the industry in question cannot sustain itself
properly without the protection of such information by law. For instance, the protection of
databases is not aimed at the protection of intellectual creation, but rather at the protectionof investment. Since, in particular, the transmitters of information are expected to become
increasingly important in the information society of the future,1 not only the people whohave created or collected information, but also those who have transmitted the information
are likely to become discussed as subjects of protection.2 However, the term “intellectual”
may be inappropriate for intellectual property law with such an expanded scope.
[8]
While initial signs of the concept of intellectual property can be glimpsed far back inhistory, the establishment of the concept of information as property was closely related tothe development of capitalism. In recent years, factors such as the elimination of national
borders in economic activities, the digitization of information, and the expansion of thescale of technology have caused information to be recognized as increasingly important
property, the meaning of intellectual property to be changed, and intellectual property law
to gain higher importance in business law.
If the only aim of the law were to protect information from unjust free-riding on
proprietary information, it would be sufficient to prohibit use of the information by others
and to guarantee reflective interests (indirect benefits that arise as a result of laws that
protect the public interest) through exclusive use of the information.3 In the course of time,
however, there has been a growth in the demand to treat information as an asset.
Accordingly, a method was adopted whereby a right similar to ownership was granted for
information so as to artificially generate a scarcity of such information and to give an
economic value to such information. As a result, it became possible to make suchinformation subject to assignment, inheritance, license, or collateralization, enabling theinformation holder not only to have the direct and exclusive use of the information, but also
to use the information as an asset to gain profits or receive loans.4 In addition, information
became tradable as an economic good, and this had the effect of promoting technology
transfer.
1 For intellectual property in the information era, see Nobuhiro Nakayama, “Dejitaru Jidai Ni Okeru Zaisanteki Jōhō No
Hogo” (Protection of Proprietary Information in a Digital Era), Hōsō Jihō (Lawyers Association Journal), Vol. 49, No.
8, p. 1.
2 Neighboring rights are mainly intended for protecting transmitters of information, and databases also follow a similar
trend in practice.
3 Specifically, if there is only a need for a right to seek an injunction, a right to claim compensation for damage, and penal
provisions, there will be no need to adopt an ownership-style legal system, as in the case of the Unfair Competition
Prevention Act.
4 In the United States, in particular, damages for infringements have become massive, and this has had a global impact.
Such profits from licensing are sometimes greater in amount or smaller in risk than the profits gained from exclusively
manufacturing and selling the products using the company’s own capital and labor. Therefore, in many fields where de
facto standards have been formed, licensing is very important in the patent strategy of a company.

7§1. Introduction

In this manner, the legal protection of information has gradually shifted from themere prohibition of abusive uses of information to making information an asset, and such
assetized portion constitutes the core of intellectual property. However, intellectual
property law also has the function of maintaining competitive order, so its nature is not
simply that of a property law as in the case of ownership. The Unfair Competition
Prevention Act, in particular, does not adopt an ownership-style legal system, and can beconstrued as an extension of tort law.
[9]Intellectual property law is made up of the complex elements mentioned above.
Generally speaking, particularly in the case of laws concerning creativity (mentioned later),the prohibition or restriction of the free use of information is considered to be an obstruction
to the distribution of information, possibly having a negative effect on the welfare of society
as a whole. If we consider only the information that exists at present, placing theinformation in the public domain (PD) for free use will clearly enhance the welfare ofsociety as a whole, but the problem becomes complex when the incentive for creating
information in the future is also taken into consideration. In short, prohibition of the freeuse of information can be considered appropriate when the prohibition of imitation andpermission for the exclusive use of information have a more positive than negative effecton society after taking all factors into consideration.
The recent rise of the idea of commons is worthy of note. It is an idea whereby
information should not be monopolized, but should be shared5 among each other for thedevelopment of society. Intellectual property law is a system which grants the creatormonopolistic profits, and uses such profits as incentives for creating new things, thereby
contributing to the enrichment of information in society. The law premises that rational
economic human beings would be influenced by profits, and that they would actively
engage in creative activities if they were able to enjoy profits. However, people’s behavior
is not decided by profits alone. For example, the world’s largest free online encyclopedia,
Wikipedia, is supported by volunteers. Creative Commons (CC)6 is an organization which
provides an infrastructure where people can share information online with each other freeof charge. The same applies to free software. In the Internet era in particular, people haveoften behaved in a manner that cannot be explained by profits, and people’s acts that do not
ask for a return sometimes have a substantial influence on even the economy and society.
In actuality, the abovementioned Wikipedia is gradually making paper encyclopedias,

5 “Share” in this context does not refer to the “co-ownership” as provided under the Civil Code, but merely means thatanybody can use the information. It means the same as “shared” as used in the phrase “asset shared by all human beings”
in everyday language.
6 See http://creativecommons.org/.

8§1. Introduction

which need to be bought with money, obsolete. The idea of commons is opposite to theidea of intellectual property law which grants an exclusive right, but they are the same inthat they both aim to enrich information. While we must wait for the results of further study
in psychology and behavioral economics for an answer, discussion is expected to become
more heated in the future as to which are the kinds of cases where allowing the exclusive
use of information would have a more positive effect on enriching information than sharing
information, and vice versa. In any case, it is important to recognize that people’s behavior
is not always decided by monetary profits, and creative activities in particular are often
carried out irrespective of monetary profits, for which reason the current intellectual
property system will not be the only incentive for creating information.
[10]
Although it is difficult to prove empirically that allowing the exclusive use of
information under intellectual property law has largely a more positive than negative effect,
patent law and other intellectual property laws are established based on a policy-oriented
determination (or, a hypothesis in a sense) that providing an incentive for creative activities
through granting exclusive rights has a positive effect on industrial and culturaldevelopment. This issue has been studied through economic analyses of intellectual
property law mainly in the United States, but there seems to be no established theory. Suchempirical analysis is likely to be extremely difficult because the scope of intellectual
property law is broad and the results can differ by field. Looking back through history, there
was a strong anti-patent movement in Europe in the late 19th century. Under the prevailing
idea that the patent system had a negative effect on economic development, the Netherlands
repealed its patent law in 1869, Switzerland delayed in enacting its patent law, and inGermany, the existence of a patent system for each Land was threatened. The dispute wasmainly over the economic function of the patent system, and the central idea was that toabolish the patent system of each country and to promote the exchange of technical ideas
were the keys to economic development. This dispute of the late 19th century did not cometo a conclusion, but was dissolved as conservatism gained power with the coming ofrecession. In a strict sense, we should expect economists to analyze this issue, but the roleof a patent system in technological, and furthermore, industrial development, probably
cannot be determined in a unified manner for all types of technology. The generally heldview is that, while a patent right functions as an exclusive right in the original sense in thechemical, and particularly, in the medical fields, where it is possible to dominate the global
market with one patent, it often serves as a cross-licensing tool in the fields of electrical
goods and machinery, because the extremely large number of patents involved in a single
product makes it difficult for one company to monopolize all the technology for that9§1. Introduction

product. Even in the same technical field, a patent system may or may not become a great
incentive for technological development, depending on the case and depending on thedevelopers/researchers. For example, it is possible that a patent system could provide an
incentive for Edison, but not for Röntgen.7 Thus, the economic significance of patent law
cannot be determined easily.
[11]
There are enormous costs involved in maintaining as massive a social system as theintellectual property system, particularly the patent system. These are not only the costs for
obtaining and maintaining patents, but also the costs for a large national patent office withnearly 3,000 officials, personnel costs for patent attorneys, lawyers, and judges, andrelevant people working in companies or patent-related foundations, as well as the costs forexperts such as patent law scholars. In addition, when large disputes occur, competentpeople who should be engaging in technological development have to participate inlawsuits, and the litigation costs would be enormous; furthermore, the disputes haveshadow effects which cannot be ignored. The explosive increase in the number of patentapplications has caused the issue of patent thickets. The present vast number of patent rights
not only requires enormous costs for conducting patent searches, but also makes it
extremely difficult to conduct accurate searches, particularly in electric and electronic
industries. A company that is unable to conduct sufficient patent searches is walking in aminefield. Also, with an increase in the number of patents, there has been a growing numberof patent trolls8 that do not directly work inventions, but acquire a large number of patentrights from others and swindle them out of money by filing or hinting to file lawsuits against
them. These tangible and intangible expenditures, which would not arise if there were nopatent system, are the costs of the patent system. The patent system is established under ahypothesis that, despite such enormous costs, the benefits it brings to society are still greater.
In the past, reward systems, subsidies for inventions, research in public institutions,and so forth, have been advocated as a means of encouraging invention in place of thepatent system, but none of them proved to be an adequate substitute for the patent system.
Reward systems existed as inventor certificate systems in socialist countries where
productive property is in principle owned by the State. However, those systems disappearedwith the collapse of those socialist countries. At least under the current free economy
system, the view claiming that no patent system is required is a minority opinion. A patent

7 Edison obtained an enormous number of patents and fought for his rights in many patent lawsuits. In contrast, Röntgen
did not obtain patents, so his technology was used and improved by many people around the world. Meanwhile, Eiichi
Negishi who won a Nobel Prize in 2010 did not obtain patents for cross-coupling either, so the technology was used inmuch subsequent research and achieved significant development. However, while Edison was a businessperson,
Röntgen and Eiichi Negishi were scientists, so it is natural that their standpoints differed.
8 A troll is a mythical creature or monster that appears in Scandinavian folklore.

10§1. Introduction

system now exists in most countries in the world, and industry is founded on the premiseof having a patent system, so it is practically impossible to abolish such a system at thisstage. Accordingly, the only option available to us is to consider the patent system as agiven and to try to improve the system.
[12]
We should note that the important point is not so simple as that the more theintellectual property system is strengthened the better it would be for society, but that abalance should be achieved between the free and exclusive use of information. Accordingly,
the system must be designed and interpreted so as to minimize the negative effects arisingfrom exclusive use, and to maximize the purpose of the law, with respect to the content ofintellectual property law, such as the subject matter, the term of protection, and the scopeof protection.
1.2.2. Classification of Intellectual Property Law
Since intellectual property law is a relatively new legal field, its concept has yet to
be clearly defined, and it has no established classification method. The possibleclassification of the law is one based on the nature of the subject matter (laws concerning
creativity and laws concerning signs) and one based on the method of protection (rightgranting laws and act-regulating laws). Both classifications merely view intellectual
property law from different aspects. Since the concept of intellectual property law is notexactly clear at present, such different perspectives on the law could be helpful for grasping
the overall picture of the law. Thus, an overview of intellectual property law is given below
from these two perspectives.
1.2.2.1. Laws Concerning Creativity and Laws Concerning Signs
The subject matter protected under intellectual property law consists of creations
resulting from human intellectual/mental activities and signs used in business; the laws forprotecting the former are referred to as laws concerning creativity, 9 while those for

9 Specifically, the Patent Act, Utility Model Act, Design Act, Semiconductor Chip Act, Plant Variety Protection and Seed
Act, and Copyright Act are categorized as laws concerning creativity. Although trade secrets and the configuration of
goods that are protected under the Unfair Competition Prevention Act sometimes include creations resulting fromhuman mental activities, creativity is not a requirement for their protection under the Act.

11§1. Introduction

protecting the latter are referred to as laws concerning signs. 10 They are collectively
referred to as intellectual property law. These two sets of laws, which are different withrespect to the nature of their subject matter, purpose of protection, and historicalbackground, have often been used for classification in the past.
The laws concerning creativity protect creations resulting from human
intellectual/mental activities, but something that subjectively appears new may not be new
objectively. While a copyright arises once a person creates a work, even if it is not new
objectively, a patent is granted only if an invention is new objectively (i.e., novel). In thismanner, the strict definition of creativity differs in each law. The purpose of the laws
concerning creativity is to inspire human creativity, provide more information to society,and contribute to the development and evolution of industry and culture.
[13]
Not all creations resulting from human intellectual/mental activities are protectedunder law; in fact, most of them are not, which means they are left to free use, in principle.
The subject matters to be protected are limited to those that are stipulated under the Patent
Act, Copyright Act, etc. However, despite the lack of protective law, some such creations
have come to be or are gradually becoming recognized as de facto property in the economy
and society, and their de facto regulations are called soft law. Such creations, which are
actually treated as de facto property without concrete legislation, are often treated in thedomain of laws concerning creativity. For instance, although the legal protection of
typefaces (character fonts) is often denied in court judgments, they are actually traded incommerce.11
In contrast, the laws concerning signs protect signs used in business, but what isreally protected is the business reputation represented by the sign. Business reputation is
the overall information that customers have with regard to a business operator, and it is, atthe same time, the property of the operator.12

10 Specifically, the Trademark Act and the portion of the Unfair Competition Prevention Act relating to signs are
categorized as laws concerning signs. The Unfair Competition Prevention Act prohibits acts of misrepresenting
information in a manner that is likely to mislead the public as to quality, etc. (Article 2, paragraph (1), item (xiii) of
the Unfair Competition Prevention Act) and acts of circulating, etc., false allegations (item (xiv) of said paragraph).
These provisions cannot be considered as provisions for protecting proprietary information, but they contribute toprotecting business reputation, and at least in that respect, they are similar to laws concerning signs.
11 Court judgments that denied the protection of typefaces or fonts under the Copyright Act include the Tokyo District
Court Judgment, March 9, 1979, Mutai Saishū, Vol. 11, No. 1, p. 114 (the Yagi Boldface case), and those that denied
protection under the Unfair Competition Prevention Act include the Tokyo District Court Judgment, March 10, 1980,
Mutai Saishū, Vol. 12, No. 1, p. 47 (the Typos case). On the other hand, court judgments that found the subject matter
protectable under the Unfair Competition Prevention Act include the Tokyo High Court Judgment, December 24, 1997,
Hanji, No. 1505, p. 136 (the Morisawa case).
12 Characters and publicity have aspects resembling signs, though they are not protected by specific laws. Charactershave an aspect that can be protected by the Copyright Act. Nevertheless, the essence of characters is not in their aspect
as copyright works, but in their function as business signs and as marks that are capable of promoting sales irrespectiveof business reputation (see Nobuhiro Nakayama, Chosakuken Hō [2 Han] (Copyright Law [2nd ed.]), p. 174). Publicity
has an aspect of business signs and that of moral rights.

12§1. Introduction

While the laws concerning signs protect such signs as property, their purpose is not
only to protect property but also to maintain the competitive order. Signs are basicallyprotected by the Trademark Act and the Unfair Competition Prevention Act. When
compared, the former is more strongly aimed at protecting property and the latter atmaintaining competitive order. Also, while the former grants real rights similar toproprietary rights for signs, the latter provides protection in an extension of tort law. Thus,
laws having different protection methods and legislative purposes are categorized under thesame set of laws concerning signs.
[14]
The laws concerning creativity and the laws concerning signs are identical in thatthey protect information, which is intangible property, and have been collectively referred
to as intellectual property law. In the past, the subject matter of intellectual property law
could be completely categorized under these two sets of laws, but due to the recent rapid
expansion of the scope of the subject matter protected under intellectual property law, many
items have appeared that cannot be categorized under either set of laws. For example, trade
secrets (Article 2, paragraph (1), item (v) onwards of the Unfair Competition PreventionAct) and the configuration of goods (item (iii) of said paragraph) have come to be protected
as a result of the recent revision of the Unfair Competition Prevention Act. Since these twothings are not necessarily the results of human intellectual/mental activities, the provisions
protecting them are outside the framework of the laws concerning creativity, but they are
considered to constitute part of intellectual property law. For instance, a customer list
protected as a trade secret is neither a creation resulting from mental activity nor a sign.
Such new subject matters are protected for protecting an investment, rather than forprotecting the creative activity.
Fundamentally speaking, there is no rationale behind limiting the intellectual
property law to laws concerning creativity and laws concerning signs. At the same time,
there is no definite reason why these two sets of laws need to be collectively referred to as
intellectual property law.
Changes in economic and social conditions are likely to further increase types ofsubject matter that cannot be covered by the two sets of laws. With the advancement of theinformation era in particular, the legal protection of transmitters of information will become
important. 13 The transmitters of information are not necessarily the creators of theinformation, but the transmitters of information are also likely to become important in the
13 This does not mean that transmitters of information have been neglected in the past. For example, performers,
broadcasting organizations, wire-broadcasting organizations, and producers of phonograms have been protected byneighboring rights. In the information era (digital era), however, an incommensurable amount of information will be
distributed and information transmission methods will diversify, so the protection of transmitters is expected to become
even more important.

13§1. Introduction

future. A new type of protective law tends to be intended more for protecting invested
capital and preventing unfair competition. For example, a law for protecting databases has
a strong implication as a law for protecting investment. A database can be protected as longas it satisfies the requirements under the Copyright Act (Article 12-2 of the Copyright Act),but information included in the database is often not protectable under the Copyright Act.
Even if the information were copyrighted, the person who invested in making the database
and the copyright holder may be different. Therefore, if a third party could freely extract
the information and reuse it, the person who invested capital in order to collect the
information will be considerably disadvantaged in competition. Accordingly, the EU
Commission adopted a directive on databases in 1996 providing for the granting of an
exclusive license for the extraction and reuse of information (content) included in a
database. Its legislative purpose was not in protecting the database as a creation, but inprotecting the investment regardless of the level of creativity involved. This is likely tohave an extremely important influence on the question of an ideal intellectual property law
in the future, that is, the question of what should be protected by intellectual property law.
[15]
1.2.2.2. Right-Granting Laws and Act-Regulating Laws
Another classification method of intellectual property law is not based on the natureof the subject matter, but based on the mode of protection. Specifically, intellectual property
law can be classified into right-granting laws and act-regulating laws.
Right-granting laws aim to protect certain types of information under a right similar
to ownership by regarding the information as tangible goods. Specifically, right-granting
laws include the Patent Act, Utility Model Act, Design Act, Trademark Act, Plant Variety
Protection and Seed Act, Semiconductor Chip Act, and Copyright Act. The Patent Act
protects technological information that satisfies certain requirements under a quasi-realright (patent right), which is similar to ownership, and grants the holder a right to seek an
injunction and a right to claim compensation for damage. By treating a patent right as a real
right (specifically, as ownership), it becomes possible to assign, inherit, license, andcollateralize the right. Since information is obviously different in nature from tangible
goods, the act of regarding information as tangible goods is only a legal fiction, and thequasi-real right is not necessarily the same as a real right as provided by the Civil Code.
This means that, although right-granting laws are currently in the form of an ownershipstyle legal system under the current law, they do not necessarily have to take such astructure theoretically. Patent rights are different from ownership with respect to how they14§1. Introduction

come into effect, their content, and when they lapse, as well as the reason for their existence.
The content of a patent right is not absolute, but can be designed based on a policy-oriented
determination. It is theoretically not irrational to constitute it as a right to charge a royalty
instead of an exclusive right, or as a right which is first an exclusive right for a limited time
and then changes to a right to charge a royalty. The right of rental of a commercial
phonogram, which is a neighboring right, stays as an exclusive right for a period of one
month or more but not exceeding twelve months from the first sale of the phonogram(stipulated as twelve months by Cabinet Order), and then becomes a right to charge aroyalty for 49 years thereafter (Articles 95-3 and 97-3 of the Copyright Act). The specificcontents of rights may differ as above, but they have the common feature of being
established as rights. Whichever mode of right contributes better to industrial development
should be decided by a policy-oriented determination.
Incidentally, Japan’s former Civil Code (the so-called Boissonade Civil Code; it was
supposed to come into effect in 1951, but the enforcement was postponed indefinitely at
the Third Imperial Diet in 1950, and the code was repealed in 1956 without being enforced)
stipulated that ownership is a controlling right over things (Article 30), and such things
include both those that are tangible and intangible (Article 6), therefore, ownership can also
be established on intangible things such as inventions. Under the current Civil Code,however, “things” only refers to tangible things (Article 85), so ownership cannot beestablished on intangible things such as inventions.
[16]
On the other hand, act-regulating laws are similar to tort law, and merely aim toprotect certain kinds of information by protecting them from illicit infringements insteadof establishing rights on the information. The Unfair Competition Prevention Act is anotable example of an act-regulating law. However, the Unfair Competition Prevention Act
differs from tort law in that it has provisions on the right to seek an injunction and penal
provisions. Since no right is established on the subject matter protected under the Unfair
Competition Prevention Act, while it can be used for eliminating infringements anddemanding compensation for damage, it cannot be assigned,14 inherited, licensed,15 orcollateralized. Accordingly, the subject matter cannot unequivocally be considered as
14 See Nobuhiro Nakayama, “Fusei Kyōsō Bōshi Hō No Hogo Wo Ukeru Chii No Jōto Kanōsei” (The Possibility ofAssigning a Person’s Status to Receive Protection under the Unfair Competition Prevention Act), Shōen Ono Kanreki
Kinen, Hanrei Fusei Kyōgyō Hō (Case Law on Unfair Competition), p. 41. An example of a court judgment which
held that a person’s or a company’s status of being able to receive protection under the Unfair Competition Prevention
Act cannot be assigned to another party, includes the Sapporo High Court Decision, January 31, 1981, Mutai Saishū,Vol. 13, No. 1, p. 36 (the Butter Candy Can case).
15 This means that it is not possible to establish, for the subject matter, an exclusive license as in the case of a patent right.
However, it is possible to conclude a de facto license by making a contract not to exercise the right to seek an injunction
and the right to claim compensation for damage under the Unfair Competition Prevention Act. Such licensing isfrequently used in the actual economic world as the licensing of know-how.

15§1. Introduction

economic goods. It may be inappropriate to use the term “intellectual property right” torefer to such subject matter. Nevertheless, the two protective methods are common in thatthey both basically protect proprietary information, so it is considered to be admissible touse “intellectual property law” as a collective term for these two types of law.
This classification divides intellectual property law by the method of protection, so
it is not likely to change when the subject matter changes through the course of time.
However, while this classification may be capable of classifying intellectual property law
in an organized manner, it does not clearly show what subject matter the intellectual
property law is supposed to protect in the first place, because it does not pay attention to
the subject matter at all. For instance, proprietary information can also be protected under
tort law, but tort law is not usually called intellectual property law. However, thisclassification gives the impression that tort law may also be included in intellectual property
law. In addition, this classification is unable to provide assistance in theoreticallydetermining which type of law should be applied to protect certain information. Service
marks had been protected under the Unfair Competition Prevention Act for a long time, but
came to be protected under the Trademark Act by trademark rights after the 1991 revisionof the Trademark Act. In other words, since the classification does not take account of thenature of the subject matter, the protection method for one certain type of subject matter
may change over time, and the classification may also change accordingly.
[17]
In short, the question of which method would be more appropriate for protecting
certain intellectual property is determined by whether it is sufficient merely to protect itagainst infringement by others or if it is necessary to grant a property right that can be
assigned, inherited, licensed, and collateralized. The determination is not a matter of theory,
but depends on which alternative the economy and society call for.

16§1. Introduction[18]
1.3. Internationalization of Industrial Property Rights
The subject matter of industrial property rights is intangible goods (a type of
information), and compared to the case of tangible goods, the protective law for intangible
goods is more likely to become an international law,1 because the significance of national
borders is relatively small in comparison with tangible goods. Patent rights are rights to use
certain kinds of information exclusively, and they are only effective within the area under
the sovereignty of the country that has granted those rights. Nevertheless, technological andother types of information, which can be distributed across national borders extremely
easily compared to tangible goods, could be transmitted around the world in an instant in
the Internet era, and could be easily imitated in foreign countries. Establishment of a unified
world patent law would be desirable for protecting information on a global scale, but since
it is difficult to establish such a law in the immediate future, we must create similar systems
in countries around the world and achieve harmonization among such systems in themeantime. This fact had already been recognized more than 100 years ago, and resulted in
the conclusion of various treaties, including the Paris Convention.
The main purpose of the conventional patent system was to protect and foster
domestic industry, and there was a relatively small need to consider the relationship withother countries because international trade was much more sluggish than at present. Eachcountry had established an independent patent system just as in the case of other legal
systems, with no links established between such national systems. If each country has anindependent patent law that is not linked with that of any other countries, a patent applicant
must file applications in all the countries in which he/she seeks protection. Furthermore, if
the patent law does not have a system similar to the right of priority stipulated under thecurrent Paris Convention, an applicant will have to file applications concurrently inmultiple countries in many cases. Moreover, countries were not obligated to grant rights toforeign applicants, so there was a risk that an inequality of treatment could occur between
national and foreign applicants.
However, the growth of international trade gave rise to a need for international
harmonization in the field of industrial property, and in 1883, the Paris Convention for theProtection of Industrial Property was established, having gained momentum from world

1 See, Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 17 (written by Nobuhiro Nakayama); andNobuhiro Nakayama, Masahiro Murakami, and Moriya Uchida, Chiteki Shoyūken (Intellectual Property Right) (The
Nikkan Kogyo Shimbun, 1987).

17§1. Introduction

expositions in Vienna and Paris.2 The convention stipulates a general framework regarding
the right of priority, and equal treatment for national and foreign applicants, among othermatters, on the premise that each country has an independent system, and it leaves a largepart of the particulars of substantive law to the national law of the respective countries.
Although the convention has been revised several times during the period of over 130 years
since its enactment, the basic framework has not been changed.
[19]
Recently, however, the international economic environment has changed
dramatically, and due to the elimination of national borders in economic activities, greater
economic emphasis on intangible goods and services and digitization, and a tremendous
increase in R&D costs, it has become difficult for the conventional Paris Convention
framework to function sufficiently. Accordingly, a number of treaties were established,including the Patent Cooperation Treaty (PCT; signed in 1970 and entered into force in1978). Nevertheless, now there is a need to harmonize not only procedures, but also aspects
such as the term of protection, protected subject matter, and the effects of patents. When
companies carry out their activities, they are now pressed to consider not only the domestic
market, but also the world market, and industrial property is becoming extremely importantfor corporate strategies with the advancement of world market integration.
While we have been exporting goods worldwide in the past, we are now embarking
on an era in which, instead of producing goods only in their home country, companies can
produce goods in a country that enables the most efficient production in light of various
circumstances, and export the goods to the rest of the world from that country. Such an era
calls for a patent system on a global scale, but if each country has a different national law,companies cannot easily make consistent business plans, must pay extra costs, and arelikely to suffer more setbacks in obtaining rights. Therefore, developed countries in which
companies engage in global activities advocated international harmonization and thereinforcement of patent law.
In contrast, some developing countries had very conservative patent systems. Fromthe viewpoint of developed countries, they seemed to be exporting illicit goods to othercountries which were serving as hotbeds of illicit imitation. However, from the developing
countries’ side, the prohibition of imitation under the industrial property system seemed to
fix the economic order and obstruct the development of their domestic industries. The key
to the future development of the world’s industrial property systems lies not only in
2 World expositions and internationalization of industrial property systems are closely linked with each other. If one
exhibits a product at a world exposition when there is no international treaty on industrial property, the exhibitor faces
a high risk of having the product and the mark attached to it imitated by others, which could discourage people fromexhibiting products at world expositions. Thus, the expositions provided momentum for the conclusion of aninternational treaty on industrial property.

18§1. Introduction

achieving harmonization of the systems among developed countries, but also in resolving
such conflicts between developed and developing countries and strengthening theirrelationships.
In light of this situation, efforts have been made in the World Intellectual Property
Organization (WIPO), the World Trade Organization (WTO; formerly the framework of
the General Agreement on Tariffs and Trade [GATT]), and other organizations to reformthe world’s industrial property systems. The greatest achievement of these efforts is the
WTO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS
Agreement). The WTO Treaty that includes this agreement was signed at Marrakesh,
Morocco in April 1994, and entered into force in 1995. The TRIPS Agreement is a groundbreaking industrial property treaty which, compared to the Paris Convention, has extensive
stipulations of substantive provisions and enforcement procedures.
[20]
1.4. Industrial Property System as a National Strategy
The industrial property system has never attracted so much attention as today, andthe present time is referred to as a pro-patent (not only patents, but intellectual property ingeneral) era. Meanwhile, some people say that measures to strengthen the effects of patents,
etc. or to broaden the scope of protection can be regarded as a pro-patent policy andcontribute to industrial development. However, it is not as simple as that the mere
strengthening of rights would immediately be considered as a pro-patent policy. In
considering intellectual property, which is a tool for industrial and cultural development,
the greatest focus must be placed on the balance of society as a whole. Since intellectual
property is an artificial right, a system needs to be designed with a view to its social
influence, and influence on industry, taking into consideration the conditions of technology,
industry, and culture in that time and any impediments caused by the exclusive use of
intellectual property. In any case, intellectual property has come to be increasingly
important, and accordingly, intellectual property policy has come to be a priority in anation’s industrial policy. This means that industrial property is not only important as
property alone, but has also become important in a nation’s strategy or a company’s strategy.
Japan has been inclined to use the intellectual property system as a tool for economic
restoration after the collapse of the bubble economy. The government found an urgent need
to use the intellectual property system to achieve a rapid shift from a product-creating
economy to an information-creating economy, that is, an idea-creating economy; in otherwords, to reform Japan’s industrial structure by using the intellectual property system as a19

§1. Introduction

lever. To symbolize this idea, the term “nation built on intellectual property” was used as aslogan.
First, in February 2002, the then Prime Minister Jun’ichirō Koizumi stated in his
policy speech at the Diet session, “I will establish the Strategic Council on Intellectual
Properties, and powerfully advance the relevant necessary policies.” This statement
sparked a reform. It is said that this was the first time since the Meiji Period (late 19th
century to early 20th century) that a prime minister referred to intellectual property in his
policy speech. According to this speech, the Strategic Council on Intellectual Property(headed by the prime minister) was established within the prime minister’s office in March
2002 as the prime minister’s private consultative organ. After a short-term, intensive
deliberation, the council announced the Intellectual Property Policy Outline in July of thatyear. The creation, protection, and exploitation of intellectual property and the developmentof human resources related to intellectual property, mentioned in this policy outline,
became the basis of Japan’s intellectual property policy. The Intellectual Property Policy
Outline almost exhaustively points to the intellectual policy-related measures that will be
required for the time being, and presents concrete action plans to each government office(see the website of the Prime Minister of Japan and His Cabinet). While the Intellectual
Property Policy Outline recommended the legislation of the Intellectual Property Basic Act,
the Act soon passed in the extraordinary Diet session in November of that year. Article 24
onward of the Intellectual Property Basic Act provided for the establishment of theIntellectual Property Strategy Headquarters headed by the prime minister as the directorgeneral. The headquarters, which were set up immediately after the enactment of theIntellectual Property Basic Act, prepared an Intellectual Property Strategic Program in July
2003, indicating concrete measures to be taken in the immediate future under intellectual
property policy. This was an upgraded version of the earlier-mentioned Intellectual
Property Policy Outline. The strategic program has been revised every year.
[21]
The formulation of the policy outline and the strategic program accelerated the speedof the intellectual property system reform, and prompted legislation and the revision ofmany intellectual property-related Acts. The Acts that have been legislated or revised todate are diversified as follows: the Intellectual Property Basic Act, Patent Act, Utility
Model Act, Design Act, Trademark Act, Copyright Act, Unfair Competition Prevention
Act, Plant Variety Protection and Seed Act, Code of Civil Procedure, Act for Establishmentof the Intellectual Property High Court, Court Act, Customs Tariff Act (the relevant
provisions have now been moved to the Customs Act), Trust Business Act, and Act on
Promotion of Creation, Protection and Exploitation of Contents.

20§1. Introduction

The most noteworthy among these developments was the establishment of theIntellectual Property High Court. In the process of deliberation, heated debates took placeover various matters, such as the positioning of the court under the law of organization (i.e.
whether it should be an independent, special court or an ordinary court), what mattersshould be tried, and the qualifications of judges (i.e. whether a technical expert who has no
qualification as a legal professional can serve as a judge). Consequently, the Intellectual
Property High Court was established as a special branch within the Tokyo High Court, andthe idea to allow a person without the qualification of a legal professional to serve as a
judge was dropped and a reasonable alternative measure was decided on, which was toresolve the issue by improving the research law clerks’ system and using technical advisers.
While the establishment of the Intellectual Property High Court is a symbolic eventof system reform, various other pieces of legislation were drawn up for strengthening theprotection of and exploiting intellectual property. For example, the examination of patents
and other procedures were accelerated, measures against counterfeits and border measures
were strengthened, and with the revision of the Trust Business Act, it became possible toconduct a business that uses intellectual property as trust property, and such business is
expected to be useful for liquidating intellectual property. The Intellectual Property
Strategic Program places large emphasis on the issue of intellectual management andexploitation in universities and the issue of human resources related to intellectual property,
and recent versions of the strategic program also devote a large portion of their contents tothe issue of digital content.
[22]
1.5. Industrial Property Law and Other Legal Domains
Intellectual property law can be regarded as an independent legal genre, andindustrial property law centering on patent law is positioned as one of its domains. Thissection discusses the relationship between industrial property law and legal domains
outside intellectual property law.
1.5.1. Civil CodeAn industrial property right has a strong characteristic of property, and it isparticularly deeply related to the most basic property law, the Civil Code. Provisions of the
Civil Code are often directly applied to the Patent Act. For example, the provisions on quasi
co-ownership are applied mutatis mutandis unless otherwise stipulated by the Patent Act,21

§1. Introduction

etc. (Article 264 of the Civil Code). Patent rights and most other industrial property rights
have a structure similar to ownership. If industrial property law could be fullycomprehended within the framework of the law of real rights, it would be sufficient toposition it as a special law of the Civil Code, such as the Act on Land and Building Leases.1
However, there is a big difference between the subject matter of patent rights and that ofownership, and patent rights have a nature that cannot be comprehended within theframework of the law of real rights.2 It may be possible to provide for rights concerning
information along with real rights in the Civil Code, but such measure has not been
observed historically in the Pandekten system.
Meanwhile, patent licensing is basically an issue of the law of obligations, and apatent infringement is an issue of tort law. The Patent Act has no provisions that serve as
the basis for compensation for damage, and a patent infringement constitutes a tort asprovided under Article 709 of the Civil Code. In this manner, the Civil Code and the Patent
Act are closely related to each other, and the Patent Act is built upon the foundation of the
Civil Code, but still the Patent Act has a unique system of its own.
[23]
1.5.2. Code of Civil Procedure
Lawsuits related to industrial property can be roughly divided into infringement
lawsuits and actions for the revocation of trial decisions. There are also other generaladministrative lawsuits, but these are small in number. While actions for the revocation of
trial decisions are administrative lawsuits, industrial property infringement lawsuits are
general civil actions, so the applicable law would be the Code of Civil Procedure.
Many provisions of the Code of Civil Procedure are applied mutatis mutandis to trial
procedures by the Japan Patent Office (JPO) (e.g., Articles 151, 169, and 171 of the PatentAct).
1.5.3. Labor Law
Patent law and labor law conflict with each other over the issues of the ownership ofrights and the distribution of profits in cases where an employee creates something in thecourse of his/her duties. These issues particularly involve that field of industrial property
law consisting of laws concerning creativity. For example, the interests protected by laws
1 If so, industrial property law would not be able to claim its own identity. See Nobuhiro Nakayama, “Mutai Zaisanken”(Intangible Property Right), Iwanami Kōza Kihon Hōgaku 3 - Zaisan (1983), p. 286.
2 For details on this point, see Chapter 2, 6.1. Comparison with Ownership.

22§1. Introduction

concerning signs are business reputations, so if an employee creates a sign, that sign
represents the business reputation of the employer; in other words, no right is attributed tothe employee, since he/she is not entitled to any business reputation. However, there is aseparate argument that a copyright issue would arise in cases where the sign is a copyrightwork.
On the one hand, there is a need to protect the employee who is actually engaged ina creative activity and increase his/her incentive for creation, but on the other, there is alsoa need to give an incentive to the employer to make an investment, in order to promote
investment in developing new technologies. The problem is how to coordinate between
these two needs and what kind of right or interest should be given to the respective parties.
The Japanese Patent Act specifically stipulates an article to deal with this problem (Article
35 of the Patent Act). Conventionally, this issue had rarely been discussed in the domain oflabor law,3 but an increasing number of essays on this issue have been written by labor law
scholars recently.
1.5.4. Administrative Law
A patent right is a property right, which basically belongs in the domain of property
law, but it is notably different from general property rights in that administrative
dispositions are involved in its establishment, amendment, and lapse. The provisions on
procedures relating to these administrative dispositions and those on the organization of theadministrative organs which carry out the procedures belong in the domain ofadministrative law. Accordingly, administrative law can be regarded as an important pillarof patent law.4[24]
Trials by the JPO are not categorized as lawsuits, but practically they serve as
proceedings in the first instance,5 and the trial procedures are similar to court proceedings.
Since trials by the JPO seek the rescission or change of an administrative disposition, theirfundamental nature is basically the same as administrative lawsuits.
However, there is little room for administrative intervention regarding intellectual
property protected under the Copyright Act and the Unfair Competition Prevention Act that
3 German patent law does not have a provision on employee inventions. As this issue belongs in the domain in between
labor law and patent law, it is regulated by a special law called Gesetz über Arbeitnehmererfindungen (Act Concerning
Employee Inventions), 1957. For details, see Nobuhiro Nakayama, Hatsumeishaken No Kenkyū: pp. 132 ff. In the
United Kingdom and the United States, this issue is often dealt with in the domain of contract law.
4 In the past, many administrative law scholars had studied industrial property law, but most of the researchers studying
industrial property law at present are civil law scholars. Nevertheless, the importance of administrative law in the domain
of industrial property law should be reaffirmed.
5 Actions for revocation of trial decisions are under the exclusive jurisdiction of the Tokyo High Court (Article 178,
paragraph (1) of the Patent Act), and unlike in the case of general lawsuits, the first instance is omitted.

23§1. Introduction

takes effect without registration. Protection of such property takes effect when the facts
required for protection under the respective laws come into existence.6
1.5.5. Antitrust Law
Patent law is a system that allows the exclusive working of an invention, which isintangible information. In contrast, antitrust law is a system that prohibits a privatemonopoly. The two systems seemingly contradict each other, and some scholars hadviewed the two laws as mutually opposed laws. Nonetheless, patent law aims to “contributeto the development of industry” (Article 1 of the Patent Act), whereas antitrust law aims to“promote the democratic and wholesome development of the national economy” (Article 1of the Anti-Monopoly Act). The expressions may differ, but the purposes of the two laws
do not seem to differ in nature. If so, the two systems should not be considered as opposing
or conflicting with each other, but should be considered and interpreted as working in
combination or supplementing each other as the institutional infrastructure for soundindustrial development.7[25]
Specifically, this issue has been raised as a matter of interpretation of Article 21 of
the Anti-Monopoly Act (Article 23 before the 2000 revision). Experts of economic law
have presented many academic papers regarding the interpretation of this Article, so thematter will not be discussed in this textbook. Just to mention the conclusion, even wheresuch an Article exists, the abusive exercise of intellectual property rights should not be
excluded from the application of the Anti-Monopoly Act.8
As the primary aim of industrial property law is industrial development, this point
must be considered as an important guide when interpreting the law. Although a specificindustrial field can rarely be monopolized by a single patent right, the adverse effects of amonopoly may arise when no alternative technology exists or when centralizing patents

6 A copyright takes effect on the creation of a work. The government only becomes involved in such cases when acopyright holder registers the right in order to meet the requirement for perfection. No registration is required to receive
protection under the Unfair Competition Prevention Act either, but only certain factual requirements need be met.
7 See Akira Negishi, Dokusen Kinshi Hō No Kihon Mondai (Basic Issues of Antitrust Law) (Yuhikaku, 1990), pp. 185
ff.; Akira Negishi, “‘Kyōsō Hō’ To Shite No Minpō, Chiteki Zaisan Hō, Dokusen Kinshi Hō” (Civil Code, Intellectual
Property Law, and Antitrust Law as “Competitive Law”), Hōsō Jihō, Vol. 56, no. 1 (2004), p. 8; Akira Negishi, ed.,Chūshaku Dokusen Kinshi Hō (Annotated Anti-Monopoly Act) (Yuhikaku, 2009), p. 534 (written by Masako Wakui);Tadashi Shiraishi, Dokusen Kinshi Hō [Dai 2 Han] (Antitrust Law [2nd ed.]) (Yuhikaku, 2009), p. 382; Tadayoshi
Honma, Chiteki Zaisanken To Dokusen Kinshi Hō (Intellectual Property Rights and Antitrust Law) (Japan Institute for
Promoting Invention and Innovation, 2011).
8 Tadashi Shiraishi, Dokusen Kinshi Hō [Dai 2 Han] (Antitrust Law [2nd ed.]) (Yuhikaku, 2009), p. 380; Tadashi
Shiraishi, “‘Chiteki Zaisan Hō To Dokkin Hō’ No Kōzō” (Structure of “Intellectual Property Law and Antitrust Law”),
Nakayama Nobuhiro Kanreki Kinen, p. 497; Shigeki Chaen, “Chiteki Zaisanken To Dokkin Hō (1)” (Intellectual
Property Rights and Antitrust Law [1]), Japan Association of Economic Law, Dokkin Hō No Riron To Tenkai [1](Antitrust Law Theories and Development Thereof [1]) (Sanseido, 2002), p. 167.

24

§1. Introduction(e.g., a patent pool), or when unfair conditions are attached to a license. Generally speaking,it is an empirical fact that a monopoly is a negative element for industrial development,
often causing adverse effects. While antitrust law is available for eliminating such harmful
effects, it is not the only law aimed at maintaining economic order. Patent rights, which are
exclusive rights, are sanctioned only because they contribute to industrial development, sothey should not be legislated or interpreted in a way that would have a negative effect on
industrial development. The aim of antitrust law should also effectively be taken into
consideration in interpreting patent law. For instance, the arbitrary license system under the
Patent Act (Articles 83, 92, and 93) should be interpreted by also considering theperspective of restricting monopolies, and the scope of a patent right may sometimes need
to be interpreted by also taking the competitive law aspect into consideration9 There is no
essential and decisive difference between monopoly by a patent right and other types ofmonopoly, and it is not reasonable to believe that monopoly by a patent right is always
good. The ultimate aims of antitrust law and industrial property law are similar, and the twolaws are not unrelated to each other.10 In other words, from the viewpoint of industrial
development, which is the aim of patent law, the competitive law aspect must inevitably beconsidered in legislating and interpreting patent law. It is impossible to think of the mostappropriate system for industrial development without considering the competitive law
aspect. Since protection under intellectual property law is expected to be strengthened evenmore in the coming information age, the relationship between patent law and antitrust law
is likely to become more important in the future.11[26]

9 Good examples include the Supreme Court Judgment, April 25, 2002, Minshū, Vol. 56, No. 4, p. 808/Hanji, No. 1785,
p. 3/Hanta, No. 1091, p. 80 (the Used Software case, which is a case relating to the Copyright Act); and JPO Trial
Decision, March 10, 1999, 1997 Shinpan, Vols. 20756-20759 (A case where the Hokkaido Shimbun Press filed, in
advance, applications for trademarks which a new market entrant, Hakodateshinbun, was likely to use, although thepress did not have a plan to use them. The JPO refused the registration on the basis of violation of public order andmorals.). The Japan Fair Trade Commission has issued a consent decision on the Hokkaido Shimbun Press case(Consent Decision, February 28, 2000, Shinketsushū, Vol. 46, p. 144).
10 There also used to be an opinion stating that the violation of antitrust law was hardly likely to occur regarding
copyrights and that it was unreasonable to have copyrights included in the provisions of Article 23 (currently Article21) of the Anti-Monopoly Act (Shigekazu Imamura, Dokusen Kinshi Hō [Shinpan] (Anti-Monopoly Act [New ed.])(Yuhikaku, 1978), p. 198; Nobuo Mon'ya, “Chosakuken To Kōgyō Shoyūken No Kankei” (Relationship Between
Copyright and Industrial Property Right), Jurist, No. 692 (1979), p. 61). However, it is clear that application of antitrust
law is sometimes required also in the domain of copyright by the fact that so many cases relating to copyright andantitrust law have been occurring in other countries, and even in Japan in recent years. Bearing the emergence ofsoftware and databases in mind, copyright is considered as one of the domains in which consideration of thecompetitive policy aspect is required the most in intellectual property law. Therefore, there should be many cases
where the competitive law aspect must be taken into consideration in interpreting the establishment and scope of
copyright.
11 See Tadashi Shiraishi, Gijutsu To Kyōsō No Hōteki Kōzō (Legal Structure of Technology and Competition) (Yuhikaku,1994).

25

§2. History of Industrial Property Law

26

§2

History of Industrial Property Law[27]§2 History of Industrial Property Law
2.1. Introduction
Since the time of the Roman Empire, intellectual property law, in other words a legal
system for proprietary information, had long been disregarded by jurists. However, the factthat a certain type of monopoly produces profits had been known since ancient times, andthe intellectual property concept of granting a monopoly for production or sale could beobserved in more than a few cases. For instance, it is well known that a cook who createda special recipe was granted a one-year monopoly on the recipe in the ancient Greek cityof Sybaris (a Greek colonial city located in Italy) in around 600 B.C.1 Similarly, there werecountless cases in various times and places where a monopoly was granted by governmental
authority and the person who gained the monopoly earned profits in return.2. However,these monopolies were arbitrarily granted by the government, and though they brought
profits to those who gained them, they were not conceptualized as property rights in thesame sense as those for tangible goods. These profits were reflective de facto interests(interests enjoyed indirectly as a result of legal regulations), and they were not backed byany detailed legal theories. Not all of such monopolies were equivalent to intellectual
property, but such grants of monopolies are considered to have been the harbinger of thelater patent system.
Since the time of the Renaissance, there had been intense competition among cities
of Italy in the woolen textile and other industries. Therefore, each city fostered its industries
by granting various privileges to skilled craftsmen, with the aim of causing them to settle
in the city. Then, in 1474, a law that is believed to be the world's oldest patent law wasestablished in Venice. It closely resembled modern patent law, stipulating novelty, utility,and enablement as the requirements for patentable inventions, as well as stipulating thefiling procedures and penal provisions..3 Nevertheless, these patent systems, which may
have had some influence on Britain and other countries of Northern Europe, disappearedwith the decline of those cities without being inherited by other countries.
[28]
1 Troller, Immaterialgüterrecht I 3. Aufl. (1983), S. 15.
2 Some of such examples are goshuin-sen (trading ships authorized by the shogunate) and kabunakama (licensed
commercial associations) in Japan, and guilds in Europe. Looking back through history, instances of free trade wererelatively rare, and it was generally more common to have the presence of a monopoly in some form.
3 This fact was made clear by an Italian called Giulio Mandich who studied materials on Venice (English translation of
the research paper: Prager, F.D., “Venetian Patents (1450-1550),” 30 JPOS 166 (1948)). Before this paper was published,
the Statute of Monopolies of Britain was considered to be the very first patent law. Other noteworthy references include
Bugbee, Genesis of American Patent and Copyright Law (1967): pp. 20-25 and Berkenfeld, “Das älteste Patentgesetz
der Welt,” GRUR (1949), 139 ff.

27

§2

History of Industrial Property Law

Thereafter the historical stage moved on to Spain, but as the country mainly engaged
in transit trade, it hardly contributed to the development of intellectual property law before
it yielded its position to Britain.
Since this textbook is not aimed at historical study but at understanding theframework of the industrial property system, the following part describes the history of theindustrial property systems of major countries to that extent.
2.2. United Kingdom4
Before the Industrial Revolution, Britain was a less-developed region in Europe. For
this reason, the monarch granted certain privileges5 to skilled craftsmen from the continent
in order to encourage their settlement and promote technological development. Industriesof those times were dominated by guilds, and those who were not guild members could notenter the industry. Therefore, the privileges granted by the monarch originally had thenature of releasing certain traders from guilds to allow free trade.
As time progressed, the monarch began to grant not only the privilege to be free fromguilds, but also to monopolize industry in a certain field. There were excessive grants ofthis type of privilege during the reign of Elizabeth I. Such privilege was not only granted
for new technologies, but also for part of existing commercial and industrial businesses
which, as a result, caused economic confusion. The privileges granted by the monarch camecloser to the present patent system with this shift from a release from guilds to a right tomonopoly or specialization.
[29]
However, such monopolies of some parts of existing commercial and industrial
businesses by specific traders caused an inflation of prices and economic confusion, andprovoked a backlash in the courts of common law and the British Parliament. Thus, after
the courts rendered decisions denying the validity of such privilege, 6 Parliament
4 With regard to the history of the U.K. patent system, see Ichirō Kiyose, Hatsumei Tokkyo Seido No Kigen Oyobi
Hattatsu (Origin and Development of the Invention of the Patent System) (not on sale; dissertation for obtaining a
degree from Kyoto Imperial University in 1915; reprinted as part of the gakujutsu sensho series in 1997); Akira
Kukimoto, “Eikoku Tokkyo Hō Shi No Ichi Sobyō” (General Outline of the History of U.K. Patent Law), Eibeihōgaku
(Common Law), No. 18 (1968), p. 19; Akira Kukimoto, Igirisu Tokkyo Seido No Kaisetsu [Shintei Ban] (Commentaryon the U.K. Patent System [Rev. ed.]), (Japan Institute of Invention and Innovation, 1983): pp. 1 ff.; and Nobuhiro
Nakayama, Hatsumeishaken No Kenkyū: pp. 18 ff. Hulme, E., “The History of the Patent System under the Prerogative
and at Common Law,” 12 Law Quarterly Review 141 (1986); Davis, D., “The Early History of the Patent Specification,”
50 Law Quarterly Review 86 (1934); Fox, H., Monopoly and Patents (1947); 200 Hundred Years of English andAmerican Patent, Trademark and Copyright Law (American Bar Center, 1976); Price, W.H., The English Patents ofMonopoly (Archibald Constable & Co.); Prager, F.D., “Examination of Inventions from the Middle Ages to 1836,” 46
JPOS 268 (1964).
5 The privileges were granted in the form of letters patent. This is how the term patent came into use. The meaning ofpatent is open.
6 Darcy v. Allen, Moor (K.B.) 672; 72 Eng. Rep. (K.B.) 830 (1602), the Clothworkers of Ipswich, 78 Eng. Rep. 147(1615).

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established the Statute of Monopolies in 1624, which was then ratified by the monarch.7
The Statute of Monopolies, which was later referred to as the great charter of patent law,is considered to be the origin of modern patent law.
This Statute confirmed a principle that had been established through past court
judgments, that is, the principle that denied the validity of the privileges granted by themonarch for some parts of existing industries. However, as the only exception, a fourteenyear exclusive right was allowed for the true and first inventor (including the first importer)(Article 6 of the Statute of Monopolies). This Statute was significant in that Parliament
imposed a heavy regulation on the privileges granted by the monarch as a result of theconflict between Parliament and monarch. It was not a law that stipulated the creation of apatent system. It prohibited the monarch from granting exclusive rights, in principle, but it
exceptionally allowed the monarch to grant exclusive rights for novel inventions. However,since the grant of exclusive rights for novel inventions was not obligatory, it was nodifferent from the conventional practice in that the monarch granted such rights as favors,and it cannot be considered as a modern patent system. This Statute was a forerunner of the
U.K. patent law and had an extremely important influence on the modern patent system.
In fact, even after such law, the monarch still sometimes granted exclusive rights that
violated the common law, but such exclusive rights gradually disappeared and only the
fourteen-year exclusive rights granted for novel inventions remained effective, leading to
the structure of the modern patent system. However, the initial grant of patents in Britain
had mainly been intended for stimulating lagging industries, and did not have much of aphilosophical aspect to it for recognizing that inventors’ rights over their creations arenaturally endowed, as in the case of the patent system after the French Revolution. Indeed,
the theory of natural human rights in France was also developed by the bourgeoisie which
had led the Revolution to deny the privileges of the monarch under the Ancien Régime andto protect property rights, and was not unrelated to industrial development.
[30]
The present type of patent law was enacted in Britain in 1852, and submission of a
description of the invention was obligated for the first time. Later, statement of claims(scope of claims) was also obligated for clarifying the scope of protection. These systems
had a great influence on the current patent systems of countries around the world.

7 Stat. 21 Jac. I. ch. 3, Halsbury’s Statutes of England, 2nd. ed., Vol. 17: pp. 617-620.

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2.3. United States8
As America was a British colony before it gained independence, some of its states
had patent systems based on British law. For example, Massachusetts established
America’s first patent system in 1641, seventeen years after the enactment of the British
Statute of Monopolies, and a patent was first granted for a salt production method in thesame year. Unlike in Britain where patents were granted under royal prerogative as a favor,
patents were granted under the state statute. However, these patent systems were only
effective within their respective states so, just as in Germany before the 1871 unification,
the economic value of a patent right was limited. The patent systems were not only
unsuitable for economic development, but even obstructed economic development bycausing differences among economies within America. From this viewpoint, Article 1,
Section 8, Clause 8 of the U.S. Constitution was established after the War of Independence
in response to the need to enact a unified patent law for securing economic consistency.
This clause provided that the U.S. Congress had the authority to enact legislation “topromote the progress of science and useful arts, by securing for limited times to authors
and inventors the exclusive right to their respective writings and discoveries.”9 Based on
this, the United States’ first federal patent law, the Act to Promote the Progress of UsefulArt, was enacted in 1790. Under this Act, the grant of a patent was determined by acommittee consisting of the Secretary of State, the Secretary of War, and the Attorney
General. The Act, being strongly influenced by British law, included the “principle of thetrue and first inventor.” As a result, the right to file a patent application is still not allowed

8 Reference works on the history of U.S. patent law include Shirō Mitsuishi, Beikoku Tokkyo Hō Kenkyū (Study on U.S.
Patent Law) (Ryosho Fukyu Kai, 1953): pp. 1 ff.; Shōzō Taniyama, Amerika Tokkyo Seido No Kaisetsu [Kaitei 3 Han]
(Commentary on the U.S. Patent System [3rd Rev. ed.]) (Japan Institute of Invention and Innovation, 1981): pp. 13 ff.;
Nobuhiro Nakayama, Hatsumeishaken No Kenkyū: pp. 27 ff.; Kōtarō Kimura, Hanrei De Yomu Beikoku Tokkyo Hō[Shinpan] (U.S. Patent Law Based on Court Precedents [New Edition]) (Shōji Hōmu, 2008); Henry Koda, Beikoku
Tokkyo Hō Kenkyū: Tokkyo Hō No Rekishi, Genri, Soshite Jitsumu Wo Kangaeru (Study on U.S. Patent Law: Thoughts
on History, Principles, and Practice of Patent Law) (ILS Publications, 2008); and Study Group of Intellectual Property
Law, Daini Tokyo Bar Association ed., Tokkyo Hō No Nishibei Hikaku (Japan-U.S. Comparison of Patent Law) (Shōji
Hōmu, 2009). 200 Hundred Years of English and American Patent, Trademark and Copyright Law (American Bar
Center, 1976), B.W. Bugbee, The Genesis of American Patent and Copyright Law (Public Affairs Press, 1967).
9 Apart from the portion concerning fundamental human rights, the significance of the Constitution to provide for thebasic structure of the nation differs completely between the United States, which adopts a federal system, and Japan,
which does not. In the United States, the U.S. Congress does not have legislative power over matters that are notstipulated in the Constitution. Therefore, without this Patent Copyright Clause, each state would have to enact its own
patent law or copyright law. Since the Constitution does not have provisions concerning trademarks, the U.S. Congress
does not have the legislative power over them, in principle, and related laws are established by the respective states.
Nevertheless, the U.S. Congress has legislative power over matters relating to interstate commerce under the Interstate
Commerce Clause, so it is able to legislate a federal trademark law within that scope, and the Lanham Act has been
established as such law. The Patent Copyright Clause of the U.S. Constitution is often misunderstood, but suchcharacteristics of the U.S. Constitution must not be overlooked. In Japan, which does not adopt a federal system, it istaken for granted that the Diet has the power to legislate patent law, so there is no need to stipulate a patent clause in theConstitution. It is noteworthy that the term secure is used instead of grant in the phrase “secure the exclusive Right” inArticle 1, Section 8, Clause 8 of the U.S. Constitution. This implies that, unlike in Britain where the right is granted asa privilege by the monarch, a right initially attributable to the inventor is protected under law.

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to be assigned to another party in the United States, so the inventor needs to file a patentapplication.10 If an inventor wishes to assign the right to file a patent application to anotherparty, he/she must file the application first, and then assign the right to the pending
application or the patent right obtained.
[31]
U.S. patent law had adopted the first-to-invent system, in which the patent was given
to the person who made the invention first. Therefore, a proceeding by which the firstinventor is determined, called interference, was established in 1793. However, the first-toinvent system was outside of the world’s mainstream, so in 2011, the United States made arevolutionary shift from the first-to-invent system to the first-to-file system (which cameinto effect in March 16, 2013). As a result, patent systems around the world now uniformly
adopt the first-to-file system, which has great meaning for international businesses.
However, we must note that the U.S. first-to-file system is not necessarily the same as theJapanese first-to-file system.11
In addition, the United States introduced the substantive examination system for the
first time in the world in 1836. Ever since, the substantive examination system has been
adopted by many countries, and it has become the world’s mainstream method. The
examination system contributed to significantly improving the credibility of patent rights
and to making them into more valuable economic goods. The present U.S. patent law wasmore or less formed with this 1836 revision.
[32]
2.4. France12
In France before the French Revolution, monopolies were granted by the monarch inthe same manner as in other European countries, and monopolies were sometimes granted
for the purpose of fostering domestic industries. However, this kind of monopoly was
entirely abolished after the French Revolution, and the first patent law in France was

10 The assignment of the right to file a patent application to another party was not allowed in the United Kingdom either,but it was allowed by a revision in 1949. As the right to obtain a patent application has property value, the prohibitionof its assignment makes it inconvenient for use as an economic good. However, in reality, even if assignment of theright to file a patent is not allowed, an assignee only has to follow the bothersome procedure of filing the application
under the name of the assigner under his/her own account, and receive the assignment of the right to the pending
application or the patent right obtained, which in the end leads to more or less the same result. Even so, if a party makes
an error in the procedure, he/she faces the risk of being denied the effects of his/her patent.
11 Toshiko Takenaka, “Beikoku Wa Hontou Ni Amerika Hatsumei Hō De Sengan Shugi Ni Ikō Shitanoka” (Did theUnited States Really Shift to the First-to-File System under the America Invents Act?), JL&T, No. 54 (2012), p. 29.
12 Reference works on the history of the French patent system include Yoshirō Hashimoto, Furansu Tokkyo Seido No
Kaisetsu [Shintei Ban] (Commentary on the French Patent System [Rev. ed.]) (Japan Institute of Invention andInnovation, 1983), and Sōta Asahina, Gaikoku Tokkyo Seido Kaisetsu [Dai 4 Han] (Commentary on Foreign Patent
Systems [4th ed.]) (Toyo Hoki Publishing, 1992).

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enacted in 1791. This patent law was legislated based on the ideology of the bourgeoisie
that had led the Revolution. Specifically, the idea was that the inventor had ownership of
his or her invention as a natural human right.
Due to this concept, France has adopted a non-substantive examination system inwhich the administrative authority does not examine the patentability requirements.
Accordingly, many applications that lacked patentability were patented in France, and any
disputes relating to such patents were to be settled in court. The non-substantive
examination system has become a distinctive feature of French-style patent laws. In
comparison to the substantive examination system, it has an advantage of requiring low
administrative expenses, but it is defective from the viewpoint of legal stability because it
allows registration of many patent rights that contain reasons for invalidation. Therefore,
the system degraded the value of French patent rights as a result. From when the world’s
first substantive examination system was adopted in the United States in 1836, thesubstantive examination system gradually spread to become the world’s major trend, andthe French system has fallen behind.
The non-substantive examination system was not only disadvantageous to Frenchindustry, but was also unfavorable from the perspective of achieving compliance with theEuropean Patent Convention or achieving harmonization with other countries’ systems. At
present, France adopts a system whereby the patent office prepares a search report on
novelty and inventive step,13 upon the request of the applicant, and grants a patent with thesearch report attached thereto. Proceedings of infringement lawsuits can no longer be
carried out without the search report. Also, the law was further revised to conduct
examinations on novelty. Due to such course of development, we can say that the system
in France has taken the form of a substantive examination system.
Later, in the revised law of 1978, the scope of the authority of the French Industrial
Property Institute was expanded, and applications came to be refused when they apparently
lacked novelty according to the search report. However, no examination is conducted todetermine the involvement of an inventive step, so the French system is still different fromthat of Japan and of many other western countries.
[33]
2.5. Germany14

13 This search is entrusted to the European Patent Office.
14 Reference works on the history of the German patent system include Nakayama, Hatsumeishaken No Kenkyū: pp. 30
ff.; and Beier, F.K., Gewerbefreiheit und Patentschutz. Zur Entwicklung des Patentrechts im 19. Jahrhundert, in Coingu. Wilhelm (Hrsg.) Wissenschaft und Kodifikation im 19 Jahrhundert, Bd. IV, 1979.

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In the beginning of the early modern age, Germany was a less-developed region in
Europe, serving as a suitable market for the British manufacturing industry. The reasonsthat Germany fell behind the Great Powers of the world were the devastation of the land
from the Thirty Years’ War (1618-1648) and the breakup of the country into Länder
according to the Peace of Westphalia which ended the war. Patent systems were also variedin each Land, and this segmentation was obstructing the development of the German
economy. In order to eliminate such negative effects, customs unions were formed between
some Länder. A typical example is the German Customs Union formed under the incentiveof Prussia in 1833. However, the patent rights of each Land were basically independent,
and the Länder remained separate just the same. While the only way for Germany tooutgrow its backwardness was to unify the nation and overcome the economic
segmentation, that was achieved only after the unification of Germany in 1871.
Even after the German unification, enactment of the patent law was delayed by the
conflict between free-trade supporters and protectionists, in the same manner as in other
European countries, but finally in 1877, the Imperial Patent Act came into effect and theImperial Patent Office was established in Berlin, forming part of the legal foundation forbuilding Germany into a great industrial nation. This patent law had the purpose of anindustrial policy, and it was aimed at making inventors file applications for their inventions
as quickly as possible so as to raise the technology level of society, rather than at protecting
the rights of individual inventors. Therefore, the patent was granted to the applicant who
filed first, in principle (this is called Anmelderprinzip).
German patent law changed to an inventor-oriented law with the Nazi patent law of1936.15 With this law, the inventor principle (Erfinderprinzip; the principle that an inventor
naturally has ownership of his/her invention under the patent law) was stipulated in the text,
and provisions on the inventor’s moral rights and the inventor’s right of resumption werealso established. This concept could already be observed in the draft of the 1913 revision,
but it was actually made into positive law in the law of 1936 and still lives on. However,provisions on the employee invention system were not stipulated in the patent law, but
separately stipulated by a special law.16 Although drastic revisions were made a couple oftimes after World War II, the basic framework of the law has not been changed since thislaw of 1936.
15 The basic concept can be understood from the following sentences in Hitler’s Mein Kampf: “All inventions are theresults of creation by certain individuals. All of these individuals are, whether they want to be or not, great benefactors
for all of mankind.” and “The most valuable thing about an invention itself is, whether it belongs in the material worldor the world of thought, the inventor as an individual human being. The primary and supreme task for the type of groupknown as an ethnic community is to allocate such an inventor so as to bring benefit to the whole of society in such amanner.” (Japanese translation: Translated by Ichirō Hirano and Shigeru Shōjaku, Waga Tōsō (My Struggle)(Kadokawa Shoten Publishing, 1973). As a matter of course, this book was only written as sloganeering.
16 See Nobuhiro Nakayama, Hatsumeishaken No Kenkyū: pp. 132 ff.

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History of Industrial Property Law[34]
In this manner, Germany created an original system of patent law, which has greatly
influenced the patent systems of Japan and other countries, but the German patent system
is undergoing changes amidst the trends of European integration and global harmonizationof patent systems.
2.6. Europe
Europe has many countries in a small region. Therefore, if an independent patent
system existed in each country, the markets of its countries would be divided by patentrights. Such a situation would have a negative effect on industrial development, and it
would require enormous costs and workload to file patent applications in many countries.
Since political integration of Europe also started, the work to integrate the patent systems
began in line with it. On October 5, 1973, the European Patent Convention (EPC) was
signed in Munich (thus also known as the Munich Convention), and it came into effect in1977.17 An applicant can designate the States in which he/she seeks to acquire a patent (theapplicant can also designate a single State), and acquire patent rights in the designatedStates that have been granted by the European Patent Organisation (EPO). An application
under the EPC has a great advantage in that it can be filed by a single procedure and in asingle language. This European patent has the same effect as a domestic patent in theContracting States of the EPC, and infringement of the patent is disputed according to thenational law of the relevant Contracting State. However, oppositions, restriction of thescope of claims, and rescission concerning European patents are handled by the EPO.
Despite the presence of the EPC, the Contracting States have their own national patent laws,
and their national patent offices grant national patents, so patents granted under nationallaw and those granted under the EPC concurrently exist, and they are referred to as a bundleof national patents.
People who are not citizens of the Contracting States can also file applications with
the EPC. Accordingly, there are three methods to file applications in European countries:
the conventional method of filing an application in each country; the method of filing a
European patent application under the EPC (designating the States in which the applicant
seeks protection and acquiring patent rights in the designated States); and the method of
filing an international application under the Patent Cooperation Treaty (PCT) (acquiring
patents by directly designating the relevant European countries or by designating theEuropean countries via a European patent application). The applicant is able to choose the17 There were 38 member states as of 2014.

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optimum method by considering the various conditions, such as the application costs andthe countries in which protection is sought. When filing a European patent application, theapplicant can make a priority claim under the Paris Convention, and conversely, a European
patent application can serve as the basis for a priority claim when filing an application inanother country or a PCT application.
[35]
While patents under the EPC constitute a bundle of national patents which take effectin the respective Contracting States, a move to establish the Unitary Patent system and theUnified Patent Court has been going on in parallel with the EPC. In 2012, the European
Council reached an agreement to establish the Unitary Patent system to be applied to 25
States of the 27 EU States, excluding Italy and Spain, 18 and the system was finallyestablished in 2013.19 The procedures for the filing to examination of a Unitary Patent are
carried out in a similar manner as those for the current European patent, and after aEuropean patent is granted, a request for a Unitary Patent is filed. Also, it was decided that
the Unified Patent Court would be set up to make judgments on disputes concerning
Unitary Patents. A decision was made to establish the central division of the court of first
instance (division centrale de la Cour de premiere instance) in Paris, thematic sections withspecial jurisdiction in London, focusing on chemistry, biotechnology, and pharmaceuticalcases, and in Munich, focusing on mechanical engineering cases, and the court of appeal in
Luxembourg.
This Unitary Patent has the same effect in all Contracting States, and its transfer,rescission, and extinction will take effect in all Contracting States in a centralized manner.

18 Since the translation languages were specified as English, German, and French, Italy and Spain which opposed thisdecision were excluded. However, these two countries can become members at any time. The languages to be used had
been discussed as an extremely important issue in regard to European patent systems.
19 With regard to details of this process, see Kaoru Kuroda, "Ōshū Tan'itsu Tokkyo Hogo Seido No Rekishiteki
Kōssatsu" (Historical Study on the European Unitary Patent Protection System) (L&T, No. 60 (2013), p. 32); andHiroshi Kawamata, Toshinao Yamazaki, and Atsuya Takeshita ed., "Ōshū Tan'itsukō Tokkyo To Tōitsu Tokkyo
Saibansho" (European Unitary Patent and Unified Patent Court), Tokkyo Kenkyū (Patent Study), No. 55 (2013), p. 31.

35

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History of Industrial Property Law[36]2.7. Japan20
Japan did not have a patent system before the Meiji period. There were, as in Europe,cases where monopolies were given and profits were gained as a result, but that wasdifferent from the present patent system. The person who first introduced western patent
systems to Japan is said to be Yukichi Fukuzawa.21
The Meiji government advocated wealth and military strength as well as theencouragement of new industry as the most important national policies, and strove to
introduce western legislation. Enactment was considerably delayed for laws such as thecivil code, that had a strong connection to the awareness of citizens, historical features,
established practices, and favored customs and manners, but industrial policy-oriented laws
such as the patent law were legislated at relatively early stages out of the need to promotewesternization.22
Japan’s first patent system, the Provisional Regulations for Monopoly (Dajōkan
Ordinance No. 175) was first decreed in 1871. This system was uniformly controlled by
the central government (Minbu Shō), and could also be considered as a strategic movetoward centralization with the abolition of clans and establishment of prefectures close at

20 The most informative reference works on the history of the Japanese industrial property system are Japan Patent Office,
Kōgyō Shoyūken Seido Hyakunen Shi Jō/Ge/Bekkan. Other references include Japan Patent Office, Tokkyo Kyoku
Gojyūnen Shi (Fifty-Year History of the Japan Patent Bureau) (Tokkyo Hō Shikō Gojūnen Kinen Kai, 1934); Japan
Patent Office, Tokkyo Seido Nanajyūnen Shi (Seventy-Year History of the Japanese Patent System) (Japan Institute ofInvention and Innovation, 1955); Ministry of International Trade and Industry, Shōkō Seisaku Shi Dai 14 Kan (Historyof Commercial and Industrial Policies Vol. 14) (Shōkō Seisaku Shi Kankōkai, 1965); edited by the Committee forCompiling History of Japan’s Trade and Industry Policy and written and edited by Nobuhiro Nakayama, Tsūshōsangyō
Seisakushi 11 Chiteki Zaisan Seisaku 1980–-2000 (History of Japan's Trade and Industry Policy (11): Intellectual
Property Policy 1980–-2000); Kazuo Ichikawa, Nihon No Tokkyo Seido (Japanese Patent System) (Nihon Hatsumei
Shimbunsha, 1964); Japan Patent Office, Kōgyō Shoyūken Seido Shi Kenkyūkai (Study Group on the History ofIndustrial Property Systems), Tokkyo Seido No Hassei To Hensen (Genesis and Transition of the Patent System)(Printing Bureau, Ministry of Finance, 1982); Yasuo Kawazu, “Tokkyo Hō No Ayumi” (Progress of Patent Law),
Patent, Vol. 11, No. 11 (1958), p. 11; Kikushi Koga, “Nihon Tokkyo Seido No Rekishi Teki Gaikan” (Historical
Overview of the Japanese Patent System), Patent, Vol. 16, No. 10 (1963), p. 26; Takio Okano, “Waga Kuni Ni Okeru
Kindai Tokkyo Hō No Keisei To Sono Keizai Teki Haikei” (Formation and Economic Background of the JapaneseModern Patent Act),” Chūō Gakuin Daigaku Rongyō (Academic Papers of Chuo Gakuin University), No. 10, p. 57;
Nobuo Sasaki, “Waga Kuni No Tokkyo Seido Seiritsu Ni Kansuru Kenkyū No Igi” (Significance of the Study on
Establishment of the Japanese Patent System), Hatsumei (Invention), Vol. 77, No. 7 (1980), p. 25; Nobuo Sasaki,“Senbai Tokkyo Jōrei No Seiritsu Katei Jō/Ge” (Process of Establishment of the Patent Monopoly Act Vols. 1 and 2),
Hatsumei, Vol. 77, No. 8 (1980), p. 25 and No. 9, p. 23; Nobuo Sasaki, “Inoue Kowashi To Tokkyo-Seido No Seiritsu
Jō/Chū/Ge” (Kowashi Inoue and the Establishment of the Patent System Vols. 1, 2, and 3,” Hatsumei, Vol. 77, No. 10(1980), p. 23, No. 11, p. 21, and No. 12, p. 25; Nobuo Sasaki, “Zoku: Inoue Kowashi To Tokkyo Seido No Seiritsu”(Sequel: Kowashi Inoue and the Establishment of the Patent System), Hatsumei, Vol. 78, No. 1 (1981), p. 55; Nobuo
Sasaki, “Waga Kuni Kōgyō No Kindaika To Tokkyo Seido No Sōsetsu 1–5” (Modernization of Japan’s Industry andFoundation of the Japanese Patent System 1–5), Hatsumei, Vol. 78, No. 3 (1981), p. 41, No. 4, p. 23, No. 6, p. 27, No.
7, p. 71, and No. 8, p. 63; Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role ofDisclosure by Description under Patent Law), p. 18.
21 He introduced the patent systems of other countries in Seiyō Jijō (Conditions in the West), Vol. 3 (1867).
22 The same situation was seen in Germany. Although the German patent law was established in 1877, which was soonafter unification, the German Civil Code (BGB) was only established in 1900. As is well known, great controversies
took place in establishing the civil code both in Germany and in Japan.

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hand. However, in light of the situation of Japan’s industry at the time, it was still too early
to establish a patent system. Although a small number of applications seemed to have been
filed, the Regulations were repealed for a certain period of time without having shown
much success23 (Dajōkan Ordinance No. 105). The reasons for the repeal are not quite
clear, but we can assume that there were not many inventions to examine, and not many
officials who could examine inventions, while it was financially difficult to hire skilled
foreign persons to do so.
[37]
Thereafter, no industrial property laws existed in Japan until the Trademark Bylaws
were established in 1884 (Dajōkan Ordinance No. 19) and the Patent Monopoly Act wasestablished in 1885 (Dajōkan Ordinance No. 7). However, technology advanced and there
were incidents like the famous case of the gara spinning machine during this period.24 Also,labels of foreign products like matches were frequently imitated, and Japan received many
complaints from other countries. In addition, Japan also needed to establish various
domestic laws for the purpose of amending the unequal treaties concluded at the end of the
Edo Period.
Accordingly, first the Trademark Bylaws were established in 1884. As for patents,
the Patent Monopoly Act was established in 1885, one year after the Trademark Bylaws.
This Act adopted the first-to-invent system and the substantive examination system. Under
this Act, a patentee was able to choose a patent term of five years, ten years, or fifteen years.
The Act was planned to be revised from the start, and necessary preparations for therevision were launched immediately after its enforcement, leading to the establishment of
the Patent Bylaws in 1888 (Imperial Ordinance No. 84). The Bylaws maintained the firstto-invent system and the substantive examination system, while making some
improvements, including the introduction of the trial system.
With the establishment of the three bylaws on trademarks, patents, and designs, Japan
had built a foundation for its industrial property laws. Presumably, the reasons that Japanrushed to enact these laws are that it wanted to use industrial property law as a tool for

23 Although the wording in the Dajōkan Ordinance was that the regulations should be repealed for a certain period oftime, it meant virtual suspension, and inventors were allowed to report their inventions to the government (Kōbu Sho)even after the repeal. With regard to this reporting, a supplementary provision of the Patent Monopoly Act of 1885
stipulated that even if an invention were already publicly known or used, the inventor could submit a patent application
for it to the Minister of Agriculture and Commerce (Nōshōmu Kyō) within six months from the enforcement of the
Patent Monopoly Act. Due to such circumstances, the Patent Monopoly Act of 1885 is usually considered to be Japan’s
first patent law, and the Japan Patent Office, Kōgyō Shoyūken Seido Hyakunen Shi, calculates the one hundred years
from 1885.
24 The gara spinning machine was a cotton spinning machine invented by Tokimune Gaun. It won an award at the First
National Industrial Exhibition (1877), but it was counterfeited because there was no protective legislation, and as aresult, Gaun could not profit from the invention. See Susumu Kitano, Hatsumei No Bunka Isan: Gaun Tokimune To
Gara Bōseki (The Cultural Legacy of Inventions: Tokimune Gaun and the Gara Spinning Wheel) (Agnes Technology
Center, 1994).

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encouraging new industries, and that it needed to quickly modernize its domestic legislationin order to amend unequal treaties. Also, Japan was likely to have been influenced by theestablishment of the Paris Convention in 1883 even though Japan had not acceded to it.
Until 1899, Japan’s industrial property rights were regulated by these three bylaws.
The fundamental revision of 1899 was implemented in order to join the Paris Convention,
which was one of the international treaties with regard to commerce and navigation thatwere concluded by Japan in order to amend the unequal treaties at the time. It was a
revolutionary revision, which incorporated principles including the equality between
Japanese and foreign nationals. Thus, the three bylaws were revised in 1899 into the Patent§6. Japan
Act (Act No. 36), the Design Act (Act No. 37) and the Trademark Act (Act No. 38),
andJapan acceded to the Paris Convention in the same year. The fact that the Civil Code (ActNo. 89; enforced in 1898) was established in 1896 was another reason for the rising numberof calls for new industrial property laws. Since the bylaws of 1888 were legislated at thetime of the former Civil Code (although it was not enforced) that was strongly influenced
by the French Civil Code drafted by Boissonade, they needed to be revised under the new
Civil Code that was under the strong influence of German law. With the enactment of the
Civil Code, provisions on compensation for damage that had been stipulated in theconventional bylaws (e.g. Articles 34 and 35 of the Patent Bylaws) were deleted and instead
they came to be treated under the tort law of the Civil Code. With these revised laws of
1899, Japan’s industrial property law reached an internationally viable level, at least in form.
[37]
Later, in 1905, the Utility Model Act (Act No. 21) was established based on German
law. This law was intended to protect practical petty inventions, which had been difficult
to protect as they fell in between patents and designs. As the subject matter was stipulated
to be “novel, practical devices relating to the shape or structure of an article or combinationof articles” in resemblance to German law, process was not made subject to protection.
This Utility Model Act adopted the substantive examination system, so it was destined todevelop into a system similar to the patent system in reality. Since the Act was designed
after German law, it adopted the first-to-file system, unlike the Japanese Patent Act of thetime that adopted the first-to-invent system.
After the end of the Russo-Japanese War, the Patent Act (Act No. 23), Design Act(Act No. 24), Trademark Act (Act No. 25), and Utility Model Act (Act No. 26) weredrastically revised in 1909 from the viewpoint of consolidating the foundation for industrial
development. The main points of revision in the Patent Act were the shift from an absolute
novelty system, which had been adopted by interpretation, to a local novelty system based

38

§2

on legislation, 25

History of Industrial Property Law

establishment of provisions concerning employee inventions,establishment of provisions on prior users’ rights, and slight modification to the first-toinvent system.26 Since the Utility Model Act had only been established in 1905, no drastic
revisions were made, but only those which were mainly for coordination with the Patent
Act.
[39]
After World War I, the Patent Act (Act No. 96), Utility Model Act (Act No. 97),
Design Act (Act No. 98), and Trademark Act (Act No. 99) were fundamentally revised in
1921. Japan became acutely aware of the need to establish its own technologies after theexperience of World War I, and to achieve this end it needed to strengthen the protectionof inventors’ rights and expedite and streamline Japan’s dispute settlement system. As for
the Patent Act, the first-to-invent system that had been adopted since 1885 was abolished,
and the first-to-file system, which is still used under the current Act, was adopted. Thissystem was introduced based on the German system in order to dispel the excessively
detailed procedures and the instability of rights associated with the first-to-invent system.
With regard to employee inventions, the existing provisions were reversed so as to attributethe right to obtain a patent to the person employed (the employee). Many other points werealso revised, and the law came closer to the current law. As for the Utility Model Act, theprotectable subject matter was confirmed to be the shape of an article, and many revisions
were made in the form of applying mutatis mutandis provisions of the Patent Act.
After that, Japan’s economy shifted to a war-time economic structure. When the
Pacific War started in 1941, the Foreign Product Control Act (Act No. 99) was immediately
established, followed by promulgation of the War-Time Special Provisions for Industrial
Property Law (Act No. 109) in 1943, by which the design system was suspended, thesystem of publication of examined applications was abolished, and the issuance of official
gazettes was suspended.
Following the end of the war, reconstruction of the devastatingly damaged industrial
property system was launched. Starting with the abolition of war-time laws including theForeign Product Control Act, the industrial property rights of the allied nationals were
preserved, after which the Order Concerning Postwar Measures for Industrial Property
25 The reason for adopting an absolute novelty system in the past had been based on an idea that the grant of Japanese
patent rights for technologies publicly known overseas would only benefit foreign companies and result in oppressing
Japanese industry. However, the Supreme Court Decision, May 4, 1903, Minroku, Vol. 9, p. 523 dismissed thisinterpretation, and supported the interpretation of using the local novelty standard, referring to the difficulty of
conducting examinations in the case of using the absolute novelty standard and stating that the purpose of the Patent
Act was to encourage and protect domestic industrial inventions. Accordingly, a local novelty system was adopted in
the Utility Model Act of 1905 and also in the Patent Act of 1909. However, the absolute novelty standard was fully
adopted (Article 29 of the Patent Act).
26 If the date of the invention was not clear, the patent was granted to the prior user, and the first inventor’s right todemand a trial for patent invalidation lapsed by prescription in three years.

39

§2

History of Industrial Property Law

Rights of the Allied Nationals (Cabinet Order No. 309) was promulgated pursuant to a
GHQ memorandum of 1949. This was a measure to restore patent rights that had lapsed
due to the non-payment of patent fees or had been rescinded by the War-Time Special
Provisions during the war, and to exclude the period from the start of the war through therestoration of the rights from the patent term (extension of the term of protection by thelength of the war period).27 Furthermore, the secrecy of secret patents was cancelled undera GHQ memorandum of 1948, and the secret patent system was abolished by partial
revision of the Patent Act in the same year.
When a new Constitution was promulgated, the organization of the courts was also
revised, and the part of the Patent Act relating to patent lawsuits was revised in 1948
accordingly (Act No. 172). With this revision, actions for the revocation of trial decisions
were placed under the exclusive jurisdiction of the Tokyo High Court.
[39]
The four industrial property laws had not undergone fundamental revisions since
1921, but calls for an overhaul grew as Japan entered a decade of high economic growthstarting in 1955. Thus the four laws were totally revised in 1959 to form the current laws.
The revisions of the Patent Act (Act No. 121) covered the stipulation of the purpose of the
Act and the definition of inventions, the addition of publications distributed in a foreigncountry as one of the reasons for a lack of novelty, the addition of a presentation in writing
at a study meeting as an exception to the lack of novelty, making substances produced byatomic nucleus transformation unpatentable, the improvement of provisions relating tolicensing, and the establishment of provisions concerning the presumption of damages,
negligence, and the producing process. The Utility Model Act (Act No. 123) was revisedin compliance with the Patent Act, in addition to stipulating the protectable subject matteras devices relating to the shape or structure of an article or combination of articles, andexcluding devices that would have been exceedingly easy to create from protectable subject
matter based on the lack of the involvement of an inventive step.
After that, the industrial property laws were revised a number of times in line withJapan’s economic development, but since no fundamental revisions have been made,basically they still maintain the structure of the 1959 Acts, though the repeated revisions
have considerably changed the details of the laws.
The Utility Model Act was drastically revised in 1993 (Act No. 26), and a nonsubstantive examination system was introduced for the first time. The adoption of the non-

27 Such measure to extend the term of protection by the length of the war period is no longer an issue for patent rights
which have short term protection, but still remains as an issue for copyrights which have long term protection. Apartfrom the allied nationals, post-war measures regarding neutral nations such as Germany and Switzerland were taken
by concluding individual agreements one at a time from 1953 in order to normalize Japan’s relationships with them.

40

§2

History of Industrial Property Law

substantive examination system was a revolutionary step for Japan. However, it is notcompletely without examination. Devices are examined as to whether or not they relate to
the shape or structure of an article or combination of articles, whether they are liable tocontravene public order, morality or public health, whether their descriptions meet thedescriptive requirements, and whether any required information is missing from thedescriptions or is not clear enough (Articles 6-2 and 2-3 of the Utility Model Act). In short,no examination is conducted to determine the novelty and involvement of an inventive step,which is the most important as well as the most time and effort consuming part of theexamination.
Today, the emergence of new technologies such as computer software andbiotechnology has begun to present various problems relating to patentable subject matter.
Therefore, the question of how the issues relating to these new areas, which are sometimes
referred to as new domains to be protected, should be introduced into the industrial propertysystem is a serious challenge that must be tackled in the future.
[40]

41

§1. Creation of Right[42]

Chapter 2 Patent Rights§1. Creation of Right
1.1. Owner of Right
1.1.1. Inventor and Successor in Title
1.1.1.1. Inventor System
A legal subject who can obtain a patent right is limited to the inventor and thesuccessor in title to the right to obtain a patent, and this principle is called the inventor
system. Although there is no provision that clearly stipulates the inventor system, Article
29, paragraph (1) of the Patent Act provides that the “inventor of an invention ... may beentitled to obtain a patent for the said invention,” which suggests that the inventor system
is adopted. Also, where an application filed by a person who is neither the inventor nor the
successor in title to the right to obtain a patent for the invention is refused (Article 49, item(vii)), such application, even if it has been registered as a patent, constitutes a reason forinvalidation (Article 123, paragraph (1), item (vi)), and it is provided that the true rightholder may request transfer of the patent right (Article 74). These provisions can be
regarded as implicitly providing for the inventor system. It must be noted, however, that an
exception was provided upon the 2015 revision that an employer, who is not the actual
inventor, originally acquires the right to obtain a patent for an employee invention, undercertain conditions (Article 35, paragraph (3)).
The inventor system, which is regarded as self-explanatory today, has not necessarily
been considered as a universal principle historically, and the applicant system had also
existed.1 Particularly in the case of a late-capitalist country, the main purpose of patent law
is to emerge from industrial backwardness. To that end, it is necessary to have people fileapplications for inventions that are hidden from society or for inventions made overseas so
as to promptly raise the technological level of the country, instead of emphasizing theprotection of inventors. From such a perspective, it may be a good idea to adopt a systemthat promotes the filing of applications without placing any emphasis on the rights of

1 The concept of the applicant system involves the idea of granting a patent to the first applicant regardless of who thetrue inventor is, but is no longer adopted. The importation patent system (which no longer exists) is based on an idea
similar to the applicant system, which is that a patent is granted to the first person who imports an invention into thecountry and files an application for it, regardless of who made the invention.

42§1. Creation of Rightinventors. However, as countries’ technological levels grew, there was a stronger tendency
to raise their technological levels through protecting inventors, and at present, the inventor
system is universal.
[43]
Japan adopted the inventor system early on. It had already adopted the system in the
Patent Monopoly Act of 1885 (Dajōkan Ordinance No. 7), which is virtually Japan’s firstpatent law. Pursuant to the Act, only the inventor or the assignee of the invention could filean application for a patent monopoly (Article 1 and Article 4, paragraph (1)), and a patentmonopoly obtained by a person other than the inventor or the assignee was invalidated(Article 14, item (i)). The reason that the inventor system was adopted at such an early stage
is said to be because Japan modeled the patent system on that of the United Kingdom, but
this fact is not certain. In any case, it is very unlikely that the idea of the inventor system
was completely adopted from the beginning. Indeed, the employee invention system, which
is closely related to the inventor system, was not developed until later on. Nevertheless, theidea of the inventor system has firmly taken root for the present, both in terms of legislationand practice.
1.1.1.2. Inventor
An inventor is a natural person who has truly made an invention. Since an invention
is a factual act, a person having no legal capacity (such as a child) can also become aninventor.
At the same time, an inventor under the Patent Act refers to a person who completed
the specific technical means of an invention,2 so a mere assistant, advisor,3 fund-provider,

2 In the Tokyo District Court Judgment, August 27, 2002, Hanji, No. 1810, p. 102/Hanta, No. 1117, p. 280 (the CoatedCore for Fine Granule case), the court held that, a person who is formally named as a joint inventor due to serving as
the head of a pharmaceutical laboratory cannot be regarded as an inventor, if such person has only indicated a general
direction for solving a problem and has not made any creative contribution to making the invention.
3 In the Tokyo District Court Judgment, September 13, 2005, Hanji, No. 1916, p.133/Hanta, No. 1214, p. 283 (theDivisible Tablet Provided with Film Coating case), the court held that a person who was merely engaged in generalmanagement, a person who merely provided assistance according to instructions, and a person who merely supported
the completion of the invention cannot be regarded as an inventor. In the Intellectual Property High Court Judgment,
May 29, 2008, Hanji, No. 2018, p. 146/Hanta, No. 1317, p. 235 (the Glass Porous Body and Its Manufacturing Methodcase), the court mentioned that “a person who carried out general management for subordinate researchers as a manager,a person who provided general advice and guidance, a person who merely compiled data or conducted experiments
according to researchers’ instructions as an assistant, or a person who supported or entrusted the completion of theinvention by providing funds to the inventor or enabling the inventor to use equipment is not regarded as an inventor.”43§1. Creation of Rightor a person who merely gave orders is not considered to be an inventor.4 In practice, there
are many cases where it is extremely difficult to determine the identity of the inventor.
However, this is quite usual in determining the identity of the creator of intellectual property.
Since the 2011 revision has enabled a person having the right to obtain a patent to request
the owner of a patent right that has been misappropriated or has violated an obligation of
joint application to transfer the patent right (Article 74, paragraph (1)), disputes over theidentity of the inventor may increase in the future. The determination would have to bemade on a case-by-case basis. For example, in the case of an invention relating to chemistry,
which is known as a science of experiments, the effects of the invention are difficult todetermine in advance, and larger weight would be placed on experiments when identifying
the inventor.5 However, in the case of an invention relating to machinery, less weight
would be placed on experiments since the use of the machine is relatively easily predictablefrom its structure.6[44]
In recent years, there has been a growing number of lawsuits involving employee
inventions in which the identification of the true inventor was disputed. It is not rare to
write the name of the inventor’s superior in the column for recording inventors’ names, so
there are cases where a person mentioned as an inventor in the application is not found to

4 The court ruled that a person who merely received instructions and drew up a manufacturing drawing for equipment
relating to an invention is not an inventor, in the Tokyo District Court Judgment, April 16, 1979, Hanta, No. 395, p.
155 (the Grain Processing Method case); the court held that a person who provided a task and a simple idea cannot be
regarded as the designer of a utility model, in the Tokyo High Court Judgment, December 24, 1991, Hanji, No. 1417,
p. 108 (the Automatic Shrimp Boiling case); the court held that a person who conceived a concrete idea and a person
who materialized this idea and completed the invention are joint inventors, in the Tokyo High Court Judgment, April
27, 1976, Torikeshishū, 1976, p. 449 (the Mahjong-Rule Pachinko case); the court held that, where the concretizationof a new idea is obvious to a person skilled in the art, only the person who conceived such idea is regarded as theinventor, and a person who merely concretized the idea is only an assistant and not an inventor, in the Tokyo District
Court Judgment, January 26, 2006, Hanji, No. 1943, p. 85 (the Laminated Film and Support for Photograph case); thecourt stated that a mere act of providing assistance, giving advice, providing funds, or giving orders is not regarded ashaving taken part in the act of creation, in the Tokyo District Court Judgment, September 8, 2006, Hanji, No. 1988, p.
106/Hanta, No. 1272, p. 242 (the Tetrazolyl Alkoxy-Carbostyril Derivatives case); the court ruled that a person who ismerely a manager, assistant, or supporter is not a joint inventor, in the Tokyo District Court Judgment, September 12,
2006, Hanji, No. 1985, p. 106/Hanta, No. 1234, p. 182 (the JSR Thermosetting Overcoat for Color Filters case); andthe court held that a person who has merely given an idea or research theme is not regarded as having actually taken
part in an act of creating a technical idea, in the Tokyo District Court Judgment, March 23, 2007, court website (theGlass Porous Body and Its Manufacturing Method case).
5 In the Tokyo District Court Judgment, January 31, 2006, Hanji, No. 1929, p. 92/Hanta, No. 1225, p. 301 (the Washing
Treatment Agent case), the court stated as follows: “For inventions in the chemical field, it is generally not easy to
predict in advance the outcome of materializing an idea, so an idea does not directly link to the establishment of an
invention that can be worked by a person skilled in the art; rather, a technical idea is often completed after confirming
its utility through repeated experiments and confirming the scope of what is useful. Therefore, in such a case, a person
who has merely indicated the initial idea is not regarded as having taken part in the act of creating the technical idea, so
a person who has indicated the initial idea cannot be automatically regarded as the true inventor.” The same view isindicated in the Intellectual Property High Court Judgment, March 15, 2007, Hanji, No. 1989, p. 105 (the Tetrazolyl
Alkoxy-Carbostyril Derivatives case).
6 Specific court cases are introduced in detail in Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō
Jō/Ge, p. 367 [written by Kazuhiko Yoshida and Kiyoshi Iida].

44§1. Creation of Right

be an inventor by the court.7 However, there have also been cases where the court held that,as long as the employer has stated the name of such worker in the column for recording
inventors’ names, it would go against the fair and equitable principle to assert otherwise.8
The identification of the inventor in a case involving an employee invention is no different
from that in the case of an ordinary invention, and merely stating the name of a person who
is not an inventor in the column for recording inventors’ names is normally not considered
to be as serious a violation as the violation of the fair and equitable principle.9 Yet, whether
or not a statement constitutes violation of the fair and equitable principle depends on thespecifics of the case, so this cannot be said definitely.
[45]
Next, there is the question of whether a juridical person can become an inventor. The
Japanese Patent Act only assumes that natural persons can be inventors, so under the current
law, juridical persons cannot become inventors.10 Article 36, paragraph (1) of the Patent
Act provides that an application must contain the “shimei (personal name) or meishō(corporate name) of the applicant” and the “shimei of the inventor,” which suggests that theapplicant can also be a juridical person, but the inventor is limited to being a natural person.
In addition, the provisions of the principal sentence of Article 29, paragraph (1), Article 49,
item (vii), and Article 123, paragraph (1), item (vi) are also collateral evidence for aninterpretation that the inventor is limited to a natural person.11 Article 35 was revised in
7 In the Tokyo District Court Judgment, September 13, 2005, Hanji, No. 1916, p. 133/Hanta, No. 1214, p. 283 (theDivisible Tablet Provided with Film Coating case), the court, finding that it was a customary practice to include thesuperior among the inventors, along with the true inventor, denied the claim for payment of a consideration filed by asuperior whose name was mentioned in the column for writing inventors’ names in the patent application. In theIntellectual Property High Court Judgment, May 29, 2008, Hanji, No. 2018, p. 146/Hanta, No. 1317, p. 235 (the Glass
Porous Body and Its Manufacturing Method case), the court mentioned that an inventor is “a person who was involvedin the creative activity of making the technical idea specific and objective enough for a person skilled in the art to work
the invention,” and that “a person who carried out general management for subordinate researchers as a manager, aperson who provided general advice and guidance, a person who merely compiled data or conducted experiments
according to researchers’ instructions as an assistant, or a person who supported or entrusted the completion of theinvention by providing funds to the inventor or enabling the inventor to use equipment is not regarded as an inventor.”
8 In the Intellectual Property High Court Judgment, March 29, 2007, Hanji, No. 1972, p. 135/Hanta, No. 1241, p. 219(the Fuel Injection Valve case), the court held that when patent filing documents submitted by an employer has the nameof its worker written in it as the inventor, the employer cannot assert that said worker is not the inventor, because it
would mean openly asserting against the JPO, which is a state organ, a fact that differs from the content that has beenstated based on Article 36, paragraph (1), item (ii) of the Patent Act, which would be a violation of the fair and equitableprinciple, unless special circumstances exist.
9 Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō/Ge, p. 367 [written by Kazuhiko Yoshida andKiyoshi Iida].
10 In the Tokyo District Court Judgment, March 16, 1955, Kamin, Vol. 6, No. 3, p. 479 (the Rubber Swimming Bladdercase), the court held as follows: “It is clear from Article 1 of the Utility Model Act that Japan’s Utility Model Act does
not adopt ... the applicant system which is adopted in some foreign countries’ legislation, and at the same time, theperson who can obtain the registration of a utility model is limited to the one who was actually engaged in making thedevice. Accordingly, the concept of a device made by a representative or a device made by an organization is not
acceptable, and a juridical person cannot be considered to be a person who made a device. ... Indeed, there may besomething that can be considered as a factory made device. It is a device which was gradually created with thecooperation of many employees by using the already-existing factory facilities and experience, which has been contrived
at some time or other by someone who cannot be specified. Under Japanese law, nobody would be able to obtain autility model registration regarding such device made by a factory of which the designer cannot be specified.”
11 For details, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 355 [written by Nobuhiro Nakayama].

45§1. Creation of Right

2015, and it was provided that the right to obtain a patent for an employee invention shalloriginally vest in the employer under certain conditions (Article 35, paragraph (3)).
However, that is merely an exception and the general principle has not changed; even in
the case of an employee invention, the name of the inventor, who is a natural person, is
written in the column for recording inventors' names. In other words, the current Act adopts
an irregular system whereby the property right for an employee originally vests in theemployer under certain conditions, but the inventor’s right to be credited (hatsumeisha
meiyo ken) vests in the employee.12[46]
1.1.1.3. Right Granting System
An inventor can obtain a patent right as long as his/her invention meets statutory
requirements, and the question of whether or not to grant a patent is not determined at thediscretion of the State. Therefore, a person who is dissatisfied with an administrative
disposition given by the JPO can dispute the validity of that disposition in court. To be
more specific, a person can institute an action against a trial decision made by the JPO in
the Tokyo High Court (Article 178 of the Patent Act).13 This is called the right granting
system.
The right granting system may be considered as self-explanatory today, but that was
not necessarily the case historically. In the past, a patent (monopoly) was granted as a
privilege by the monarch, etc. However, the world’s mainstream became inclined to place
more emphasis on the inventor’s rights, and at present, the right granting system has takenroot globally.
1.1.1.4. First-to-File System
A person who has made an invention rightfully acquires certain rights related to theinvention (inventor’s rights) without putting in place any formal procedures. The core partof the inventor’s rights is the right to obtain a patent (Articles 33 and 34 of the Patent Act).
Meanwhile, a patent right is not automatically granted to the inventor, but is granted to the

12 A similar provision is stipulated for copyrights in cinematographic works. It is provided that a copyright in acinematographic work vests in the producer of the work under certain conditions.
13 Actions against trial decisions are under the exclusive jurisdiction of the Tokyo High Court, and are handled by theIntellectual Property High Court (Article 2, item (ii) of the Act for Establishment of the Intellectual Property High
Court).

46

§1. Creation of Right

person who filed the application first14 (Article 39). As a matter of course, the principle ofthe inventor system prevents a patent from being granted to a person who files anapplication for another person’s invention without succeeding to the right to obtain a patent
for such invention (Article 49, paragraph (7)), and such application, even if it has beenregistered as a patent, constitutes a reason for invalidation (Article 123, paragraph (1), item(vi)). Such filing by a person who does not have the right to file a patent application iscalled a misappropriated application, and the person who filed it is called an applicant of amisappropriated application.15
In contrast to this first-to-file system, the method of granting a patent to the person
who made the invention first is called the first-to-invent system. Canada (in 1989) and thePhilippines (in 1998) shifted from the first-to-invent system to the first-to-file system, andfinally in 2011 (though becoming effective on March 16, 2013) the United States also
shifted to the first-to-file system.16 As a result, no country any longer adopts the first-toinvent system. In line with this change, the United States also established provisions onprior users’ rights, requiring the prior user to have been commercially using or selling thepatented subject matter at least one year before the priority date of the U.S. patent (the filingdate of the U.S. patent application or the priority date under the Paris Convention).
[47]
1.1.1.5. Successor in Title
A patent application can also be filed by a person (a natural person or a juridical
person) who has succeeded to the right to obtain a patent from the inventor (Article 33,
paragraph (1) of the Patent Act). An organization that has no juridical personality cannot
become the owner of a patent right, but has the capacity to undertake some procedures
including filing a request for examination and filing a request for trial for patent invalidation(Article 6).17
14 With the 2011 revision, a person who has the right to obtain a patent was now able to request the transfer of amisappropriated patent or a patent in violation of an obligation of joint application and become the patentee, even if that
person had not filed a patent application (Article 74, paragraph (1) of the Patent Act).
15 Incidentally, bōnin (misappropriated) is an expression used in the Ming regulations of China, referring to the act ofmaking another person’s thing one’s own; in other words, embezzlement. The term bōnin has also been used in theJapanese penal code in the past, specifically, in Vol. 3 Zokutō (Theft) of Shinritsu Kōryō (Platform of New Regulations)(Pandect of 1870, p. 579), and kasumetori (stealing another person’s thing while that person is not looking) was printed
in kana as the meaning of the term. The term also appeared in Articles 10 and 11 of the former Patent Act (1921), but
not in the current law. The term is now only used in patent studies.
16 The America Invents Act (AIA) was adopted by the U.S. Congress on September 8, 2011, and became effective after
the President signed it on September 16 of the same year.
17 In the Tokyo High Court Judgment, September 30, 1999, Hanji, No. 1704, p. 131 (the Japan Foundation of Aesthetic
Medicine case), which was a case relating to the Trademark Act, the court stated that the reason for bestowing on
unincorporated associations the capacity to undertake procedures is to extend the same protection as that for juridical
persons to such associations with regard to the types of interests that should be protected through the JPO's trials forpatent invalidation.

47§1. Creation of Right

The successor in title only succeeds to the right to file a patent application as aproperty right, and the inventor’s right to be credited (inventor’s moral right (hatsumeisha
jinkaku ken)) remains with the inventor. Therefore, the successor in title must write thename of the true inventor in the application (Article 36, paragraph (1), item (ii)). However,even if the successor in title writes the name of a person who is not the true inventor in theapplication, it is often difficult in practical terms for the JPO to examine who the true
inventor is; therefore, a patent is sometimes granted for an application containing the nameof a person who is not the true inventor. Nevertheless, since this does not constitute a reason
for invalidation (i.e. it is not listed among the reasons for invalidation under Article 123,
paragraph (1)), the true inventor cannot have such patent invalidated even if his/her nameis not indicated on the certificate of patent, as long as the applicant possesses the right toobtain a patent.18
When an application is pending before the JPO, the true inventor should beconsidered to be capable of seeking a court judgment ordering the applicant of amisappropriated application to carry out an amendment procedure with the JPO to indicate
the plaintiff as the inventor stated in the written application of the patent application.19 Thisis an issue of amendment while the procedure is pending before the JPO, and the Patent
Act has no provisions precluding such amendment. There is also a theory insisting that theinventor can institute, against the patentee, an action for a declaratory judgment to the effectthat he/she is the inventor, and can instigate a procedure with the JPO to correct thecertification of a patent based on such judgment even when the case is no longer pending
before the JPO (after the patent registration).20 However, while a change made after patentregistration requires a trial for correction, there are no provisions under the Patent Act about
the correction of the name of the inventor after patent registration. After all, it would not
be possible to change (correct) the name of the inventor, and the remaining issue would be

18 Under the former Patent Act, there was controversy over whether a case in which a successor in title to the right toobtain a patent lists his/her own name as the inventor on the application would be considered as a misappropriation or
would be merely considered as a deficiency in the formality of the application, thus not affecting the validity of thepatent right. See supervised by Nobuhiro Nakayama, Tokkyo Hōshiki Mondai Eno Apurōchi (Approach to Patent
Formality Issues) (Research Institute of International Trade and Industry, 1982), p. 204.
19 In the Osaka District Court Judgment, May 23, 2002, Hanji, No. 1825, p. 116 (the Santoku Rare Earth case), the court
ordered the true inventor to request the applicant to instigate a procedure for making an amendment to indicate his/hername as the inventor’s name in the written application of the patent application, as a request for the abatement of a
nuisance based on an inventor’s right to be credited, which is a moral right, and stated that this was lawful based on thefollowing reasons: (1) Article 4ter of the Paris Convention stipulates, “The inventor shall have the right to be mentioned
as such in the patent,” and according to Article 26 of the Patent Act which provides that “Where specific provisions
relating to a patent are provided by treaty, such provisions shall prevail,” Article 4ter of the Paris Convention concerning
the inventor’s right to be mentioned in the patent is directly applicable in Japan; and (2) the inventor’s right to be credited(the inventor’s right to be mentioned in the patent) is construed to have an exclusive nature similar to a real right, giventhat said right, which is a moral right, protects the credit of the inventor and that credit is an extremely important legal
interest to be protected along with life and body.
20 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 186.

48

§1. Creation of Rightcompensation for damage.21[48]
Since the 2011 revision recognized the right of the true right holder to request theowner of a patent right that has been misappropriated to transfer the patent right (Article
74, paragraph (1) of the Patent Act), the true right holder can take back the patent right, but
he/she cannot change the name of the inventor. The true right holder, i.e. the owner of theright to obtain a patent, is not necessarily the true inventor, and the 2011 revision, which
only recognizes a request for transfer of the patent right by the true right holder, is unrelated
to the inventor’s right to be credited, and has not solved this issue. The fact that the property
right can be returned, but the inventor's right to be credited cannot be restored is somewhat
strange. However, it is a problem that should be solved through legislation, and it seems to
be an inevitable interpretation of the current Act. With regard to the issue of what types ofrequests the true inventor can file after patent registration, see “1.4.2.6. Relationship withThird Parties (Particularly Relationship with Person Who Filed MisappropriatedApplication).” Also, see “1.4. Legal Status before Registration” for various issues relating
to the succession of a right to obtain a patent.

21 In the Tokyo District Court Judgment, March 23, 2007, court website (the Glass Porous Body and Its Manufacturing
Method case), the court held that a person's act of assigning the right to obtain a patent for another person's invention toa third party, stating that the person is the sole inventor, constitutes a tort, even if the invention was likely to be notpatented due to lack of novelty and involvement of an inventive step.

49§1. Creation of Right[48]
1.1.2. Joint Inventor (Article 38 of the Patent Act)
When multiple persons make an invention jointly, the inventor’s right will bejointly owned by all of the inventors, and a patent application on the invention can only
be filed by all of those joint owners (Article 38 of the Patent Act).1 Therefore, if evenone of the joint owners opposes the filing, the other owners cannot file a patent application
for the invention. One of the joint owners may believe that the invention should not bemonopolized by individuals, while another joint owner may insist that a patent application
be filed, and yet another joint owner may assert that the invention should be kept
confidential as a trade secret. Another joint owner may lose motivation to obtain a patent,
or run away, or go bankrupt, making it impossible to file an application in actuality. As
the right to file a patent application has a property-like characteristic, the fact that theapplication cannot be filed by other joint owners in the case above may be problematic,
but it cannot be helped as long as the current law has express provisions to that effect.
However, even under the current law, it is possible for a joint inventor to request the otherjoint inventors to purchase said inventor’s share of the right.
[49]
A joint inventor must satisfy the same requirements as those for a sole inventor, so
the mere proposer of an idea, or a mere assistant, advisor, fund provider, or a person who
only gave orders is not a statutory joint inventor. Since this issue is the same for thedetermination of the identity of the inventor, see “1.1.1.2. Inventor.”2
Problems related to joint inventions mainly occur in the case of employee
inventions, but this issue will be discussed in “1.1.3. Employee Inventions.”
In the case of joint R&D, problems can easily occur and it is often difficult todetermine the degree of contribution made by each joint inventor afterwards. Thus, it isdesirable to conclude a contract concerning the handling of the results of the joint R&D
in advance.3
When a joint inventor has filed a patent application and obtained a patent without
the consent of the other joint inventors, the other joint inventors could demand a trial forinvalidation. In addition to this, with the 2011 revision, the other joint inventors also
became eligible to seek transfer of their share of the patent. Since this is the same as in

1 Article 38 provides for joint ownership of the right to obtain a patent in general. Apart from joint inventions, joint
ownership also arises when an invention becomes joint owned as a result of inheritance, and when a share of theright to obtain a patent is assigned, and all joint owners must file the patent application together.
2 For relatively detailed descriptions of the criteria for determination, see Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai13 Han], p. 187; and Takeo Sakano, “Hatsumeisha Kettei No Kijun” (Criteria for Determination of an Inventor),
Tokkyo Kanri (Patent Management), Vol. 10, No. 11 (1960), p. 16.
3 Hideo Iijima, “Waga Kuni No Jūgyōsha Hatsumei No Kadai Wo Saguru (1)” (Identification of Problems Relating
to Japan’s Employee Inventions (1)), Tokkyo Kanri (Patent Management), Vol. 25, No. 6 (1975): pp. 629 ff.

50

§1. Creation of Rightthe case of a misappropriated application, see “1.4.2.6. Relationship with Third Parties(Particularly Relationship with Person Who Filed Misappropriated Application).”Meanwhile, when a joint inventor has filed a patent application without the consent
of the other joint inventors, such other inventors may file an action seeking a declaratory
judgment on their own right to obtain a patent,4 and file an amendment with the JPO tochange the application into a joint application based on that declaratory judgment.

4 In the Tokyo District Court Judgment, October 28, 2011, court website (the Magnesium Alloy Hot Rolling Devicecase), the court stated as follows: “The inventor acquires the right to obtain a patent by making an invention (Article
29, paragraph (1) of the Patent Act), and if the inventor acquires a patent right, he/she shall have the exclusive rightto work the patented invention as a business (Article 68 of the Patent Act). Meanwhile, the right to obtain a patent
may be transferred (Article 33, paragraph (1) of said Act), and is recognized to be assignable as an independent right.
Therefore, the right to obtain a patent can be regarded as an independent right with property value, which arises
concurrently with the completion of an invention, so if there is a dispute over the ownership of the right, one of theparties claiming ownership of the right may seek the court to make a declaratory judgment on his/her ownership of
the right to obtain a patent against the other party in the dispute.”51§1. Creation of Right[50]
1.1.3. Employee Inventions1 (Article 35 of the Patent Act)
1.1.3.1. Significance of the Employee Invention System(1) Encouragement of inventions
Today, industry has an extremely important significance for a nation, and thedevelopment of innovative technology can even affect national economic conditions.
Therefore, the encouragement of inventions is one of the vital duties of a nation.
Organizations play an overwhelming part in developing inventions nowadays, bothin terms of quality and quantity. 2 Thus, in order to encourage inventions today, it isnecessary to give incentives for inventions or for investment in inventions both toemployees, etc. (hereinafter referred to as “employees” except in special cases, although
they include officers of juridical persons and government employees) and to their
1 For details on this issue, see Bunzō Takino, Shiyōnin Hatsumeiken Ron (Discussion on Employees’ Rights toInventions) (Chuo University Press, 1966); Bunzō Takino, Hatsumeiken Rippō No Kenkyū (Study on Legislation
concerning Rights to Inventions) (Chuo University Press, 1967); Bunzō Takino, Hatsumeiken No Gendaiteki Kadai(Today’s Problems relating to Rights to Inventions) (Chuo University Press, 1967); Nobuhiro Nakayama,
Hatsumeishaken No Kenkyū; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 331 [written by
Nobuhiro Nakayama]; Japan Institute of Invention and Innovation, Shokumu Hatsumei To Hoshōkin: Kitei No
Sakutei To Un’yō No Gaidorain (Employee Inventions and Compensation: Guidelines on Formulation and
Implementation of Related Rules); Hiroshi Enatsu, Waga Kuni Ni Okeru Hiyōsha Hatsumei Seido No Enkaku To
Sono Hōteki Kaishaku—Kakkoku To No Hikaku Hō Teki Kōsatsu; Nobuhiro Nakayama and Hidetaka Aizawa,“Taidan Shokumu Hatsumei No Gendaiteki Ichizuke” (Interview: Modern Positioning of Employee Inventions), L& T, No. 14 (2002), p.4; Ichirō Nakayama, “Shokumu Hatsumei Ni Taisuru Hoshōkin No Sekkei Shisō Ni Kansuru
Ichi Kōsatsu: Inobēshon Takarakuji Ron O Tegakari Ni” (How Should Employers Design Remuneration Policy for
Employees’ Invention: One Perspective Based on Innovation Lottery Theory), Tokkyo Kenkyū (Patent Studies), No.
33 (2002), p. 28, Japan Patent Office Research Study Report on Issues Related to Industrial Property Right Systems,
Shokumu Hatsumei Seido No Arikata Ni Kansuru Chōsa Kenkyū Hōkokusho (Modalities for the Employees’
Inventions System) (Institute of Intellectual Property, 2003); Yoshiyuki Tamura and Noriyuki Yanagawa, “Shokumu
Hatsumei No Taika Ni Kansuru Kiso Riron Teki Na Kenkyū” (Study on the Value for Employee Inventions from a
Basic Theory Approach), Minshō Hō Zasshi (Civil and Commercial Law Journal), Vol. 128, Nos. 4 and 5 (2003), p.
447; Naoki Koizumi, “Tokkyo Hō 35 Jō No Tekiyō Han’i” (Scope of Application of Article 35 of the Patent Act),
Minshōhō Zasshi (Journal on Civil and Commercial Law), Vol. 128, No. 4 and 5 (2003), p. 561; Keizō Yamamoto,“Shokumu Hatsumei To Keiyaku Hō: Keiyaku Hō Kara Mita Genkō Tokkyo Hō No Igi To Kadai” (Employee
Invention and Contract Law: Significance and Challenges of the Current Patent Act from the Viewpoint of ContractLaw), Minshōhō Zasshi (Journal on Civil and Commercial Law), Vol. 128, Nos. 4 and 5 (2003), p. 470; Hidetaka
Aizawa, “KEYWORD Shokumu Hatsumei” (KEYWORD Employee Inventions), Hōgaku kyōshitsu (Law Class),
No. 268 (2003), p. 2; December 2003, Patent System Subcommittee, Intellectual Property Policy Committee,
Industrial Structure Council “Shokumu Hatsumei Seido No Arikata ni Tsuite” (Improvement of Employee-Invention
System) (2004); Yoshiyuki Tamura and Keizō Yamamoto, Shokumu Hatsumei; Takuya Iizuka, ed., Tettei Kaiseki
Shokumu Hatsumei: Shokumu Hatsumei Wo Meguru Funsō No Bunseki Kara Seido Sekkei Made (In-depth Analysisof Employee Inventions: From Dispute Analysis to Institutional Design Relating to Employee Inventions), Bessatsu
NBL (NBL Separate Volume), No. 105 (2005); Taizō Ōta, Shokumu Hatsumei Kitei Jitsumu Handobukku (Practical
Handbook on Employee Invention Rules) (Shoji Homu, 2005); Hōseisaku Kenkyūkai (Legal Policy Study Group,
Kobe University), Shokumu Hatsumei (Employee Inventions) (Shinzansha, 2006); Takashi Chōsa, Shokumu
Hatsumei Seido No Hōritsu Kenkyū (Legal Study on the Employee Invention System) (Kurume University Law
Association, Seibundoh, 2007), and Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p.
484 [written by Takuya Iizuka and Hiroyuki Tanaka]. Although a variety of expressions including “jyūgyōin” and“hiyōsha” are sometimes used in lectures to refer to the employee who makes an employee invention, this book uses
the term “jyūgyōsha (employee)” as used in Article 35 of the Patent Act.
2 Juridical persons and government agencies are said to account for about 97% of all patent filings (Tokkyo Gōsei
Nenji Hōkokusho 2014 Ban (Tōkei/Shiryō Hen) [Japan Patent Office Annual Report (Statistics and Appendixes)],p. 47 shows the statistics for the period from 2004).

52§1. Creation of Right

employers, etc. (hereinafter referred to as “employers” except in special cases, although
they include juridical persons, the national government, and local governments). In theintellectual property system, not only creators, but also intermediaries, transmitters, andinvestors related to creations play significant roles, and these people cannot be overlooked
in successfully promoting industry and culture. This point is an extremely importantfactor in considering today's intellectual property system. In the same manner, when we
consider the employee invention system, we must not only focus on the viewpoint of theprotection of employees, but also the viewpoint of incentives for employers, if we are toattain the purpose of the Patent Act to promote industrial development.
[51]
The patent system itself is intended for encouraging inventions, and the core issueof the employee invention system is how the rights and profits arising from an invention
should be divided between employers and employees in order to maximize efficiency andequity in encouraging inventions. In other words, while increasing incentives for
employees, who are inventors, to make inventions, incentives for employers must also be
increased, since it is the employers who take risks to commercialize such inventions.
Unless the system is so designed or the law is so interpreted to achieve a good balance
between the incentives for both sides, the system will not contribute to the developmentof industry. 3 There was a period when the number of lawsuits concerning employee
inventions drastically increased in recent years, and most of them were disputes over theamount of value (benefits after the 2015 revision of the Patent Act) of the invention, but
we must not forget that the employee invention system also involves theoreticallyimportant issues other than the issue of the amount of the value of the invention.
[52]
Article 35, which was introduced by the Act of 1959, was revised in 2004 and 2015

3 In the Tokyo District Court Judgment, March 9, 2006, Hanji, No. 1948, p. 136/Hanta, No. 1226, p. 204 (the Fuel
Injection Valve case), the court stated that the amount of value to be paid for an invention should be sufficiently highto give employees an incentive to invent, while at the same time, it should be an amount that enables the company,
etc. to develop by overcoming the severe economic situation and international competition. The court further
mentioned that, because it is reasonable to consider the amount of value to be essentially different in nature from theamount of profit to be received by a business partner of a company bearing various risks at a time of favorable
economic conditions, so when the amount of the value to be paid for an invention is extremely high, the degree ofthe contribution made by the employer can be higher than usual, unless special circumstances exist, giving
consideration to both the worker and the employer. In contrast, in the Intellectual Property High Court, February 26,
2009, Hanji, No. 2053, p. 74/Hanta, No. 1315, p. 198 (the Scanning Optical System Removing Ghost Images case),
the court held that, among the values of the right pertaining to the monopolistic working of an employee invention,
we cannot neglect the aspect of the value for the invention, which is claimed by making a monetary assessment ofwhat is possessed by the worker, etc., and we cannot conclude that its amount is sufficient as long as it gives theemployees, etc. an incentive; the court determined that the amount should be decided by the value of the invention
itself, and even if the amount of profit to be received by the employer, etc. is extremely high, it should not be taken
into consideration. A similar determination was made in the Tokyo District Court Judgment, January 30, 2004, Hanji,
No. 1852, p. 36/Hanta, No. 1150, p. 130 (the Nichia Corporation Blue LED case).

53§1. Creation of Right(to come into effect in April 2016), but the provision is not applied retroactively.4 The
issue of an employee invention often develops into litigation after the retirement of theemployee, that is, after a considerable time has passed from the invention. Therefore,
companies needed to set up three types of employee invention management systems to
respond to the Act of 1959, the Act of 2004, and the Act of 2015, which made the practicaloperations inevitably complicated. Since there would still be cases to which the Act of1959 and the Act of 2004 would be applied for the time being, such cases will also be
discussed below.
The problems concerning the employee invention system are not limited to thoserelating to patentable inventions. Similar situations can occur in cases of keeping an
invention within a company as know-how without filing a patent application for it, incases of proposing ideas for improvements or business ideas that are not patentable bytheir nature, or in cases involving copyright, such as with computer programs. For acompany, it would be desirable to deal with these situations under a consistent policy, butsince Article 35 of the Patent Act is a provision specifically targeting inventions, this partof the book will only discuss the matter as regards inventions.
(2) Related legal domains
This issue of employee inventions is not only related to the Patent Act. The
provisions are only stipulated in one article of the Patent Act, but it is also widely related
to other legal domains.
If the essence of the issue of employee inventions is considered to lie in therelationship between the employer and the employee, the labor law aspect cannot be
overlooked,5 and the issue has been drawing attention from labor law scholars in recent
years. In fact, many companies deal with this issue by labor contracts, collective labor
contracts, and rules of employment. However, since an employee, etc. as set forth in
Article 35 also includes an officer of a juridical person (Article 35, paragraph (1)), thisprovision cannot be defined to fall purely into the category of labor law. Since specificissues are sometimes processed under contracts,6 the interpretation and validity of thecontracts become an issue.7 From the viewpoint of patent law, the issue would be the4 Article 2 of the Supplementary Provisions of the revised Act of 2004 stipulates that “(the revised provisions) shallnot preclude the effects that have arisen based on the provisions of these Acts prior to the revision,” but somehow
no such Supplementary Provision is established in the revised Act of 2015. However, since the value of an invention
is the employee’s property right and it is not possible to deprive a once-established claim for value retroactively, theprovision is construed to have no retroactive effect, by operation of law, also under the revised Act of 2015.
5 In Germany, this issue is treated in the legal domain in-between patent law and labor law. With regard to issues
concerning labor law, see Michio Tsuchida, “Shokumu Hatsumei To Rōdō Hō” (Employee Invention and Labor
Law), Minshōhō Zasshi (Journal on Civil and Commercial Law), Vol. 128, Nos. 4 and 5 (2003), p. 524.
6 In the United States, this issue is mainly treated as an issue of contracts, and arguments are made over theinterpretation and validity of the contracts.
7 With regard to issues concerning labor law, see Keizō Yamamoto, “Shokumu Hatsumei To Keiyaku Hō: Keiyaku
Hō Kara Mita Genkō Tokkyo Hō No Igi To Kadai” (Employee Invention and Contract Law: Significance andChallenges of the Current Patent Act from the Viewpoint of Contract Law), Minshōhō Zasshi (Journal on Civil andCommercial Law), Vol. 128, Nos. 4 and 5 (2003), p. 470.

54

§1. Creation of Rightquestion as to what kind of system would be desirable in order to encourage inventions
and to promote the development of industry. As shown above, the issue of the employee
invention system is an issue in a mixed domain of patent law, labor law, and contract
law.8
[53]
(3) Basic structure of Article 35 of the Patent Act9Japan adopts the inventor system, and until the 2015 revision of the Patent Act, aninvention made by an employee had also originally belonged to that employee. 10
Meanwhile, an invention made by an employee as part of the employee’s present or past
duties, which falls within the scope of the employer’s business operations, is called an
employee invention, and the employer rightfully obtains a statutory non-exclusive license
free of charge for such employee invention (paragraph (1); this point has remained thesame after the 2015 revision). For an invention made by an employee which is not an
employee invention, any provision in a stipulation providing in advance that the right toobtain a patent shall be acquired by an employer, that the patent rights shall vest in theemployer, or that a provisional exclusive license or exclusive license for said invention
shall be granted to the employer, is null and void (paragraph (2); this point has also
remained the same after the 2015 revision).
Before the 2015 revision, if there was a provision in a stipulation providing that theright to obtain a patent, etc. for an employee invention shall vest in the employer, theemployer was able to acquire such right, etc. from the employee who was the inventor,
and the employee was able to acquire a reasonable value. However, it was stipulated upon
the 2015 revision that, if there is a provision in a stipulation providing in advance that theright to obtain a patent for an employee invention shall vest in the employer, such rightto obtain a patent shall originally belong to the employer (paragraph (3)), and in that case,the employee shall have the right to receive reasonable money or any other economic
benefits (paragraph (4)). When there is no such provision, an employee invention
originally belongs to the employee and the employer does not have a justifiable right todemand the assignment, etc. of the employee invention from the employee after the

8 Hideo Iijima, “Waga Kuni No Jūgyōsha Hatsumei No Kadai O Saguru (1)” (Identification of Problems Relating toJapan’s Employee Inventions (1)), Tokkyo Kanri (Patent Management), Vol. 25, No. 6 (1975), p. 622.
9 With regard to this point, see Hisayoshi Yokoyama, “Tokkyo Hōgaku No Tachiba Kara” (From the Standpoint ofPatent Law Jurisprudence), Jurist, No. 1302 (2005), p. 103.
10 In the Supreme Court Judgment, April 22, 2003, Minshū, Vol. 57, No. 4, p. 477/Hanji, No. 1822, p. 39/Hanta, No.
1121, p. 104 (the Olympus Pickup Device case), the court held that Article 135 premises the fact that the right toobtain a patent for an employee invention originally belongs to the employee, etc. who made the invention.
Regarding whether or not a reasonable explanation can be given for a complicated system of having the rights
belong to the employee first, and subsequently having the rights assigned to the employer, see Ryō Shimanami,“Shokumu Hatsumei Ni Kansuru Kenri No Bunpai To Kizoku” (Distribution and Ownership of Rights on Employee
Inventions), Nakayama Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai(Theories of Intellectual Property Law and Modern Issues), p. 117; Yoshiyuki Tamura and Keizō Yamamoto, eds.,
Shokumu Hatsumei (Employee Inventions), p. 6, [written by Yoshiyuki Tamura].

55§1. Creation of Rightinvention is made. This is the basic structure of Article 35 of the Patent Act. The
requirements and effects of an employee invention are discussed later on.
[54]
If stronger protection were extended to employees, it would contribute to increasing
incentives for employees. However, it is not simply that merely having stronger
protection for employee inventors would contribute to the development of industry.
Unless incentives for employers to invest in inventions are boosted at the same time, themotivation to invest in inventions would be diminished and the system would notcontribute to the development of industry, which is the purpose of the Patent Act.
Whereas employee inventors receive various benefits such as salaries and researchfacilities from their company and are free of the risk of being dismissed or being required
to compensate for damage in the event their invention fails, employers bear the risk ofending up wasting their investment in the invention.11 Unless employers assume suchrisk, investment will not be made in inventions, and as a result, good inventions will not
be created, and even if superior inventions are made, they will not be commercializedeasily.
In addition, due to the current globalizing trend of the economy, we must take into
account the current situation in other countries, particularly in developed countries.
Setting the theoretical structure aside, it is problematic for Japan, in terms of maintaining
its international competitiveness, to have a system of paying outstandingly high amounts
as the values for employee inventions compared to other countries. In such a case,research bases in Japan could flee to other countries, and it could serve as a disincentive
factor for foreign companies to locate development bases in Japan.
Companies' earnings do not solely depend on inventors, but also rely to a great
extent on workers in sales and other divisions which are unrelated to inventions.
Nevertheless, however hard such workers contribute to increasing the companies'
earnings, they are not guaranteed to receive payment of the benefits (value until the 2015
revision of the Patent Act) prescribed in Article 35. Even if an employee in the intellectual
property division drafts a high-quality patent description and contributes to obtaining avaluable patent right, the employee is not guaranteed a right to receive the benefits underlaw. However high quality the invention is, an act of invention alone rarely produces
benefits, and in may cases, its commercialization requires much work and many funds. If
a sense of unfairness or dissatisfaction arises among workers, it would cause inefficiency
for the company as a whole. Thus, the issue of employee inventions is a difficult problem
that needs to be solved while giving consideration to all such circumstances.
11 An approach that places emphasis on who should bear the risk is indicated in Takashi Sawai, “Shokumu Hatsumei
Seido No Arikata Ni Tsuite” (Improvement of Employee Invention System), Chizai Kanri (Intellectual Property
Management), Vol. 54, No. 6 (2004), p. 877.

56§1. Creation of Right

Until the 2015 revision, if the employer was vested with the right to obtain a patentor the patent right for an employee invention, or the like, the employee had the right toreceive a reasonable value. While only a handful of inventions bring notable benefits tocompanies, Article 35 treats all patented inventions in the same manner. Therefore,
companies that file an enormous number of patent applications, such as companies in theelectronics industry, must pay huge amounts of costs merely for managing the employee
inventions. For employee inventions that bring large profits, the value received by theemployee will be high, and it will serve as a great incentive; but most inventions only
correspond to a lower value, and such low amount of value hardly serves as an incentive,
while it does impose a vast administrative burden on the companies. 12 While the court
carries out a meticulous and complicated calculation of the amount of the value of theinvention, such a calculation is possible because it is part of a lawsuit. For a company,
carrying out such a calculation for an enormous number of inventions requires so muchcosts and labor that make the process practically impossible or excessively difficult. Sucha system is wasteful in terms of cost-effectiveness. A possible legislative solution would
be to grant benefits only for large inventions, and to pay nothing or a fixed-amount sum
for small inventions.13 In any case, the number of lawsuits had sharply increased eversince the court began to render judgments upholding claims for large amounts of
payments of the value of the invention, and Article 35 had proved to be inefficient.
[55]
If we premise a completely free labor market, there will be little need for the law
to intervene in this problem. Workers can maximize their interests by concluding an
employment contract with an employer who would pay a large sum for their inventive
abilities, while employers can employ competent inventors on favorable terms anddismiss incompetent inventors, which would automatically lead to economically rational
conditions. In reality, however, no such completely free employment market exists.
Particularly in Japan, which has had a tradition of lifetime employment, it was determined
to be inappropriate to leave the issue solely to be handled by free contracts, and that some

12 Since the duration of a patent is long, if a company adopts a system to pay employee inventors according to thelevel of profits brought by their inventions, the company will have to manage such payments over a long period,
and will even need to manage the payments for retired employees and their heirs in many cases.
13 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 337; Ichirō Nakayama,“Shokumu Hatsumei Ni Taisuru Hoshōkin No Sekkei Shisō Ni Kansuru Ichi Kōsatsu: Inobēshon Takarakuji Ron
O Tegakari Ni” (How Should Employers Design Remuneration Policy for Employees’ Invention: One Perspective
Based on Innovation Lottery Theory), Tokkyo Kenkyū (Patent Studies), No. 33 (2002), p. 28; Hisayoshi Yokoyama,“Shokumu Hatsumei Seido No Yukue” (Future of the Employee Invention System), Jurist, No. 1248 (2003), p. 48,
p. 49. Incidentally, the UK Patents Act provides that the employer should pay compensation to the employee
inventor if the invention is of outstanding benefit to the employer (Section 41), but payment of such compensation
is likely to have been extremely rare to date. It is provided, however, that this provision shall not apply to theinvention of an employee where a relevant collective agreement provides for the payment of compensation (Section
40, Subsection (3)).

57§1. Creation of Rightlaw-based intervention was necessary, which led to the establishment of Article 35.14
1.1.3.2. History and Current Status of the Employee Invention System
Provisions on employee inventions were not stipulated in either the Provisional
Regulations for Monopoly of 1871 or the Patent Monopoly Act of 1885. The firstprovisions on employee inventions were established in the Patent Act of 1909. The Act
adopted the principle of the inventor system, but stipulated that unless otherwise provided
for, rights to an employee invention would belong to the employer, and making provisionsin advance to assign the right to obtain a patent for an invention that had not been madein the course of the employee’s duty would be invalid (Article 3). Given the labormanagement relationship in those times, it would have been considered natural tostipulate that employee inventions belonged to the employer, in principle.
[56]
Under the Patent Act of 1921, an employer could obtain a license free of charge (anon-exclusive license under the current law) for an invention made in the course of theemployee’s duties (equivalent to an employee invention under the current law), and if
provisions were stipulated in advance, he/she could receive an assignment of theinvention, and the employee could claim a reasonable value therefor (Article 14). How
the system was actually operated is not quite clear due to a lack of related documents,
statistics, and court judgments. Judging from the labor-management relationship of thosetimes, there is an assumption that employers had an advantage over employees in dealing
with such cases.
As this issue is deeply rooted in the domestic issues of labor market, it is not
appropriate simply to compare the status of Japan with that of western countries whichface different issues affecting their labor markets. 15 In western countries, where job
mobility is high and workers are protected by industry-wide unions, inventors areconcerned about making their employers pay as high an amount as possible for theirinventive abilities. In contrast, in Japan, where the system of employment had been basedon life-time employment and the seniority system, it had been considered important totreat all employees equally and to build a sense of togetherness among employees, and it
had been difficult to give a very high reward to a specific competent inventor. In addition,
since most labor unions in Japan are company unions, they had principally argued about
job security and pay raises, rarely touching on the subject of employee inventions. On the
14 Although there was a strong opinion that Article 35 should be abolished at the time of the 2004 revision, it was
concluded that it would not be appropriate to leave the issue solely to be handled by contracts.
15 With regard to the development patterns, court cases, legislation, and academic theories concerning the employee
invention systems of various countries, see Nobuhiro Nakayama, Hatsumeishaken No Kenkyū (Study on Rights of
the Inventor).

58§1. Creation of Right

part of employees, they rarely demanded extra money, in the hope that they would get
promoted in the future or receive other special treatment, and they did not find it realistic
to sue their employers under the lifetime employment system.
However, the Olympus Pickup Device case and Nichia Corporation Blue Lightemitting Diode (LED) case, as discussed later, prompted a change in employee awarenessand the occurrence of active lawsuits involving employee inventions. While the majorityof such lawsuits have been filed by workers who have left their companies, some lawsuits,
though small in number, have been filed by workers who are currently working for theircompanies. Also, the fact that the lifetime employment system is collapsing may be oneof the factors for the increase in disputes over employee inventions.
[57]
1.1.3.3. History and Current Status of the Employee Invention System(1) Employee inventions and free inventions
Any invention, made by an employee who is working for an employer, which “bythe nature of the said invention, falls within the scope of the business of the said employer,
etc. and was achieved by an act(s) categorized as a present or past duty of the said
employee, etc. performed for the employer, etc.” (Article 35, paragraph (1)) is categorized
as an employee invention, which has a special legal effect. However, other inventions
made by an employee are categorized as free inventions16 which originally belong to theemployee and which the employee can freely implement, make profits from, and dispose
of. After the completion of a free invention, the invention can be assigned, etc. under afree contract between the employer and the employee. However, upon such assignment,a contract forcing the employee to assign his/her free invention to the employer free ofcharge or at a low cost, taking advantage of the employer's superior position, may bedeemed to be in violation of public order and morals. Since it is a question of whether thecontract violates public order and morals, the validity of the contract will be determinedby taking into consideration all kinds of factors. There can be cases where a contract thathas been concluded while the employee was still employed is deemed to be invalid, but
the same contract that has been concluded based on the free intent of the employee after
he/she has left the company is deemed to be valid. Also, a contract may be deemed to bevalid depending on the amount of the value to be paid, and it may be deemed to be valid
where the president of a sole proprietorship company assigns his/her free invention to thecompany free of charge after making the invention. A contract for assigning a free
16 Inventions that were made outside the employee’s duty, but that fall within the scope of the business of the employer
are sometimes referred to as “gyōmu hatsumei” (dependent or connected inventions). Under the current Act,however, no special effect is recognized for such inventions, so there are no practical benefits in recognizing theconcept of “gyōmu hatsumei.”.

59§1. Creation of Rightinvention to the employer after making the invention can be considered to be basicallythe same as the case of assigning the employee's ordinary personal property to theemployer. Although provisions stipulated in advance, which provide for assignment ofeven inventions other than employee inventions, would be null and void, the entire
contract would be not nullified; only the portion relating to free inventions would benullified (partial nullification).17
Some companies impose an obligation of notification or an obligation ofpreferential negotiation18 regarding all inventions, including employees’ free inventions,but as the ultimate disposition of the inventions are left to the employees’ discretion, theimposition of these obligations does not have to be considered as illegal, given therelationship of trust between the employer and the employees.
[58](2) Scope of business of an employer
An entity that can be deemed to be an employer as prescribed in Article 35 includes
a sole proprietorship employer, a juridical person, the State, and a local public entity.
When the representative of a one-man company makes an invention, said one-man
company is deemed to be the employer.19
The employer as referred to in Article 35 is not necessarily the employer underlabor law or that under an employment contract, but should be determined from a patentlaw perspective, which is to promote the development of industry by encouraging
inventions.20 The most significant criterion in determining who the employer is may be
the question of who paid the employee’s salary, but that alone is insufficient. The
employer should be determined from the viewpoint of who would be the reasonable
person to obtain the non-exclusive license, or who would be the reasonable successor intitle to the rights, or conversely, who should be given an incentive in order to effectively
encourage inventions, by comprehensively taking into account various other factors
including who undertook the investment risk, who provided the research facilities, who

17 The Osaka District Court Judgment, May 18, 1979, Tokkyo To Kigyō (Patents and Enterprises), No. 128, p.
49/Torikeshishū, 1979, (District Court Section), p. 239/Tokkyo Nyūsu (Patent News), Nos. 5210 and 5211 (theContinuous Kneading Machine case).
18 This refers to an obligation of an employee to consult with the employer before assigning the rights to or the patenton his/her invention to a third party or before licensing out his/her patent to a third party. It only obligates theemployee to consult with the employer, and does not obligate the employee to assign his/her rights or to grant aprovisional exclusive license or an exclusive license to the employer.
19 The Osaka District Court Judgment, March 31, 1972, Hanji, No. 678, p. 71 (the Pressure-Resistant Hose case).
20 Chikashi Nagano, Shokumu Hatsumei No Riron To Jitsumu “Sōtō No Taika” To Insenteibu No Kenshō To Shishin(Theories and Practices concerning Employee Inventions: Verification of and Guidelines for “Reasonable Value”
and Incentives), (Gyosei, 2004), p. 174.

60

§1. Creation of Rightprovided the research assistants, and who gave instructions and orders. 21 Temporary
workers formally tend to have an employment relationship with a temporary staffing
agency. However, often the company to which a temporary worker is assigned provides
the research facility, and the worker is under the instructions and orders of the company
and engages in duties that are similar in practical terms to those of regular employees of
the company, while that company also bears the risk of failure of the invention. In suchcase, the company to which the temporary worker is assigned should be deemed to be theemployer under the Patent Act in many cases. If the company to which the temporary
worker is assigned were not deemed to be the employer, then the temporary staffing
agency would likely be deemed to be the employer, but in such cases, the invention would
likely not satisfy such requirements as falling within the scope of the business of theemployer (the temporary staffing agency) or falling within the scope of the duty of theemployee, and would end up being a free invention. In that case, the temporary staffing
agency is likely to conclude with the temporary worker a contract for receiving an
assignment of the rights free of charge, which is unfavorable to the worker, because
Article 35 does not regulate the relationship between the temporary staffing agency andthe temporary worker. In short, the employment relationship should be judged from theviewpoint of how the profits of the provider of physical assistance, such as funds andmaterials, and those of the provider of the technical idea should be adjusted in order toencourage inventions effectively.
[59]
The scope of business of an employer should be construed to refer to all business
which the employer currently conducts and/or has concrete plans to conduct in the
future.22 Therefore, a business which is described in the purpose of the company in thearticles of incorporation, but is not currently conducted or where there is no concrete plan
to conduct such a business in the future will fall outside the scope of business of the
21 In the Osaka District Court Judgment, May 23, 2002, Hanji, No. 1825, p. 116 (the Santoku Rare Earth case), which
is a slightly peculiar case, the inventor was not in such a relationship with the defendant company whereby his/herinvention would be regarded as an employee invention at the time when the inventor completed the invention.
However, since the company had a technical/economic unity with the inventor and was giving instructions to andsupervising the inventor in practice, the court, by applying Article 35, paragraph (3) by analogy, affirmed theinventor’s claim for payment of a reasonable value against the company, which had received an assignment of theright to obtain a patent from the inventor without agreeing on the amount of the value for the right. As the court
applied Article 35 by analogy in this judgment, it provides a suggestion as to the scope of the application of said
Article. An opposite view is indicated in Hiroshi Enatsu, Waga Kuni Ni Okeru Hiyōsha Hatsumei Seido No Enkaku
To Sono Hōteki Kaishaku: Kakkoku To No Hikaku Hō Teki Kōsatsu (History of Employee Invention System inJapan and Its Legal Interpretation: International Comparative Study), p. 488.
22 The same view is indicated in Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law[New and Expanded Edition]), p. 145; Bunzō Takino, Shin Kōgyō Shoyūken Hō Kōgi [Kaitei Zōho Ban] (Lecture
on New Industrial Property Law [Revised and Expanded Edition]), p. 38; Tomoko Takii, Kigyō Hō Kenkyū (Studyon Enterprise Law), Vol. 190, (1971) p. 19; Tsutomu Jinbo, “Hiyōsha Hatsumei No Hikakuhōteki Kōsatsu (1)”(Comparative Study on Employee Inventions (1)), Patent, Vol. 3, No. 3 (1950), p. 13; Nobuo Mon'ya, ed.,Chūshaku Tokkyo Hō (Annotated Patent Act), P 96 [written by Nobuo Mon'ya]; Nobuhiro Nakayama,
Hatsumeishaken No Kenkyū (Study on Rights of the Inventor), p. 182; and Nobuhiro Nakayama and Naoki Koizumi,ed., Shin Chūkai Tokkyo Hō Jō, p. 508 [written by Takuya Iizuka and Hiroyuki Tanaka].

61§1. Creation of Right

employer. On the other hand, a business which is not described in the articles ofincorporation but where there is an explicit or implicit decision to conduct such a businessin the future as company policy will fall within the scope of business of the employer.23
The articles of incorporation of a company are intended for protecting shareholders andcreditors, and not for regulating the relationship of rights between the company and its
employees. In the case of the State or a local public entity, it would not be equitable withprivate companies, and it would also be too vast and ambiguous, to consider all businesses
that are currently conducted and businesses for which there are concrete plans to be
conducted in the future as falling within the scope of business of the employer. Instead,the scope of business of the organ to which the public officer belongs should be regarded
as the scope of business of the employer.24 Although disputes over the scope of businessof the employer are relatively rare, the question of what the business of universities ismay become an issue in respect to inventions made by university instructors in the future.
(3) Duty of an employee
The term “employee, etc.” in Article 35 of the Patent Act is a concept that includes
company directors, 25 employees of sole proprietorships, and public officers, besides
employees of companies in a general sense. It does not matter whether the employee is aregular worker, part-time worker, or temporary worker.26[60]
To constitute an employee invention, the act of invention must be part of the present
or past duty of the employee. The act of invention itself does not need to be the duty ofthe employee. An invention is deemed to be an employee invention as long as it is madeas a result of the employee's performance of his/her duty. Such duty not only includes
tasks specifically instructed by the employer. When an employee makes an invention asa result of voluntarily finding a research theme and studying it, in some cases such
23 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 229 construes the businesses described in the articles ofincorporation to be the businesses of the employer, but since the literature mentions that “businesses incidental
thereto” should be interpreted broadly, there would be no large difference in the conclusion. Nevertheless, as it is
not rare for an employer to advance into a business field totally unrelated to those described in the articles ofincorporation, it would not be appropriate to determine such businesses based on the articles of incorporation.
24 The same view is indicated in Kokka Kōmuin No Shokumu Hatsumei Tō Ni Taisuru Hoshōkin Shiharai Yōryō(Guideline on Payment of Compensation for Employee Inventions, etc. Made by National Government Employees)(Japan Patent Office, Notice No. 1366 of General Affairs Department, Japan Patent Office of 1984; issued in 1984),
Article 1. The JPO has abolished these guidelines in February 1, 2002, but this view concerning the employer’s
businesses is itself reasonable. Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13thed.]), p. 229; Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act,
Rev. ed.), p. 220.
25 Cases in which an invention made by a company director was found to be an employee invention include the Tokyo
District Court Judgment, June 8, 1965, Hanta, No. 180, p. 182 (the File Wrapper case); the Osaka District Court
Judgment, March 31, 1972, Hanji, No. 678, p. 71 (the Pressure-Resistant Hose case); the Kobe District Court
Decision, December 12, 1989, Mutai Saishū, Vol. 21, No. 3, p. 1002 (the Hydraulic Gate case), and the second
instance judgment on the same case, the Osaka High Court Decision, September 13, 1990, Mutai Saishū, Vol. 22,
No. 3, p. 569.
26 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 230; Hiroshi Enatsu, Waga Kuni Ni Okeru Hiyōsha
Hatsumei Seido No Enkaku To Sono Hōteki Kaishaku: Kakkoku To No Hikaku Hō Teki Kōsatsu (History of the
Employee Invention System in Japan and Its Legal Interpretation: International Comparative Study), p. 481.

62§1. Creation of Rightinvention is also deemed to be an employee invention. 27 Some companies’ central
research centers let their researchers engage in free research, and an invention made undersuch circumstances can also constitute an employee invention. The question as to whether
an invention was part of the employee’s duty is determined by comprehensively
considering the orders from a superior at work, as well as the position, salary, and type ofoccupation of the employee, as well as the degree of the employer’s contribution to theprocess of completing the invention. 28 In general, workers in higher-level positions
receive higher salaries and, accordingly, they should be recognized as being engaged ina wider scope of duty.29 However, even if a worker were a director, not all businesses ofa company would immediately be considered to fall within the duty of the director;30
rather, the specific contents of his/her duty would need to be studied.
Unlike under the Act of 1921, the current Act also treats inventions that were partof an employee’s past duty as employee inventions. Past duty in this case means past duty
within the company for which the employee was working at the time the invention was
made, and any invention made after the employee had left the company is not an

27 In the Osaka District Court Judgment, April 28, 1994, Hanji, No. 1542, p. 115 (the Zojirushi Thermos Flask case),
the court held that, even when an inventor has voluntarily found a research theme and completed an invention, suchinvention constitutes an employee invention if, by objectively studying the employee’s primary duty, an act ofattempting to make such invention and completing it is found to have been generally anticipated under the
relationship with the employer, and if the employer is found to have extended facilities for and assistance in making
the invention. Meanwhile, in the Kobe District Court Decision, December 12, 1989, Mutai Saishū, Vol. 21, No. 3,
p. 1002 (the Hydraulic Gate case), the court stated that a person who had been the representative director since theestablishment of a company had a concrete duty to attempt to make a device for improving the production
technology and increasing its efficiency, so the representative director’s act of making the device was part of his/herduty without having to consider the actual contents and the level of facilities provided by the company. In the Tokyo
District Court Judgment, September 19, 2002, Hanji, No. 1802, p. 30/Hanta, No. 1109, p. 94 (Interlocutory
judgment in the Nichia Corporation Blue LED case), the court ruled that an invention that was made against acompany order constitutes an employee invention as long as it was made within a company facility during working
hours by using company equipment and with the help of an assistant who was a company employee.
28 In the Tokyo District Court Judgment, November 25, 1991, Hanji, No. 1434, p. 98 (the Flue Gas Desulfurization
Equipment case), which was a complicated case, the court mentioned that the question of whether or not aninvention constitutes an employee invention would be determined by considering various circumstances, including
the employee’s position, type of occupation, and job experience, as well as the degree of the employer’s contribution
to the process of completing the invention.
29 In the Supreme Court Judgment, December 13, 1968, Minshū, Vol. 22, No. 13, p. 2972 (the Lime Nitrogen Furnacecase), the court affirmed that the invention in question was an employee invention since the inventor was the chief
executive of the company’s technical department and had a concrete duty to endeavor to improve the production oflime nitrogen. In the Tokyo District Court Judgment, February 22, 1985, Hanta, No. 559, p. 284 (the Starting Stallscase), the court stated that the act of the inventor, who was the representative director, to make such a device waspart of the inventor’s duty.
30 Cases in which a device made by a director in charge of market development and sales planning was found not tohave been made as part of his/her duty include the Tokyo High Court Judgment, May 6, 1969, Hanta, No. 237, p.
305 (the Enameled Bathtub case).

63§1. Creation of Right

employee invention. 31 Otherwise, an invention made after the employee had left thecompany and joined another would be an employee invention for both the previous
company and the newly-joined company. This does not only cause a complicatedsituation, but such act of binding the employee after leaving a company would also
deprive the employee of the means of earning a livelihood and would in practical terms
take away his/her freedom to choose a job, so it is not reasonable.32[61]
Special consideration would be required for inventions made by instructors atuniversities, etc. The Intellectual Property Strategic Program formulated by theIntellectual Property Strategy Headquarters cites, as its major pillars, the promotion of
inventions at universities and the use of those inventions for the benefit of society bypatenting them. Against such background, the handing of instructors' inventions atuniversities has become an important issue. Conventionally, the handling of inventions atuniversities had been unspecified, but with the publication of the report “Handling ofPatents, etc. Pertaining to Inventions by University Instructors, etc.” by the Science
Council in 1977, a Notice of the Ministry of Education announced that inventions madeat national universities shall belong to individual inventors, in principle, and that, as
exceptions, (a) inventions which the inventor proposed should be assigned, (b) inventions
resulting from research specially funded by the State, and (c) inventions resulting fromresearch conducted by using a specialized research facility installed by the State for a
special research purpose, shall belong to the State. National universities independently
established and now operate their rules on inventions in accordance with that notice.
Meanwhile, the United States enacted the Bayh-Dole Act (1980; §§ 200–212 of the
U.S. Patent Act [35 U.S.C.]) which was aimed at promoting the use of inventions arisingfrom federally supported research or development, by having such inventions belong touniversities. This measure proved extremely successful. Inspired by such success,31 The same view is indicated in Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13thed.]), p. 234; Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act,
Rev. ed.), p. 221; Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han]
(Clause-by-Clause Explanation of Industrial Property Acts [18th ed.]), p. 112; Mitsue Toyosaki, Kōgyō Shoyūken
Hō [Shinpan/Zōho] (Industrial Property Law [New and Expanded Edition]), p. 148; Bunzō Takino, Shin Kōgyō
Shoyūken Hō Kōgi [Kaitei Zōho Ban] (Lecture on New Industrial Property Law [Revised and Expanded Edition]),p. 39; Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan] (Detailed Explanation of Patent Law [New ed.]), p. 180.
However, in the case where an inventor had substantially completed an invention while still working for a company,
but resigned while keeping the invention secret, and filed an application for it after the resignation, such invention
is regarded as having been made while the inventor was still with the company (the Osaka District Court Judgment,
May 18, 1979, Tokkyo To Kigyō [Patents and Enterprises], No. 128, p. 49/Torikeshishū, 1979 [District Court
Section], p. 239/Tokkyo nyūsu [Patent News] Nos. 5210 and 5211 [the Continuous Kneading Machine case]. the
Nagoya District Court Judgment, September 2, 1996, Hanji, No. 1609, p. 137 [the Parking Structure case]).
32 In the Nagoya District Court Judgment, December 21, 1992, Hanta, No. 814, p. 219 (the Multistory Car Park Floor
Structure case), the court held that an invention of which an outline was completed while the inventor was working
for the first company but which was completed by the inventor in the course of executing business in the second
company after he/she had resigned from the first company is regarded as an employee invention of the second
company.

64§1. Creation of Right

university inventions in Japan also began to attract attention. In 1998, the Act on the
Promotion of Technology Transfer from Universities to Private Business Operators (theUniversity Technology Transfer Promotion Act, or the so-called TLO Act) was enacted
so as to promote the transfer of research results achieved at universities to industry. Since
then, technology licensing organizations (TLOs) have begun to play a significant role inthe management and use of inventions made at universities, with the support of thegovernment. Further, in “Toward the Establishment of Industry-Academia-Government
Collaboration in the New Era” published on April 28, 2003, the Committee on Promotionof Industry-Academia-Government Collaboration, Technology and Research
Foundations Section, Council for Science and Technology turned around Japan's
conventional policy and set out that it would be appropriate to have university inventions
belong to the universities, in principle. Many universities followed this guideline andformulated provisions incorporating such principle to have inventions belong to theuniversities.
[62]
The issue of who is the most rational party to be the owner of university inventions
is a major problem that concerns the essence of universities. While the Patent Act has
been designed with focus on industry, it regulates company workers and university
professors under the same provisions, so its system is not necessarily suitable foruniversities. Companies' activities are based on the logic of making profits, which iscompatible with the patent system, whereas universities' activities are based on a logic
different from that of companies. Universities are fundamentally not places for pursuing
profits, but places for pursuing the truth. They have developed by sharing information,and their primary mission is to teach students, etc. the results of research and to use thoseresults for the benefit of society. Thus, they are not exactly compatible with the patent
system which aims to provide exclusive profits. Recently, however, universities havebeen called on to use their research results for the benefit of society in the form of patents,
and it has become difficult for universities to procure research funds unless they raise thefunds themselves. Due to such a change in circumstances, universities are now making
independent efforts to manage their patents. In the case of private companies, there arecases where their employees assert that their inventions are not categorized as employee
inventions, but in most of such cases, the court has found such inventions to be employee
inventions. In contrast, with regard to inventions by university instructors, the questionof what the duty of university instructors is under the Patent Act should be considered
first; but there failed to be any discussion on such point. 33 Despite the fact that the
33 Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han] (Lecture on Intellectual Property Law [2nd ed.]) p. 145
mentions that an invention by a university professor is not an employee invention. Although this point is
controversial theoretically, the current practice in universities premises that such an invention could be an employee
invention.

65§1. Creation of Rightquestion of what the duty of university instructors is concerns the essence of universities,
there has been no court dispute over whether an invention made by a university instructor
is categorized as an employee invention yet, so it is an issue that needs to be addressed in
the future.34
At universities, not only instructors, but also students (including graduate students)
and research students, etc. often make inventions. However, Article 35 does not apply to
students, etc. since they are not employees, etc. of the university. Accordingly, inventions
made by students, etc. would be processed by contracts between the universities andstudents, etc. There are many cases where such clear contracts are not concluded in reality,
but the issue has not developed into a major problem to date due to a lack of disputes incourt on the issue. In addition, a university has many researchers who are not employees,
etc. of the university, such as temporary researchers sent from companies and research
students from overseas, and Article 35 of the Patent Act is not applicable to inventions
made by such researchers. Moreover, joint research and commissioned research between
universities and companies have increased, so it is desirable to conclude appropriate
contracts in advance for inventions arising from such research because the attribution andthe share of ownership of research results present difficult problems. On the other hand,from the viewpoint of ensuring free research and free information exchange at universities,
imposing overly strict contract-based management of inventions on members of theuniversity could run counter to the primary purpose of universities. Therefore, it is adifficult issue to resolve.
[63]
1.1.3.4. Employer’s License(1) Content of the employer’s license
If an employee makes an employee invention and that employee or the successor
to the right to obtain a patent obtains a patent right for it, the employer rightfully gains a
non-exclusive license for the invention free of charge35 (Article 35, paragraph (1)). This
employer’s non-exclusive license takes effect upon the registration of the patent and is
automatically effective against third parties.
It should be understood that there is no limit to the scope of the employer’s license,
either in terms of place, time, or the extent of the application of the exploitable

34 An essay that sharply points out this issue is Shintō Teramoto, Chitekizaisanken Shintaku No Kaihō, (Solution toIntellectual Property Trust), (Koubundou, 2007) Ch.1 “Daigaku Kyōin No Hatsumei No Kenri Shori To
Chitekizaisanken Shintaku” (Processing of Rights Concerning University Instructors' Inventions and Intellectual
Property Trust).
35 Such license is free of charge in Japan, but it is a matter of legal policy. The U.S. license called the shop right isalso free of charge, but in Germany which has a system similar to that of Japan, the license is for value.

66§1. Creation of Righttechnology.36 This is because the wording of the provisions only mentions that it is a
non-exclusive license, and does not mention any limitation. 37 Also, in actuality, theestablishment of any limitation on the employer’s license would be too disadvantageous
for the employer, who invested funds and materials in the invention, and would be
improper from the perspective of encouraging investment in inventions in an era oftechnological innovation as today.
[64]
There is also a theory that considers that the non-exclusive license should remain
with the employer even if the employer receives an assignment of the right to obtain apatent from an employee but returns the right to the employee or assigns the right to athird party, and the employee or the third party subsequently obtains a patent right,38 but
this is erroneous. When the right to obtain a patent is assigned from the employee to theemployer, the employer obtains both the right to obtain a patent and the right to work theinvention, and the license of the employer is extinguished as a result of the merger ofrights. The minimum necessary guarantee secured for the employer has been fulfilled at
the time of the assignment. Any subsequent assignment of the right to obtain a patent or
the patent right from the employer would be an ordinary assignment, so there is no reason
to give such assignment any special treatment in relation to an employee invention, andfurther, such assignment would jeopardize the safety of business dealings.39 In short, it
is sufficient to prevent the employer from being unable to work the invention against
his/her intent, and there is no need to extend the special treatment to cases where theemployer has made a disposition by his/her own intent after obtaining the right to obtain

36 In the Tokyo High Court Judgment, September 25, 1985, Hanta, No. 576, p. 90 (the Starting Stalls case), the court
held that the scope of a non-exclusive license for an employee device is not limited to its use, but also extends to
its manufacture, assignment, display and the leasing thereof. For details, see Nobuhiro Nakayama, Hatsumeishaken
No Kenkyū (Study on Rights of the Inventor), p. 184; Bunzō Takino, Shiyōnin Hatsumeiken Ron (Study on
Legislation concerning Rights to Inventions) (Chuo University Press, 1966), p. 221; Nobuo Mon'ya, “Shokumu
Hatsumei Ni Motozuku Shiyōsha Tō No Hōtei Tsūjō Jisshiken Ni Tsuite No Jakkan No Kōsatsu” (SomeConsideration concerning the Statutory Non-exclusive License of the Employer, etc. based on an Employee
Invention), Seikei Hōgaku, No. 13 (1978), p. 239; Mutsuo Ōya, “Shokumu Hatsumei” (Employee Invention), Kazuo
Inoue, ed., Tokkyo Kanri (Patent Management) (Yuhikaku, 1966), p. 142.
37 When we look at other provisions on statutory licenses, the limitation, “ only to the extent of the invention and the
purpose of such business worked or prepared,” is provided, for example, for a non-exclusive license based on prioruse under Article 79 and a non-exclusive license due to the working of the invention prior to the registration oftransfer of patent right under Article 79-2. However, no such limitation is provided for a non-exclusive license of
the employer.
38 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 236; Nobuo Mon'ya,“Shokumu Hatsumei Ni Motozuku
Shiyōsha Tō No Hōtē Tsūjō Jisshiken Ni Tsuite No Jakkan No Kōsatsu” (Some Considerations concerning the
Statutory Non-exclusive License of the Employer, etc. based on an Employee Invention), Seikei Hōgaku, No. 13(1978), p. 239, p. 243.
39 Mutsuo Ōya, “Shokumu Hatsumei” (Employee Invention), Kazuo Inoue, ed., Tokkyo Kanri (Patent Management)(Yuhikaku, 1966), p. 142; Hiroshi Enatsu, Waga Kuni Ni Okeru Hiyōsha Hatsumei Seido No Enkaku To Sono
Hōteki Kaishaku: Kakkoku To No Hikaku Hō Teki Kōsatsu (History of Employee Invention System in Japan and
Its Legal Interpretation: International Comparative Study), p. 534.

67§1. Creation of Righta patent or the patent right.40 Under the revised Act of 2015, the employer originallyacquires the right to obtain a patent under certain conditions, so, to that extent, theemployer, which becomes a patentee, would not acquire a non-exclusive right for theemployer's own patent right. The case where an employee originally acquires the rightunder the revised Act of 2015 is the same as the state before the 2015 revision.
(2) Treatment before the grant of the patent
The non-exclusive license of the employer under Article 35 takes effect when thepatent is granted, but in reality a long time is required from the completion of an invention
until the registration of the patent, so the employer sometimes needs to work the invention
even before the registration. The purport of Article 35 is to adjust the interests of theemployer who provided funds and materials and the employee who provided the technicalidea and this purport does not change whether it is before or after the grant of the patent.
Accordingly, it should be interpreted that the employer can rightfully work the employee
invention free of charge even before the grant of the patent.41 As long as the employee
has yet to obtain the patent right, the employee has no right to prohibit the employer fromworking the invention, and from such a point of view, it is natural that the employer canwork the invention. It should be construed that the employer can work the invention until
the patent registration even after the laying open of the application, without claims formonetary compensation (Article 65) being made by the employee, who is the patentee,
nor a tort being constituted, and after the registration, the employer obtains a nonexclusive license. A company does not always file a patent application for its employee
invention, but often keeps it secret as its own know-how. It should be understood that theemployer can also use such know-how free of charge. Under the revised Act of 2015,
where any stipulation provides in advance that the right to obtain a patent for an employee
invention shall vest in the employer, said right shall belong to said employer from its
occurrence (Article 35, paragraph (3)). So, in such case, there would be no problem forthe employer to work the invention. If there is no such stipulation, the conventional
practice applies.
[65]

40 For details, see Nobuhiro Nakayama, “Shokumu Hatsumei Ni Tsuite No Shiyōsha No Jisshiken” (Employer’s
License for Employee Inventions), Tokkyo Nyūsu (Patent News), No. 5660 (1981); Nobuhiro Nakayama,
Hatsumeishaken No Kenkyū (Study on Rights of the Inventor), p. 185.
41 The same view is indicated in Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the
New Patent Act, Rev. ed.), p. 225; Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law[New and Expanded Edition]), p. 149; Nobuo Mon'ya, “Shokumu Hatsumei Ni Motozuku Shiyōsha Tō No Hōtei
Tsūjō Jisshiken Ni Tsuite No Jakkan No Kōsatsu” (Some Consideration concerning the Statutory Non-exclusive
License of the Employer, etc. based on an Employee Invention), Seikei Hōgaku, No. 13 (1978), p. 239; Yoshirō
Hashimoto, Tokkyo Hō [Dai 3 Han] (Patent Law [3rd ed.]), p. 230; Mutsuo Ōya, “Shokumu Hatsumei” (Employee
Invention), Kazuo Inoue, ed., Tokkyo Kanri (Patent Management) (Yuhikaku, 1966), p. 143; Hisayoshi Yokoyama,“Shokumu Hatsumei” (Employee Invention), Hōgaku kyōshitsu (Law Class), No. 325 (2007), p. 197.

68

§1. Creation of Right

1.1.3.5. Ownership of the Right to Obtain a Patent(1) Introduction
An employer rightfully obtains a non-exclusive license for an employee invention,
but is rarely satisfied with it, and it is natural that the employer seeks to obtain some kindof stronger rights. From the Act of 1921 to before the 2015 revision, an employee
invention originally belonged to the employee, but the employer was able to acquire therights on the invention by succession based on a stipulation in advance. However, therevised Act of 2015 provided that, if any stipulation is made in advance to the effect thatthe employer acquires the right to obtain a patent for an employee invention, said right
will originally belong to the employer from its occurrence (Article 35, paragraph (3)).
However, such stipulation is invalid for a free invention (paragraph (2) of said Article),
as in the past.
[66](2) Stipulation on Acquisition of the Right to Obtain a Patent
Under the Act of 1959, if the succession to a right to obtain a patent or a patentright, or grant of a provisional exclusive license or an exclusive license (hereinafterreferred to as a “succession or license”) was stipulated in advance with respect toemployee inventions by “any agreement, employment regulation 42 or any otherstipulation,” specifically, ordinary contracts, labor contracts, collective labor contracts,
rules of employment, or rules on employee inventions, the employer could acquire thoserights by succession, and the employee could claim payment of a reasonable value. The
main purpose of this provision is to balance the interests of the inventor and the employer
who are considered to be in an unequal relationship, and to guarantee a certain level ofrights for the employer, who offered physical assistance such as funds and materials andwho is bearing the investment risk. It can be said that employers have one type of interest
in employee inventions. In that sense, the phrase “any agreement, employment regulationor any other stipulation” in the Article should be construed to cover not only an agreement(contract) between the employer and the employee, but also a clause on a succession or
license established by other methods 43 and the stipulation on a succession or license

42 The term “employment regulation” (kinmu kisoku) is not generally used in labor law; rather, it should be considered
as a concept under the Patent Act. Although the concept of the rules of employment under the Labor Standards Act
was already established at the time of the enactment of the current Patent Act (1959), the term “rules of employment”
was purposefully not used in the Act.
43 In practice, the stipulation is usually made in the rules of employment or provisions on employee inventions, butthese often cannot be categorized as contracts. There are different theories on the legal nature of rules of
employment, but such rules are at least subject to various restrictions under the Labor Standards Act, so in thatsense, they are not entirely at the employer’s own discretion.

69§1. Creation of Right

made by the employer’s one-sided indication of his/her intentions.44 In that sense, a viewthat assignment to the employer must be made based on a contract cannot be adopted, andsuch view has not been adopted in practice or in court decisions either (the same applies
to the revision of 2004). Even a one-sided stipulation would bind the employee, and it
would need to be sufficiently disclosed to the employee similarly to the case of the rulesof employment (Article 106 of the Labor Standards Act).
Since the employee receives a payment of “reasonable value” when rights, etc. areassigned, such payment is considered to be balancing the employee’s interests with thoseof the employer. Therefore, we cannot adopt a view that the assignment of an invention
to the employer must be based on a contract, and such view has not been adopted inpractice or in court cases in actuality. In the case where no contract or rules of
employment exist, the reasonable intention of the parties would be presumed and that
determination would be made by taking into consideration all the practices and othercircumstances of the company.45 Also, it would often be possible to presume a practiceor an implied agreement whereby the employee assigns his/her rights to the employer byreceiving reasonable value therefor.46[67]
Even under the 2004 revision, the employer was able to one-sidedly stipulate
provisions on employee inventions, but unless those rules were stipulated in a reasonable
manner "in light of circumstances where a negotiation between the employer, etc. and theemployee, etc. had taken place in order to set standards for the determination of the said

44 Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han] (Lecture on Intellectual Property Law [2nd ed.]), p. 145
states that the employer needs to have concluded a contract with the employee. Meanwhile, Michio Tsuchida,“Shokumu Hatsumei To Rōdō Hō” (Employee Invention and Labor Law), Minshōhō Zasshi (Journal on Civil andCommercial Law), Vol. 128, Nos. 4 and 5 (2003), p. 538 states that steps should be taken to regard such stipulation
as the contents of a contract, but Tsuchida’s theory seems to require not a contract in the strict sense, but mere
disclosure of the contents of such stipulation to the employee by analogizing the rules of employment. Under the2004 revision of the Act, however, the payment of the value for the rights would be found to be “unreasonable”(Article 35, paragraph (5) before the 2015 revision) if such disclosure to the employee were insufficient.
45 In the Tokyo District Court Judgment, September 19, 2002, Hanji, No. 1802, p. 30/Hanta, No. 1109, p. 94(Interlocutory judgment in the Nichia Corporation Blue LED case), the court stated that, when patent applications
have been filed repeatedly by designating the employer as the applicant for a specific period of time, and theemployee’s behavior has premised such practice, an implied agreement on the succession to the right to obtain apatent is established between the employer and the employee.
46 In the Tokyo High Court Judgment, July 20, 1994, Chiteki Saishū, Vol. 26, No. 2, p. 717 (the Signal Demodulatorcase), the court stated that, apart from a case where an express intent of the employee, etc. has been shown or whereapparent circumstances can be found to presume the implied intent of the employee, etc., it cannot easily bepresumed that the reasonable intentions of the employee is to have the patent rights, etc. relating to employee
inventions belong to the company. Whether or not an implied intent can be presumed would depend on specificcases. Yoshiyuki Tamura and Keizō Yamamoto, eds., Shokumu Hatsumei (Employee Inventions), p. 16 [written by
Yoshiyuki Tamura] states that caution is required in finding an implied agreement, since an aspect of Article 35
provides, as a default rule, that the employer who does not establish rules would be disadvantaged. Indeed, there islittle reason to protect an employer who failed to establish any stipulation in spite of being able to establish a onesided stipulation. However, since companies, including small and medium-sized enterprises (SMEs), are not fully
aware of this issue, it may be too harsh to require such companies that have hardly ever used the patent system
previously to establish such stipulation.

70§1. Creation of Rightvalue, the set standards had been disclosed, the opinions of the employee, etc. on thecalculation of the amount of the value had been received and any other relevant
circumstances," there was a risk that the amount of the reasonable value would bedetermined by the courts (Article 35, paragraphs (4) and (5) before the 2015 revision).
Under such circumstances, industry strongly called for the employer's ownershipof employee inventions, and with the 2015 revision, it was provided that, if there is a
stipulation such as a contract providing in advance that the right to obtain a patent shallbe acquired by the employer, the right to obtain a patent shall be originally vested in theemployer. In other words, the employer can choose between having an employee
invention originally vested in the employer or having them originally vested in theemployee. When it is originally vested in the employer, the employee has no right toobtain a patent in the first place, so even if the employee assigns the right to obtain apatent to a third party, it would be assignment by a person who does not have such right,
so it would not affect the employer's right to obtain a patent. In the past, the right to obtaina patent was first vested in the employee, and then it was transferred to the employer, so
if a third party was assigned the right from the employee before the employer satisfied
the requirements for duly asserting the transfer against third parties, the third party andthe employer were in an adversary relationship. However, the position of the employer
became more robust with the 2015 revision. However, under the revised Act, the right toobtain a patent, which is a property right, is originally acquired by the employer, but theinventor’s right to be credited, which can be considered as a kind of moral right, belongs
to the employee who is the inventor, so the name of the natural person (employee) who
actually made the invention must be stated in the inventor column of the filing documents.
[68](3) EffectA. Timing of the Succession or License
Before the 2015 revision, if there was “any agreement, employment regulation or
any other stipulation,” the employee could transfer, etc. the right to obtain a patent or apatent right to the employer, and the timing of the transfer was decided by the contents of
the "stipulation." If the transfer, etc. was not an act that requires formalities such as
registration, the effect of the transfer, etc. occurred at the time specified by the"stipulation," and if it was an act that requires formalities, the effect of the transfer, etc.
occurred when the formality was performed. Specifically, the transfer of the right toobtain a patent before filing an application or the transfer of rights after the filing but
before patent registration is not an act that requires formalities, so the rights weretransferred at the time provided in the stipulation. In order to make succession to the rightto obtain a patent effective, the successor in title needs to make a notification to the71§1. Creation of Right

Commissioner of the Patent Office47(Article 34, paragraph (4) of the Patent Act). Whenmaking a notification of the succession to the right, it is necessary to submit a document
proving the succession to the right, and the Commissioner of the Patent Office may orderthe submission of a document proving the successor status when necessary (Article 5 of
the Patent Act Enforcement Ordinance). Thus, the successor in title would need to havean instrument of assignment prepared. In contrast, transfer of a patent right or grant of aprovisional exclusive license or an exclusive license after the patent registration is an act
that requires formalities, and the time of succession to the right or obtainment of thelicense will be the time the transfer of the right or the grant of the license is registered.
Such transfer and grant require registration in order to come into effect (Article 98,
paragraph (1), items (i) and (ii) and Article 34-4, paragraph (1) of the Patent Act). The
registration must be made either by the filing of applications by both the person entitled
to register and the person obliged to register (Article 18 of the Patent Registration Order)
or by attaching the written consent of the person obliged to register (Article 19 of the
Patent Registration Order). However, such system was drastically revised with the 2015
revision. If there is a “stipulation” providing in advance that the right to obtain a patentshall vest in the employer, such right to obtain a patent shall originally belong to theemployer from the time the right occurs (the time when the invention is made), so to that
extent, the dispute over the time of transfer of the right, as seen before the 2015 revision,
became unnecessary. Yet, the practice remains the same as before the Act of 2015 for acase where there is no such “stipulation.”
B. Benefits (value, before the 2015 revision)48(i) Introduction
Before the 2015 revision, when the employee assigned his/her right to obtain apatent or the patent right or granted a provisional exclusive license or an exclusive license
to the employer, the employee was entitled to receive reasonable value (Article 35,
paragraph (3) of the Patent Act prior to the 2015 revision). Before the 2004 revision, it
was provided that the amount of the reasonable value should be decided by considering
the “amount of profit to be received by the employer” (Article 35, paragraph (4) of the
Patent Act prior to the 2004 revision). It was not provided that the amount should be basedon the “amount of profit actually received by the employer,” so Article 35 was not aprovision for the distribution of the profit that actually arose in a strict sense, but it was
47 The provision reads as if the notification is a requirement for the succession to become effective, but in substance,
it is a requirement for duly asserting the succession against third parties.
48 The legal nature of the “value” before the 2015 revision is discussed in Ryō Shimanami, “Shokumu Hatsumei Taika
Seikyūken No Hōteki Seishitsu (Jō/Ge)” (Legal Nature of the Right to Claim the Value for an Employee Invention(Vols. 1 and 2)), Tokkyo Kenkyū (Patent Studies), No. 39 (2005), p. 21, No. 42 (2006), p. 5.49 The Tokyo District
Court Judgment, April 16, 1999, Hanji, No. 1690, p. 145/Hanta, No. 1002, p. 258 (the Olympus Pickup Devicecase); the second instance judgment on the same case, the Tokyo High Court Judgment, May 22, 2001, Hanji, No.
1753, p. 23/Hanta, No. 1064, p. 196; and the final appeal judgment on the same case, the Supreme Court Judgment,
April 22, 2003, Minshū, Vol. 57, No. 4, p. 477/Hanji, No. 1822, p. 39/Hanta, No. 1121, p. 104.

72

§1. Creation of Rightat least a provision for the distribution of the employer’s anticipated profit.
Since the 1921 Act, until around 1998, the level of awareness of employee
inventions had been low, with only a few law cases, and the amount of value actually paidby employers had been small. Many companies had not calculated the amount of value
separately, but had combined payments with other factors, such as promotion, as part ofpersonnel management, so litigation to dispute over the amount of the value had rarely
been filed.
[69]
However, in the Olympus Pickup Device case,49 the court ruled for the first timethat there are no grounds for an inventor to be bound by the value for an invention
calculated based on provisions for the treatment of inventions and devices which theemployer has one-sidedly specified, and that if the amount of remuneration is below theamount of the reasonable value specified under law, the inventor may claim the shortfall
from the employer, etc.50 Furthermore, the court affirmed an enormous amount of value
in the Nichia Corporation Blue Light-emitting Diode (LED) case. 51 This issue was
widely covered by the mass media and drew public attention.52 Prompted by this incident,
the number of court cases involving employee inventions surged, and thrown theeconomic world into confusion. As a result, the Patent Act was revised in 2004, and theprovisions came to place an emphasis on procedure (Article 35, paragraph (4) of the
Patent Act of 2004). As long as a reasonable procedure was followed, the “amount of
profit to be received by the employer” was evaluated as being justifiable.
(ii) Act of 1959
The value to be received by the employee under the Act of 1959 was the value forthe transfer of the right to obtain a patent or the patent right, etc., and the theoretical valueof the amount was construed to be the profit received by being able to work the invention
exclusively under the patent, that is, the amount obtained by subtracting the price of the
49 The Tokyo District Court Judgment, April 16, 1999, Hanji, No. 1690, p. 145/Hanta, No. 1002, p. 258 (the Olympus
Pickup Device case); the second instance judgment on the same case, the Tokyo High Court Judgment, May 22,
2001, Hanji, No. 1753, p. 23/Hanta, No. 1064, p. 196; and the final appeal judgment on the same case, the Supreme
Court Judgment, April 22, 2003, Minshū, Vol. 57, No. 4, p. 477/Hanji, No. 1822, p. 39/Hanta, No. 1121, p. 104.
50 Even before the Olympus Pickup Device case, in the Osaka District Court Judgment, April 26, 1984, Mutai Saishū,Vol. 16, No. 1, p. 282/Hanta, No. 536, p. 337 (the Automatic Focusing Device case), the court held as follows: thelegislative intentions of Article 35, paragraph (3) is construed to be to protect employees who are in a weaker
position in their relationship with their employer; in light of this purpose, it is reasonable to construe that paragraph(3) is a mandatory provision, and that a contract, etc. concluded between an employer and an employee in violationof said provision is invalid, making it possible for the employee to claim a reasonable value for his/her invention.
However, this judgment did not draw much attention since the court dismissed the claim on the basis that the time
for payment has not yet arrived. A similar opinion was also stated in the Osaka District Court Judgment, April 28,
1994, Hanji, No. 1542, p. 115 (the Zojirushi Thermos Flask case), but this judgment did not draw much attention
either.
51 The Tokyo District Court Judgment, January 30, 2004, Hanji, No. 1852, p. 36/Hanta, No. 1150, p. 130 (the Nichia
Corporation Blue LED case). In this case, a settlement was reached at the Intellectual Property High Court.
52 For subsequent law case trends, see Yasuyuki Ishii, “Shokumu Hatsumei Taika No Hanrei Dōkō To Insenteibu To
Shiteno Igi” (Trend of Law Cases on Employee Inventions and Their Significance as an Incentive), Chizai Purizumu(Intellectual Property Prism), No. 50 (2006), p. 46.

73

§1. Creation of Right

non-exclusive license from the price of the patent right. 53 Specifically, the profit istypically the value received when the employer allows a third party to work the invention,
but the excess profit received by the employer through the exclusive working of theinvention is also regarded as the profit to be received by the employer. 54 Whichever
approach is taken, the theoretical value to be derived would be the same, but it isextremely difficult to actually calculate the profit.
[70]
The Act prior to the 2004 revision had provided that when calculating the value for
an invention, the amount must be decided by taking into consideration the degree of thecontribution that the employer, etc. has made in the making of the invention (Article 35,
paragraph (4) of the Patent Act prior to revision). This meant that the degree of thecontribution from the employer, which is an ambiguous variable, would be reflected in
the profit to be received by the employer through exclusively working said patent right,
and the amount would end up being a rough calculation. Since the decision was largely
left to the court’s discretion, actual law cases lacked consistency, and the amount of the
profit was difficult to foresee. Inventions and patent rights do not themselves produce
actual profits, but only produce profits when they are worked or licensed. Since suchprofits are greatly affected by subjective conditions, such as the employer’s ability or
enthusiasm to work an invention, or objective conditions such as the competing
technology of other companies and the economic climate, and since complicated
53 The Tokyo District Court Judgment, December 23, 1983, Mutai Saishū, Vol. 15, No. 3, p. 844 (the Stainless SteelGold Plating Method case); the Osaka District Court Judgment, April 26, 1984, Mutai Saishū, Vol. 16, No. 1, p.
282 (the Automatic Focusing Device case), and the second instance judgment on the same case, the Osaka High
Court Judgment, November 28, 1984, Mutai Saishū, Vol. 16, No. 3, p. 733; the Tokyo District Court Judgment,
September 30, 1992, Chiteki Saishū, Vol. 24, No. 3, p. 777 (the Triangular Plate case); the Osaka District Court
Judgment, March 4, 1993, Chiteki Saishū, Vol. 26, No. 2, p. 405 (the Gosen Fishing Line case), and the second
instance judgment on the same case, the Osaka High Court Judgment, May 27, 1994, Chiteki Saishū, Vol. 26, No.
2, p. 356/Hanji, No. 1532, p. 118; the Osaka District Court Judgment, April 28, 1994, Hanji, No. 1542, p. 115 (theZojirushi Thermos Flask case); the Tokyo District Court Judgment, November 29, 2002, Hanji, No. 1807, p.
33/Hanta, No. 1111, p. 96 (the Hitachi Optical Pickup case), and the second instance judgment on the same case,
the Tokyo High Court Judgment, January 29, 2004, Hanji, No. 1848, p. 25/Hanta, No. 1146, p. 134; the Tokyo
District Court Judgment, January 30, 2004, Hanji, No. 1852, p. 36/Hanta, No. 1150, p. 130 (the Nichia Corporation
Blue LED case); the Osaka District Court Judgment, September 26, 2005, Hanta, No. 1205, p. 232 (the Sansho
Seiyaku Medicated Hair Growing Agent case); the Tokyo District Court Judgment, January 26, 2006, Hanji, No.
1943, p. 85 (the Laminated Film and Support for Photograph case); the Tokyo District Court Judgment, June 8,
2006, Hanji, No. 1966, p. 102/Hanta, No. 1271, p. 183 (the Mitsubishi Electric Non-volatile Memory case); theTokyo District Court Judgment, September 12, 2006, Hanji, No. 1985, p. 106/Hanta, No. 1234, p. 182 (the JSR
Thermosetting Overcoat for Color Filters case); the Intellectual Property High Court, February 26, 2009, Hanji, No.
2053, p. 74/Hanta, No. 1315, p. 198 (the Canon Scanning Optical System Removing Ghost Images case).
54 In the Tokyo District Court Judgment, November 26, 2003, Hanji, No. 1846, p. 83/Hanta, No. 1152, p. 269 (theInfluence Analyzing Device case), the court held that because the employer has a non-exclusive license free ofcharge, the “profit to be received by the employer” is not the amount of profit the employer receives by merely
working the device, but the amount of profit which the employer receives by having the right to work the device
exclusively (the incremental amount), and in the case where the employer works the device exclusively, it isreasonable to calculate the amount of profit based on an amount equivalent to the royalty that could be received
when making an assumption that the employer had granted a license to a third party. A detailed explanation on thespecific calculation can be found in Yoshiyuki Tamura and Keizō Yamamoto, Shokumu Hatsumei, p. 23 [written
by Yoshiyuki Tamura] and Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 508[written by Takuya Iizuka and Hiroyuki Tanaka].

74§1. Creation of Rightproblems are involved in the calculation in the case of cross-licenses, particularlycomprehensive cross-licenses, 55 by their very nature they are incompatible with anaccurate calculation. Since defensive patents also bring indirect profit to the employer,56
the actual profit received by the employer is also difficult to calculate for such defensive
patents.57[71]
Given the provision that the degree of the contribution that the employer has made“in the making of the invention” should be taken into consideration, it was alsoquestionable whether such costs as patent acquisition/maintenance costs, investment incommercialization, licensing negotiation costs, and costs related to measures against
infringement could be taken into consideration. Since an employer can make a profit only
after patenting an invention, and exercising, licensing, or defending a patent right, andengaging in sales activities, it is unreasonable to exclude such costs from the employer’s

55 Hisayoshi Yokoyama, “Shokumu Hatsumei Seido No Yukue” (Future of the Employee Invention System), Jurist,
No. 1248 (2003), p. 42. In the Tokyo District Court Judgment, November 29, 2002, Hanji, No. 1807, p. 33/Hanta,
No. 1111, p. 96 (the Hitachi Optical Pickup case), the court held that, when a comprehensive license contract has
been concluded, the degree to which the invention contributed to the conclusion of the license contract should beconsidered, the amount of royalty which the employer no longer needs to pay to the licensee due to the conclusionof the license should be considered as part of reference information, and the degree to which the patent rightcontributed to the license contract should be considered in light of various circumstances such as the value of eachpatent right and details about the conclusion of the license contract. In the Tokyo High Court Judgment, January
29, 2004, Hanji, No. 1848, p. 25/Hanta, No. 1146, p. 134, which is the second instance judgment on the same case,the court stated that the value to be paid can be calculated either by a method of calculating the amount of theroyalty which the licensee should pay for the working of the invention in question, or a method of multiplying theamount of the royalty which the employer, etc. originally had to pay for working the licensee’s multiple patents by
the rate of the contribution of the invention in question to all patented inventions, etc. which the employer, etc.
licensed to the licensee.
56 For example, when a company that manufactures and sells Medicine A owns a patent for Medicine B, which has
the same effect as Medicine A, but where the company does not manufacture and sell Medicine B, the patent for
Medicine B is preventing other companies from entering the market for medicines which have the same effect as
Medicine A and the patent is only functioning to defend the market of Medicine A, it would be difficult to determine
the relationship between the value to be paid to the inventor of Medicine A and the value to be paid to the inventorof Medicine B.
57 With regard to this point, see Yoshiyuki Tamura, “Hōkatsuteki Kurosu Raisensu To Shokumu Hatsumei No.
Hoshōkin No Santei” (Comprehensive Cross-Licensing and Calculation of Compensation for Employee Invention),
Chiteki Zaisan Hō Seisaku Gaku Kenkyū (Intellectual Property Law and Policy Journal), No. 2 (2004), p. 1.

75

§1. Creation of Rightcontribution that can be taken into consideration. 58 Although there were many court
judgments in which the amount was calculated by taking such costs into account, this was
not clearly indicated in the Patent Act, so the provisions were revised upon the 2004
revision.
[72]
Before the 2004 revision, there had been a series of cases in which the value to be
paid by the employer was raised to an amount found to be reasonable by the court on thebasis that the amount of value stipulated by the employer was below a reasonable amountas provided in Article 35, and therefore the employer’s stipulation was invalid. The court
awarded amounts that were far higher than the conventional industry standard in somecases. These cases triggered an outburst of criticism, mainly from the industry, that theamount deviated far from reality, and was at an unusually high level worldwide, insistingthat the Patent Act, which should be a tool for industrial development, would prove to bea heavy drag on industrial development. In particular, the Nichia Corporation Blue LED
case 59 in which the court awarded approximately 60 billion yen as the value of theinvention was a special case, and it is dangerous to generalize this judgment, but it seems
that the viewpoint of who bears the risks seems to be lacking when determining thespecific amount. Even if an employee makes a high-quality invention, itscommercialization requires an enormous amount of work and funds, and involves greatrisks, and the person who is bearing such risks is the employer. If an employer is to pay
an enormous amount of money to an employee who makes a successful invention, theemployer should be able to dismiss or cut the wage of an employee whose invention fails
or claim compensation for the associated loss from such employee, but that never happensin actuality. It must not be overlooked either that the contribution made by the employer
58 In the Tokyo District Court Judgment, April 16, 1999, Hanji, No. 1690, p. 145/Hanta, No. 1002, p. 258 (theOlympus Pickup Device case), and the second instance judgment on the same case, the Tokyo High Court Judgment,
May 22, 2001, Hanji, No. 1753, p. 23/Hanta, No. 1064, p. 196 (both of which are cases under the Act prior to 2004
revision), the court took into consideration the fact that a patent division member in charge changed the contents ofthe patent description. In the Tokyo District Court Judgment, August 29, 2003, Hanji, No. 1835, p. 114/Hanta, No.
1140, p. 248 (the Hitachi Metals Nitrogen Magnet case), the court stated that the degree of the contribution fromthe employer, etc. in patenting the invention, exclusively working the invention, and concluding license contracts,
and any other circumstances that are found in the evidence should be comprehensively taken into consideration,and in the second instance judgment on the same case, the Tokyo High Court Judgment, April 27, 2004, Hanji, No.
1872, p. 95, the court stated that the special personnel measure which the employee received should also be taken
into consideration. In contrast, in the Tokyo District Court Judgment, January 30, 2004, Hanji, No. 1852, p.
36/Hanta, No. 1150, p. 130 (the Nichia Corporation Blue LED case), which may be a peculiar case, the court
mentioned that circumstances that occurred after the completion of the invention are not regarded as circumstancesthat should be taken into consideration as the degree of the contribution from the employer. In the case of paying
the value in a lump sum at the time of the succession to or licensing of a right, the amount of the value will becalculated without considering these costs individually (the amount will be decided by incorporating all the factors
into the value). However, in the case of a performance-based payment, it will a problem if the costs paid by theemployer after the completion of the invention were not taken into consideration. The same view is indicated in
Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 328.
59 In the Tokyo District Court Judgment, January 30, 2004, Hanji, No. 1852, p. 36/Hanta, No. 1150, p. 130 (the Nichia
Corporation Blue LED case), the court concluded that the reasonable value for the invention is about 20 billion yen(about 60 billion yen in effect, since this was a case regarding only part of the claim) (the parties reached a settlementin the second instance).

76§1. Creation of Rightis not limited to the actual expenses borne for providing funds, materials and personnel,
but also the fact that he/she bears various risks.60
An employee invention subject to the payment of a value does not need to be apatented invention. Even in cases where an examiner’s decision that the patent application
is to be refused has been made or where an applicant has withdrawn the application, an
employer needs to pay a reasonable value for the invention as long as the invention isfound to have brought exclusive profit to the employer.61
Regarding the amount of the value to be paid, it was difficult to predict the amountthat would be regarded as the amount in short in the case where the employer loses thecase, and to predict the amount that would be claimed in the future as the value forinventions in the case of M&A and the like; in this manner, the system had an aspect oflacking in legal stability.62 There were strong calls for a revision of the law because theamount of value found to be reasonable by the courts was becoming increasingly highand such an obligation had still not been fixed over a long period of time, proving to be
an unstable factor in corporate management. Thus, new provisions (Article 35, paragraphs(4) and (5) of the revised Act of 2004) were introduced by the 2004 revision.
[73](iii) Act revised in 200463⚫ Substantive provisions, however carefully drafted, cannot eliminate ambiguityin the process of calculating the actual amount, so there was growing criticism
from the economic world to the effect that the calculation of the profit impedes
stability. Therefore, Article 35, paragraph (4) of the revised Act of 2004 adopted
a method to ensure substantive fairness by placing emphasis on voluntary
procedures between the employer and the employee, such as negotiation
between them, and ensuring procedural fairness in the calculation of the amountof value for the invention. The situation surrounding employee inventions would
differ by industry or company, and companies provide incentives for employees
in different ways, while there can also be cases where special treatment is given

60 In particular, enormous costs are involved in development of new pharmaceuticals, but most inventions end up in
failure, and only a handful of inventions succeed. In such case, it would be unreasonable to consider the benefits(value) only based on the profits gained from successful inventions. The benefits (value) would be determined bytaking into account the employer’s degree of contribution in actuality.
61 The Tokyo District Court Judgment, January 26, 2006, Hanji, No. 1943, p. 85 (the Laminated Film and Support for
Photograph case).
62 It became clear through the accumulation of many law cases that such factors as “the degree of the contribution ofeach invention to licensing contracts,” “presumed royalty rate,” “the degree of the contribution from the employer,”and “the degree of the contribution from each inventor” are taken into consideration. However, since there is noclear calculation basis with regard to the degree of the contribution from the inventor or the employer, the degreeof the contribution would have to be assessed as a rough estimate.
63 See Yōichi Kimura, “Aratana Shokumu Hatsumei Seido” (New Employee Invention System), L&T, No. 24 (2004),
p. 4; Hidetaka Aizawa, “Tokkyo Hō 35 Jō No Kaisei Ga Motarashitamono” (Outcome of the Revision of Article
35 of the Patent Act), Jurist, No. 1279 (2004), p. 116; and Taizō Ōta, Shokumu Hatsumei Kitei Jitsumu Handobukku(The Employment Regulations Determine “Considerable Remuneration”) (Syōji Hōmu, 2005), p. 14.

77

§1. Creation of Rightby a method other than monetary payment. Therefore, more flexible measuresthat suit the actual conditions can be taken by leaving the matter to voluntaryarrangements between the parties, rather than deciding on uniform and specificcalculation standards (substantive provisions) by law. The purpose of thisrevised Act is, under the influence of recent labor law studies, to emphasize theprocedure for determining the value to be paid for the invention, to prevent theemployee from feeling dissatisfied by guaranteeing a certain procedure, and toprovide the employer, etc. with a sense of stability whereby, as long as he/she
has followed a reasonable procedure, it will be presumed that the amount of thevalue for the invention is appropriate. After the law revision, many companies
revised their rules on employee inventions and developed procedures for
employee inventions. Thus, the number of disputes was expected to decrease in
the future under the revised Act of 2004, but since many cases to which the Actof 1960 applied still remained to be processed for the time being, the revision
was not expected to have an immediate effect.
[74]
Under the revised Act of 2004, where an employment regulation, etc. provides forthe value to be paid for an invention, the payment of the value in accordance with the said
provisions must not be considered unreasonable in light of circumstances where anegotiation between the employer and the employee had taken place in order to set thestandards for the determination of said value, the set standards had been disclosed, theopinions of the employee on the calculation of the amount of the value had been received,
and any other relevant circumstances (Article 35, paragraph (4) of the revised Act of2004), but the provision does not require the employer to hold consultations withindividual inventors.64 If the stipulation of the value for the invention and the specificcalculation based on such stipulation are reasonable, it will be presumed that thecalculated amount is appropriate. The requirements for “negotiation,” “disclosure,” and“receiving of opinions” mentioned above are only examples, and the unreasonablenessshould be determined comprehensively by also taking into account various othercircumstances. While paragraph (4) provides for procedure and does not mention specificfactors for deciding the value for the invention, it would be permissible to take into

64 December 2003 Patent System Subcommittee, Intellectual Property Policy Committee, Industrial Structure Council,“Shokumu Hatsumei Seido No Arikata Ni Tsuite” (Improvement of Employee Invention System), p. 17. If one-toone negotiation is required, it will be closer to an individual contract, and Article 35, paragraph (4) will lose its
meaning. The question of what kind of procedure is reasonable would be determined by taking into consideration
the size and type of the employer, etc. (the company size, a university or public office, etc.).

78§1. Creation of Rightconsideration the various circumstances provided for in paragraph (5).65 However, sinceparagraph (5) provides for the case where no reasonable stipulation exists, thedetermination under paragraph (4) is not necessarily bound by the factors provided for inparagraph (5). Even when a calculation under the provisions of paragraph (5) is expected
to produce a higher amount than that under paragraph (4), the amount would not be
considered unreasonable if an appropriate procedure has been followed, unless theamount is extremely inappropriate (e.g., a fixed amount of 1,000 yen).66 Due to the above,
factors related to the substantive aspect should be considered to be complementary indetermining the reasonableness.67 This point was debated by the revision council, andthere was also a strongly held opinion that as long as a procedure is reasonable, the court
should not intervene in the specific amount of the value for the invention. However, since
there can be cases where a procedure is in place but the actual amount of value is decidedin an extremely unreasonable manner, the council concluded that it would be inconvenient
to preclude court intervention in such a case. 68 Meanwhile, even if the procedure isunreasonable, if a sufficient amount of value has been paid as a result, it would belegitimate. While the Act lists “negotiation,” “disclosure,” and “receiving of opinions” asfactors to be considered when determining the reasonableness of the procedure, it does
not list substantive factors, such as the amount of value that has actually been paid, as
factors to be considered. However, in interpreting the provisions, such factors should beconsidered for inclusion in the phrase “any other relevant circumstances.” This implies apremise whereby the amount of value should be taken into consideration not as a corefactor, but as a complementary factor.69 Studying past law cases, there is a question as to
65 Japan Patent Office, Shin Shokumu Hatsumei Seido Ni Okeru Tetsuzuki Jireishū (Case Studies of the Procedures
under the New Employee Invention System), (NBL Additional Volume, No. 96, 2004) provides an explanation byciting specific case examples of the procedure. A detailed explanation on this issue is provided in Hisayoshi
Yokoyama, “Shokumu Hatsumei Seido Wo Meguru Hō Kaisei To Sonogo No Ugoki” (Law Revision relating to
the Employee Invention System and Subsequent Developments), Jurist, No. 1326 (2007), p. 54.
66 Taizō Ōta, Shokumu Hatsumei Kitei Jitsumu Handobukku (The Employment Regulations Determine “Considerable
Remuneration”) (Syōji Hōmu, 2005), p. 41.
67 Japan Patent Office, Shokumu Hatsumei Seido Ni Okeru Tetsuzuki Jireishū (Case Studies of the Procedures under
the New Employee Invention System), (NBL Additional Volume, No. 96, 2004), p. 7; and Nobuhiro Nakayama
and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 536 [written by Takuya Iizuka and Hiroyuki Tanaka].
Yoshiyuki Tamura and Keizō Yamamoto, eds., Shokumu Hatsumei (Employee Inventions), p. 16 [written by
Yoshiyuki Tamura] states that, with regard to provisions on the amount of value which were established by an
employer having an environment that fills the gap in the negotiating power between the employer and the employees,
the court should refrain from intervention, and should take the approach of regarding such provisions as valid,
unless there are special circumstances.68 December 2003 Patent System Subcommittee, Intellectual Property
Policy Committee, Industrial Structure Council, “Shokumu Hatsumei Seido No Arikata Ni Tsuite” (Improvementof Employee Invention System), p. 15; Japan Patent Office, Shokumu Hatsumei Seido Ni Okeru Tetsuzuki Jireishū(Case Studies of the Procedures under the New Employee Invention System), (NBL Additional Volume, No. 96,
2004), p. 7, p. 8.
68 December 2003 Patent System Subcommittee, Intellectual Property Policy Committee, Industrial Structure Council,“Shokumu Hatsumei Seido No Arikata Ni Tsuite” (Improvement of Employee Invention System), p. 15; Japan
Patent Office, Shokumu Hatsumei Seido Ni Okeru Tetsuzuki Jireishū (Case Studies of the Procedures under the
New Employee Invention System), (NBL Additional Volume, No. 96, 2004), p. 7, p. 8.
69 Takuya Iizuka, ed., Tettei Kaiseki Shokumu Hatsumei: Shokumu Hatsumei O Meguru Funsō No Bunseki Kara Seido
Sekkei Made (Thorough Analysis of Employee Inventions: From Analysis of Employee Invention Disputes to the
Design of the Employee Invention System), (NBL Additional Volume, No. 105, 2005), p. 16, p. 65.

79

§1. Creation of Right

whether it is appropriate, or possible, for the courts to intervene in the details of a specificcalculation. The court should only intervene in the specific amount of value in exceptional
cases.
[75]
In a suit filed by an employee asserting that the value that has been paid wasinsufficient, the employee is considered to have the burden of proof with regard tounreasonableness.70 Since an employee needs to prove not the unreasonableness of theamount itself, but the unreasonableness of the process for determining the amount, it
would not be a heavy burden for the employee. It is possible to have a case where theprocedure is reasonable but the amount is unreasonable, but that would be in the case ofan extremely low amount which anybody would consider unreasonable; thus, that would
not impose a heavy burden of proof on the employee either.
When there is no stipulation on the value for an invention, or when the payment of
the value is found to be unreasonable according to the provisions of paragraph (4), theamount of value under paragraph (3) is determined by taking into consideration theamount of profit to be received by the employer, etc. from the invention, the employer's
burden, contribution, and treatment of the employee and any other circumstances relating
to the invention (Article 35, paragraph (5) of the revised Act of 2004). 71 Small andmedium-sized enterprises (SMEs) might not have rules on employee inventions, or haveunreasonable rules due to the power gap between the employer and the employees, orthere is unreasonableness in applying the rules to the calculation of the value for theinvention. In such case, a reasonable value will be decided by the court, in the samemanner as before the revision of the Act.
[76]
As a generality, Article 35 has a strong aspect of protecting employees who are ina weaker position than the employer, and it should be construed as setting out unilateral

70 Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 4 Han], p. 84. However, the question of whether it is appropriate tohave employees, who are in a weaker position than the employer, bear the burden of proof was debated by the Dietat the time of legislating the provisions. The government consistently asserted that employees have the burden of
proof.
71 In the Tokyo District Court Judgment, October 30, 2014, court website (the Nomura Securities case), the court heldthat it would be unreasonable for the employer to pay a value in accordance with the regulations it has established,
unless there are special circumstances, because [i] with regard to the establishment and revision of the employer's
invention regulations, the employer has not held any discussion independently with the employee nor with anyother employees, [ii] the employer has not disclosed the employer's invention regulations, which specify the details
such as the amount of value and the method of payment, to its employees, and [iii] the employer does not plan toask opinions from the inventor about how to calculate the amount of value. At the same time, it was final andbinding that the invention in question was unpatentable due to lack of novelty, so the court dismissed the employee’s
claim on the basis that the employer had no exclusive interests for the invention. In its appellate instance, theIntellectual Property High Court Judgment, July 30, 2015, court website, the court dismissed the appeal, but it foundthat "discussion," "standards disclosure," and "opinion hearing" were all insufficient, and found that it was
unreasonable for the employer to calculate the value in accordance with its regulations. Since the defendant in thiscase was a securities company, the procedure may have been deficient, unlike in the case of the manufacturingindustry.

80§1. Creation of Right

mandatory provisions.72 It does not preclude alterations that would be advantageous forthe employee; in other words, even if an amount exceeding a reasonable value is paid tothe employee, it would not be regarded as unjust enrichment for the employee.73
A question has been raised suggesting that it is not appropriate to construe theprovisions in Article 35 as mandatory, because it would prevent the employer and theemployee from resolving the issue ex post facto through negotiation or reconciliation,74
but this is a misunderstanding. Article 35 mandates only two matters: the employer isprohibited from stipulating in advance succession to rights with regard to free inventions(paragraph (2)), and the employer must pay a reasonable value when succeeding to or
obtaining a license for rights related to an employee invention based on a stipulation
established in advance (paragraph (3)). The Article does not mention anything about ex
post facto assignment, and does not deny resolution of the issue through reconciliation,etc. after the invention has been made. For example, an employee invention is sometimes
made by the president of a company, and in the case of an SME, it is not rare for thepresident to assign the invention free of charge to the company after making the invention,and this does not cause a problem under the Act. However, since it would be a transaction
between the employer and the employee, attention needs to be paid as to whether thetransaction is truly based on the free will of both parties.
The revised Act of 2004 is not applied retroactively to an invention succeeded toon or before March 31, 2005 (Article 2, paragraph (1) of the Supplementary Provisionsof the revised Act). Since the value to be received by the employee is a property right,changing ex post facto the value for an invention which has already come into existence
has the risk of infringing on a property right. Therefore, it was decided that the revised
Act should be applied only to succession, etc. that takes place after the enforcement of
the revised Act. Given that the duration of a patent right is 20 years after the filing of thepatent application at the most (the duration could be extended under Article 67, paragraph
72 While the phrase “mandatory provisions” was used in the second instance judgment on the Olympus Pickup Device
case (the Tokyo High Court Judgment, May 22, 2001, Hanji, No. 1753, p. 23/Hanta, No. 1064, p. 196), this phrase
was not used in the Supreme Court Judgment, April 22, 2003, Minshū, Vol. 57, No. 4, p. 477/Hanji, No. 1822, p.
39/Hanta, No. 1121, p. 104, which was the final appeal judgment on the same case. However, there are no great
differences between these two judgments, given that, in both judgments, the court ordered the company to pay an
additional amount to make up the shortfall in an amount that is considered to be reasonable, irrespective of the
stipulation established by the company. Hisayoshi Yokoyama, “Shokumu Hatsumei” (Employee Invention),
Hōgaku Kyōshitsu (Law Class), No. 325 (2007), p. 201.
73 Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han] (Lecture on Intellectual Property Law [2nd ed.]), p. 151
states that, if the employer pays a value exceeding a reasonable amount, it would be regarded as the employee’s
unjust enrichment. While overpayment is expected to occur only in rare cases, such as in the case of miscalculation,
the mistake under the Civil Code may become an issue. There have been no cases where an employer demanded an
employee to return an excessive amount that has been paid, but in the Tokyo District Court Judgment, June 8, 2006,
Hanji, No. 1966, p. 102/Hanta, No. 1271, p. 183 (the Mitsubishi Electric Non-volatile Memory case), while thecourt found the reasonable value to be 3,966,305 yen, the employees had received 4,805,490 yen as the reasonablevalue for employee inventions, etc., and the court dismissed the employees’ claim for payment. In this case, theemployer did not claim the return of the excessive amount, but if the employer were to claim such a return, theclaim should not be upheld.
74 Kōji Hasegawa “Toki No Hanrei” (Law Cases in the News), Jurist, No. 1251 (2003), p. 173.

81

§1. Creation of Right(2)), that many companies adopt the system of compensation for performance and thatthe period of the prescription of the right to claim the value for an invention is ten years,
the Act of 1959 and the Act of 2004 will continue to be applied to many actions for sometime to come[77](iv) Revised Act of 2015
There were growing calls from industry seeking further drastic revision of therevised Act of 2004, so a revision was made in 2015. 75 Specifically, if there is a
stipulation providing in advance that the right to obtain a patent shall be transferred to theemployer, the right shall vest in the employer from the time of occurrence of the right(paragraph (3)), and at that time, the employee shall have the right to receive “reasonablemoney or any other economic benefits” (paragraph (4)). It was also provided thatguidelines (public notice by the minister) on matters concerning circumstances, etc. to beconsidered in the case of paying reasonable benefits shall be established (paragraph (6)).
The fact that the employer can choose to have the right to obtain a patent originally belong
to the employer is an extremely substantial change from a theoretical point of view.
Under the revised Act, the employee shall have the right to receive “reasonablemoney or any other economic benefits” in the case above (paragraph (4)), and thestandards for determination of the reasonableness of the amount are the same as before(paragraph (5) of the Act of 2015; paragraph (4) of the prior Act). In other words, thereasonableness determined by taking into consideration the status of consultation between
the employer, etc. and the employee, etc. that is held in formulating the standards for
deciding the contents of the reasonable benefits, the status of disclosure of suchformulated standards, and the status of hearing opinions from the employee on thedecision of the contents of the reasonable benefits, etc. (it is stipulated that more detailed
standards should be indicated by guidelines; paragraph (6)). The Act is no different fromthe Act of 2004 in that it places emphasis on procedural fairness, which means to placeemphasis on negotiation between the employer and the employee, in deciding the contentsof the reasonable benefits, instead of providing specific calculation standards by the
Patent Act. The revised Act of 2004 also placed emphasis on procedures (paragraph (4)prior to the revision), and it would have been well possible to determine the value by also
incorporating factors other than monetary payments, through negotiation between theemployer and the employee, but such point was made clearer also in the provisions in therevised Act of 2015. The term “value” was revised to “benefits,” so they now include
75 For the background of the revision, see Yuriko Inoue, “Heisei 27 Nen Shokumu Hatsumei Seido Kaisei Ni Tsuite
No Ichi Kōsatsu” (Consideration on the 2015 Employee Invention System), Tokkyo Kenkyū (Patent Studies), No.
60 (2015), p. 18.

82

§1. Creation of Rightmoney as well as stock options, study abroad, promotion accompanying monetary
treatment, a special leave that exceeds the prescribed number of days, a gold medal(which can be converted into money), and grant of an exclusive license or a non-exclusive
license 76 for the patent right on the employee invention. However, they must be
economic benefits, so they do not include a paper award certificate or a medal that has nomonetary value, or benefits that are not related to an employee invention. A question iswhether giving a special research facility as a reward for an employee invention would
be included in such economic benefits. Research facilities are the employer’s capital
investment, and they could be considered to be unrelated to employee inventions, butsince there are strong calls for such facilities among researchers, particularly among
university instructors, how they will be treated in the guidelines to be published in the
future should be closely watched. In any case, the 2015 revision made it possible for theemployer to take more flexible measures.
[78]
Since it has been emphasized in discussions at the council and in government
statements at the Diet that employees will not be treated more disadvantageously than
before, the revised provisions would not be construed in a manner that would decrease
the benefits to be received by the employee. What is different from the Act of 2004 is that
the Patent Act provides that the Ministry of Economy, Trade and Industry shall establish
guidelines on circumstances, etc. to be considered in deciding the reasonable benefits(paragraph (6)). These guidelines take the form of a public notice by the minister,77 andthey do not legally bind the court. However, it is presumed that if the employer establishes
rules on employee inventions in accordance with these guidelines, they would also be
respected in court decisions in practice. Although the guidelines have not been publishedyet (as of December 2015), they are expected to bring stability.
If there is no stipulation providing in advance that the right to obtain a patent shallvest in the employer, the right to obtain a patent originally belongs to the employee. If noprovision setting forth the reasonable benefits exists, or if it is recognized that thereasonable benefits to be granted in accordance with the relevant provision are
unreasonable, the decision of the reasonable benefits to be received by the employee(paragraph (7)) should be made in the same way as under paragraph (5) of the revised Actof 2004.
Both under the Act of 1959 and the Act of 2004, the right to obtain a patent firstbelonged to the employee, and then it was transferred to the employer, so the term “value”
was used. However, under the Act of 2015, the right to obtain a patent originally belongs
76 Although it would be very unlikely for an ordinary company, there can be cases where a highly independent
employee like a university instructor starts up a business by obtaining a license.
77 While guidelines on conduct of administrative agencies are often issued in the form of a public notice by the minister,
it was unconventional to issue norms of court judgments in the form of a public notice by the minister.

83§1. Creation of Rightto the employer if there is a stipulation providing in advance to that effect, so what is tobe received by the employee was no longer something that represents the direct value ofthe employee invention, so the term was changed to “benefits.” Nevertheless, it is not
appropriate to immediately cut off the employees’ interests which had been continued
since 1921, so it was provided in the Act of 2015 that, even when the employer originallyacquires the right to obtain a patent, the employee has the right to claim “reasonablemoney or any other economic benefits” from a policy perspective (paragraph (4)). Before
the Act of 2015, the provision set forth that the employee can claim the value by operationof law because the employee assigns his/her own right to the employer, but under the Actof 2015, the employer originally acquires the right to obtain a patent under certain
conditions, so the benefits to be paid to the employee no longer have the nature of thevalue of the invention, but it is rather a special measure established under the Patent Act
for providing an incentive to the employee.78 Theoretically, there is a great difference inthat the right was acquired by succession before the 2015 revision, and it is originallyacquired after the revision, but in practice, there would hardly be any substantial
difference before and after the revision because it has been indicated that employees
would not be treated more disadvantageously than before the revision. Nevertheless,while the term “value” that had been used until the Act of 2004 gives a monetary
impression, the term “money or any other economic benefits” used under the revised Actof 2015 gives a strong impression that treatments other than money are included, so,
although employees would not be treated disadvantageously in practice, what they receive
would be broader in variety.
[79](v) Know-how
Article 35 of the Patent Act, which relates to an invention (Article 2, paragraph (1)),
does not require the invention to be a patented invention (paragraph (2) of said Article).79
It would seem that Article 35 will be applied as long as the employer is found to receive
78 See Hisayoshi Yokoyama, “Shokumu Hatsumei Seido No Minaoshi Ni Kakaru Heisei 27 Nen Tokkyo Hō Kaisei
Hōan No Kentō” (Study on the 2015 Bill for Amending the Patent Act for Revising the Employee Invention System),
L & T, No. 68 (2015) p. 39; Roundtable Talk (Masakazu Iwakura, Eiji Matsuba, and Hidetaka Aizawa), “Shokumu
Hatsumei Kitei No Kaisei” (Revision of the Provisions on Employee Inventions), L & T, No. 69 (2015).
79 In the Tokyo District Court Judgment, December 23, 1983, Mutai Saishū, Vol. 15, No. 3, p. 844/Hanji, No. 1104,
p. 120/Hanta, No. 536, p. 312 (the Stainless Steel Gold Plating Method case), the court held that Article 35 is also
applicable to a case where there is an agreement between the employer and the employee to the effect that theemployee’s invention will be kept secret as know-how for protecting the employer’s business interests and that theemployer alone will exclusively work the invention. The Tokyo District Court Judgment, January 30, 2004, Hanji,
No. 1852, p. 36/Hanta, No. 1150, p. 130 (the Nichia Corporation Blue LED case); the Osaka District Court
Judgment, April 28, 1994, Hanji, No. 1542, p. 115 (the Zojirushi Thermos Flask case); Tokyo District Court
Judgment, January 26, 2006, Hanji, No. 1943, p. 85 (the Laminated Film and Support for Photograph case). Yūko
Kimijima “Shokumu Hatsumei No Taika No Santei Ni Atatte Kōryo Subeki Shiyōshatō No Rieki” (Profit of the
Employer, etc. to be Taken into Consideration in Calculating the Value for an Employee Invention); Nakayama
Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai (Theories of Intellectual
Property Law and Modern Issues), p. 96; Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō,
p. 556 [written by Takuya Iizuka and Hiroyuki Tanaka].

84§1. Creation of Righta profit through the exclusive working of the invention, and the employee would have theright to claim reasonable benefits, but even though it seems that know-how can be worked
exclusively, know-how is not a legal right to a monopoly, but a de facto monopoly. This
point is a fundamental problem of whether the employee can obtain the right to acquirereasonable benefits by offering the patent right, which is a legal right to a monopoly, tothe employer, or whether the employee can obtain the right to acquire reasonable benefits
by offering an invention, which is a valuable property, to the employer.
Many companies have a stipulation that inventions including know-how should betransferred to the employer. The employer may then file patent applications for suchinventions or keep them secret as know-how. The current Act can be interpreted so that,in either case, if they bring an exclusive profit to the employer, the employer would needto pay reasonable benefits. In reality, however, some difficulty will remain in thecalculation of the value when there is no patent right, which is a legal right to amonopoly.80[80](vi) Time of calculation of the benefits
Literally, Article 35, paragraph (7) (paragraph (5) before the 2015 revision)
provides that “the amount of profit to be received by the employer, etc.” should be taken
into consideration, instead of “the amount of profit received by the employer, etc.,” so theemployer should calculate and pay “the profit to be received by the employer” at the timeof the acquisition of or succession to the right, in principle. 81 Nevertheless, many
companies do not make a lump-sum payment of the benefits (the value, before the Act of2015), but divide the payment into compensation for application, compensation forregistration, compensation for performance, etc. and, as for compensation for
performance, they calculate the benefits based on the “profit received by the employer”

80 Takuya Iizuka, ed., Tettei Kaiseki Shokumu Hatsumei: Shokumu Hatsumei O Meguru Funsō No Bunseki Kara Seido
Sekkei Made (Thorough Analysis of Employee Invention: From Analysis of Employee Invention Disputes to the
Design of the Employee Invention System), (NBL Additional Volume, No. 105, 2005), p. 32.
81 This view is indicated in many law cases including the Tokyo District Court Judgment, December 23, 1983, Mutai
Saishū, Vol. 15, No. 3, p. 844/Hanji, No. 1104, p. 120/Hanta, No. 536, p. 312 (the Stainless Steel Gold Plating
Method case). In the Osaka District Court Judgment, March 4, 1993, Chiteki Saishū, Vol. 26, No. 2, p. 405 (theGosen Fishing Line case), the court mentioned that “the profit to be received by the employer, etc.” is not only the
profit which the employer actually received from the invention, but also the profit that is expected to be received,that is, the objective value of what the employer, etc. would gain through the succession to the right as assessed at
the time of the succession. The same view is indicated in the second instance judgment on the same case, the Osaka
High Court Judgment, May 27, 1994, Chiteki Saishū, Vol. 26, No. 2, p. 356/Hanji, No. 1532, p. 118; the Nagoya
District Court Judgment, January 27, 1999, Hanta, No. 1028, p. 227 (the Ohi Kenkou Parking Structure case); theOsaka District Court Judgment, November 26, 2003, 2002 (Wa) No. 5323 (the Otsuka Pharmaceutical Meptin case).

85§1. Creation of Rightin actuality, and pay the amounts in installments for divided periods of time.82 In thatcase, the benefits are calculated at the end of each specific period based on theperformance during that period. Law cases and academic theories have construed thatsuch a method of calculation is also valid as a method for payment of “the profit to bereceived by the employer.”83 Before the 2015 revision, it was provided that the right toobtain a patent owned by the employee was transferred to the employer under certain
conditions, and a value for the invention was paid to the employee. However, the revised
Act of 2015 provides that the right to obtain a patent originally belongs to the employer
under certain conditions, so there is no problem in making a lump-sum payment. Thereis also no problem in establishing rules to pay, at the time of retirement of the employee,
the benefits for the subsequent period in a lump sum.
[81]
Both under the Act of 2004 and the Act of 2015, if there is a stipulation that thepayment is to be made at the time of the acquisition or at the time of the succession, theemployee may receive the value for the invention even when the employer has yet to work
the invention or has yet to grant a license to a third party.84 There may be a view that itis difficult to calculate the value of the invention in a lump sum at the time of thesuccession,85 but rights to obtain a patent or patent rights are actually traded, so it isunlikely that such calculation is only impossible in the case of an employee invention.
Theoretically, the current value is calculated by subtracting the interim profit from theprofit to be received from the employee invention in the future (the discount cash flow
82 In the Tokyo District Court Judgment, August 29, 2003, Hanji, No. 1835, p. 114/Hanta, No. 1140, p. 248 (theHitachi Metals Nitrogen Magnet case), the court rejected the defendant’s assertion that, as long as there is a
stipulation on performance-based compensation, it is sufficient to calculate the reasonable value for the invention
based on the amount at the time of succession of the right to obtain a patent. In other words, it means that a lumpsum payment of the amount cannot be claimed as long as there is a stipulation on performance-based compensation.
However, if the employer stipulates from the start that the amount will be paid in a lump sum at the time of thesuccession of the right, it would be possible to calculate the amount based on the value at the time of the succession.
83 In the case of performance-based compensation, if a superior invention is neither worked nor licensed out by theemployer, the invention will not be associated with performance, and the amount of the value could become zero
(if it has a significance as a defensive patent, such aspect may be evaluated). It is questionable whether this willcorrespond to the “reasonable benefits” assumed under Article 35. Such a problem will not occur if the benefits arepaid at the time of the succession to a right. Hisayoshi Yokoyama, “Shokumu Hatsumei Ni Okeru ‘Sōtō No Taika’
No Kihonteki Kangaekata” (Basic Idea of “Reasonable Value” for an Employee Invention), Nakayama Nobuhiro
Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai (Theories of Intellectual Property
Law and Modern Issues), p. 83.
84 In the Tokyo District Court Judgment, July 23, 2004, Hanji, No. 1889, p. 120/Hanta, No. 1176, p. 284 (the Antidioxin and Health Food case), the court held that, even if the employer has yet to succeed in commercializing theinvention, the employer who is the owner of the patent right enjoys the benefit of prohibiting other companies fromworking the invention.
85 In the Tokyo District Court Judgment, February 20, 2008, Hanji, No. 2009, p. 121/Hanta, No. 1296, p. 273 (theTelephone Card Reader case), the court stated that “the objective value of an invention is extremely difficult to
calculate by taking into consideration factors other than the amount of profit actually received by the employer, etc.
through the use of the patent right, since it is affected by extensive and diverse conditions of society not limited to
the field of that invention, so unless there are special circumstances to otherwise express the value of the profit tobe received by the employer, it is reasonable to calculate such value based on the amount of profit actually received
by the employer, etc. through the use of the patent right.” This was a case where the employer had a stipulation
whereunder he/she was obliged to pay performance-based compensation for employee inventions, so the judgment
is construed not to prohibit payment at the time of succession of the right.

86§1. Creation of Right[DCF] method).
When the value for an invention is calculated at the time of a succession to the rightthereto, the amount will be calculated based on the objective value of the invention at thetime of the succession and the employer’s performance is not taken into consideration, sosome believe that such a method will be disadvantageous for the employee. 86 However,in the case of a lump-sum payment, because the value is often determined based on theobjective value of the invention at the time the invention was made (at the time ofassignment, before the Act of 2015), reasonable benefits would be paid even if theinvention fails to be commercialized in the future, and inventions that produce large
profits are rare in reality. Therefore, we cannot immediately conclude that such a lumpsum payment would be disadvantageous for most employees. In the case of patents, future
profits often fall short of predictions, and as long as the reasonable benefits are judged
reasonably at the time of determination, it cannot be helped that an inequality will arise
between the parties as a result if the predictions fail. 87 Meanwhile, the incentivizing
effect of the payment of the benefits decreases as the time elapsing from the time ofinvention until the payment of the benefits lengthens, so lump-sum payment would bereasonable also from the viewpoint of encouraging invention.88[82]
If the payment is made in a lump sum, the company will be free from the workloadof managing employee inventions for a very long time in the future, so it is likely to beconsiderably beneficial. Also, if the value is paid at the time of the succession to a right,
it will also encourage the employer to license out or assign the right to another party whenthe employer does not intend to use the right, so it will be useful for preventing the social
loss of creating unused inventions.89
Before the 2015 revision, succession to a right could be granted by a one-sided
stipulation from the employer, so payment of the value and the transfer, etc. of a right86 Hiroshi Yoshida “Shokumu Hatsumei Ni Okeru Shomondai” (Some Questions on Employee's Invention) Tokkyo
Kenkyū (Patent Studies), No. 37 (2004), p. 38 seems to consider the possibility of allowing a retrial depending on
the size of the actual profit that is subsequently received by the employer. However, the question is whether or not
the amount was appropriate as the value for the assignment of the employee invention at the time of the assignment,
and no retrial should be allowed even if the invention produces an unexpectedly high profit, or conversely, a low
profit after assignment (i.e. such outcomes do not constitute grounds for retrial under Article 338 of the Code ofCivil Procedure).
87 Essentially, patent rights are very risky. There is a risk that grounds for invalidation would be found or a better
invention would be made in the future and the value of the invention would decrease considerably. However, theriskiness is not specific to patent rights; there are also many other products, such as shares of stock, for which
predictions could fall short.
88 Hisayoshi Yokoyama, “Shokumu Hatsumei Seido No Yukue” (Future of the Employee Invention System), Jurist,
No. 1248 (2003), p. 40. This essay mentions that, because it is also important for the employee to receive the value
for the invention as quickly as possible, it was decided that the right to claim the value for the invention should takeeffect and the amount of the value should be fixed at the time of the assignment of the right.
89 For details, see Hisayoshi Yokoyama, “Shokumu Hatsumei Ni Okeru ‘Sōtō No Taika’ No Kihonteki Kangaekata”(Basic Idea of “Reasonable Value” for an Employee Invention), Nakayama Nobuhiro Kanreki Kinen Ronbun Shū,
Chiteki Zaisan Hō No Riron To Gendaiteki Kadai (Theories of Intellectual Property Law and Modern Issues), p.
74.

87

§1. Creation of Right

were not conditions concurrent.90 Under the revised Act of 2015, the right to obtain apatent originally belongs to the employer if there is such a “stipulation,” so conditions
concurrent never arise.
(vii) Prescription
Prescription commences when it has become possible to exercise a right (Article
166, paragraph (1) of the Civil Code). Since the right to claim reasonable benefits (thevalue, before the Act of 2015) for an employee invention is a specified claim stipulated
in Article 35 and does not arise from a unilateral commercial act, prescription has been
determined to be ten years in all relevant court judgments, and hardly any objection has
been indicated against this.91 In the 2004 revision, there was an opinion that a shorter
extinctive prescription should be recognized as a legislation theory. 92 However, cases
concerning employee inventions are, by their nature, often disputed after the resignationof the employee, which delays the filing of an action. Therefore, if a shorter extinctive
prescription is recognized, the employee will not be saved in many cases. Accordingly, it
was concluded that the ten-year prescription would be maintained in accordance withconventional case law, without introducing new provisions on prescription.
[83]
If there is no stipulation regarding the time of the payment of reasonable benefits,
just as in the case of an ordinary assignment, prescription commences at the time when it

90 The Osaka District Court Judgment, May 18, 1979, Tokkyo To Kigyō (Patents and Enterprises), No. 128, p.
49/Torikeshishū, 1979 (District Court Section), p. 239/Tokkyo nyūsu (Patent News) No. 5210 and 5211 (theContinuous Kneading Machine case).
91 Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han] (Lecture on Intellectual Property Law [2nd ed.]), p. 169
states that the prescription is five years, by applying commercial prescription (Article 522 of the Commercial Code).
It mentions that the reason that the prescription has been ten years in court judgments is that the employer had failed
to think about invoking commercial prescription, and if the counsel does not invoke commercial prescription, thecounsel deserves to be accused of breaching his/her fiduciary duty (p. 171). However, before the 2015 revision,
when an employer succeeded to the right to an employee invention, the employer did not receive the right in thecourse of a commercial act, but under a system especially established under law. Therefore, law cases and prevalent
theories acknowledge a ten-year prescription. In addition, the book cites the Tokyo District Court Judgment,
September 28, 1983, Hanta, No. 536, p. 260 (the Tosen Concrete Pole case), which found a five-year commercialprescription, and indicated that this case does not relate to a pure employee invention, but if the meaning of
employee inventions were to be interpreted broadly, an invention made by a technical advisor can be regarded as
an employee invention. However, since it is a typical case of a commercial act where an independent technicaladvisor assigned know-how on devices and designs to the company, it is natural that commercial prescription should
be applied, and the question of whether or not the know-how is an employee invention was not disputed in the case.
Meanwhile, Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 568 [written by Takuya
Iizuka and Hiroyuki Tanaka] states that a short extinctive prescription could be applied in some cases.
92 A short extinctive prescription of two years is recognized for a claim for wages, and of five years for a claim for aretirement allowance (Article 115 of the Labor Standards Act), but since such prescription is secured by penal
provisions and administrative dispositions, it cannot be discussed on the same level as the value for an employee
invention. Hisayoshi Yokoyama, “Shokumu Hatsumei Seido No Yukue” (Future of the Employee Invention
System), Jurist, No. 1248 (2003), p. 51 and Michio Tsuchida, “Shokumu Hatsumei To Rōdō Hō” (Employee
Invention and Labor Law), Minshōhō Zasshi (Journal on Civil and Commercial Law), Vol. 128, No. 4 and 5 (2003),
p. 556 state that a short extinctive prescription can be considered as a legislation theory, which is worth considering.

88§1. Creation of Right

becomes possible to claim the reasonable benefits.93 If there is a stipulation on the timeof payment of reasonable benefits,94 prescription commences at that time, because there
is a legal obstacle against enforcement of the right to claim payment of the value untilthat time arrives (Article 412, paragraph (1) of the Civil Code).95 Many companies adopt
a system of compensation for performance with a stipulation that a payment will be madein installments for each set period of time, so prescription for the reasonable benefits thatarise within a certain period commences at the time of payment predetermined for said
period.96 Even when there is no stipulation on the time of payment, if a performancebased payment system is adopted, prescription commences at the time when an employee
invention is worked (mostly at the end of the fiscal year).97
Under the Act of 2015, when an employee invention originally belongs to theemployer, the employee may demand not the value for the right to obtain a patent or forthe patent right, but a claim that is specially provided under the Patent Act, but
prescription commences at the time when it becomes possible to claim the benefits, justas before. In other words, when there is a stipulation on the time of payment, prescription
93 The Tokyo District Court Judgment, December 23, 1983, Mutai Saishū, Vol. 15, No. 3, p. 844/Hanji, No. 1104, p.
120/Hanta, No. 536, p. 312 (the Stainless Steel Gold Plating Method case); the Osaka District Court Judgment,
March 4, 1993, Chiteki Saishū, Vol. 26, No. 2, p. 405 (the Gosen Fishing Line case), the second instance judgmenton the same case, the Osaka High Court Judgment, May 27, 1994, Chiteki Saishū, Vol. 26, No. 2, p. 356/Hanji, No.
1532, p. 118, the final appeal judgment on the same case, the Supreme Court Judgment, January 20, 1995, 1994
(O) No. 1884; the Nagoya District Court Judgment, January 27, 1999, Hanta, No. 1028, p. 227 (the Ohi Kenkou
Parking Structure case); the Tokyo District Court Judgment, February 24, 2004, Hanji, No. 1853, p. 38/Hanta, No.
1147, p. 111 (the Ajinomoto Aspartame case) (the court determined that the prescription commences at the time ofthe succession to a right, but rejected the prescription defense considering the timing of the acknowledgment of theobligation); the Osaka District Court Judgment, April 28, 2005, Hanji, No. 1919, p. 151 (the Sumitomo Chemicalcase); the Tokyo District Court Judgment, June 8, 2006, Hanji, No. 1966, p. 102/Hanta, No. 1271, p. 183 (theMitsubishi Electric Non-volatile Memory case).
94 There can be cases where there is no express stipulation on the time of payment, but the time of payment can be
determined by interpretation. When there is a stipulation on compensation for an application or compensation for aregistration, the time of the filing or registration of an application may be construed as the time of payment in somecases. In the Tokyo District Court Judgment, January 30, 2004, Hanji, No. 1852, p. 36/Hanta, No. 1150, p. 130 (theNichia Corporation Blue LED case), which was a case where provisions on the payment of compensation for an
application had been stipulated, the court held that extinctive prescription commences at least from the time of theregistration establishing the patent right.
95 The Tokyo District Court Judgment, April 16, 1999, Hanji, No. 1690, p. 145/Hanta, No. 1002, p. 258 (the Olympus
Pickup Device case), the second instance judgment on the same case, the Tokyo High Court Judgment, May 22,
2001, Hanji, No. 1753, p. 23/Hanta, No. 1064, p. 196, the final appeal judgment on the same case, the Supreme
Court Judgment, April 22, 2003, Minshū, Vol. 57, No. 4, p. 477/Hanji, No. 1822, p. 39/Hanta, No. 1121, p. 104;
the Tokyo District Court Judgment, November 29, 2002, Hanji, No. 1807, p. 33/Hanta, No. 1111, p. 96 (the Hitachi
Optical Pickup case), the second instance judgment on the same case, the Tokyo High Court Judgment, January 29,
2004, Hanji, No. 1848, p. 25/Hanta, No. 1146, p. 134; the Tokyo District Court Judgment, September 30, 2004,
Hanji, No. 1880, p. 84/Hanta, No. 1181, p. 333 (the Toshiba Stainless Steel Can case); the Tokyo District Court
Judgment, November 16, 2005, Hanji, No. 1927, p. 119/Hanta, No. 1226, p. 242 (the Otsuka Pharmaceutical
Tetrazolylalkoxycarbostyril Derivatives case).
96 The Tokyo District Court Judgment, September 30, 2004, Hanji, No. 1880, p. 84/Hanta, No. 1181, p. 333 (theToshiba Stainless Steel Can case); the Tokyo District Court Judgment, May 29, 2006, Hanji, No. 1967, p.
119/Hanta, No. 1250, p. 305 (the NTT Advanced Technology Printer case).
97 The Osaka District Court Judgment, November 26, 2003 (not included in any law report) (the Otsuka
Pharmaceutical Meptin case); the Osaka District Court Judgment, April 28, 2005, Hanji, No. 1919, p. 151 (theSumitomo Chemical case). In the Osaka District Court Judgment, April 26, 1984, Mutai Saishū, Vol. 16, No. 1, p.
282/Hanta, No. 536, p. 337 (the Minolta Autofocus case), which is not a case concerning prescription, the court
stated that the obligation to make a payment has not yet been established where there is no stipulation on the timeof payment, but there is a stipulation on performance-based compensation.

89§1. Creation of Right

commences at the time when it becomes possible to claim benefits according to that
stipulation. If there is no such stipulation (Article 35, paragraph (7)), prescriptioncommences at the time when the employer acquires the right, which is the time when it
becomes possible to claim benefits.
(4) Other Issues
A. Right to obtain a patent in another country
Article 35 of the Patent Act provides for the way in which Japanese employee
inventions should be handled in Japan, and does not directly provide for how they should
be handled when filing foreign applications for them. There is a question of whether it islawful to establish a “stipulation” in advance providing that, when an employee makes an
employee invention in Japan, the right to obtain a patent in a foreign country shall vest in
the employer, and whether the employee can claim reasonable benefits under Article 35
when the employee has the employer acquire the right to obtain a patent. In short, it is aquestion of whether Article 35 is applied or applied by analogy, or whether Article 35 is
not applied and the issue is left to a contract between the parties.
This issue is deeply related to how the nature of Article 35 is viewed. If the Article
is viewed as a mandatory provision strongly characteristic of a labor law for protecting
the inventor who is an employee in a weak position, there is hardly room to stipulate thegoverning law by contract, and Article 35 would likely be applied to Japanese employee
inventions even when foreign applications are filed for them. In contrast, if the Article isviewed as being strongly characteristic of a contract law, the governing law would likely
be stipulated by based on the intention of the parties. From a patent law perspective, there
is a question of what interpretation will contribute the most to Japan’s industrial
development, that is, the most favorable for providing an incentive for making inventions
and promoting industrial development.
[85]
While Article 35 is construed to be a unilateral mandatory provision from theviewpoint of protecting the weak, it is also applied to an officer, etc. of a juridical person,
so it cannot be completely determined as a provision which is characteristic of a laborlaw. Also, considering the basic structure of Article 35, the provision cannot be regarded
as completely relying on contracts. No legislative measure was taken regarding this issue
either at the time of the 2004 revision or the 2015 revision, so the issue remains as amatter of interpretation. In any case, it is difficult to deal with this issue by a single rulein a unified manner.
Turning our eyes overseas, other countries have different systems and rules withregard to the ownership and the value for employee inventions, and since employee
inventions are also related to labor issues, any discussions about such issues will have adomestic aspect, and there is no momentum toward unifying the systems worldwide.

90§1. Creation of Right

Based on Article 4bis of the Paris Convention, which provides for the principle ofthe independence of patents, the establishment, extinguishment, ownership, effects, etc.
of patents are decided by the patent law of the country of registration. Some countries
provide that it is the employer who is the owner of the right to file a patent application,some countries provide that it is the employee who is the owner, and some countries do
not allow the assignment of such right. The ownership of the right depends on the law of
the country of registration of the patent. However, there is a view that the issue of
assignment after the original ownership has been decided is basically a matter of contract,
and that the claim-causing juridical act is a matter concerning Article 7 of the Act onGeneral Rules for Application of Laws, and further there is a view that Article 35 of theJapanese Patent Act should be regarded as an issue similar to a labor issue rather than acontract issue, and that the Article should be applied directly. In contrast, there is also aview that the issue of an employee invention is closely related to the establishment andownership of a patent right, so it should be fully dealt with by the patent law of eachcountry of registration.98
Article 35 does not directly mention the right to obtain a patent or the patent rightin a foreign country for an employee invention, but even if the right to file an application
were to belong to the employee, as in the case before the 2015 revision, Article 35 is notconsidered to prohibit a contract (including an implied contract) to transfer the right tofile a foreign application or the right to a pending foreign application, or a foreign patentright to the employer.99 However, there remains a question of whether it is permissible
to provide for such a measure by a one-sided stipulation. Since the employer’s one-sided
stipulation is permitted for domestic patents, it would be difficult to construe that such
stipulation is not permissible for foreign patents. Not permitting such on-sided stipulation
could serve as a disincentive for the employer to invest in research and development.
[86]
Nevertheless, the question of who owns the right to file an application is decided
by the law of the country in which the patent is to be obtained. There is no problem in thecase of countries where the employer owns employee inventions, but even in countries
where the employee owns employee inventions, many countries permit the assignment of
the right to file a patent application; so, if there is a stipulation on the assignment of theright to file an application, the employer, who is the assignee, can file an application underthe employer’s name. In contrast, there are countries like the United States where theassignment of the right to file an application is not permitted. In such case, a desirable
98 With regard to identification of the issues, see Naoshi Takasugi, “Shokumu Hatsumei Ni Motozuku Gaikoku
Tokkyo O Ukeru Kenri No Jōto Taika No Junkyo Hō” (Law Governing the Value for Assignment of the Right toObtain a Foreign Patent Based on an Employee Invention), Jurist, No. 1370 (2009), p. 252.
99 It is natural that the contract may be nullified according to general legal principles, such as the violation of publicorder and morals and abuse of a dominant bargaining position.

91§1. Creation of Right

interpretation in Japan would be, instead of nullifying the contract for assignment to theemployer, to acknowledge an outcome that is as close to the contents of the contract as
possible. Specifically, filing an application under the employee’s name on the employer’s
account and assigning the right thereto to the pending application or the patent right tothe employer may often be considered as the reasonable intentions of the parties in thecase of a contract, and as the intentions of the employer in the case of the employer’s onesided indication of his/her intentions.
The question is whether or not the employee may claim reasonable benefits under
Article 35 in such case. It may be possible to consider that Article 35 should be applied
directly, considering the nature of Article 35 as a mandatory provision. 100 Also, it may
be possible to consider that the succession to a right will be governed by the law of theplace chosen by the parties, as it is a juridical act as provided under Article 7 of the Act
on General Rules for Application of Laws. Even where the application of Japanese law ispremised, there could be a view that Article 35 will be applied (or applied by analogy),101
and a view that Article 35 will only be applied to the right to receive a patent in Japan,

100 In the Osaka District Court Judgment, April 26, 1984, Mutai Saishū, Vol. 16, No. 1, p. 282/Hanta, No. 536, p.
337 (the Minolta Autofocus case), the court held that the right to obtain a patent has been assigned based on theemployment regulations, etc. between the employer and the employee, so irrespective of whether the application
is filed in Japan or in a foreign country, the relationship between the employer and the employee is regulated by
Article 35 and the employment regulations, etc. In the Tokyo High Court Judgment, January 29, 2004, Hanji, No.
1848, p. 25/Hanta, No. 1146, p. 134 (the Hitachi Optical Pickup case), the court ruled that, while the law governinga contract for assignment of the right to obtain a Japanese patent or a foreign patent for an employee invention isdecided by Article 7, paragraph (1) or (2) of the Act on General Rules for Application of Laws prior to revision,even if Article 7 of the Act is not applied, the law of the place that applies most closely to the employment
relationship between the employer and the employee will be the law governing said contract for assignment by
the rule of reason. The court held that, because Article 35 is a mandatory provision which also has the meaning ofa labor regulation, and “reasonable value” should be decided uniformly by law as determined based on theindustrial policy of the country to which both parties belong, Article 35, paragraph (3) should be construed tocover the right to obtain a foreign application. In the Tokyo District Court Judgment, February 24, 2004, Hanji,
No. 1853, p. 38/Hanta, No. 1147, p. 111 (the Ajinomoto Aspartame case), the court calculated the amount of the“profit to be received by the employer, etc.” by including the profit from foreign patents, holding that whichever
governing law is decided upon under the employment contract, Article 35, which is a labor regulation having thenature of an absolute mandatory provision, should be applied, and the “right to obtain a patent” as referred to in
Article 35, paragraph (3) does not preclude the “right to obtain a patent in a foreign country.”
101 In the Supreme Court Judgment, October 17, 2006, Minshū, Vol. 60, No. 8, p. 2853/Hanji, No. 1951, p. 35/Hanta,
No. 1225, p. 190 (the Hitachi Optical Pickup case), the court held that, since the issue of the value for assignmentof the right to obtain a foreign patent is an issue of the effects of a claim-causing legal act, the law governing thatissue should primarily be decided upon according to the intentions of the parties based on the provisions of Article
7, paragraph (1) of the Act on General Rules for Application of Laws prior to revision, and in this case, Japanese
law should be the law governing the value for assignment because there was an implied agreement between theparties to regard Japanese law as the governing law. The court further mentioned that, although Article 35,
paragraphs (3) and (4) cannot be applied directly to a claim for the value for assignment, these provisions aim toachieve the purpose of the Patent Act to encourage inventions, and thereby to contribute to the development ofindustry, by protecting the employee through ensuring that the employee can secure a certain portion of the profit
which the employer is objectively expected to receive, given that it is difficult for the two parties to carry outtransactions on an equal footing. In addition, the court stated that the right to obtain a patent that takes effect invarious countries arises from what is socially recognized as a single invention, and it is construed that the intentionof the parties to uniformly process legal relations concerning that invention is entirely ordinary. On these bases,
the court concluded that the provisions of Article 35, paragraphs (3) and (4) are applied by analogy.

92§1. Creation of Rightand not to the right to receive a patent in a foreign country.102 There is also a view thatthe governing law should be decided uniformly, and that this issue should be governedby the law of the country in which the right to obtain a patent takes effect.103 Anotherview considers this issue from the perspective of labor law, and insists that the law that is
applied to an employment relationship should be the governing law.104 Concerning thisissue, academic theories are also diversified with no sign of convergence. Given that thelegal nature of Article 35 cannot be explained by a single principle, any of these theories
would have both merits and demerits if adopted. Many law cases have acknowledged theapplication of Article 35, but academic theories are expected to see continued debates in
the future. Issues of external affairs concerning employee inventions are not limited tothe above, but are wide-ranging. For example, complicated problems could arise in suchcases as where an employee of a Japanese company makes an invention abroad, where an
employee of a foreign company makes an invention in Japan, or where multiple
employees of a Japanese company complete an invention in multiple countries.
[87]
B. Joint inventions and employee inventions
In the case of a joint invention, the right to obtain a patent is jointly owned by all
the inventors concerned, and an individual share of ownership cannot be assigned without
the consent of all the other joint owners (Article 33, paragraph (3) of the Patent Act).
Since joint research between companies or between a company and a university is
becoming increasingly common in large-scale R&D in order to shorten development time,share development funds, diversify risks, and for other reasons, various problems are
occurring in relation to employee inventions as a result.
Before the 2015 revision, each employee would deal with the related rights between
the employee and his/her employer concerning an employee invention, but the consent of
all the other joint owners would be required for assigning his/her share of the right to102 In the Tokyo District Court Judgment, November 29, 2002, Hanji, No. 1807, p. 33/Hanta, No. 1111, p. 96 (theHitachi Optical Pickup case), the court held that, in light of the principle of territoriality, the patent laws of therespective foreign countries should be the laws governing matters including the ownership of the right to obtain apatent in a foreign country, whether or not a non-owner has a license, and whether or not the right to obtain apatent can be assigned and the requirements therefor, and governing the obligation to pay the value for theinvention. On such basis, the court stated that Article 35 is only applicable to the right to obtain a Japanese patentand is not applied or applied by analogy to the right to obtain a foreign patent, and dismissed the employee’s claim
for the value for the employee’s invention. Ryō Shimanami, “Gaikoku Tokkyo O Ukeru Kenri Ni Kansuru
Shokumu Hatsumei SōTō Taika Seikyū No Kahi” (Possibility of Claiming a Reasonable Value for an Employee
Invention with Regard to the Right to Obtain a Foreign Patent), Jurist, No. 1296 (2005), p. 78.
103 Hidetaka Aizawa, “Tokkyo Hō 35 Jō No Kaisei Ga Motarashitamono” (Outcome of the Revision of Article 35 of
the Patent Act), Jurist, No. 1279 (2004), p. 120.
104 Naoki Koizumi, “Tokkyo Hō 35 Jō No Tekiyō Han’i” (Scope of Application of Article 35 of the Patent Act),
Minshōhō Zasshi (Journal on Civil and Commercial Law), Vol. 128, No. 4 and 5 (2003), p. 574; Naoki Koizumi,“Tokkyo Hō 35 Jō No Kaishaku Ni Kansuru Shūen Teki Ronten” (Peripheral Issues Concerning Interpretation of
Article 35 of the Patent Act), Nakayama Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To
Gendaiteki Kadai (Theories of Intellectual Property Law and Modern Issues), p. 129; Yoshiyuki Tamura“Shokumu Hatsumei Ni Kansuru Teishoku Hō Jō No Kadai” (Challenges of Conflict of Laws Concerning
Employee Inventions), Intellectual Property Law and Policy Journal, No. 5 (2005), p. 10.

93§1. Creation of Rightobtain a patent (Article 33, paragraph (3) of the Patent Act) or his/her share of the patentright (Article 73, paragraph (1) of the Patent Act), or for granting a provisional exclusive
license or an exclusive license (Article 33, paragraph (4) and Article 73, paragraph (3) ofthe Patent Act). Thus, although it is an employee invention, the employee needs to gain
the consent of the other joint owners to assign, etc. those rights to his/her employer. This
principle does not change even when the right is to be succeeded to or licensed based on
the employer’s one-sided stipulation. Without the consent of the other joint inventors who
are not employees of the same company, the employer will not be able to succeed to or
obtain a license for the right despite the presence of such stipulation. Such a conclusion
is considered to be inappropriate, and in that sense as well, an advance contract had an
extremely important meaning. If one's employee is one of joint inventors of an invention,and that invention falls under an employee invention, the employer should be justifiably
entitled to a non-exclusive license for the invention, even when the right thereto cannot
be succeeded to. 105 It is construed that the employer can have a license to the entire
invention despite his/her employee being only one of the joint inventors, because a person
having a share of a patent right can work the entire invention regardless of the amount of
the share owned (Article 73, paragraph (2) of the Patent Act).
Under the revised Act of 2015, if there is a certain “stipulation,” the right to obtaina patent for an employee invention originally belongs to the employer, so even if an
employee of a certain employer makes a joint invention with an employee of another
employer, the share of the right to obtain a patent for the employer’s own employee will
belong to that employer, so the right became jointly owned by the two employers, and thecomplicated situation that occurred before the revision could be avoided.
C. Directors’ inventions
Any transaction between a company director and his/her company requires
approval from the shareholders meeting in the case of a company other than a company
with a board of directors (Article 356, paragraph (1), item (i) of the Companies Act), andapproval from the board of directors in the case of a company with a board of directors(Article 365, paragraph (1) of the Companies Act).106
Before the 2015 revision, there was a question of whether the approval of thegeneral meeting of shareholders or the board of directors was also required whenassigning the rights to an employee invention made by a director to the company or
granting a provisional exclusive license or an exclusive license for the invention to the

105 Though it is a case on an employee design, see the Osaka District Court Judgment, January 26, 1987, Hanta, No.
640, p. 217 (the Ikeda Drill for Making Holes in Rigid Materials case). Ryūichirō Sengen, Tokkyo Hō Kōgi [Dai4 Han] (Lecture on Patent Law [4th ed.]), p. 142.
106 For example, the purchase of raw materials which constitutes a company’s main business incidental to the purposeof the company is also a transaction that requires approval (the Supreme Court Judgment, June 4, 1949, Minshū,Vol. 3, No. 7, p. 235 [the Tōkai Mokuzai Kōgyō case]).

94§1. Creation of Rightcompany. Many theories say that approval is required; 107 but that is unrealistic. The
approval of the board of directors should only be required for a transaction that could
cause a conflict of interest between the company and the director, and should not be
required uniformly for all transactions.108 An invention made by a director should not
require the approval of the shareholders meeting or the board of directors, as long as it isprocessed under the same stipulation as that for other employees. As patent applications
often need to be filed quickly, the appropriate timing may be lost by waiting for ashareholders meeting or a board of directors meeting, and the practice of waiting for
approval is very likely to inflict damage on the company. This issue is very importantbecause there is a large number of directors that serve concurrently as employees in Japan.
The only way the company’s profits are harmed is when the amount of the value for theassignment is abnormally high for that patent right. If so, the assignment should not be
invalidated due to a lack of approval of assignment. Rather it should be an issue of theamount of the value for the invention. The assignment should be regarded as being valid,
and the matter should be processed as an issue of the amount.
[89]
After the 2015 revision, the right to obtain a patent came to belong to the employer
at the time of completion of the invention if there is a certain “stipulation,” for an
invention made by any employee including directors, so to that extent, the problem of theapproval of the board of directors, etc. does not occur.
[89]
1.1.4. Foreign Nationals (Article 25 of the Patent Act)
1.1.4.1. Foreign Nationals’ Eligibility to Enforce Rights
Today, as international exchanges are dramatically increasing in all areas including
between people, commodities, capital, and information, many countries around the world
recognize the eligibility of foreign nationals to enforce their rights, in principle. The Civil
Code of Japan also acknowledges the private rights of foreign nationals under Article 3,
107 Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 484 [written by Takuya Iizuka and
Hiroyuki Tanaka]. In the Tokyo District Court Judgment, December 23, 1983, Mutai Saishū, Vol. 15, No. 3, p.
844 (the Stainless Steel Gold Plating Method case), the court stated, in opposition to the defendant’s allegation of
the assignment being invalid because it had not gained the approval of the board of directors, that a report on the
preparation of the filing of the application had been made by the board of directors, so that should be recognized
as approval. It cannot be determined that court cases require approval from the board of directors merely based on
this judgment, because the approval of the board of directors was not taken up as an important point of issue inthis judgment.
108 For instance, if the director of a bank deposits money as a general user according to general terms and conditions,
it may technically be a transaction with the company, but it does not cause a conflict of interest so it does not
require the approval of the board of directors. Article 356, paragraph (1), item (iii) of the Companies Act provides
that the approval is required only if the transaction results in a conflict of interest.

95§1. Creation of Right

paragraph (2), unless otherwise provided for by applicable laws, regulations or treaties.
In connection with this, Article 25 of the Patent Act provides that foreign nationals canenjoy individual eligibility to enforce their rights related to patents in the following threecases.
[90]
The first is the case where the foreign national is domiciled or resident (or, in thecase of a juridical person, with a business office) in Japan (the principal sentence ofArticle 25 of the Patent Act). This requirement is written in the same manner as theprovision on patent administrators for overseas residents (Article 8 of the Patent Act) andthe provision on the scope of authority of representation (Article 9 of the Patent Act). A
domicile refers to the principal place where a person lives (Article 22 of the Civil Code),but a person does not need to have the intention of settling there permanently. A
temporary address cannot be considered to be a domicile in this context. A residence
refers to a place which a person continuously inhabits although it is not the principal place
wherein the person lives. A business office refers to a place where a person conducts
business and where he/she intends to continue to do so, and its substance must be
determined from the perspective of the Patent Act. Such business office excludes suchplaces that exist only in name, and includes all places where business is conducted in
actuality.1 It does not merely refer to stores, but also to places such as factories and farms.
It should be interpreted consistently with the concept of an establishment that serves as
the basis for individual eligibility to enforce rights under the Paris Convention (Articles
2, paragraph (2) and Article 3 of the Paris Convention).
The second is the case where the foreign national is a national of either a country
that provides a national treatment to Japanese people or a country that adopts thereciprocity principle (Article 25, items (i) and (ii) of the Patent Act). The Patent Act
provides that if the patent-related rights of Japanese nationals are recognized in a foreign
national’s country under the same conditions as those for the nationals of that country,
the patent-related rights of that country’s nationals will also be acknowledged in Japan.2
In practice, once a foreign national proves that his/her country adopts the reciprocity
principle, there is no longer a need to submit a document proving that said country adopts
the reciprocity principle, as a general rule.3
The third is the case where individual eligibility is specifically provided by treaty
1 Supervised by Mitsue Toyosaki and Nobuhiro Nakayama, Radasu Kokusai Kōgyō Shoyūken Hō, (Ladas International
Industrial Property Law) p. 1224.
2 A foreign national may be ordered to submit a document proving that the foreign national’s country adopts thereciprocity principle, when filing a patent application (Article 7, item (ii) of the Patent Act Enforcement Ordinance).
3 Specifically, as of 2012, the reciprocity principle is adopted in the Turks and Caicos Islands, Samoa, and the Republicof Vanuatu, and adoption of the reciprocity principle has been confirmed through an official reply in the Britishcolonies of Anguilla, Bermuda, the Virgin Islands, Guernsey and Jersey of the Channel Islands, the Falkland Islands,
Gibraltar, the Cayman Islands, Montserrat, and Saint Helena.

96§1. Creation of Right(Article 25, item (iii) of the Patent Act). The Paris Convention is the most important treaty
in this regard, but there are also countries that conclude individual treaties with Japan,
and the nationals of such countries are subject to this provision. Since Article 26 of the
Act provides that where specific provisions are provided by treaty, such provisions shallprevail, the provision of this item exists to act as a guarantee.
Foreign nationals who are not nationals of the countries that fall into one of theabove three categories cannot enjoy individual eligibility to enforce rights related topatents, but such people would be rare in reality.
[91]
Due to the economic globalization trend, efforts are being made to internationallyharmonize the patent system as well as other intellectual property systems. Thus, it isdesirable to settle the issue in a way that recognizes the broadest possible rights of foreign
nationals as well. An ideal theory would be to eliminate the reciprocity principle and toopen the door to all foreign nationals,4 but then countries that have no patent system andcountries that discriminate against foreign nationals would have no incentive to rectify
such situations. However, there would be no problem in opening the door to all foreign
nationals, because the Paris Convention and the WTO TRIPS Agreement, to which mostcountries of the world have acceded, adopt the national treatment principle.
1.1.4.2. Definition of Foreign National
A person who does not have Japanese nationality is referred to as a foreign national.
Specifically, a foreign national refers to a person who has foreign nationality and who isa stateless person. A person who has both Japanese and foreign nationality (dualnationality) is treated as a Japanese national. The JPO Commissioner can order thesubmission of a nationality certificate when he/she recognizes it to be necessary inconnection with the procedures taken by a foreign national (Article 7, item (i) of the
Patent Act h). It should be considered that a foreign national who is domiciled or resident
in Japan does not fall under the case that requires a nationality certificate. In addition, aforeign national who is domiciled or resident in a member state of the Paris Convention
should be treated according to the interpretation of the Paris Convention (Article 26 of
the Patent Act), and as a result, such foreign national is construed as being eligible toenforce the rights relating to a patent. A stateless person who is domiciled or resident inJapan and a person who is domiciled or resident in a member state of the Paris Convention
4 The newest industrial property law, the “Act on the Circuit Layout of a Semiconductor Integrated Circuits” (the socalled Semiconductor Chip Act) (Act No. 43 of 1985) does not adopt the reciprocity principle, but recognizes
ownership rights for all foreign nationals. Meanwhile, the U.S. Semiconductor Chip Protection Act adopts thereciprocity principle, but since this was the world’s first legislation of its kind, it is said to have been intended topromote similar legislation in other countries.

97§1. Creation of Rightor the WTO should be construed as being eligible to enjoy the rights relating to a patent.5
1.1.4.3. Nationals of Countries with which Japan Has No Diplomatic Relations
There is a question as to whether or not eligibility to enforce the rights related topatents in Japan should be recognized for a national of a country with which Japan has
no diplomatic relations, but which recognizes such eligibility for Japanese nationals or
adopts the reciprocity principle. There is only one court decision regarding this matter;6
the gist of the decision is that the question of whether or not to acknowledge
diplomatically a country as a state is only an issue of diplomatic policy, and as long as
the country satisfies the substantive requirements for a state, it complies with the purposeof the reciprocity principle and it is reasonable on the basis of the equality principle of
the Paris Convention to recognize rights related to patents for that country’s nationals.
This conclusion is reasonable, and also in theory it is hardly controversial. Nevertheless,even if a country with which Japan denies diplomatic relations were a member of theParis Convention, the Convention would not be effective between that country and Japandue to the lack of diplomatic relations. Therefore, the prevailing view is that nationals ofsuch country would not be able to enjoy the benefits of the Paris Convention, such as theright of priority, in Japan, and would consequently be considerably disadvantaged inreality. 7 The TRIPS Agreement provides that not only countries, but also separate
customs territories can also become members of the WTO. Taiwan is a member of theWTO, so Taiwanese people also have the rights provided under the TRIPS Agreement.
[92]

5 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 27; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai13 Han], p. 243.
6 The Tokyo High Court Judgment, June 5, 1973, Mutai Saishū, Vol. 5, No. 1, p. 197 (the East Germany case). In thiscase, the plaintiff, who was a juridical person of the German Democratic Republic (East Germany) with which Japan
had no diplomatic relations at the time, requested a trial for invalidation of a trademark registration, but since therequest was dismissed by the JPO, the plaintiff filed a suit against the JPO’s trial decision. The court held that an
East German juridical person has the capacity to request an invalidation trial, as long as East Germany adopts thereciprocity principle. A final appeal on this case was dismissed on the grounds that the original decision was
reasonable, as mentioned in the Supreme Court Judgment, February 14, 1977, Hanji, No. 841, p. 26. This case is not
related to the enjoyment of rights, but to procedures. Although it is a case under the old Trademark Act (Act of 1921),
it also serves as a valuable precedent under the current Act.
7 While it is a case related to copyright, in the Supreme Court Judgment, December 8, 2011, Minshū, Vol. 65, No. 9,
p. 3275/Hanji, No. 2142, p. 79/Hanta, No. 1366, p. 93 (the North Korean Cinematographic Work case), the court
held that, even if North Korea, which Japan does not recognize as a sovereign state, were to join the Berne
Convention ex post facto, as long as the Japan takes stance of not recognizing any rights and obligations under theConvention in its relationship with North Korea, a cinematographic work of North Korean nationals does notcorrespond to a work as prescribed in Article 6, item (iii) of the Copyright Act (a work in respect of which Japan has
an obligation to grant protection under an international treaty). In contrast, Nobuhiro Nakayama and Naoki Koizumi,ed., Shin Chūkai Tokkyo Hō Jō/Ge, p. 211 [written by Yasuto Komada] states that private-law-like provisions of theParis Convention, for which official diplomatic relations do not become a direct issue, can also be positively
interpreted for unrecognized states.

98§1. Creation of Right

1.1.4.4. Effect of Violation of Article 25 of the Patent Act
A patent application that violates Article 25 of the Patent Act will be refused(Article 49, item (ii) of the Patent Act), and if the application were registered, the violation
serves as grounds for invalidation (Article 123, paragraph (1), items (ii) and (vii) of the
Patent Act). However, it is provided that if the patentee becomes ineligible to enforce therights related to a patent after the patent registration, the patent becomes invalid from thatpoint (proviso to Article 125 of the Patent Act, Article 123, paragraph (1), item (vii), andArticle 25), and the effect of the invalidation retroacts to the point of time when theforeign national became no longer able to enjoy the right.
If a patent right is transferred from a patentee to a foreign national who is ineligible
to enforce his/her rights, the transfer should be construed as being invalid, rather than thepatent right itself becoming invalid.8

8 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act, Rev. ed.), p.
28.

99

§1. Creation of Right[93]
1.2. Subject Matter of a Patent Right
1.2.1. Definition of the Subject Matter of a Patent Right
1.2.1.1. Definition of an Invention (Article 2, paragraph (1))
The subject matter of a patent right is an invention, but only a few patent laws in
the world stipulate the definition of an invention.1 The old Japanese Patent Act (Act of1921) did not have definition provisions either,2 so the definition was left to scholarly
theories and court decisions. However, as post-war-legislated laws generally included
definition provisions and because the definition of an invention is important, thedefinition was stipulated in Article 2, paragraph (1) upon the enactment of the 1959 Patent
Act for the purpose of clarification.3
According to the Patent Act, an “invention” is defined as “the highly advanced
creation of technical ideas utilizing the laws of nature” (Article 2, paragraph (1) of the
Patent Act). This is considered to be based on the definition by Kohler. 4 Many theories
are more or less based on a similar concept, though the expressions may be slightly
different.
The current Japanese Patent Act defines inventions in general in Article 2,paragraph (1) and mentions that, of such inventions, those that satisfy the requirements
in Article 29 are patentable. Some scholars consider that it is unnecessary for the Patent
Act to define inventions in general, but that it is sufficient to provide for only patentable
inventions.5 At the same time, there are also theories that are skeptical about establishinga definition for an invention in the Patent Act, in light of the inherent difficulty of defining
inventions. 6 As long as the Patent Act protects inventions, their definition would be

1 Some patent laws have formal definition provisions, but do not define what an invention is in practical terms, suchas “the term ‘invention’ means invention or discovery” (35 U.S.C. 100 (a); here a “discovery” implicitly suggests a
selection invention). Meanwhile, the United Kingdom had definition provisions in the Patents Act of 1949 (§ 101(1)), but deleted them in the Patents Act of 1977. Article 52 of the European Patent Convention provides a passive
definition which lists subject matters and activities that are not regarded as patentable inventions (a negative list).
2 The old Act provided that a person who makes an industrial invention may obtain a patent for said invention (Article
1 of the old Act), but it did not have a provision defining an invention.
3 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Shoyūken Hō) Chikujō Kaisetsu [Dai 19 Han], (Clause-by-Clause
Explanation of Industrial Property Acts [18th ed.]), p. 13.
4 Kohler, Lehrbuch des Patentrechts (1908), S.13. Takeo Suzuki, “Kōrā No Hatsumei No Gainen” (Kohler’s Idea of
Invention), Tokkyo To Shōhyō (Patents and Trademarks), Vol. 3, No. 9 (1934), p. 29.
5 For an opinion that is skeptical about stipulating a separate definition of inventions in general and another one forpatentable inventions, see Bunzō Takino, “Hatsumei No Teigi” (Definition of an Invention), Hogaku shimpo, Vol.
74, No. 11 and 12 (1967), p. 55; Takeshi Akiyama, “Hatsumei/Hakken/Shinkisei” (Invention/Discovery/Novelty),
Tokkyo Kanri (Patent Management), Vol. 12, No. 1, p. 12.
6 Isay, Patentgesetz und Gesetz betreffend der Schutz von Gebrauchsmustern, 5. Aufl., S. 41., Elster, Urheber und
Erfinder, Warenzeichen und Wettbewerbsrecht, 2. Aufl., S. 284. Tokkyo Hō Seminā (1) Hatsumei (Yuhikaku, 1969),
p. 12, [Comment by Masuji Hara].

100§1. Creation of Right

important. However, there is a question of whether such a definition should be stipulated
in the Patent Act or whether it should be left to scholarly theories and court decisions. If
it is stipulated in the Patent Act, the concept of an invention would be very clear, and it
would be easier to determine the scope of the application of the Act. On the other hand,the concept of an invention would be fixed, so there is a risk that the Act would not beable to meet the new demands of the times. In particular, due to the recent technologicalinnovation, the center of industry has dramatically shifted from the manufacturing sector
to the tertiary sector, or from hard industries to soft industries, and some newly emerging
technologies do not fit the concept of an invention in the conventional sense.7 In order todeal with such needs promptly, it may be better to leave the definition of inventions toscholarly theories and court decisions. Meanwhile, there is also a view that therequirement of the “laws of nature” should be deleted from the existing definition
provision or that the definition provision itself should be deleted, but changing thedefinition provision could have unexpected side effects, so considerable care should betaken in the event of making such a deletion, unlike in the case of drafting a provisionfrom scratch. 8 Incidentally, revision of the definition provision of inventions was
discussed upon the 2002 revision of the Patent Act, but it was shelved.
[94]
The Japanese Patent Act has a definition provision on inventions, but its details areleft to theories and court decisions. The following section discusses the content of thatdefinition.
1.2.1.2. Utilization of the Laws of Nature(1) Meaning of laws of natureFirst of all, an invention must utilize the “laws of nature” (Article 2, paragraph (1),and Article 29, paragraph (1) of the Patent Act). Utilization of the laws of nature means
the use of the principle of cause and effect underlying a natural phenomenon. 9 The
definition whereby an invention must utilize the laws of nature simply adopts a scholarly
theory advocated in the 19th century. In those times, the system of patents for substances
was not popular and the concept of selection inventions was still not clear. As a matter ofcourse, the presently disputed technologies such as computer software and biotechnology

7 For instance, computer software and biological inventions constitute types of such new technologies. Of course, thequestion of whether or not it is appropriate to protect all of these new technologies by the Patent Act should be
examined, but at the very least it is a fact that the Patent Act loses flexibility by including definition provisions oninventions.
8 Hiroaki Sakai, “Tokkyo Hō 2 Jō 1 Kō Ron” (Discussion on Article 2, paragraph (1) of the Patent Act) Nakayama
Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai (Theories of Intellectual
Property Law and Modern Issues), p. 143.
9 Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p, 13 [written by Ryūta Hirashima].

101§1. Creation of Right

did not exist. Due to such changes in technology, today, it is necessary to interpret theconcept of the laws of nature quite flexibly in order to meet the needs of the times.
[95]
Article 2, paragraph (1) appears to give a positive definition of an invention, but in
substance, it has very little positive meaning. The laws of nature in this context should
only be interpreted as indicating that mere mental activities,10 pure and simple academic
principles,11 artificial arrangements,12 etc. are excluded from inventions. The pure andsimple mental activities of human beings do not utilize the laws of nature, so they do notconstitute an invention by themselves, but inventiveness is not denied simply by the factthat a human mental activity or an artificial arrangement is included in an invention. A
technical idea is regarded as an invention if it is found to utilize laws of nature a by
judging from the entire statement of the scope of claims.13 Incidentally, the fact that aninvention must utilize a law of nature implies that an actual law of nature itself (e.g. the
10 For example, memorization techniques and methods of displaying and selling goods (these may contribute to greatly
increasing sales, but only utilize people’s psychology), melodies, rhythms, etc.
11 For example, mathematical principles such as the Pythagorean theorem, economic principles, legal principles, etc.
In the Tokyo District Court Judgment, January 20, 2003, Hanji, No. 1809, p. 3/Hanta, No. 1114, p. 145 (the Balance
Sheet by Fund case), which was a case relating to a utility model, the court held that “creation of a technical idea
cannot be granted a utility model registration if the idea solely uses a principle or a law that involves human mental
activity, a social science principle or law, or artificial arrangements (similarly, a utility model registration should not
be granted not only when no part of the creation utilizes a law of nature, but also when only a very small part of thecreation utilizes a law of nature and such part does not have a technical significance),” and concluded that “the device
in question is a creation which utilizes a certain economic law or an accounting law and of which the subject matteris human mental activity per se, and it is not a creation utilizing a law of nature.”
12 For example, rules of sport and games, cryptographic code books, etc.
13 In the Intellectual Property High Court Judgment, August 26, 2008, Hanji, No. 2041, p. 124/Hanta No. 1296, p.
263 (the Bilingual Dictionary case), the court held that the invention focuses on the fact that people have an especiallyhigh natural ability to distinguish consonants, and that it is a method for repetitively and continuously realizing thespecific effect of finding the meaning of an English word without knowing the correct spelling, by making use ofsuch a characteristic. On such a basis, the court concluded that the creation of a technical idea utilizing a law ofnature is being indicated as a core means for solving the problem. In contrast, in the Intellectual Property High Court
Judgment, June 14, 2007, court website (the Cosmology case), the court stated that the invention classifies a large
number of pairs of words into four groups of ideas, namely, cosmology, beginning of life, birth of human beings,
and civilization, according to the meanings of those words, and sorts out those pairs of words by listing them; thecourt held that, even if the laws of nature were taken into consideration in the process of classifying and sorting out
those words, the invention as a whole merely classifies and sorts out words (pairs of words), and is not found to be
utilizing the laws of nature. In the Intellectual Property High Court Judgment, March 6, 2013, Hanji, No. 2187, p.
71 (the Calendar of Great Figures case), the court held that "subject matter that does not utilize a law of nature, suchas a law of mathematics or economics, an empirical rule based on a human psychological phenomenon (a law ofpsychology), or mere presentation of information does not constitute an invention." The court stated, with regard toa calendar that describes various matters about great figures, that "determination on whether or not the presented
information is knowledge which a person should acquire as a member of society or learning that is useful for
academic work is merely a selection based on human subjectivity which is unrelated to laws of nature." In theIntellectual Property High Court Judgment, June 24, 2008, Hanji, No. 2026, p. 123 (the Bidirectional Dental Therapy
Network case), the court held that, even if an invention includes an act carried out by human mental activity, if theessence of the invention supports human mental activity or provides an alternative technical means, the invention
constitutes a statutory invention. The court stated that the “means to determine the required dental restoration” andthe “means to formulate an initial therapy plan including the design standards for the prepared specimen of the dental
prosthetic material for the dental restoration” includes elements that are realized by human acts, and mental activities
such as evaluation and determination are considered to be necessary for implementing those means, but in light ofthe purpose of the invention and the detailed explanation of the invention, which are written in the description, theinvention in question is not directed at mental activity itself. The court further mentioned that, as a whole, theinvention is understood to be one that comprises a “network server equipped with a database,” a “communication
network,” a “computer installed at a dental therapy room,” and “equipment that can display and process images,”that functions based on a computer, and that provides technical means for supporting dental therapy.

102§1. Creation of Right

universal law of gravitation) is not an invention.
[96]
Court decisions also hold that cryptographic methods combining characters,
numbers and symbols are not inventions for they do not utilize a law of nature, 14 and an
advertising method to display advertisements by moving them in rotation around a few
sets of utility poles and billboards, using a catch on each pole, does not constitute an
invention because it does not utilize elemental powers in any way.15 There is also a court
decision in which the court ruled that an algorithm that merely indicates a method to solvea mathematical problem or a mathematical calculation procedure is not a creation oftechnical ideas utilizing the laws of nature.16
Given that a law of nature must be utilized, those things that are against the laws of

14 There are the following cases under the old Patent Act: the Tokyo High Court Judgment, February 28, 1950, Gyōshū,Vol. 1, No. 7, p. 1066 (the Alphabetic Single Cable Code Creating Method case), and the final appeal judgment on
the same case, the Supreme Court Judgment, April 30, 1953, Minshū, Vol. 7, No. 4, p. 461; the Tokyo High Court
Judgment, November 14, 1953, Gyōshū, Vol. 4, No. 11, p. 2716 (the Japanese-Character Single Cable Code Creating
Method case). The concept of inventions is considered not to have changed between the old Act and the current Act,so they are valuable precedents even under the current Act. It should rather be understood that Article 2, paragraph(1) of the current Act was created through these precedents. While it may be clear in consideration of the period
when these cryptography-related court decisions were handed down, the cryptographic methods mentioned here areclassic ones that used random code tables. Such cryptographic methods merely utilize artificial rules and do not
utilize a law of nature. However, current cryptographic technologies are completely different. In an information era,
cryptographic technologies are indispensable for electronic money and e-commerce, and the issue of theirpatentability is the same as the issue of the patentability of software. In fact, many cryptographic technologies havebeen patented.
15 The Tokyo High Court Judgment, December 25, 1956, Gyōshū, Vol. 7, No. 12, p. 3157 (the Utility Pole Advertising
Method case). In the Tokyo High Court Judgment, February 12, 1986, Hanrei Kōgyō Shoyūken Hō 2001 (Law
Report: Industrial Property Law 2001), p. 15/Tokkyo Nyūsu (Patent News) No. 6901 (the Electronic Mirrored
Dressing Table case), the invention of an electronic mirrored dressing table that places a television behind it to enable
a person to see his/her back was judged unpatentable for merely being a method of arranging a television unit without
a technical means utilizing a law of nature. In the Tokyo High Court Judgment, July 31, 1951, Gyōshū, Vol., 2,
No. 8, p. 1273 (the Spot Announcement Device case), it was held that a device to use the margins of a book as spaces
for spot announcements to deliver entertaining content and advertisements cannot be protected as a utility model. In
contrast, in the Tokyo High Court Judgment, May 26, 1999, Hanji, No. 1682, p. 118 (the Video Recording Mediacase), the court held that the invention in question, which is structured to record lyrics as characters and to record
those characters that should be sung in a different color so as to distinguish them from other characters, and which
actually provides such outcome, has a technical feature in the presentation of information with regard to thecharacters, and therefore the invention is patentable. In the Intellectual High Court Judgment, October 31, 2007,
court website (the Medicine Bag with a Tear-off Line case), the court held that even though the invention partly
includes an artificial arrangement, etc., it is regarded as utilizing the laws of nature as a whole.
16 The Tokyo High Court Judgment, December 21, 2004, Hanji, No. 1891, p. 139 (the Circuit Simulation Methodcase). The court held as follows: With regard to the “mathematical model of the circuit,” which is to be processedby the invention in question, the description in the scope of claims only mentions “non-linear simultaneous equation
indicating circuit characteristics.” It merely formulates circuit characteristics as a nonlinear simultaneous equation
based on a physical law, and makes no indication as to how the non-linear simultaneous equation reflects the electric
properties of each element constituting an actual circuit. Moreover, the formulated model is a mathematical, nonlinear simultaneous equation itself. Accordingly, the invention in question is not a “creation of technical ideas
utilizing the laws of nature.” In the Intellectual Property High Court Judgment, February 29, 2008, Hanji, No. 2012,
p. 97 (the Method to Generate Abbreviated Expression of Bit Group case), the court stated that an algorithm itself isa pure academic law, which does not utilize a law of nature, and even if the algorithm is computed by using an
existing arithmetic unit, it does not add any technical idea that utilizes a law of nature.

103§1. Creation of Rightnature are not inventions, as represented by a perpetual motion machine17[97]
If an inventor creates something that utilizes a law of nature, but he/she is not awareof that law, his/her creation is still regarded as an invention.18 Further, even if somethingis created through a mistaken understanding of a law of nature, if a certain result is derived
therefrom, it would be an invention. In short, it is sufficient to have a certain effectachieved by a specific technical means that utilizes a law of nature, even if, in extreme
cases, it may appear as the work of the devil to the inventor.
An invention based on the discovery of an unknown attribute of a known productand the product becoming suitable for a new use as a result of such discovery is called a
use invention. In the case of chemical substances, it is often difficult to identify how they
can be used by looking at their structure, so use inventions are used. On the other hand,usually, a new use is rarely found for the case where the product and its use are combined(even if a new use is found, it is often not novel and involves no inventive step) such as
in the case of products in the machinery field. Conventionally, there had been disputes
over the question of whether or not a use invention of a substance utilizes a law of nature.
At present, however, there is no dispute about the fact that inventions of new uses for

17 The Tokyo High Court Judgment, April 4, 1952, Gyōshū, Vol. 3, No. 3, p. 563 (the Perpetual Motion Machinecase); the Tokyo High Court Judgment, March 31, 1956, Gyōshū, Vol. 7, No. 3, p. 640 (the Self-Generator case);
the Tokyo High Court Judgment, June 27, 1967, Torikeshishū, 1967, p. 441 (the Homopolar Direct Current Generatorcase); the Tokyo High Court Judgment, June 29, 1973, Hanta, No. 298, p. 255 (the Infinite Power Generating Methodcase). Masahiko Gotō “Eikyū Kikan No Yume To Genjitsu” (Dreams and Reality of Perpetual Motion) (Japan
Institute of Invention and Innovation, 1988) describes in detail, while citing actual examples, that a perpetual motion
machine is impossible as it goes against a law of nature, the energy conservation law. There is also an idea that an
infeasible invention such as a perpetual motion machine can be patented, because it would cause no actual harm.18
Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 53; Shirō Mitsuishi,
Tokkyo Hō Shōsetsu [Shinpan] (Detailed Explanation of Patent Law [New ed.]). In the Osaka District Court
Judgment, February 14, 1966, Hanji, No. 456, p. 56 (the Fused Alumina case), which was a case on prior user's rightand thus cannot be generalized, the court stated that it is sufficient if a prior user is able to understand by experience
the external causal relation for solving the problem and is able to have factual control, and the prior user does notneed to have a theoretical understanding of the external causal relation. Also, in the Tokyo District Court Judgment,
October 29, 1987, Mutai Saishū, Vol. 19, No. 3, p. 409 (the Drum Brake Shoe Supporting Mechanism case), thecourt held that even if the creator of a device lacked awareness or had an erroneous awareness of the causal relationor theoretical relation between the means for solving the problem and the action/effect, it does not affect its ability
to be protected as a device. A similar view was indicated in the Tokyo District Court Judgment, September 28, 1993,
Torikeshishū, 1993, p. 159 (the Dokudami Deodorizing Method case)).
18 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 53; Shirō Mitsuishi,
Tokkyo Hō Shōsetsu [Shinpan] (Detailed Explanation of Patent Law [New ed.]). In the Osaka District Court
Judgment, February 14, 1966, Hanji, No. 456, p. 56 (the Fused Alumina case), which was a case on prior user's rightand thus cannot be generalized, the court stated that it is sufficient if a prior user is able to understand by experience
the external causal relation for solving the problem and is able to have factual control, and the prior user does notneed to have a theoretical understanding of the external causal relation. Also, in the Tokyo District Court Judgment,
October 29, 1987, Mutai Saishū, Vol. 19, No. 3, p. 409 (the Drum Brake Shoe Supporting Mechanism case), thecourt held that even if the creator of a device lacked awareness or had an erroneous awareness of the causal relationor theoretical relation between the means for solving the problem and the action/effect, it does not affect its ability
to be protected as a device. A similar view was indicated in the Tokyo District Court Judgment, September 28, 1993,
Torikeshishū, 1993, p. 159 (the Dokudami Deodorizing Method case)).

104§1. Creation of Right

known substances are patentable. 19 In Japan, use inventions are regarded as productinventions, but in Europe and the United States, they are basically regarded as process
inventions. There is room for discussion as to whether they are product inventions orprocess inventions in theory.
[98]
Use inventions that most frequently present a problem are medicinal use inventions.
If a chemical substance (e.g., thalidomide) is publicly known as a hypnotic and sedative
drug, but it is newly found that the substance is effective as a drug against multiple
myeloma, it can be registered as a use invention. In this way, the second use or the thirduse of a medicine could become a use invention. 20 The Examination Guidelines asrevised in 2005 set forth that a medicinal invention defined by combination of two or
more medicines, or defined by dosage and administration, is also industrially applicable.
Then, the Examination Guidelines as revised in 2009 set forth that an invention of a
medicine with a new dosage and administration, which produces effects that exceed the
expectations of experts, is to be protected as a product invention, and if there is adifference between the claimed medicinal invention and the cited invention in medicinaluse of applying the medicine to a specific disease with a specific dosage andadministration, the claimed invention is to be found to be novel. Basically, inventions ofmethods of therapy for humans are not regarded to be industrially applicable, so this must
be an outcome of the effort to make inventions that are as close as possible to methods of
19 A textbook example of a use invention is an invention regarding an insecticide. Where a person discovers that aknown chemical substance called DDT has an insecticidal effect, he/she can obtain a patent for it as an insecticidecontaining DDT as a major component or an insecticidal method using DDT. Also, it is possible to obtain a patent
for a method of manufacturing a seasoning containing monosodium glutamate as its main ingredient, based on a
discovery that the existing substance, monosodium glutamate, has an outstanding effect as a seasoning. For details
on use inventions, see Shōji Kamon “Yōto Hatsumei Ni Tsuite” (On Use Inventions), Hara Masuji Hanji Taikan
Kinen, Kōgyō Shoyūken No Kihonteki Kadai Jō (Essays in Honor of Retirement of Judge Masuji Hara: Basic Issuesof Industrial Property Rights Vol.1), p. 145; Shōji Matsui “Iwayuru Yōto Hatsumei No Jittai To Sono Kōsatsu”(Actual Status of the So-Called Use Invention and Its Study), Tokkyo Kanri (Patent Management), Vol. 15, No. 3(1965), p. 181; Shōji Matsui “Kagaku Busshitsu No Yōto Hatsumei To Tokkyo Ken” (Relation between a Use
Invention of a Chemical Substance and a Patent Right), Ishiguro Junpei Sensei Tsuitō Ronshū, Mutai Zaisanken Hō
No Shomondai (Essays in Memory of Professor Junpei Ishiguro: Various Problems in Intangible Property Law), p.
204; Sōta Asahina and Yasuo Tamura “Yōto Hatsumei” (Use Inventions), Tokkyo Kanri (Patent Management), Vol.
19, No. 11 (1969), p. 903; Nobuhiro Nakayama, “Busshitsu Tokkyo To Riyō Hatsumei” (Substance Patents and Use
Inventions), Someno Koki Kinen Ronbunshū, Kōgyō Shoyūken: Chūshin Kadai No Kaimei (Essays in Honor of theSeventieth Birthday of Professor Someno: Industrial Property Rights: Study into Central Issues) (Keiso Shobo, 1989),
p. 159; Hiroshi Yoshida, “Yōto Hatsumei Ni Kansuru Tokkyoken No Sashitome Seikyūken No Arikata: ‘Mono’ Ni
Chakumomu Shita Handan Kara (Mono) Ni Chakumomu Shita Handan He” (Right to Seek Injunction Based on a
Patent on a Use Invention: Shift from Determination Focusing on Infringing Goods to Determination Focusing onInfringers), Chiteki Zaisan Hō Seisaku Gaku Kenkyū (Intellectual Property Law and Policy Journal), No. 16 (2007),
p. 167. With regard to the examination of use inventions, the following three reports of the Institute of Intellectual
Property are helpful: Shuyō Koku Ni Okeru Yōto Hatsumei No Shinsa/Unyō Ni Kansuru Chōsa Kenkyū Hōkokusho(The Examination and Implementation of Use Inventions in Major Countries) (2004); Yōto Hatsumei No
Shinsa/Unyō No Arikata Ni Kansuru Chōsa Hōkokusho (Desirable Ways to Examine and Implement Use Inventions)(2005), Yōto Hatsumei:Iryō Kanren Kōi O Chūshin To Shite (Use Inventions: Focusing on Medical Practice) (2006,
this report is published by Yushodo).
20 Since the sale of the medicine for the first use has already been permitted, there is a question of what kind of effectthere is in acquiring a patent for the second use invention. A physician's act of using the medicine for the second use
could become a problem, but since it is difficult to sue the physician in actuality, the patent may merely have aneffect of ensuring that the second use be written on the label.

105§1. Creation of Righttherapy for humans patentable (with regard to this point, see “1.3.1.1. Industrial
Applicability (Principal sentence of Article 29, paragraph (1) of the Patent Act)”).
[99]
The utilization of a law of nature means that the invention abides by causality basedon natural science, and that the invention must always be able to attain the same effect;in other words, be repeatable (reliable). An unrepeatable invention cannot be considered
to have an objective existence since the same result cannot necessarily be obtained whena third party implements the invention. However, repeatability does not mean that thesame effect can be achieved with a 100% probability, and if the effect can definitely beachieved with even a slight probability, the invention can be considered to be repeatable.
Generally speaking, the probability would be lower for more pioneering inventions; forinstance, the pearl culturing invention of Koukichi Mikimoto is said to have had a verysmall probability of success. Merely having a particular knack or proficient skills are
generally regarded as unrepeatable. Strictly speaking some aspects are still unclear. A
famous baseball player’s method of throwing a forkball is regarded as a typical example
of an unrepeatable proficient skill. However, the throwing method utilizes physicalphenomena, such as the spinning of the ball and air resistance. If a pitching machine iscreated by pursuing this principle, the machine will have repeatability and can bepatentable subject matter, but if a human throws the ball, it will constitute a proficient
skill and cannot be patentable subject matter.
Scholarly theories in Japan are divided into one deriving the repeatability
requirement from the “utilization of the laws of nature” and one deriving such an outcome
from the fact that an invention must be a “technical idea.” However, there is no use insuch arguments. It is sufficient merely to conclude that repeatability is required for a“technical idea utilizing a law of nature.”(2) Organisms
Repeatability is the most controversial issue for biological inventions. There is alsoa theory that denies the repeatability of biological inventions, because, unlike industrial
products, organisms could develop individual specificity according to the environment
and they are subject to mutation. The question of whether or not it is appropriate to protect
a new organism itself under the Patent Act has been debated in relation to the Plant
Variety Protection and Seed Act.21 It is true that organisms have individual specificity,
but there is no reason to deny the repeatability of an invention, as long as the subject

21 Nobuhiro Nakayama, Shokubutsu Tokkyo To Shubyō Hō (Plant Patents and the Plant Variety Protection and SeedAct) (Kodansha, 1985). With regard to the Plant Variety Protection and Seed Act, see the following: Supervised by
the Seeds and Seedlings Division, Agricultural Production Bureau, Ministry of Agriculture, Forestry and Fisheries,
Shubyō Hō No Kaisetsu, (Explanation of the Plant Variety Protection and Seed Act) (Chikyusha, 1983); Tatsuki
Shibuya, Shubyō Hō No Gaiyō (Outline of the Plant Variety Protection and Seed Act) (Research Institute of Economy,
Trade and Industry, 2014).

106§1. Creation of Rightmatter is a fixed specie or variety of organism.22 In the past, the identity of an organism
could only be determined based on its shape, but today, it can be determined based ongene sequences, so there is even less reason to deny the patentability of biologicalinventions.23 For details, see “1.3.3.1. Biological Inventions.”[100]
Meanwhile, the question of whether or not a patent should be granted for a neworganism, particularly an animal, is often discussed as an issue of public order andmorality, rather than an issue of the utilization of the laws of nature.
(3) Computer software24
The question of whether an invention utilizes a law of nature is probably the mostdifficult as regards computer software.25 Software is a system for creating and executing
a computer program,26 which can be boiled down to a method for using a computer (aprocedure). While its core part is a computer program, it does not solely consist of acomputer program. The system design specifications, flow charts, and manuals are also
included in the software in a broad sense. A computer program is a set of instructions forprocessing information on a computer, and the question is whether or not it utilizes a lawof nature. A computer program itself is similar to a mathematical formula merely
expressing human mental processes, so conventionally, an application for a computer
program (program list) would have been refused as not utilizing a law of nature.27[101]
22 Examination Guidelines (1993), Part IV, Chapter 2 “Biological Inventions.” the Tokyo High Court Judgment,
August 7, 1997, Chiteki Saishū, Vol. 29, No. 3, p. 1042/Hanji, No. 1618, p. 10 (the Kurakata Yellow Peach Breeding
Method case), and the final appeal judgment on the same case, the Supreme Court Judgment, February 29, 2000,
Minshū, Vol. 54, No. 2, p. 709/Hanji, No. 1706, p. 112/Hanta, No. 1028, p. 173. This was a case in which the newvariety was lost. It may be reasonable to say that the invention was unrepeatable at the time of the court judgment if
the new variety had been lost, but the Supreme Court held that it is sufficient for the invention to be repeatable at thetime of filing the patent application.
23 With regard to biotechnology, see Hidetaka Aizawa, Baiotekunorojī To Tokkyo Hō (Koubundou, 1994).24 With
regard to the history of protection of computer programs, see Hiroaki Sakai, "Konpyūtā Puroguramu Hogo Taiyō No
Shiteki Hensen—Shihanseiki Ni Wataru Shinsa Kijun Tō Wo Furikaette" (Historical Changes in the Mode ofProtection of Computer Programs: Looking Back at the Examination Guidelines, etc. over the Past Quarter-Century),
Nakayama Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Essays in Honor of theSeventieth Birthday of Professor Nobuhiro Nakayama: Spreading Wings - Intellectual Property Law in the 21stCentury), p. 154.
24 With regard to the history of protection of computer programs, see Hiroaki Sakai, "Konpyūtā Puroguramu Hogo
Taiyō No Shiteki Hensen—Shihanseiki Ni Wataru Shinsa Kijun Tō Wo Furikaette" (Historical Changes in the Modeof Protection of Computer Programs: Looking Back at the Examination Guidelines, etc. over the Past QuarterCentury), Nakayama Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Essays in Honorof the Seventieth Birthday of Professor Nobuhiro Nakayama: Spreading Wings - Intellectual Property Law in the
21st Century), p. 154.
25 With regard to this issue, see Masanobu Katō “Sofutowea Kanren Hatsumei No Hogo To Hatsumei No Teigi(Tokkyo Hō Dai 2 Jō Dai 1 Kō) No Kaitei No Zehi Ni Tsuite (1)(2)” (Propriety of Protection of Software-related
Inventions and Revision of the Definition of an Invention [Article 2, paragraph (1) of the Patent Act) ](1)(2)), Patent,Vol. 54, No. 9 (2001), p. 49, No. 10, p. 45.
26 A computer program is “a set of instructions given to an electronic computer which are combined in order toproduce a specific result” (Article 2, paragraph (4) of the Patent Act).
27 Examination Guidelines (1993), Part VII, Chapter 1: p. 6. Article 52 of the European Patent Convention stipulates
that computer programs are not patentable, and the same applies to many European countries, but in fact a large
portion of computer programs are being patented by writing the description in a specific way.

107§1. Creation of Right

However, with the progress of computer program technology, it became unrealistic
to regard software-related inventions as unpatentable. Accordingly, the JPO changed its
practice over time as below, and came to interpret the concept of the laws of nature more
broadly and to widely acknowledge the patentability of software-related inventions.
Specifically, it started out by recognizing the patentability of such invention as a productor process utilizing software, and finally reached a conclusion whereby the patentabilityof a program itself should not be denied.
According to the “Examination Guidelines for Computer Software-related
Inventions (Part 1)” published in December 1975, if the theory used for attaining a
specific result (the causal relation of the method) did not utilize a law of nature, thecomputer program did not utilize a law of nature. 28 On the other hand, if the causal
relation of the method utilized a law of nature, the computer program utilized a law ofnature.29 It further described that a claim statement in the form of a program as itself, acomputer action itself, a programmed computer itself, or a storage medium on which a
program is recorded was not acceptable. These Examination Guidelines only explained
the invention of processes, and equipment inventions were explained in the Implementing
Guidelines (1982) discussed below.
Since many devices came to be controlled by microcomputers, the “Implementing
Guidelines for Inventions Relating to Microcomputer-applied Technology, Treatment of
Operating System-related Technology in Examination” released in December 1982
clearly indicated that inventions of products (equipment) related to microcomputerapplied technology are patentable, and allowed for software inventions to be protected as
equipment.
In “Part VII, Chapter 1 Computer Software-related Inventions” of the“Examination Guidelines for Patent and Utility Model in Japan” published in July 1993,
the criteria on the utilization of the laws of nature were clarified. It said that if theinformation processing by the software utilized a law of nature, or if a hardware resource
was utilized (excluding the mere use of a hardware resource), the computer program
utilized a law of nature and was patentable, and cited many actual examples.30 Based on
this, subject matter that was not related to hardware resources came to be found toconstitute an invention.
[102]
In “Chapter 1 Computer Software Related Inventions, 1. Description Requirement

28 For example, a program for obtaining the circle ratio by using the Monte Carlo method; or a program for solving
shogi (Japanese chess) problems.
29 For example, a program that pays attention to the properties of a rolling machine and the nature of the rolled material,and utilizes such properties to control the rolling machine to roll the material into a specific shape.
30 See Software Information Center, “Sofutowea Kanren Gijutsu No Hogo No Arikata No Kenkyū Hōkokusho”(Study Report on Ideal Protection of Software-related Technology) (1996).

108§1. Creation of Rightfor Patent Specifications, 1.1 Claims” of the “Implementing Guidelines for Inventions inSpecific Fields” published in December 1997, “A computer-readable storage medium
having a program recorded thereon or a computer-readable storage medium having
structured data recorded thereon” is described along with the process category andproduct category. Applications filed in the form of medium claims had been refused in
the past for the reason that they were not technical ideas, but according to descriptions in
the implementing guidelines, medium claims became allowed. 31 However, there
remained a legal question of whether claims that had been regarded as unpatentable in thepast could now be accepted by merely changing the implementing guidelines without
legal revision. This question also applied when computer program patents came to beallowed as mentioned later.
The “Examination Guidelines for Patent and Utility Model in Japan” was revisedin 2000, and “Part VII Examination Guidelines for Inventions in Specific Fields, Chapter
1 Computer Software-related Inventions” was added. It set out that when a softwarerelated invention is expressed as a combination of multiple functions performed by theinvention, the invention can be defined as an invention of a product by specifying suchfunctions.32
Since a computer program is intangible in substance, the concept of its assignment
is not clear, unlike in the case of a tangible product. Therefore, upon the 2002 revision of
the Patent Act, a provision was established to include an act of providing a computer
program in the concept of assignment (the part in parentheses in Article 2, paragraph (3),item (i) of the Patent Act). While assignment of a medium of a computer program(product) can be conceived, it is difficult to conceive assignment of the computer program,which is intangible information. Because it was unclear whether or not mere provision(or transmission) of a computer program to another person constituted an infringement,
the part in parentheses "a product (including a computer program, etc. ...)" was added inorder to make it clear that an act of providing a computer program is included in an actof working a product invention.
[103]
After the decision of the U.S. Court of Appeals for the Federal Circuit (CAFC) in
the State Street Bank case (a decision that found a business method patent on financial
31 The Implementing Guidelines position a medium claim as a kind of product claim, and provide the following as
descriptive examples: “A computer-readable storage medium having a program recorded thereon; where the programis to make the computer execute procedure A, procedure B, procedure C, ...”; “A computer-readable storage medium
having a program recorded thereon; where the program is to provide function A, function B, function C, ... to thecomputer.”; and “A computer-readable storage medium having structured data recorded thereon; where thestructured data comprises portion A, portion B, portion C, ...”
32 Such claims as “A program which makes a computer execute procedure A, procedure B, procedure C, ...” or “Aprogram which makes a computer operate as means A, means B, means C, …” or “A program which makes acomputer realize function A, function B, function C, …,” which had not been acceptable in the past, became
acceptable.

109§1. Creation of Right

services called “hub and spoke” to be valid) in 1998, expectations grew that businessmethods could also be patented in Japan, and a large number of patent applications on
business methods that had conventionally been considered to have little involvement withthe patent system were filed by the banking and securities industries, and there was aboom in such business method applications.33 However, the revision to include computer
programs in products does not mean that computer programs immediately constituteinventions, just as that products do not immediately constitute products. Since thedefinition of an invention (Article 2, paragraph (1) of the Patent Act) has not been revised,
it should be noted that the Act only treats those programs that can be regarded as technicalideas utilizing the laws of nature in the same manner as product inventions.34 In otherwords, a business method itself cannot be patented, and it is only treated as one kind of
the software-related inventions which have been mentioned previously. Under the Patent
Act, the business method itself does not matter, but the technical aspect of the method forsolving the problem matters. As long as the business method provides a technical means
as a whole, it can constitute an invention.35 In reality, however, most applications on
business methods are refused, and even if they are patented, hardly any of them can win
in a lawsuit, so the boom of business method patents seems to have come to an end,36
and the question of the scope of programs that should be protected under the Patent Act
still remains.37
The above suggests that there has been a gradual broadening of the scope forinterpreting the concept of a law of nature. Now there are calls for clarifying the current
status of the functioning of the utilization of a law of nature as a requirement and,furthermore, for determining once again whether such requirement is truly necessary atpresent.38[104](4) Reconsideration of “utilization of the laws of nature”
Legal protection cannot be extended to all achievements of human mental activity.
Nevertheless, unless legal protection is extended to certain kinds of achievement,
33 See Tokushū “Bijinesu Hōhō Tokkyo No Shomondai” (Special Feature “Problems Related to Business Method
Patents”), Jurist, No. 1189 (2000).
34 As an opposite view, Hidetaka Aizawa, “Tokkyo Hō 2 Jō 3 Kō No Kaisei No Imisurumono” (Meaning of the
Revision of Article 2, Paragraph (3) of the Patent Act), Jurist, No. 1227 (2002), p. 10 states that, as long as therevision has made computer programs subject to the working of inventions, computer software must be
acknowledged as an invention, and makes the criticism that it is arbitrary to deny the claiming of computer software
as a signal or carrier wave.
35 The Tokyo High Court Judgment, December 21, 2004, Hanji, No. 1891, p. 139 (the Circuit Simulation Methodcase).
36 With regard to business model patents, see Hidetaka Aizawa “Bijinesu No Hōhō To Tokkyo” (Business Methods
and Patents), Jurist, No. 1189 (2000), p. 27 and Nobuyasu Ogata, “Bijinesu Moderu Tokkyo Ni Kansuru Jitsumujō
No Mondai” (Practical Problems Related to Business Model Patents), NBL, No. 727 (2001), p. 36.
37 Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 19 [written by Ryūta Hirashima].
38 With regard to the definition of an invention, see Yoshiyuki Tamura, “Tokkyo Hatsumei No Teigi—'Shizen Hōsoku
No Riyō' No Yōken No Teigi” (Definition of a Patented Invention: Definition of the “Utilization of Laws of Nature”
Requirement), Hōgaku Kyōshitsu (Law Class), No. 252 (2001), p. 13.

110§1. Creation of Right

incentives for investing in creation or R&D would be lost. Thus, achievements that shouldor should not be protected under the Patent Act must be distinguished from each other,and it can be concluded that the requirements of “utilization of the laws of nature” and“industrial applicability” were adopted under the Patent Act for that reason. The practicalreason as to why the utilization of the laws of nature should be required is today no longer
as clear as in the past. In the past, the adoption of the utilization of the laws of nature asa requirement could have had the function of distinguishing between science andtechnology, but today these two domains have blended together, and it is difficult toseparate them. In the core industries in the 19th century, specifically in the fields ofmachinery, chemistry and electricity, the utilization of the laws of nature must havefunctioned as a marker for distinguishing between protectable and unprotectable subject
matter. Nevertheless, today, even an invention that is itself practically computer softwareis regarded as a statutory invention depending on how the claims are described, so there
is a call to review the significance of the utilization of the laws of nature. Is there truly noneed to protect any of the technical ideas that do not utilize the laws of nature? Particularly
with the development of computers, today it is not only humans that carry out acts ofcreation, but products identical to creations can be made without the intervention ofhumans. There may be a need to establish legislation for protecting not only the outcomesof humans' acts of creation, but also investments in certain cases. If so, the border between
laws concerning creativity and the Unfair Competition Prevention Act may become
ambiguous. It seems to be about time that we should look for a requirement that replaces
the requirement of utilizing the laws of nature, but we still do not have one yet. For thetime being, we should interpret the requirement of utilizing the laws of nature in a relaxedmanner, and introduce new requirements in the Patent Act if there is a strong demand forthem from society. There is a view that the requirement of the utilization of the laws ofnature should be abolished,39 but a sufficient study would have to be conducted on whatkinds of side effects would arise if the existing requirement were to be abolished.
1.2.1.3. Technical Ideas
An invention must be a technical idea (Article 2, paragraph (1) of the Patent Act).
A technique, or an “art,” is a concrete means for attaining a certain purpose, which needs
to be feasible and repeatable.40 In other words, the same result must be attained when atechnician with only an average level of skills in that technical field (a person skilled in
39 Hiroya Kawaguchi, Tokkyo Hō No Kōzō To Kadai (The Structure of and Problems in Patent Law), p. 40.
40 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 46; Kōsaku Yoshifuji,
Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 55. Shigeru Yoshida, “Hatsumei No
Honshitsu” (Essence of Invention) Hara Masuji Taikan Kinen Jō (Essays in Honor of Retirement of Judge MasujiHara Vol. 1), p. 73.

111

§1. Creation of Rightthe art)41 implements the art. Implementing an art requires objectivity,42 and a mere skill(knack), such as a musical performance technique and a sports technique, are not arts.
The mere presentation of information43 is not an art either.
[105]
An invention is an idea that has put a concrete art into an abstract form, and it isintangible. At the same time, an invention is required to be concrete to some extent aslong as a monopoly right is granted for it. For example, the mere presentation of a problem
alone or the presentation of an idea without indicating a concrete method to solve a
problem is not an invention.
The requirements of utilizing the laws of nature and an invention being a technicalidea are virtually inseparable, and should be regarded as a combined requirement for an
invention.
1.2.1.4. Creativity
An invention must be a “creation” of technical ideas. The mere finding of analready existing matter is a discovery, and not an invention. However, the difference
between the two is a delicate one, as mentioned earlier. In addition, an inventor needs tocreate an invention by himself/herself, and any application of an invention created byanother person will be refused as a misappropriated application (Article 49, item (vii) of
the Patent Act), and will constitute a reason for invalidation if patented (Article 123,
paragraph (1), item (vi) of the Patent Act). Although the status of a prior application had
not been recognized for a misappropriated application, since a system was introduced
upon the 2011 revision to enable the true right holder to claim back a misappropriatedpatent right, the patent system was revised to grant the status of a prior application for a
41 What kind of person should be specifically assumed as a person skilled in the art is an extremely difficult question,and it would not be easy to specifically indicate the technical contents of a person skilled in the art. The European
Patent Convention uses the term "person skilled" (Article 83), and it is considered to refer to similar contents. See
Ryō Shimanami, “Tokkyo Hō Ni Okeru Tōgyōsha No Gainen—Beikoku Baiotekunorojī Hatsumei Wo Sozai Ni
Shite” (The Concept of the PHOSITA in Patent Law: Using U.S. Biotechnological Inventions as Materials), Kōbe
Hōgaku Nenpō (Kobe Annals of Law and Politics), No. 18 (2002), p. 231.
42 In the Supreme Court Judgment, October 13, 1977, Minshū, Vol. 31, No. 6, p. 805/Hanji, No. 870, p. 58/Hanta,
No. 355, p. 265 (the Veterinary Composition case), the court reasoned that “in light of the purpose of the patent
system, it is reasonable to consider that the technical content must have a concrete and objective structure to theextent that a person with ordinary skills in the technical field can repeatedly work it and attain the intended technicaleffect; therefore an invention in which the technical content is not structured to meet the above level is incomplete,and cannot be considered to be an ‘invention’ as mentioned in Article 2, paragraph (1) of the Act.” Also, in theSupreme Court Judgment, February 29, 2000, Minshū, Vol. 54, No. 2, p. 709/Hanji, No. 1706, p. 112/Hanta, No.
1028, p. 173 (the Kurakata Yellow Peach Breeding Method case), the court mentioned that an invention needs to berepeatable, concrete, and objective.
43 The mere presentation of information refers to where there is no distinctive feature in the means of presenting
information, but there is a distinctive feature (novelty) in the presented information. For example, it is not possible
to obtain a patent for a “new phonograph record” by recording a new tune (new information) onto a phonographrecord, which is a known medium already (means of presentation). If the phonograph record is a novel medium
involving an inventive step, a patent can be obtained for the medium itself, but a tune has no patentability eventhough the information (tune) itself is new.

112§1. Creation of Right

misappropriated application (Article 39, paragraph (6) of the Patent Act prior to the 2011
revision was deleted). If the status of a prior application is not granted as in the case prior
to the revision, when the true right holder files an application for the same invention whilea misappropriated application is pending before the JPO, the application will not berejected, and when the true right holder subsequently requests the person who filed themisappropriated application to transfer the patent right, there is a risk that the true rightholder will obtain overlapped patent rights for the same invention.
[106]
There is also an argument over whether or not an art is required to be unprecedented
and novel or uncommon in order to be creative, but such an argument is not useful. These
requirements are examined in relation to novelty or the involvement of an inventive step,which are patentability requirements, and it is sufficient to treat the invention claimed by
the party (subjective invention) as an invention before conducting such examination. A
patent application that does not include anything new is refused not on the basis that it
does not constitute an invention as set forth in the principal sentence of Article 29,
paragraph (1) of the Patent Act, but on the basis that it lacks novelty or the involvementof an inventive step.44 Such an invention may not be patentable, but there is no point inarguing over whether or not it falls under the general concept of an invention.
1.2.1.5. Advanced Art
The definition of an invention in Article 2, paragraph (1) of the Patent Act includes
the term “advanced” (advancedness). This term is not so important for the definition of
an invention, but was included merely to distinguish an invention from a device, whichis the subject matter of utility models.45 The definition of a device (Article 2, paragraph(1) of the Utility Model Act) is almost the same as the definition of an invention (Article
2, paragraph (1) of the Patent Act), only lacking the term “advanced.” Setting aside thequestion of how much difference there is between inventions and devices in an actual
examination, these definitions theoretically suggest that utility models are registered even
if they are at a lower level than patents.
[107]

44 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han] (Clause-byClause Explanation of Industrial Property Acts [19th ed.]), p. 83; Sōtarō Watanabe, Kōgyō Shoyūken Hō Yōsetsu(Summary of Industrial Property Law), p. 15; Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge ofPatents [8th ed.]), p. 117.
45 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han] (Clause-byClause Explanation of Industrial Property Acts [19th ed.]), p. 15.

113

§1. Creation of Right

1.2.1.6. Incomplete Inventions46
An incomplete invention is an idea that has the appearance of an invention in lightof the statement in the description, but where a method for solving the problem it posesis missing or unclear. A statutory invention must have a concrete and objective structure
to the extent that a person with ordinary skills in the technical field can repeatedly work
it and attain the intended technical effect. An invention which is not structured to meet
the above level is incomplete, and cannot be considered to be an “invention” as mentioned
in Article 2, paragraph (1) of the Act, nor an “invention” as referred to in the principal
sentence of Article 29, paragraph (1) of the Act, which stipulates patentability
requirements. It is difficult to distinguish specifically between complete inventions andincomplete inventions, and one can only learn to make the distinction through practicalexperience.47 An idea that cannot constitute an invention, such as the rule of a game oran advertising method, is called a “non-invention,” which is different in concept from an
incomplete invention.
If an invention is incomplete, it cannot be protected under the Patent Act. Often, an
incomplete invention such as this cannot be worked by third parties just from looking at
the description of the invention, and it is not useful for raising the general technologicallevel of society.48
An incomplete invention had been refused upon examination on the grounds that it
does not correspond to an “invention” as set forth in the principal sentence of Article 29,

46 For details on this issue, see Supervised by Minoru Takeda, Tokkyo Shinsa/Shinpan No Hōri To Kadai (Legal
Principles and Challenges of Patent Examination and Trials) (Japan Institute of Invention and Innovation, 2002),“Hatsumei No Mikansei” (Incomplete Inventions), p. 95 [written by Mayumi Saitō and Noriyuki Inoue].
47 A court decision indicating one criterion for the determination is the Tokyo High Court Judgment, June 21, 1984,
Hanji, No. 1131, p. 135 (the Noxious Organism Control Agent case). In this decision, the court held that a description
based on objective and concrete experimental data cannot be considered as an incomplete invention, even if it does
not meet the desirable standard to be published as experimental data in an academic essay on experiment and research.
This matter is determined based on the contents of the description of the invention. Also, see the Tokyo High Court
Judgment, July 22, 1965, Gyōshū, Vol. 16, No. 8, p. 1387 (the Unique Colloid Manufacturing Method Process case);
the Supreme Court Judgment, January 28, 1969, Minshū, Vol. 23, No. 1, p. 54 (the Atomic Energy Generator case);
the Supreme Court Judgment, October 13, 1977, Minshū, Vol. 31, No. 6, p. 805/Hanji, No. 870, p. 58/Hanta, No.
355, p. 265 (the Veterinary Composition case); and the Tokyo High Court Judgment, April 11, 1991, Hanji, No.
1393, p. 129 (the Microwave Oven case).
48 If an incomplete invention were something that is only inches away from completion, it could be useful for raising
the general technological level of society (e.g., the Supreme Court Judgment, January 28, 1969, Minshū, Vol. 23,
No. 1, p. 54 [the Atomic Energy Generator case]). However, under the first-to-file system, there is a greater chanceof people filing an incomplete invention in order to acquire the status of a prior application. To eliminate suchapplications, and to treat only completed inventions as inventions would contribute to fair technological developmentcompetition (Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] [Knowledge of Patents (8th ed.)], p. 66) and would
comply with the purpose of the Patent Act. Further, the court stated that an invention that has merely been conceived
is incomplete, and the conception of a certain technical matter must take a concrete shape, in the Tokyo High Court
Judgment, April 27, 1976, Torikeshishū, 1976, p. 449/Tokkyo To Kigyō (Patents and Enterprises), No. 90, p. 19 (theMahjong-Rule Pachinko case).

114§1. Creation of Right

paragraph (1) of the Patent Act.49 An incomplete invention, which is still not complete,
will not be regarded as a statutory invention after amendment, in principle.50 However,in the case of a deficiency in the description, an amendment could be made in the past as
long as it did not change the gist of the description and drawings.51 Accordingly, it has
been said that there is a reason for distinguishing between an incomplete invention and a
deficiency in a description.
[108]
The concept of an incomplete invention often appears in the chemical field. In thechemical field, there are frequently cases where the claim is described in a rather generalmanner but the working example in the description, which is backed by experiments, isnarrower in scope. 52 Chemistry is referred to as a science of experiments. Unless achemical invention is backed by experiments, it is difficult to determine its feasibility.
The conventional practice in Japan in such a case was to treat the part of the claim that
goes beyond the scope of the working example or beyond the scope that can be worked
easily by a person skilled in the art based on the working example, as an incomplete

49 This had been the long-established practice, but confusion occurred in that practice due to the Tokyo High Court
Judgment, September 18, 1974, Mutai Saishū, Vol. 6, No. 2, p. 281 (the Veterinary Composition case). In thisdecision, the court mentioned that “no provisions in the entire Patent Act are considered to stipulate matters on thecompletion or incompletion of an invention claimed in a patent application, and no provisions are found to stipulatethat a patent application can be refused based on the grounds that the invention is incomplete.” It stated that"regardless of whether it is appropriate or not to process the matter (as an incomplete invention), it should not be
permissible to devise such a reason for refusal as incompleteness of the invention, of which substance is totallydifficult to understand legally," and held that an incomplete invention cannot be refused based on the grounds that it
does not correspond to an “invention” as set forth in the principal sentence of Article 29, paragraph (1) of the PatentAct. In the final instance (the Supreme Court Judgment, October 13, 1977, Minshū, Vol. 31, No. 6, p. 805), the court
reversed the High court judgment, stating that "the technical content must have a concrete and objective structure to
the extent that a person with ordinary skills in the technical field can repeatedly work it and attain the intended
technical effect; therefore an invention in which the technical content is not structured to meet the above level isincomplete, and cannot be considered to be an ‘invention’ as mentioned in Article 2, paragraph (1) of the Act," soconventional practice regained its force. Incidentally, the above-mentioned Tokyo High Court Judgment merely
stated that an invention cannot be refused on the grounds that it is incomplete, and it neither implies that a patentshould be granted to an incomplete invention nor denies the refusal of an invention on the grounds of insufficient
disclosure. In the text of the judgment, the court set forth that "it may be reasonable to construe that it is intended bylaw to process the mater based on the provision of Article 36, paragraph (4) or (5) of the Patent Act (Act of 1959),"
but it shall be omitted because it is not directly related to the point at issue in this case.
50 In the Tokyo High Court Judgment, June 3, 1993, Hanji, No. 1493, p. 126 (the Rotor Fixator case), which reversed
a JPO trial decision that had found an invention to be incomplete, the court stated that, generally, in the case where
an invention is incomplete, there is no room for remedying the defect by making an amendment, unlike in the caseof a deficiency in the description. However, if an invention is regarded as incomplete as a whole due to including an
incomplete portion in its claims, it may be possible to amend it by deleting the incomplete portion to leave only thecomplete portion.
51 Under the current Act, whether or not an amendment is acceptable is determined by whether or not the amendment
adds a new matter, but at the time this discussion was taking place, it was determined by whether or not theamendment changes the gist of the description and drawings. See “2.3.3. Admissible Scope of Amendment.”
52 A claim statement method called "Markush claim" is often used for inventions in chemical and pharmaceuticalfields. It is a style of expression that states options as alternatives. For example, the claim specifies the invention byusing options, such as "a compound selected from the group consisting of Group A, Group B, and Group C"; as aresult, an enormous amoount of compounds will be covered by the claim. Such compounds may include those thathave not been supported by experiments.

115§1. Creation of Rightinvention,53 and not to allow the inventor to back up the effect of the invention by adding
experimental data, etc. through amendment, since this would be an act of making an
incomplete invention complete.
[109]
An invention in a field other than chemistry can also be treated as incomplete; forexample, in the case where an invention that needs to secure safety does not take measures
to avert danger.54 In addition, an invention would be treated as an incomplete invention
if the purpose of the invention could not be attained with the technical means stated in thedescription of the patent application.55
However, since there is no concept of incomplete inventions in Europe and theUnited States, the concept was deleted from the Examination Guidelines for Patent andUtility Model in Japan upon its revision in June 1993. Since then, the incompleteness ofinventions has been treated as an enablement requirement, and the number of inventions

53 The Tokyo High Court Judgment, January 27, 1977, Mutai Saishū, Vol. 9, No. 1, p. 16 (the Vinyl Acetate
Manufacturing Method case); the Supreme Court Judgment, October 13, 1977, Minshū, Vol. 31, No. 6, p. 805/Hanji,
No. 870, p. 58/Hanta, No. 355, p. 265 (the Veterinary Composition case); the Tokyo High Court Judgment,
November 29, 1978, Mutai Saishū, Vol. 10, No. 2, p. 594/Hanta, No. 381, p. 170 (the Diamond Composition Methodcase); the Tokyo High Court Judgment, October 20, 1993, Chiteki Saishū, Vol. 25, No. 3, p. 622 (the MB-530A
Derivative case); the Supreme Court Judgment, February 29, 2000, Minshū, Vol. 54, No. 2, p. 709/Hanji, No. 1706,
p. 112/Hanta, No. 1028, p. 173 (the Kurakata Yellow Peach Breeding Method case).
54 The Supreme Court Judgment, January 28, 1969, Minshū, Vol. 23, No. 1, p. 54 (the Atomic Energy Generator case).
The invention in question was an atomic energy generator (a nuclear reactor), but the court judged it to be an
incomplete invention, stating that it lacked a concrete method sufficient for averting the great danger unavoidably
pertaining to atomic fission, and that the danger is a unique one that cannot be prevented by ordinary means andmethods applied in ordinary power plants. This decision has been subject to controversy. On the one hand, there isan opinion that such method of averting danger can constitute a separate invention, so the invention in question
should be regarded as a complete invention as it is. On the other hand, some say that the invention of an atomic
reactor has a technical challenge in extracting the energy safely, so an invention lacking a concrete method of
securing safety should be regarded as an incomplete invention. There is also a view that such safety issue is not an
issue over the completeness of an invention, but is an issue of industrial applicability, which is a patentability
requirement. It is publicly known that energy occurs as a result of atomic fission, and the invention in question should
be considered to be an invention of a device for solving the problem of safely extracting the energy without evoking
an explosion. This invention, which was made by Jean Frédéric Joliot-Curie, was contributed to the Frenchgovernment, and was registered as patents in most countries around the world. In Japan, an application was filed by
the French government in 1940. Although the application received a disposition of invalidation during World War
II, it was restored under Article 7, paragraph (1), item (ii) of the Order Concerning Postwar Measures for Industrial
Property Rights of the Allied Nationals on March 15, 1951. However, an examiner's decision of refusal was issued
for the application on August 13, 1952. The plaintiff, who was dissatisfied with the decision, lodged an appeal, but
a trial decision holding the appeal to be invalid was rendered. The duration of the patent had already expired in mostcountries, but the application in Japan was restored under the Order Concerning Postwar Measures for Industrial
Property Rights of the Allied Nationals (wartime extension), and this had an extremely significant meaning inJapanese nuclear power policy. Also, though the term “incomplete invention” was not used, the court held that asocket for which safety has not been ensured is not qualified to be protected as a practical industrial device(terminology under the old Act) in the Tokyo High Court Judgment, May 28, 1968, Hanta, No. 225, p. 198 (theMulti-Way Plug case).
55 The Tokyo High Court Judgment, November 30, 1977, Mutai Saishū, Vol. 9, No. 2, p. 738 (the Course Rope Floatscase). In the Tokyo High Court Judgment, June 3, 1993, Hanji, No. 1493, p. 126 (the Rotor Fixator case), the court
denied that an invention was incomplete, but mentioned that, generally, an invention should be considered to beincomplete if it does not have a concrete and objective structure to the extent that a person skilled in the art canrepeatedly work it and attain the intended technical effect.

116§1. Creation of Right

refused on the grounds of incompleteness has decreased. 56 In the past, there was apractical benefit to distinguishing between an incomplete invention and a deficiency in a
description, because while an incomplete invention could not be amended, a deficiency
in the description (Article 36) could be amended as long as it did not change the gist of
the description and drawings. Accordingly, it has been said that there is a reason for
distinguishing between them. However, revising the conventional Examination
Guidelines which allowed a broad scope of amendment as long as it did not change thegist of the description and drawings, the allowable scope of an amendment came to bestrictly limited upon the 1993 revision of the Act, and adding new matter to the claim wasprohibited. As a result, it became rarer for amendments of a deficiency in the description
to be accepted, and now there is hardly any need to use the concept of incomplete
inventions from the viewpoint of refusing inventions. 57 At any rate, incomplete
inventions can be dealt with as deficiencies of the disclosure requirements (theenablement requirement and the requirement of support in description), so it is consideredthat there is little meaning in discussing incomplete inventions today.
[110]

56 Supervised by Minoru Takeda, Tokkyo Shinsa/Shinpan No Hōri To Kadai (Legal Principles and Challenges ofPatent Examination and Trials) (Japan Institute of Invention and Innovation, 2002), “Meisaisho No Kisai Yōken”(Descriptive Requirements of a Patent Description), p. 138 [written by Yoshinobu Murofushi] sets forth a theory thatan incomplete invention no longer needs to be grounds for refusal at present. In contrast, Kazuhiko Takeda, Tokkyo
No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 63 states that it was too early to delete the conceptfrom the Examination Guidelines, because the person who files an application first will enjoy an advantage even if
the description were incomplete.
57 The following judgments mentioned the incompleteness of an invention as the reason for the judgment after the
1993 revision: the Tokyo High Court Judgment, March 13, 2001, court website (the Vasodilatory Peptide case), andthe Tokyo High Court Judgment, January 29, 2003, court website (the Imidazole case).

117§1. Creation of Right[111]
1.2.2. Types of Inventions (Categories of Inventions) (Article 2, paragraph 3 of the
Patent Act)1Inventions can be roughly divided into inventions of products and inventions ofprocesses, and inventions of processes are further divided into simple process inventions
such as a measuring process, an operation process, or a signal transfer method andinventions of processes for producing products. These categories have not been classified
from a scientific viewpoint, but the Patent Act has established them in order to haveinventions demonstrate respective effects that differ by category (with regard to theeffects, see 7.2.2. Working (Article 2, paragraph (3) of the Patent Act)). Since aninvention is a technical idea (Article 2, paragraph (1) of the Patent Act), a productinvention is not the product itself, but a technical idea expressed in the form of a product.
Because a computer program is regarded as a product under the current Act, a process for
producing a computer program also constitutes a process for producing a product. An
invention of a process for producing a product refers to an invention whereby a productis produced by implementing a process. Inventions of products and inventions ofprocesses not only differ in respect of the expressions of the claims, but also in the legal
effects of the patent rights as a result of such differences (Articles 2, paragraph (3),Articles 101 and 104, and Article 175, paragraph (2), items (ii) and (iii) of the Patent
Act).2 Since the effects of a patent right for an invention claimed in the form of a productextend to that product regardless of how the product was made, particularly in the case ofa chemical substance, the inventor sometimes enjoys protection beyond the invention
he/she actually made, and the relationship between the disclosure and the scope of rightcannot be explained in some cases.3 However, because making the substance first is theimportant thing for a chemical substance, it is likely to have been considered not as atheoretical issue, but as a policy issue of extending sufficient protection.
Inventions of products are technical ideas materialized into the form of products,
which basically involve no chronological elements. On the other hand, inventions ofprocesses are inventions involving chronological elements (the sequential nature of
1 See Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (The Role of Disclosure ThroughDescription under the Patent Act), p. 371; Masanobu Katō, "'Mono,' 'Hōhō' Toiu Hatumei No Kategorī Gainen No
Kigen Ni Tsuite No Ichi Kōsatsu" (Study on the Origin of the Concept of "Product" and "Process" Invention
Categories), Nakayama Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Essays in
Honor of the Seventieth Birthday of Professor Nobuhiro Nakayama: Spreading Wings - Intellectual Property Law inthe 21st Century), p. 136.
2 In the Supreme Court Judgment, July 16, 1999, Minshū, Vol. 53, No. 6, p. 957/Hanji, No. 1686, p. 104/Hanta, No.
1010, p. 245 (the Physiologically Active Substance Measuring Method case), the court held that the patentee of an
invention of a process cannot demand an injunction to suspend the manufacture and sales of products for which a
quality standard inspection was conducted by using said process.
3 See Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (The Role of Disclosure ThroughDescription under the Patent Act), p. 378.

118§1. Creation of Rightprocesses), which are “constituted by several sequential acts or phenomena aimed at a
certain purpose.”4 Although the distinction between products and processes had been
relatively strict in the past, since programs were stipulated as inventions of products (thepart in parentheses in Article 2, paragraph (3), item (i)), it is no longer possible todistinguish clearly between the two solely based on chronological elements.5 Programs
are, in substance, calculation methods, which involve strong chronological elements, andare considered to resemble processes in nature, but since they can be distributed via
electronic telecommunication lines, they are categorized as products. In that sense, it may
be possible to categorize inventions that cannot only be used, but can also be produced
and distributed as product inventions, and other inventions as process inventions.6[112]
Since the type of invention affects the legal force of the patent, the type is notdetermined merely from how the claims are described by the applicant. Although themeanings of the terms are determined based on the statements of the scope of claims andthe description, the category of the invention is ultimately determined based on thesubstance of the invention.7 However, in reality, it is often difficult to draw a clear line
between inventions of products and inventions of processes. It is the applicant's own
responsibility to choose the claim type, and the category of the invention would be first
determined based on the claim statement.8 Even if an invention is claimed in the form ofa product, a difficult problem arises when the invention is not defined by the structure or
characteristics of the product, but is claimed as a manufacturing method. With regard to
this point, see “8.6.3. Product-by-Process Claim.”
Chemical substances had been unpatentable until 1975, but they can be patented as
inventions of products at present, and they constitute the most important field ininventions of products. Under the JPO’s implementation standards, the mere confirmationof the existence of a certain chemical substance cannot be regarded as the “creation oftechnical ideas utilizing the laws of nature” (Article 2, paragraph (1) of the Patent Act),

4 The Tokyo High Court Judgment, May 21, 1957, Gyōshū, Vol. 8, No. 8, p. 1463 (the Radiation Shielding Methodcase).
5 Japan Patent Office, Heisei 14 Nen Kaisei/Sangyō Zaisanken Hō No Kaisetsu (2002 Revision: Explanation ofIndustrial Property Right Laws) (Japan Institute of Invention and Innovation, 2002), p. 14.
6 The following essay suggests that there is an influential theory which distinguishes between products and processes
based on whether they can be distributed: Hiroshi Yoshida, “Yōto Hatsumei Ni Kansuru Tokkyoken No Sashitome
Seikyūken No Arikata: ‘Mono’ Ni Chakumomu Shita Handan Kara ‘Mono’ Ni Chakumomu Shita Handan He”(Right to Seek Injunction Based on a Patent on a Use Invention: Shift from Determination Focusing on Infringing
Goods to Determination Focusing on Infringers), Chiteki Zaisan Hō Seisaku Gaku Kenkyū (Intellectual Property
Law and Policy Journal), No. 16 (2007), p. 172. The essay mentions that selection inventions are processes, inessence.
7 The Tokyo High Court Judgment, April 14, 1959, Gyōshū, Vol. 10, No. 4, p. 774 (the Gas Cutting Burner case); theSupreme Court Judgment, July 16, 1999, Minshū, Vol. 53, No. 6, p. 957 (the Physiologically Active Substance
Measuring Method case).
8 The Intellectual Property High Court Judgment, September 20, 2007, court website (the Holographic Grating case).

119§1. Creation of Rightand some kind of utility needs to be clarified with regard to the chemical substance.9[113]
Also, when determining senior and junior applications, two inventions can beconsidered to be the same as long as the technical ideas are the same, even if one were an
invention of a process and the other were an invention of a product according to thedescriptions of the claim.10
The categories of inventions are limited to the above three types under the current
Act, but this categorization has only been established for convenience, and is subject tochange in the future. Computer programs are currently categorized as inventions of
products (the part in parentheses in Article 2, paragraph (3), item (i) of the Patent Act),but programs are not theoretically products. Thus, it is theoretically possible to placecomputer programs in a new category.

9 In the Tokyo High Court Judgment, March 22, 1994, Chiteki Saishū, Vol. 26, No. 1, p. 199/Hanji, No. 1501, p. 132(the Imidazole Herbicide case), the court held that, in order for a chemical substance patent to be established, it is
not sufficient for the chemical substance itself to be merely confirmed and be producible, but its utility needs to bedisclosed in the description. See Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8thed.]), p. 98.
10 The Tokyo High Court Judgment, October 5, 1977, Hanta, No. 364, p. 278 (the OF Cable Manufacturing Methodcase).

120§1. Creation of Right[114]
1.3. Requirements for Patentability
1.3.1. Positive Requirements
1.3.1.1. Industrial Applicability (Principal sentence of Article 29, paragraph (1) of
the Patent Act)
The Patent Act, of which the purpose is to contribute to industrial development(Article 1), only needs to protect industrially applicable inventions. Thus, it makes
industrial applicability a requirement for registration in the main clause of Article 29 of
the Act.
“Industry” in this context is a broad concept including not only engineering, butalso agriculture, forestry and fishery, mining and commerce. The term “kōgyō”(industry/engineering) was used in the old Act, but its actual meaning was more broadlyinterpreted than its literal meaning. However, there was a risk that the true meaning could
not be conveyed by using the term “kōgyō,” so the term was changed to “sangyō”(industry) in order to use a term closer to the actual meaning.1 There is a theory which
offers an interpretation whereby the service industry is excluded from “industry” here,2
but that is unreasonable. In fact, it was the case that technical ideas utilizing the laws ofnature had only been rarely used in the service industry. Recently, some business models
have been considered patentable as software-related inventions, and industries such as
finance and transportation are also entering the patent world. The question of whether aservice can be a patentable invention and the question of whether the service industry
should be excluded from the patent system are separate issues.
A question lies in the meaning of “applicability,” and this issue is the subject ofmany irreconcilable theories. According to some such theories, an invention with“applicability” means the following: an invention that can be utilized operatively, that is,utilized repeatedly and continuously;3 an invention that creates a new value when applied
to a particular industry, and only such technology that is directly related to the
manufacturing of products;4 or an invention which is not one than can only be utilized

1 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han] (Clause-by-Clause
Explanation of Industrial Property Acts [19th ed.]), p. 81.
2 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 68 states that “sangyō”(industry) does not include the service industry, such as insurance services, financial services, and medical services,though there are some exceptions.
3 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law [New and Expanded Edition]), p.
153.
4 Hajime Kaneko and Yoshinobu Someno, Kōgyō Shoyūken Hō (Industrial Property Law), p. 89.

121

§1. Creation of Right

academically or experimentally.5,6[115]
Where the theories are diverse as above, in order to decide the contents of thisrequirement, it is necessary to study the issue from a perspective of why industrial
applicability is being required in the first place. The reason is because the purpose of the
Patent Act is to “contribute to the development of industry” (Article 1 of the Patent Act)and inventions that are not industrially applicable are being excluded, accordingly.
Because “industry” in this context is, as mentioned earlier, interpreted as a broad concept,“industrial applicability” must also be interpreted as a broad concept. From such
viewpoint, a limited interpretation whereby the concept of applicability indicatesinventions that are directly related to production is not only groundless, but also unfair.
For instance, a measuring technique should not be refused for a lack of industrial
applicability even if it is not directly related to production. In short, it is sufficient for theinvention to contribute to the development of industry in the broad sense, and nounnecessary requirement should be imposed.7
There is also a question of the appropriate stage which the invention should havereached so that recognizing industrial applicability and patentability for the invention
would benefit the development of industry. If a patent is granted for an invention in thestage where it is still unknown what the invention can be used for, it could hindersubsequent inventions.8
Although there are exceptions like the later-mentioned medical practice andbiotechnology as special issues, an invention only needs to be applicable in one industry
or another. In that sense, “industrial applicability” rarely presents a problem as a patentrequirement. Even if a piece of apparatus or equipment is utilized only in universities(though such apparatus or equipment would be rare in reality), there are business
operators who manufacture pieces of apparatus or equipment that are utilized inuniversities, so the Patent Act must provide an incentive for technological development
to such business operators, too. Items that are unproductive and not industrial inthemselves, such as playthings, can also be considered industrially applicable if their
5 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han] (Clause-by-Clause
Explanation of Industrial Property Acts [19th ed.]), p. 81; Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan] (Detailed
Explanation of Patent Law [New ed.]), p. 133.
6 Some people indicate that the applicability requirement is also related to other patent or invention requirements, so
it is difficult to consider it as an independent, positive requirement. (Mutai Zaisan Hō Kenkyūkai [Study Meeting on
Intangible Property], Hanrei Tokkyo/Jitsuyō Shin’an Hō [Court Judgments relating to Patent and Utility ModelLaws] [Shinnippon-Hoki Publishing, 1980], p. 2096).
7 The Examination Guidelines, Part II, Chapter 1, 2. cites "inventions of methods of surgery, therapy or diagnosis ofhumans," "commercially inapplicable inventions," and "obviously impracticable inventions" as categories ofinventions that are industrially inapplicable inventions.
8 There is a detailed description on this matter in Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No
Yakuwari (The Role of Disclosure Through Description under the Patent Act), pp. 254 ff. The description indicatesthat the situation would also depend on such factors as whether the invention is of cumulative nature and whether
the license negotiation costs are overly high.

122§1. Creation of Right

production or sale has an industrial effect.9 The same applies to weapons.
[116]
The most important element in practice is the safety of the invention. The questionof whether or not safety has an industrial applicability requirement has not been clearly
determined in court judgments, but it is not appropriate to impose the safety requirement
strictly. The stricter the requirement the scarcer the protection of basic inventions in fields
where safety is a prerequisite would become.10 For example, even a pharmaceutical witha side effect which is too strong to be certified by the Ministry of Health, Labour andWelfare should be regarded as patentable, in principle, if it has medicinal virtues.
Otherwise, such inventions would not be filed and made public and, as a result, would
not contribute to raising technological standards of society. It would, rather, comply withthe purpose of the patent system to grant patents to such inventions in order to make thempublic and encourage the emergence of improved inventions for preventing side effects.
The necessary and sufficient prevention of detriments from side effects can be ensured
by regulation under the Act on Securing Quality, Efficacy and Safety of Products
Including Pharmaceuticals and Medical Devices (the Act on Pharmaceuticals andMedical Devices; the Pharmaceutical Affairs Act until 2014). If the side effects are strong,
the manufacturing and sale of the pharmaceutical will simply not be permitted, so there
is no actual harm.
Even inventions which are faulty should not be denied industrial applicability
unless the faults are so serious that the invention cannot be worked.11
Applicability in the economic sense is not a factor for consideration. The economic
value of an invention is affected by the social and economic conditions of the time, so itcannot constitute a patent requirement. For instance, the utility of an alternative energy
resource in the economic sense is affected by the oil price and government assistance, but
its industrial applicability can be recognized under the Patent Act.
[117]
9 In the Tokyo High Court Judgment, December 15, 1956, Gyōshū, Vol. 7, No. 12, p. 3133 (the Bingo Game case),
which is a case under the old Act, the court stated that even if a bingo game may be unproductive and non-industrial,
it can hardly be said that the game device itself has no industrial effect (e.g., an industrial effect through manufactureor sale of the device).
10 However, if a certain kind of safety is indispensable for an invention, an invention lacking such safety can be
regarded as being not industrially inapplicable. For example, in the following court judgment, the court held that aninvention relating to an atomic energy generator “is not sufficient for creating an industrial technological effect as
an energy generator, since it cannot be worked regularly and safely and is considered to be a technologically
incomplete invention”: the Supreme Court Judgment, January 28, 1969, Minshū, Vol. 23, No. 1, p. 54 (the Atomic
Energy Generator case). In the Tokyo High Court Judgment, May 28, 1968, Hanta, No. 225, p. 198 [the Multi-Way
Plug case], the court held that “a device that lacks safety or includes danger on a justifiably expected basis should
also have a measure for circumventing or preventing such factor in advance in the specific constitution of the device,”and an invention lacking such a measure cannot be approved as being practical.
11 In the Tokyo High Court Judgment, December 25, 1986, Mutai Saishū, Vol. 18, No. 3, p. 579 (the Bank Note case),
the court rescinded a JPO trial decision which determined that a device consisting of a bank note with punch holes
for those who cannot see was not practical, because the durability of the note would be reduced. (This case also
involved an issue of offending public order and morals.)123§1. Creation of Right

The most controversial subject matter with regard to industrial applicability is
medical practice on the human body. 12 According to the Examination Guidelines, 13
medical practice is not considered as an “industry.” Inventions in which the human bodyis an essential constituent feature,14 specifically, surgical methods, treatment methods,
and diagnostic methods for humans, are denied patentability for their lack of industrial
applicability.15 However, the standard of not finding industrial applicability for medical
practice in such manner not only lacks statutory grounds, but also appears to be odd froma commonsense viewpoint. It may be an interpretation somehow worked out for a majortask of having to exclude medical practice from the patent system, but that major task
itself needs to be given in-depth consideration. 16 Also, if there is a need to exclude
medical practice from the patent system, it should be solved by legislation, and not byinterpretation.
There is a problem in asserting that medical practice is not an industry, 17 andconsidering the advancement of regenerative medicine and genetic treatment technology
in recent years, it does not seem appropriate to exclude all medical practice from thepatent system.18 As there is intense development competition on a global level in thesefields, advanced Japanese medicine could fall behind critically if the race is lost. In thepast, the development of medical technology (particularly treatment methods) was mainly
conducted outside the framework of the patent system in the form of medical research inuniversities and large hospitals. There were calls to use the findings in such a development
not for the benefit of specific persons, but for the benefit of the public by making them
open and available to the public. From among medical technology, medicines andtherapeutic equipment are also often developed by private companies for profit, andpatents function as incentives for technological development in those areas. However,such a scheme does not apply to medical research in universities, etc. It has also been
considered inappropriate to drag medical research into an intensive developmentcompetition for profit. Therefore, there were indeed certain substantial grounds for the
12 See Ryōko Iseki, "Iryō Kōi No Tokkyo Hogo" (Patent Protection of Medical Practice), Ryū Takabayashi, Ryōichi
Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza I (Lecture on Modern Intellectual Property
Law I), p. 85.
13 Examination Guidelines, Part II "Requirements for Patentability," Chapter 1 "Industrially Applicable Inventions."
14 In the Tokyo High Court Judgment, December 22, 1970, Hanta, No. 260, p. 334 (the Ionic Toothbrush case), thecourt held that a process invention "the method to use an ionic toothbrush" lacked patentability since presence of ahuman body is an essential constituent element of the invention.
15 In the Tokyo High Court Judgment, April 11, 2002, Hanji, No. 1828, p. 99 (the Surgical Operation Optical Displaycase), the court held that the plaintiff’s claim that medical practice should be patentable is worth consideration as alegislative approach, but industrial applicability cannot be recognized for doctors’ practice as an interpretation of thecurrent Act, since the necessary measures for recognizing patentability for such practice have not been taken.
16 With regard to advanced medicine and patents, see Advanced Medical Patent Exploratory Committee, Expert Study
Group on Enhancement of Competitiveness, Intellectual Property Strategy Headquarters, “Sentan Iryō Bunya Ni
Okeru Tokkyo Hogo No Arikata Ni Tsuite” (Patent Protection in Field of Advanced Medical Technologies), (May29, 2009).
17 Hidetaka Aizawa, Baiotekunorojī To Tokkyo Hō (Biotechnology and Patent Law), p. 78.
18 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 116.

124

§1. Creation of Rightidea that the development of medical technology was not an “industry” requiring the
incentive of patents. Nevertheless, achievements in other areas of academic research arenaturally subject to patents even though the research is conducted in universities and othersuch institutions. There has been a strong trend for obtaining patents for the results ofresearch from universities and for commercializing the technology, mainly in the UnitedStates, and a similar movement has also been active in Japan recently. It is not clear how
the situation regarding the research and development of medical technology will change
in the future. The recently spotlighted research into iPS cells, etc. is attracting worldwide
attention as a technology directly linked to therapy, and it is in the middle of a fierce
global patent race. It is strange that technology relating to matters so close to the humanbody is exposed to a patent race, but technology relating to the human body itself is denied
patentability. Future research on medical and other technologies in universities and othersuch institutions is likely to involve large funds, so the idea of excluding only thedevelopment of medical technology from the scope of the application of the Patent Act
may not continue to be appropriate in the future.19 Such discussions can take place intheory, but as this issue of medical practice involves various complex elements,
conclusions should only be drawn from observing the future situation in the medical field,
but as discussed below, it would be necessary to include medical practice in the patent
system insofar as possible, through interpretation, for the time being.
[118]
Under the above circumstances, a heated debate grew over medical practice. As aresult, the Examination Guidelines were revised to regard most medical practices, otherthan methods of surgery, therapy or diagnosis of humans in the narrow sense, as being
industrially applicable in practice (Examination Guidelines Part II, Chapter 1, 2.1.1.3).
For example, a method for treating samples that have been extracted from the humanbody on the presumption that the samples are to be returned to the same body (e.g., amethod of dialyzing blood)20 is regarded as a “method of surgery, therapy or diagnosisof humans,” but such a method is not regarded as a “method of surgery, therapy or
diagnosis of humans” if it is a method for manufacturing a medicinal product (e.g., ablood preparation, vaccine, genetically modified preparation and cell medicine) or a
medical material (e.g., an artificial substitute or alternative for a part of the human body,such as an artificial bone, a cultured skin sheet, etc.) since it does not include a processof surgery, therapy or diagnosis by a doctor. In addition, methods for controlling the

19 Hidetaka Aizawa, Baiotekunorojī To Tokkyo Hō (Biotechnology and Patent Law), p. 178.
20 A method of extracting one's own blood from the body and returning it to the same body after being processed, as
in the case of dialysis treatment, is regarded as not being industrially applicable. However, this does not have a large
meaning for companies since dialyzers are patentable. Still, an invention not of a dialyzer, but a dialysis process
would be regarded as not industrially applicable, but to quite an extent, a patent can be obtained depending on how
the claim is written.

125§1. Creation of Right

operation of a medical device, medicinal inventions defined by the method for the therapyof humans such as methods of administrating medicine, and methods for gatheringvarious kinds of information by measuring structures and functions of the various organsof the human body (e.g., a method for an influenza test by extracting oral mucous
membranes, or a method for capturing the image of the lung by X-ray irradiation to thechest) are regarded as being industrially applicable under the Examination Guidelines.
Also, the Examination Guidelines on medicinal inventions were revised, and a medicinal
invention specified by combination of two or more medicines, or specified by dosage andadministration, which could not be registered as a treatment method, became registrable
as a product invention.21 However, methods that include steps corresponding to methodsof surgery or therapy of humans are still deemed to lack industrial applicability today.
The revision of the Examination Guidelines represents the outcome of an effort to adapt
to the recent trends without drastically changing the conventional interpretation.
[119]
Another reason for not approving a monopoly for medical inventions is forhumanitarian considerations relating to the survival and dignity of human beings. Apartfrom a rightful cause that this kind of technology should be made widely available, there
is also an indication that if a patent is granted for a treatment method, a doctor would haveto request a license from the patentee even when the patient requires treatment urgently,
and this could put the life and body of the patient in danger, and obstruct adequate,
impartial and expeditious treatment. 22 For the purpose of preventing confusion at thescene of treatment, inventions do not necessarily have to be regulated at an earlier stage
by denying their patentability, but they could be regulated at a later stage by approving
patentability, and then creating statutory non-exclusive licenses for the acts of doctors or
by restricting the effect of the patent right in the same manner as for the acts of preparing
medicines (Article 69, paragraph (3) of the Patent Act). 23 Since there are special
circumstances regarding treatment methods wherein only doctors are allowed to givetreatment under the Medical Practitioners Act, the practice of excluding certain acts ofdoctors from the effects of patents may have virtually the same effect as denying thepatentability of the treatment methods. However, since the patent system is establishedbased on the assumption that all technology is patentable, 24 necessary regulations on
21 Examination Guidelines, Part VII "Examination Guidelines for Inventions in Specific Fields," Chapter 3 "Medicinal
Inventions."
22 The Tokyo High Court Judgment, April 11, 2002, Hanji, No. 1828, p. 99 (the Surgical Operation Optical Displaycase).
23 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 116. Even if patents were
to be recognized for medical practice, most of the patentees would be pharmaceutical companies, etc. which invest
enormous funds in research. The patentees would want to contain acts of other pharmaceutical companies, butbasically they would not likely want to contain acts of individual physicians, so it would not be difficult to impose
regulations at a later stage.
24 Article 28 of the TRIPs Agreement makes patents available for inventions in all fields of technology.

126§1. Creation of Rightinventions should be imposed at a later stage. In any case, there is a need to explore a way
to achieve a balance between technological development and humanitarian issues, and by
excluding medical practice from industry a priori and uniformly denying its patentability,
the status of medical technologies and other technologies may become uneven, which isinappropriate.25[120]
Since inventions of treatment methods have the human body as their essential
constituent feature, there seems to be a vague sense of ethical repulsion against granting
a monopoly for those inventions. However, if the patentability of those inventions were
to be denied from such a viewpoint, the matter should simply be discussed as grounds forunpatentability, and not as an issue of industrial applicability (see “1.3.2. Unpatentable
Inventions [Article 32 of the Patent Act]”).
Incidentally, Article 52, paragraph (4) of the European Patent Convention denies
the patentability of methods for treatment of not only humans, but also animals, by
surgery or other methods based on a lack of industrial applicability, but patentability isrecognized for such methods for animals in Japan. That must be because the value ofanimals in the ethical sense is different from that of humans.
In recent years, the industrial applicability of biotechnology-related inventions has
drawn attention. In particular, in the case of an invention which merely elucidated thestructure of DNA and whose specific use is unknown, the future application of its applied
technology would be monopolized as long as that DNA is concerned, and could hinder
the development of industry (the so-called "tragedy of the anticommons"). The questionof the stage which the invention should have reached so that recognizing industrial
applicability for the invention would benefit the development of industry is a difficult one.
1.3.1.2. Novelty (Article 29, paragraph (1) of the Patent Act)
A. Significance of Novelty
The purpose of the Patent Act is to contribute to the development of industry, so,however brilliant an invention may be, subjectively, if it is the same as existing
technology, it does not contribute to society, and there is no meaning in creating an
incentive for an invention by granting a monopoly right for it. To grant an exclusive rightfor such an existing invention may have the effect of granting a monopoly right to part ofan existing industry. This would, similar to the case of a monopoly in medieval times, bedisadvantageous for the development of industry. Accordingly, novelty of an invention is
25 Since medical practice is becoming more and more sophisticated and complicated, treatment is no longer under thesole control of doctors. It is not rare for engineers of device manufacturers to take part in a medical setting to operate
devices. The development competition has intensified, and it is becoming difficult to judge the extent of an activity
which can be regarded purely as a doctor's medical act.

127§1. Creation of Rightan important requirement for the invention to be patented.
Article 29 of the Japanese Patent Act stipulates to that effect, but instead of
positively defining novelty, it mentions three grounds for lack of novelty and, negatively,
provides that inventions to which these grounds are not applicable are novel. The specificgrounds for lack of novelty are when the invention is publicly known, publicly worked or
has been described in a publication, etc.
[121]
B. Time and Location Criteria for Determination of Novelty
The time criterion for determination of novelty is not the date of filing, but the timeof filing.26 Therefore, if the content of an invention becomes publicly known through apresentation at an academic conference in the morning, and another applicant files anapplication for it in the afternoon of the same day, the novelty of the invention would
have been lost, but if the timing of the presentation and that of the filing were reversed,
the invention would be novel.
The criterion for determining the location of a novelty is in Japan or a foreigncountry. In the past, inventions described in a publication that was distributed anywherein the world were considered to lack novelty, but those inventions which were publicly
known or publicly worked in a foreign country were not considered to lack novelty.
However, with the 1999 revision of the Act, inventions which were publicly known or
publicly worked in a foreign country came to be considered to also lack novelty. This isbecause there is no rational reason to bar only inventions that are publicly known or
publicly worked in Japan in an information era where economic globalization has madeprogress and where various pieces of information are transmitted around the world
through a variety of media.27
In Japan, an absolute novelty system had been adopted before the 1909 revision of
the Act. This was because people considered that Japan’s industry would be pressured if
foreign companies were authorized to obtain patents for inventions that were publicly
known outside Japan. However, conversely, if a Japanese company were to obtain apatent for an invention that was publicly known outside Japan, it could gain an advantage
in the Japanese market. Thus, it is difficult to say which system is more beneficial for
protecting Japan’s industry.
C. Grounds for Lack of Novelty
a Publicly known inventions (Article 29, paragraph (1), item (i) of the Patent Act)
A patent is not granted for an invention that was publicly known prior to the filingof the patent application (a publicly known invention). While a publicly known invention
26 In contrast, determinations of junior/senior applications (Article 39 of the Patent Act) and use of another person’s
industrial property (Article 72 of the Patent Act) are based not on the time of filing, but the date of filing.
27 The European Patent Convention specifies the whole world as the location criterion for determining novelty (Article
54 of the Convention; it is referred to as absolute novelty or being publicly known in the world).

128§1. Creation of Right

indicates an invention that is no longer secret, the question lies in its specific details. Thus,
the details will be studied below, based on court judgments. Meanwhile, publicly known
inventions and publicly worked inventions cannot always be distinguished clearly. Quite
a number of court judgments state that the invention in question is categorized as apublicly known/worked invention after finding certain facts, and there is no practicalbenefit in distinguishing strictly between the two.
[122]
Specific examples in court judgments show that an invention is not publicly known
if the inventor merely notifies a few people unofficially about the invention in order torequest financial assistance.28 Also, even if a supplier of a wooden form for the frame fora prototype unit were to see the prototype unit in the factory, the invention would not be
publicly known, as long as the supplier were there under an agreement as to the duty ofconfidentiality.29 In addition, an invention is not publicly known even if the person who
created the drawings were to file an application and submit the drawings through adifferent company.30 An invention is not publicly known, either, if a family member orthe like sees the inventor creating and keeping a device within the house.31 However, adesign drawing included in approved Draft No. 600 of the Bureau of Construction, Tokyo
Metropolitan Government, which has been made available for viewing upon request, wasdetermined as being publicly known. 32 If equipment of which the structure andperformance can be identified externally is assigned to another party without aconfidentiality agreement, that equipment will no longer be a secret when it is delivered
to the assignee, and it will be considered to be publicly known/worked.33 An invention
disclosed to another party under a confidentiality agreement is not regarded as publicly
known, but since the status of whether an invention is publicly known is a factual status,
if the confidentiality agreement is breached and the invention becomes open tounspecified people, it is regarded as being publicly known. Even where there is no explicit
agreement on the duty of confidentiality, if a duty of secrecy under the fair and equitableprinciple is affirmed in light of the nature of the drawing delivered or the reason for thedelivery, the drawing is not regarded as a publication open to unspecified third parties,

28 The Prewar Supreme Court Judgment, September 11, 1928, Minshū, Vol. 7, p. 749 (the Rotary Seat Mesh Driercase).
29 The Prewar Supreme Court Judgment, April 17, 1942, Minshū, Vol. 21, p. 374 (the Lady’s Shoes Heel Forming
Device case).
30 The Prewar Supreme Court Judgment, May 18, 1942, Minshū, Vol. 21, p. 560.
31 The Tokyo High Court Judgment, July 12, 1948, Torikeshishū, 1948-1958, p. 21 (the Hollow Combustion Improvercase).
32 The Tokyo High Court Judgment, August 18, 1959, Gyōshū, Vol. 10, No. 8, p. 1552 (the Drainage Device case).
33 The Tokyo High Court Judgment, March 29, 1985, Torikeshishū, 1985, p. 391 (the Labeling Machine case).

129§1. Creation of Rightand the invention is found to be novel.34 These are all court judgments for individual
cases in different circumstances, so it is difficult to derive an unambiguous standard fromthem.
At the same time, there is an argument over whether an invention needs to be
actually known to the public35 or whether it is sufficient for it to be available to become
publicly known 36 in order for an invention to be “publicly known.” By a literalinterpretation, if an invention were considered to be “publicly known” when it was merely
available to become publicly known, it can be considered that an invention would beavailable to become publicly known if it fell under item (ii) or (iii) of Article 29,
paragraph (1) of the Patent Act and the consistency between these provisions would
become questionable. However, in reality, it is often difficult to prove that a third party
has actually gained knowledge of the invention, so an invention has to be determined tobe “publicly known” when the invention is available to become publicly known. 37
Incidentally, items (i) to (iii) of the paragraph all have the same effect, so there is no use
in distinguishing strictly between each item.
[123]
b Publicly worked inventions (Article 29, paragraph (1), item (ii) of the Patent Act)
A patent is not granted for an invention that was publicly worked prior to the filingof the patent application (a publicly worked invention). The concept of “worked” isdefined in Article 2, paragraph (3) of the Act. An invention is not considered to have been
publicly worked if the invention is worked in public, but in a manner in which a person
skilled in the art cannot know the contents of the invention. For example, if a test car runs
in a manner in which anybody can see the car but a person skilled in the art cannot know
the details of its engine, the invention of the engine is not considered to have been publicly
worked. Also, even if a product using an invention has been sold, if third parties cannot
34 In the Tokyo High Court Judgment, December 25, 2000, court website (the Six-Roll Calendar case), the court statedthat it is sufficient for the duty of secrecy to be "that which occurs when it is implicitly sought and expected to keep
the information secret under social conventions or commercial customs, even without particular explicit instruction
or request from the inventor's side." The Tokyo District Court Judgment, March 23, 2007, Hanta, No. 1294, p. 183(the Molten Metal Supplying Container case).
35 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law [New and Expanded Edition]),p.157; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 78; Sueaki Oda
and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act, Rev. ed.), p. 90; Kazuhiko
Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 118; Toshio Hattori, Tokkyo HōYōsetsu (Introduction to Patent Law), p.71. The following are cases under the Design Act: the Tokyo District Court
Judgment, September 17, 1973, Mutai Saishū, Vol. 5, No. 2, p. 280 (the Spray Gun case); the Tokyo High Court
Judgment, April 23, 1979, Mutai Saishū, Vol. 11, No. 1, p. 281 (the Sandpaper case); the Tokyo High Court Judgment,
May 30, 1979, Torikeshishū, 1979, p. 685 (the Electronic Organ case).
36 Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan] (Detailed Explanation of Patent Law [New ed.]), p. 142; Nobuo
Mon'ya, ed., Chūshaku Tokkyo Hō (Annotated Patent Act), P 74 [written by Nobuo Mon'ya]. The Tokyo High Court
Judgment, December 6, 1962, Gyōshū, Vol. 13, No. 12, p. 2299 (the Three-wheeled Motorcycle case). The following
is a case under the Design Act: the Tokyo High Court Judgment, January 20, 1976, Mutai Saishū, Vol. 8, No. 1, p.
1 (the Pachinko Ball Counting Device case).
37 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 78 mentions that aninvention needs to be actually publicly known to be determined as such, but if it is available to become publicly
known, the invention is presumed to have become publicly known.

130§1. Creation of Right

identify its technical contents through analysis, etc., the invention is not regarded ashaving been publicly worked.38
Specific examples of publicly worked inventions in court judgments include thefollowing. An invention that was applied to the flat concrete roof of a department store
was considered to have been publicly worked.39 Even where a lubricating oil controller
installed in the motor of a three-wheeled motorcycle was not visible externally by being
installed at the back of the chain case and covered by a case cover, the controller wasdetermined to have been publicly worked by being made available to become known to
the general public and being used in such a manner.40 A shaved kelp manufacturing tool
was determined to have been publicly worked where it had been viewed by many
unspecified people including visitors to a store of the kelp manufacturer and seller as wellas people passing by that store, and where its structure was simple and its technicalcontents could be easily understood from its appearance and the status of its use.41 In thecase where an inventor transferred the ownership rights and related documents to abuilding, which was built by working the invention, to a public housing corporation, andan official of the corporation resided in the building to examine its habitability, theinvention has been publicly worked.42 Where an invention was worked at a factory in astate where any person could visit and see the invention, and where no arrangement had
been made to keep the invention secret, the invention was determined to have been
publicly worked.43[124]
As shown from the above, the distinction between publicly known inventions andpublicly worked inventions is not necessarily clear, and it rather suits the actual situation
not to distinguish strictly between items (i) and (ii) of Article 29, paragraph (1) of the
Patent Act. For instance, there would be no need to reverse a trial decision that refused
an invention by applying item (ii) where item (i) should have been applied, by filing alawsuit against the trial decision, and to refuse the invention again by applying item (i) in
38 In the Tokyo District Court Judgment, February 10, 2005, Hanji, No. 1906, p. 144/Hanta, No. 1196, p. 209 (thePharmaceutical Granular Preparation Containing Amino Acid case), the court held that where an inventor was sellinga pharmaceutical granular preparation containing amino acid, but, due to the nature of said granular preparation, it
was extremely difficult for a person skilled in the art to analyze the sold preparation and know the contents of thepatented invention, the invention was not considered to have been publicly worked. The Tokyo District Court
Judgment, June 17, 2005, Hanji, No. 1920, p. 121/Hanta, No. 1209, p. 284 (the Low-Frequency Therapy Equipment
case; the court denied novelty in conclusion on the basis that a person skilled in the art could easily make theinvention based on analysis results).
39 The Tokyo High Court Judgment, November 15, 1962, Gyōshū, Vol. 13, No. 11, p. 2034 (the Concrete Flat Roofcase).
40 The Tokyo High Court Judgment, December 6, 1962, Gyōshū, Vol. 13, No. 12, p. 2299 (the Three-wheeled
Motorcycle case).
41 The Tokyo High Court Judgment, August 15, 1986, Mutai Saishū, Vol. 18, No. 2, p. 264 (the Shaved Kelp
Manufacturing Tool case).
42 The Tokyo High Court Judgment, June 18, 1974, Mutai Saishū, Vol. 6, No. 1, p. 170 (the Wall-type Building
Construction Device case).
43 The Tokyo High Court Judgment, September 27, 1984, Hanta, No. 543, p. 177 (the Electric Arc Furnace case).

131§1. Creation of Rightthe re-trial. Incidentally, under the old Act (Act of 1921), provisions on publicly known
inventions and publicly worked inventions were stipulated in the same item of the same
Article (Article 4, item (i)), and the court used language such that an invention lacked
novelty due to being publicly known/worked, treating these two without distinction. Even
under the current Act, in which the provisions on publicly known inventions and publicly
worked inventions are stipulated in separate items, it is considered difficult andimpractical to distinguish strictly between the two. There is also a question of whether it
is appropriate to stipulate them in two separate items, and such stipulation may havecaused an unnecessary confusion in interpreting the provisions.
c Inventions described in a publication (inventions publicly known throughliterature) (Article 29, paragraph (1), item (iii) of the Patent Act)
A patent is not to be granted to an invention described in a distributed publicationor made publicly available through an electric telecommunication line prior to the filingof a patent application, due to lack of novelty. The latter part was added upon the revisionof the Act in 1999, because the Internet has become an important tool in collecting
information, and it is inappropriate to grant a patent for an invention that has been madeavailable to the public through the Internet. One point to note is that information
distributed via the Internet can easily be altered, and there are ways to make such analteration without leaving a trace, so it is often difficult to identify the date and time onwhich the invention was made publicly available and the contents of the invention as ofthat time. It would be necessary to establish the date and time with regard to necessary
information, by using an appropriate certification organization, etc. In order to search
information that had been published on a website that no longer exists, such services as“Wayback Machine”—a cache data viewing service run by a U.S. nonprofit organization,
Internet Archive—are convenient. These services, which are useful for proving theexistence of an old website, are actually being used in lawsuits and patent examinations.
However, since these services are not always totally reliable, and there is a court judgmentthat has denied the credibility of such services,44 they need to be used carefully.45[125]

44 In the Intellectual Property High Court Decision, March 26, 2007, court website (the EIGOTOWN case), which
was a case in which dates were disputed with regard to cancellation of a registered trademark not in use, the court
held that, because the Wayback Machine sometimes displays contents that differ from the truth, it cannot be said thatthe display was available for viewing within three years prior to the registration of the request for a trial.
45 The 2000 Examination Guidelines, Part II, Chapter 5 “Treatment of Information Disclosed on the Internet as Prior
Art (Applied to applications on January 1, 2000 and after)” states as follows: Since electronic information on theInternet, etc. can be easily altered, the issue will always arise as to whether the cited electronic technical information
was published as it was at the indicated time of publication. The question of whether or not the electronic technicalinformation became publicly available before the filing is determined based on the time of publication indicated on
the cited electronic technical information, and if the information does not indicate the time of publication, suchinformation should not be cited, in principle. Also, the examiner should not cite information on websites, etc., if
there is only a small possibility of clearing the doubt that the cited electronic technical information was not publishedas it was at the indicated time of publication.

132§1. Creation of Right

Under the old Act, inventions denied for loss of novelty due to being described ina publication were limited to those described in publications distributed within Japan; but
under the current Act, inventions described in a publication distributed anywhere in theworld are subject to this provision. Since the locational criteria for publicly known andpublicly worked inventions were also expanded to include the whole world upon the 1999
revision of the Act, all grounds for lack of novelty are based on absolute novelty at present.
This is because, in an information era where databases and search engines have developed,
and a lot of information is distributed instantly across national borders, there is no longer
any reason to distinguish between publications in and outside Japan.
There are many theories regarding the concept of a publication, 46 but the generalidea is that it is an information communication medium, such as a document or a drawing,
reproduced for the purpose of publishing its content to the public through distribution.47
A publication needs to have been distributed, and an invention does not lose novelty if it
is described in a publication which has yet to be distributed.48
The term “publication” was directly inherited from the term used in Article 4 of theold Act when almost all publications were in a printed form. There were also views statingthat non-printed media should be excluded from the scope of “publications” under thecurrent Act. However, considering the state of the distribution of information today, more
and more prior art documents are expected to be distributed in a digital form in the future,and there is no reason to exclude microfilms, 49 CD-ROMs, etc. from “publications.”
Conventionally, many academic theories and court judgments had discussed the conceptof “publications,”50 but since all grounds for lack of novelty are now based on absolute
novelty, even if a medium were denied being a “publication,” the invention described inpublication distributed in the form of CD-ROM, etc. would likely have been accessible
to the public in most cases, and therefore the invention is regarded as having been publicly
known and lacking novelty as a result. Accordingly, there are hardly any practical benefits
46 For details, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han] (Explanatory Notes on the Patent Act
Vol. 1 [3rd ed.]) , p. 234 [written by Nobuhiro Nakayama].
47 The Supreme Court Judgment, July 4, 1980, Minshū, Vol. 34, No. 4, p. 570 (the West Germany Utility Model
Description case).
48 In the Tokyo High Court Judgment, October 30, 1978, Mutai Saishū, Vol. 10, No. 2, p. 499/Hanta No. 373, p. 156(the Belgian Patent Description case), the court stated that a printed publication needs to have been intended for
distribution (distributability) to an unspecified or large number of people (openness).
49 In the following court judgments, microfilms were found to be publications: the Tokyo High Court Judgment,
October 23, 1985, Mutai Saishū, Vol. 17, No. 3, p. 506 (the Second Leveling Rod case), and the final appeal judgmenton the same case, the Supreme Court Judgment, July 17, 1986, Minshū, Vol. 40, No. 5, p. 961.
50 In, the Tokyo High Court Judgment, March 9, 1978, Mutai Saishū, Vol. 10, No. 1, p. 48 (the West German Utility
Model Description case), and the final appeal judgment on the same case, the Supreme Court Judgment, July 4, 1980,
Minshū, Vol. 34, No. 4, p. 570, the courts held that a medium can be considered to be a “publication” when themedium itself was not published, but hard copies thereof were distributed on request. Also, in the Tokyo High Court
Judgment, July 29, 1993, Chiteki Saishū, Vol. 25, No. 2, p. 439/Hanji, No. 1494, p.148 (the Method of Assigning
Elevators to Elevator Hall Calls case), a thesis was written in order to acquire a doctoral degree from a foreign
university, and a small number of hardcover books of this thesis were produced, one of which was received by auniversity library and was made available for those who wished to inspect the book freely and receive copies onrequest. With regard to this case, the court held that such a book can be considered as a distributed publication.

133§1. Creation of Rightin discussing the concept of a “publication” today.
[126]
Novelty is lost when a publication is actually distributed or made publicly available
through an electric telecommunication line. “Distribution” means that the publication is
distributed in a form subject to public inspection or that it has become subject to publicaccess, and there is no need to prove specifically that it has been inspected. For instance,
if it is acquired by a library and becomes available to the public, the publication isregarded as having been distributed and its novelty is lost at the point when it was madeaccessible to the public, without there being any need to prove that it was actuallyinspected by someone.51
In addition, the description of an invention in a publication must be sufficient to
the extent that a person skilled in the art can work the invention with no special
consideration.52 It is enough to have the constituent elements of the invention described,
and there is no need to have the purpose of the invention or its effects included in thedescription.53[127]
D. Exceptions to Lack of Noveltya Significance of providing exceptions
The novelty of an invention is determined based on the time of filing. However, thestrict application of this standard to all cases could lead to an unfavorable result fortechnological development. For instance, it could have an effect of restraining people
from presenting their inventions at academic conferences or exhibiting them at

51 In the Tokyo High Court Judgment, April 27, 1961, Gyōshū, Vol. 12, No. 4, p. 884 (the Tetrapod case), the court
pointed out that the distribution of a publication refers to a state where the publication leaves the hands of the issuer
and it is acquired or is made available to be acquired by a third party openly, and that the novelty of a publication islost when it reaches the JPO’s industrial property library. Similar views are indicated in the following: the Tokyo
High Court Judgment, October 22, 1964, Hanta, No. 172, p. 174 (the Quartz-Crystal Oscillator case); the Tokyo
High Court Judgment, February 25, 1965, Gyōshū, Vol. 16, No. 2, p. 247 (the Nylon Yarn Manufacturing Methodcase); the Tokyo High Court Judgment, April 30, 1968, Hanta, No. 224, p. 264 (the Knitting Machine case); theTokyo High Court Judgment, April 27, 1973, Hanta, No. 297, p. 261 (the Laminating Sheet case). In the Tokyo High
Court Judgment, February 26, 1975, 1973 (Gyō Ke) No. 119 (the Pentylamine case), the court held that, where aGerman non-regular publication, which is distributed directly to subscribers by postal mail, is mailed to subscribers
in the afternoon of the issue date, the issue date cannot be presumed to be the date of distribution. The court statedthat until the publication is delivered to one of the subscribers, who is a member of the general public, it cannot be
regarded as having been published.
52 The Supreme Court Judgment, January 29, 1963, Torikeshishū, 1963-1964, p. 19 (the Tetrapod case). Under theold Act, an invention needed to be described in the publication to the extent that “it can be worked easily,” but thishas been deleted in the current Act. However, there is no reason to interpret the current Act differently from the old
Act in this respect. Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent
Act, Rev. ed.), p. 91; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]),p.85; Yoshirō Hashimoto, Tokkyo Hō [Dai 3 Han], p. 194; Mutai Zaisan Hō Kenkyūkai (Study Meeting on Intangible
Property), Hanrei Tokkyo/Jitsuyō Shin’an Hō (Court Judgments relating to Patent and Utility Model Laws)(Shinnippon-Hoki Publishing, 1980), p. 309.
53 The Tokyo High Court Judgment, November 30, 1971, Torikeshishū, 1971, p. 67; the Tokyo High Court Judgment,
January 23, 1973, Mutai Saishū, Vol. 5, No. 1, p. 1 (the Ice Melting Dew Prevention Method for Frozen Fish case);
the Tokyo High Court Judgment, November 22, 1978, Hanta, No. 383, p. 145 (the Planograph Machine Humidifiercase).

134§1. Creation of Right

exhibitions, or imposing an excess burden on engineers who lack legal knowledge. In
order to avoid such drawbacks, exceptions to a lack of novelty were stipulated in Article
30 of the Patent Act. Also, under specific conditions and during a specific period, a
remedial measure is provided for inventions that have lost novelty, and this period isreferred to as a “grace period.”
When these provisions on exceptions are applied, inventions are treated as not
falling under paragraph Article 29, paragraph (1) or (2), that is, not having lost novelty or
the inventive step, with regard to the application of the provisions of Article 29, paragraph(1) (novelty) and Article 29, paragraph (2) (inventive step) (Article 30, paragraph (1) of
the Patent Act). Conventionally, the provisions indicated that, when an invention that has
been presented at an academic conference, etc. falls under any of the items of Article 29,
paragraph (1), it shall be deemed not to have fallen under “any of the items of said
paragraph” (novelty). Therefore, only an invention identical to one that has beenpresented at an academic conference, etc. was exempted from lack of novelty, and noremedial measure was provided for an invention that was regarded as lacking an inventive
step (Article 29, paragraph (2)). For example, a remedy was often not provided when thecontents of an invention presented at an academic conference and the contents of an
application for a patent therefor were slightly different. However, since a report at an
academic conference and a patent application have different purposes, their contents are
not always the same even when they concern the same invention. Also, a report at an
academic conference is under time and other limitations, so it runs against the purpose of
the system to require the contents of such a report to be identical to those of the patentapplication. Thus, the above-mentioned wording “any of the items of said paragraph” wasrevised to “paragraph (1) or (2) of said Article” upon the 1999 revision of the Act, andadditionally it was provided that Article 29, paragraph (2) would not be applied either.
As a result, a remedial measure also came to target an invention that was not identical tothe invention presented at an academic conference, etc., but that could be easily arrived
at by a person skilled in the art based on such presented invention. Subsequently, upon
the 2011 revision, the provisions of Article 30 were drastically eased as discussed later.
These provisions on exceptions merely specify that, when an invention loses
novelty or an inventive step against the will of the person who has the right to obtain apatent or due to an act carried out by the person who has the right to obtain a patent, thatinvention will be treated as not having lost novelty or the inventive step during a specificperiod, with no retroactivity of the filing date involved. Accordingly, even where a patentapplication can be saved under Article 30, if grounds for lack of novelty or an inventive
step have occurred by an act of another person before the filing, the patent application
would be refused. For example, if A presents an invention at an academic conference, andthen B makes the same invention public before A files an application for that invention,135§1. Creation of Right

A's invention loses novelty by B's act, and A's application is refused without receiving
application of Article 30. Meanwhile, if A presents an invention at an academic
conference, and then B files an application for the same invention, after which A files anapplication for that invention, the invention claimed in B's application is refused on thebasis that it became publicly known due to A’s presentation at the academic conference.
Since it was stipulated that a refused application has no status of a prior application(Article 39, paragraph (5)) upon the 1998 revision, B’s refused application is deemed
never to have been filed with regard to the relationship between senior and later
applications, and A’s application will be patented if B's invention is kept secret at the timeof A's filing.
[128]
In the case where a person having the right to obtain a patent assigns the right,
his/her successor in title can also enjoy the application of Article 30 of the Patent Act.
b

Grounds for exceptions to lack of novelty
Grounds for exceptions to lack of novelty were substantially expanded upon the2011 revision. Conventionally, the following grounds were listed: testing, presentation ina printed publication, presentation through electric telecommunication lines, presentation
at a study meeting (Article 30, paragraph (1) of the Patent Act before the revision),
becoming publicly known against the will of the person having the right to obtain a patent(paragraph (2) of said Article), and being shown at an exhibition (paragraph (3) of said
Article). Since the provisions before the 2011 revision had limitatively listed the grounds
for exceptions, they were sometimes not adapted to the actual circumstances of theinformation era. For example, upon the 1999 revision, publication on the Internet becamea ground for exception, but television broadcasting was not a ground for exception. Also,presentation at study meetings and exhibitions was limited to those of organizations
designated by the JPO Commissioner, but the designation procedure was troublesome,and if the meeting or the exhibition happened not to be designated, the exception to lackof novelty did not apply.
With the 2011 revision, such individual grounds for exception to lack of novelty
were abolished, and inventions which became publicly known against the will of theperson who has the right to obtain a patent (Article 30, paragraph (1)) and inventions
which became publicly known due to an act carried out by the person who has the rightto obtain a patent (paragraph (2) of said Article) were uniformly made subject to remedy.
Due to such general provisions, the scope of inventions able to be remedied was expanded,and the system proved to be very convenient for right holders.
In the past, there was a dispute over the definition of printed publications, etc., but
the 2011 revision eliminated the need for any such discussion. Also, there was a questionof whether or not an invention disclosed in the scope of claims or description that have136§1. Creation of Right

been published can be regarded as an invention which has been presented in a printed
publication, but they were clearly excluded from such presentation under the revised Act(the part in parentheses in Article 30, paragraph (2)). It was clarified that the remedy
cannot be extended to a case where an application for the invention was filed in a foreigncountry where the application was made public, and an application was also filed in Japan
within six months from publication by invoking Article 30.54[129]
Incidentally, grounds for exception to lack of novelty differ by country, so whenintending to file an application in a foreign country, it is desirable to file the application
as early as possible, regardless of the grounds for exception under the Japanese system.
c Procedure55
In order to enjoy the application of exception to lack of novelty, one must file thepatent application within six months from the date on which the invention became subject
to the exception (Article 30, paragraphs (1) and (2)). If the patent application wereconstrued to mean the first application, it would have the effect of extending the period
for claiming priority to one year and six months, so in practice, the patent application isconstrued to mean the application filed in Japan, and this is considered to be an
appropriate interpretation.56

54 Based on the past court judgments, namely the Tokyo High Court Judgment, June 22, 1982, Mutai Saishū, Vol. 14,
No. 2, p. 467 (the Horizontal Non-Iron-Core Induction Furnace case); the Tokyo High Court Judgment, May 29,
1986, Mutai Saishū, Vol. 18, No. 2, p. 192 (the Cyclic Amine case); the Tokyo High Court Judgment, June 30, 1987,
Mutai Saishū, Vol. 19, No. 2, p. 216 (the Fuse Holder case), and later the Supreme Court Judgment, November 10,
1989, Minshū, Vol. 43, No. 10, p. 1116 (the Final Instance of the Cyclic Amine case), it was established in court
precedents that being published in a Japanese or foreign patent gazette is not regarded as making a presentation asprovided in Article 30, paragraph (1). The same view is indicated in the Supreme Court Judgment, February 16,
1993, Hanji, No. 1456, p. 150/Hanta, No. 816, p. 199 (the Bicycle Child Seat Design case). See Masao Uchiyama,“Jitsumu Kara Mita Tokkyo Hō Dai 30 Jō No Mondai Jō/Chū/Ge” (Study on Issues relating to Section 30 of the
Patent Law from a Practical Perspective) (Vols. 1, 2 and 3), Hatsumei (Invention), Vol. 69, No. 7 (1972), p. 8, No.
8, p. 20, and No. 9, p. 24. This type of case often occurred when the substance patent was introduced with the 1975amendment of the Patent Act, and the applicant, who filed an application for a substance patent abroad but had filed
the invention as an invention of a process in Japan, tried to obtain a substance patent in Japan as well by applying
Article 30 of the Patent Act.
55 For details, see Japan Patent Office, “Heisei 23 Nen Kaisei Hō Taiō Hatsumei No Shinkisei Sōshitsu No Rēgai Kitē
No Tekiyō O Ukeru Tame No Shutsugannin No Tebiki” (Response to the 2011 Revision: Applicants’ Manual for
Receiving Application of Provisions on Exception to Lack of Novelty), September 2011. For applications filed
before the Act of 2011 became effective, see Japan Patent Office, “Hatsumei No Shinkisei Sōshitsu No Rēgai Kitē
No Tekiyō O Ukeru Tame No Shutsugannin No Tebiki” (Applicants’ Manual for Receiving Application ofProvisions on Exception to Lack of Novelty), October, 2006.
56 In the Tokyo High Court Judgment, March 13, 1997, Chiteki Saishū, Vol. 29, No. 1, p. 434/Hanji, No. 1611, p. 122(the Treatment Agent for Blood Sludging case), the court held that, with regard to a patent application containing apriority claim which is filed in Japan as a subsequent filing, the filing date of the “patent application” referred to in
Article 30, paragraph (2) means the date on which a patent application was filed in Japan, in light of the following
reasons: (i) Article 4, Section B of the Paris Convention provides that a subsequent filing in another country shallnot be disadvantaged based on an act, such as the publication of the invention, accomplished between the date of thefirst filing and the date of the subsequent filing, but it does not provide that the subsequent filing shall not bedisadvantaged based on an act accomplished before the date of the first filing; and (ii) the provision of Article 30,
paragraph (2) provides for exception to lack of novelty, and if the filing date of the “patent application” is construed
to mean the filing date of the first application with regard to a patent application containing a priority claim, it would
expand the period for exception to lack of novelty to one year and six months, which would give an unfair benefit to
the person having the right to obtain a patent against the purpose of this provision.

137§1. Creation of Right

Also, at the time of filing the patent application, the person seeking the applicationof the exception provision needs to submit a document stating thereof, and within 30 days
therefrom, submit a document proving that the invention falls under grounds for
exception (paragraph (3) of said Article). However, if the person was unable to submit
the certificate due to reasons beyond his/her control, the person may submit the certificate
within 14 days (where an overseas resident, within two months) from the date on which
the reasons ceased to be applicable, but not later than six months following the expirationof the said time limit (paragraph (4) of said Article).
[130]dProblems
The exceptions under Article 30 of the Patent Act were basically established forthe purpose of saving researchers, individual inventors, SMEs, and others, who lackknowledge of the Patent Act, from a situation where their invention becomes publicly
known due to their lack of knowledge of the Act or on grounds not attributable to them.
Such a measure, which grants a patent even to an invention that has become publicly
known, is an exception to the first-to-file system and thus an unstable factor. Therefore,
many European countries do not have a remedial measure identical to that of Japan. If
that is still the case, today, when more than one century has passed since the establishmentof the Patent Act, and the knowledge of the Patent Act has been diffused more widely,these exceptions should probably either be abolished or reduced conceptually.57
In reality, however, as there is a trend of applying these exceptions more widely,presentation in a printed publication and presentation at a study meeting were introduced
upon the 1959 revision and were further expanded upon the 2011 revision. It is a policy
issue of whether legal stability should be secured by strictly applying the first-to-fileprinciple, or to save the vulnerable, such as individual inventors.
1.3.1.3. Expanded Prior Application Status (Quasi-Publicly Known Inventions;Fictitious Publicly Known Invention) (Article 29-2 of the Patent Act)At the time when the current Act (the Act of 1959) was enacted, an invention statedin the description of a prior application could be granted a patent in a later application, as
long as it was not stated in the scope of claims of the prior application (Article 39,
paragraph (1) prior to the 1970 revision). However, when the examination request systemand the early publication system were introduced upon the 1970 revision, Article 29-2
57 Upon the 1959 revision, there was an opinion insisting that the exception provisions should all be abolished.
However, since the Paris Convention obligates is members to provide such exceptions with regard to exhibitions,those exceptions could not be abolished. Therefore, it was decided that the grounds for exception other thanexhibitions should also be maintained (Explanation on the Council Report on Amendment of the Industrial Property
System, p. 4)

138

§1. Creation of Right

was newly stipulated, and the scope of prior applications was expanded. As a result, aninvention disclosed in the description came to eliminate later applications.
If the later application is filed after the laying open of the prior application, theprior application has become publicly known due to being described in the patent gazette,
so the later application is refused (Article 29, paragraph (1), item (iii) of the Patent Act).
However, if the later application is filed before the laying open of the prior application,
the description of the prior application is not yet publicly known, because it is kept secretwithin the JPO. In such a case, the prior application, which was originally incapable ofeliminating the later application even if it was described in the description of the priorapplication, is fictitiously considered to be publicly known in spite of the fact that it is
kept secret, through the application of this Article, and the later application is refused.
Specifically, even if a later application is filed before the prior application has been
disclosed to the public, provided that the prior application has been published, anapplication claiming an invention or device identical to one disclosed in the description,scope of claims, or drawings (including foreign language documents) originally attachedto the written application of the prior application for which a patent gazette or a utility
model gazette has been published is refused (Article 29-2).58 This is called the expandedprior application status or a fictitious publicly known invention (quasi-publicly known
invention).
[131]
The elimination of later applications is based solely on the description, etc.
originally attached to the prior application, which do not include any additions made byamendment after the filing. Although the description, etc. that have been laid open do notnecessarily coincide with the originally attached description, etc. since they may havebeen amended, only an invention disclosed in the originally attached descriptions, etc. isregarded as a fictitious publicly known invention, in order to avoid the procedure frombecoming too complicated. The fictitious requirement is satisfied if the prior applicationis laid open or is pending before the JPO at the time of the issuance of the gazettecontaining the patent (utility model), and the fictitious publicly known status remains
even if it is subsequently withdrawn, abandoned, or dismissed.
However, when the inventor of the prior application and the inventor of the later
application are the same (the part in parentheses in Article 29-2) and when, at the time offiling the later application, the applicant of the later application and the applicant of theprior application are the same (the proviso to said Article), the later application is notrefused as an exception. The former is intended for remedying later applications filed by
the true inventor from misappropriated applications filed by others, and the latter is
58 Article 184-13 provides for the case where a prior application is an application based on the Patent Cooperation
Treaty (PCT).

139§1. Creation of Rightintended to prevent a person's later applications from being refused based on a priorapplication filed by that person. A later application is refused only when it is identical toan invention disclosed in the description, etc. of a prior application on condition that it
has been laid open, and not when an invention can be easily arrived at from such invention,that is, when an invention lacks an inventive step.
The reasons for the legislation of Article 29-2 were as follows.59
First of all, the invention disclosed in the description or drawings of the priorapplication is due to be laid open to the public in the future, in principle,60 so a later
application does not provide anything new to society.
Secondly, this Article was related to the introduction of the request for examination
system. Under the request for examination system, examinations are not always carriedout in the order of filing, so in the earlier system that only recognized the effect of refusing
later applications within the scope of claims of the prior application, the scope effective
for refusing later applications did not become decisive until the scope of claims wasdetermined after the completion of an examination of the prior application.. Therefore,
the conventional system could not be continued. Accordingly, the early publication
system was introduced concurrently in order to lay open to the public all the applications
after one year and six months after filing, and Article 29-2 was introduced so as to expand
the effective scope for refusing later applications from the scope of claims to theoriginally attached description, etc. Thereby, the effective scope for refusing later
applications and the examination procedure were separated, and it became possible todetermine the scope for refusing later applications even before the determination of thescope of claims of the prior application.
[132]
Thirdly, under the conventional system, the applicant who filed the priorapplication was pressed to file applications for inventions that he/she did not intend tomonopolize, merely for defensive purposes. Unless the applicant filed defensive
applications for inventions that were not disclosed in the scope of claims, but weredisclosed in the description or drawings, there was a risk that such inventions would be
patented by later applicants. If the prior applicant does not have the prior user’s rights insuch a case, he/she might not even be able to work the invention in spite of having filed
the application earlier. By also making inventions that are disclosed in the description anddrawings of the prior application effective for refusing later applications, such wastefuldefensive applications could be reduced and it would help to speed up examination.
For these reasons, the material scope of the prior application effective for refusing
59 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Shoyūken Hō) Chikujō Kaisetsu [Dai 19 Han] (Clause-by-Clause
Explanation of Industrial Property Acts [19th ed.]), p. 86.
60 The provision on the expanded prior application status is not applicable to any applications that do not go as far as
becoming laid open to the public.

140§1. Creation of Rightlater applications was expanded. Nevertheless, the differences between Article 29-2 ofthe Patent Act and Article 39 (Prior application) of the Act, which regulates therelationship between prior and later applications, present problems.
First, the effective scope for refusing later applications is different in these two
provisions. With regard to the scope of timing, the provisions of Article 29-2 of the Patent
Act cover an application filed before the filing date of the later application, while Article
39 is also applicable to an application filed on the same date. As for the material scope,
Article 29-2 covers inventions disclosed in the description, the scope of claims, anddrawings originally attached to the application of the prior application (including foreign
language documents of foreign language written applications), while Article 39 only
covers inventions disclosed in the scope of claims.
Secondly, the conditions required for refusing later applications are different. In
the case of Article 39, if the prior application has been withdrawn, abandoned, or
dismissed, or if the examiner's decision of refusal or a trial decision of refusal becomes
final and binding, that application is deemed never to have existed, and cannot eliminate
a later application. However, Article 29-2 does not have such restrictions, and isapplicable if the prior application has been laid open, etc.; while Article 29-2 is notapplicable when the applicant who filed the prior application and the later application are
the same person, 61 Article 39 has no such limitation (paragraph (5)), but if the priorapplication is a misappropriated application, the application does not lose its priorapplication status (then Article 39, paragraph (6) was deleted by the 2011 revision).
Such differences exist in these two Articles, but in actuality, many cases of using
prior applications satisfy the requirements of both, though most cases are processed under
Article 29-2. In such cases, the later application can be refused under either of theseprovisions.
[133]
The next problem is the relationship between the right of priority under Article 4,
Section B of the Paris Convention and Article 29-2.
Article 4, Section B of the Paris Convention provides that an application containing
a priority claim shall not be invalidated by a third party's act, such as a filing,accomplished in the interval between the filing of the first application and the filing of asubsequent application in another country enjoying the benefit of a right of priority, andthat such third party's act shall not give rise to any third-party right or any right of personal
possession. With regard to Article 29-2, the question of whether the filing date of an
application containing a priority claim should be the filing date of the first application or
61 The identification of the same applicant or the same inventor throws up various problems in practice, but for details,
see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 279 [written by Haruo Gotō/Masaaki Arisaka];
Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 216; Kazuhiko Takeda,
Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 171.

141

§1. Creation of Rightthe date of the subsequent filing (the filing in Japan) is the subject of a theoretical dispute.
In practice, the filing date does not retroact by making a priority claim, so for an invention
which is disclosed in the description of an application filed in Japan and which isdisclosed in the description of the first application, the filing date of the first applicationis regarded as the date on which the invention gained its fictitious publicly known status.62
Therefore, if, between the filing date of the first application of an application containing
a priority claim and the filing date of its subsequent application, a third party were to filean application for an invention identical to that disclosed in the description, etc. attachedto the first application, the subsequent application (Japanese application) is not refused
based on the third party's filing. 63 In other words, the third party’s application filed
between the filing of the first application and the filing of the subsequent application will
be refused, and the application containing a priority claim is patented. With regard tointernal priority, the reference date is prescribed as the time of the filing of the earlier
application under Article 41, paragraph (2), so there is no reason to adopt a different
interpretation in the case of a priority claim under the Paris Convention.64
1.3.1.4. Inventive Step (Article 29, paragraph (2) of the Patent Act)
A. Significance of the Inventive Step
The “inventive step” is a term used in patent studies and practices.65 An invention
which a person skilled in the art would have been able to make easily from the state of
the art as of the time of filing the patent application66 is called an “invention involving
no inventive step.” Under the old Act (Act of 1921), there was no provision requiring an
inventive step as an essential element of registration, but an invention that is found to
involve no inventive step under the current Act was refused in practice, on the grounds
62 The Tokyo District Court Judgment, November 26, 1971, Mutai Saishū, Vol. 3, No. 2, p. 367/Hanji, No. 650, p.
52/Hanta, No. 271, p. 130 (the Vitamin B Manufacturing Method case); the Tokyo High Court Judgment, March 13,
1997, Chiteki Saishū, Vol. 29, No. 1, p. 434/Hanji, No. 1611, p. 122 (the Treatment Agent for Blood Sludging case).
Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han] (Explanatory Notes on the Patent Act Vol. 1 [3rd ed.]),p 271 [written by Haruo Gotō/Masaaki Arisaka], Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo
Hō Jō, p. 316 [written by Hiroaki Sakai and Takashi Kawasaki].
63 In the Tokyo High Court Judgment, September 13, 1988, Mutai Saishū, Vol. 20, No. 3, p. 401/Hanji, No. 1296, p.
123 (the Electroconductive Textile Fiber case), the court mentioned that the reference date for the prior application
status (the reference date for eliminating later applications) is the date of making the priority claim (the filing dateof the first application) pursuant to the provisions of Article 4, Section B of the Paris Convention and Article 26 of
the Patent Act. In the Tokyo High Court Judgment, July 19, 1990, Mutai Saishū, Vol. 22, No. 2, p. 402/Hanji, No.
1363, p. 133 (the Vinyl Chloride Aqueous Suspension Polymerization Method case), the court held that, even when
an application filed in a foreign country has been withdrawn due to an examination not having been requested, theextinguishing of the effect of the priority claim does not retroact to a time before the laying open of the application,
so the effect under Article 29-2 arises on the date of making the priority claim.
64 An opposite view is indicated in Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8thed.]), p. 173.
65 In positive law, the term “inventive step” is used in Article 33 (3) of the PCT (1970).
66 It means the highest technological level at the time of the filing (Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13
Han] (Summary of Patent Law [13th ed.]), p. 107). It specifically indicates inventions that have become publicly
known, etc. pursuant to Article 29, paragraph (1).

142§1. Creation of Right

that the mere replacement of materials or a change of design did not constitute an“invention” as stipulated in Article 1 of the old Act. Upon the enactment of the current
Act (Act of 1959), this practice was stipulated as Article 29, paragraph (2). In actuality,
the involvement of an inventive step is determined according to the JPO's Examination
Guidelines.67 In that sense, the Examination Guidelines have great meaning, but since
they are a kind of directive with no binding force on the court, they may be reversed by acourt judgment.
[134]
It is a self-evident truth that a patent should not be granted to an invention involving
no inventive step. Although there are differences in expressions and available provisions,a similar patent requirement is also imposed in other countries.68 Inventions involving
no inventive step are expected to be made even without giving an incentive by granting
an exclusive right, and the grant of an exclusive right for such inventions could obstruct
the free business activities of third parties. It is desirable for the development oftechnology to let inventions involving no inventive step be freely used. However, it isextremely difficult to determine whether an invention involves an inventive step.
Abstractly speaking, the inventive step is an issue of the point of balance between how
broadly the inventive step should be recognized in order to provide an incentive to theinventor and whether it is appropriate to let the invention be freely worked.
The concept of the inventive step is quite ambiguous, so a variety of court decisions
have been made concerning the involvement of an inventive step in an invention. This
point of dispute, which is an important and frequently discussed point in a JPO
examination 69 and patent infringement litigation, is a top-priority issue in practice.
However, the inventive step often needs to be determined from a technologicalperspective, and it is an issue that is difficult to handle in a book on a legal system, so
only the outline of the concept will be indicated here.70[135]

67 The Examination Guidelines have been established by the JPO as guidelines for patent examiners. They are notlegally binding, but since the actual examination is carried out according to the Examination Guidelines and they are
made public, applicants file their applications by referring to these guidelines. Accordingly, the Examination
Guidelines are an extremely important document in practice.
68 For systems in other countries, see Benkichi Jinbo, “Hatsumei No Shinposei Ni Tsuite” (Involvement of an
Inventive Step in an Invention), Hara Masuji Hanji Taikan Kinen, Kōgyō Shoyūken No Kihonteki Kadai Jō (Essaysin Honor of Retirement of Judge Masuji Hara: Basic Issues of Industrial Property Rights Vol.1), p. 227.
69 Lack of involvement of an inventive step was mentioned as the reason for refusal in about 83% of all notices ofreasons for refusal issued in FY2008.
70 For details, see Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 257 [written by
Kazuhiko Naitō, Taku Yamada, and Jirō Sakai]; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of
Patent Law [13th ed.]), p. 110; Kazuo Masui and Yoshiyuki Tamura, Tokkyo Hanrei Gaido [Dai 4 Han] (Guide toPatent-related Law Cases [4th ed.]), p. 48; Masami Ichikawa, “Tokkyo Hatsumei No Shinposei No Handan Hōhō Ni
Tsuite” (Method of Determining the Involvement of an Inventive Step in a Patented Invention), Toshisuke Kiyonaga
and Ryūichi Shitara, Gendai Saiban Hō Taikei 26 Chiteki Zaisanken (Modern Trial Law System 26 Intellectual
Property Rights), p. 135.

143

§1. Creation of Right

B. Person Skilled in the Art71
A person skilled in the art means “a person ordinarily skilled in the art of theinvention” (Article 29, paragraph (2) of the Patent Act), 72 and the existence of an
inventive step is determined by whether or not the invention could easily be made by aperson skilled in the art at the time of the filing of a patent application.73 A person skilledin the art does not assume a specific engineer, but conceptually assumes an engineer with
common knowledge in the relevant technical field. Sometimes, it is more reasonable toconsider a person skilled in the art to be a group of engineers rather than a single engineer.
For example, in the case of a business-related invention, we may assume a level of theentire group of computer experts and business experts.74
The first question to be asked is about the meaning of “the art of the invention.” Inrecent years, technical fields have become more and more subdivided and specialized. On
the other hand, technology can often be applied to other unexpected fields oftechnology. 75 The application of technology to a seemingly completely different
technical field may be easy for a person skilled in the art in some cases, but difficult inothers. Therefore, it is difficult to decide on a specific technical field a priori, and there isno other way but to accumulate judgments on individual cases taking into consideration
the constitution, purpose, effects, etc. of the invention.76[136]
C. Methods of Determination concerning Involvement of an Inventive Step
The only stipulated criterion for determining the involvement of an inventive stepis whether or not a person skilled in the art would have been able to make the invention
from publicly known art easily, so the provision itself is extremely abstract. Generally,
71 See Ryō Shimanami, “Tokkyo Hō Ni Okeru Tōgyōsha No Gainen” (The Concept of the PHOSITA in Patent Law),
Kōbe Hōgaku Nenpō (Kobe Annals of Law and Politics), No. 18 (2002), p. 242.
72 Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 5 Han] (Patent Law from the Ground Up [4th ed.]), p. 56 states that aperson skilled in the art is not a person with an average skill in the relevant field of an art, but a person who hasreferred to and has an understanding of everything in that field of art. The Examination Guidelines state that “aperson skilled in the art” means a person who has common general knowledge of inventions in a particular area asof the filing, is able to use ordinary technical means for research and development, is able to exercise ordinary
creativity in selecting materials and changing designs, and is able to comprehend all technical matters for state of theart technology in the field of the claimed inventions.
73 The Tokyo High Court Judgment, February 18, 1965, Gyōshū, Vol. 16, No. 2, p. 194 (the Concrete Reinforcing
Steel case); the Tokyo High Court Judgment, January 19, 1978, Torikeshishū, 1978, p. 285 (the Sintering Devicecase).
74 Yoshiaki Aita, “Hatsumei No Shinposei” (Inventive Step of an Invention), supervised by Minoru Takeda, Tokkyo
Shinsa/Shinpan No Hōri To Kadai (Legal Principles and Challenges of Patent Examination and Trials), p. 220; Ryū
Takabayashi, Hyōjun Tokkyo Hō [Dai 5 Han], p. 56. The Examination Standards as revised in 2000 also state that“for some inventions, it is appropriate to consider these persons skilled in the art to be a ‘team of experts’ in several
fields rather than individuals.”
75 For example, it is not rare for a non-stick frying pan to be developed from rocket technology, or a stealth aircraft tobe developed from microwave oven technology.
76 In the Tokyo High Court Judgment, March 23, 1971, Mutai Saishū, Vol. 3, No. 1, p. 109 (the Dry-Cleaning
Composition case), the court stated that the field of the art of a composition for dry-cleaning was not the art relating
to laundry operations, but one relating to the dirt and stain removing effect of chemical agents or relating to theresearch, utilization, manufacture and development of such type of agents, but this is only one example of a court
judgment.

144§1. Creation of Rightthe core of an invention is the constitution of the invention, so the presence of an inventive
step is determined mainly based on its constitution, but also by considering
comprehensively whether the cited invention (publicly known invention) contains
suggestions (teachings, incentives, or more specifically, the presence of a statement ofsolution to the same problem), whether there is a close similarity in the problem to besolved, the function, or the operation, and whether there is a close similarity in thetechnical field, among other matters. It is determined by focusing on the constitution of
the invention, or by focusing on the purpose and effect of the invention, or by evaluatingthem equally, depending on the specific cases, and it is difficult to set a general standard.
The involvement of an inventive step is more likely to be found if the constitution of theinvention is quite different from that of the prior art, but even where the constitution issimilar, the inventive step is sometimes found based on the differences between theoperation and effect of the invention.77 Apart from the JPO’s Examination Guidelines,
there is an enormous number of trial decisions and court judgments regarding this matter,so a specific determination is made according to each of them. The determinations are notnecessarily consistent, and they are different in each technical field.
An examination at the JPO is carried out according to the Examination Guidelines
for Patent and Utility Model in Japan, and guidelines concerning the inventive step areprovided as part of the examination guidelines by industry. However, under the
Examination Guidelines as revised in 1993, the inventive step is determined by first
identifying the technical scope of the claimed invention (identifying the gist of theinvention), then identifying the cited invention (including well-known or commonly usedart) closest to the claimed invention, and identifying where the two correspond or differ,
and finally evaluating the differences (reasoning). If no difference is identified, theinvention lacks novelty; in other words, the application is refused. If the differing
composition is optimization, a design change, or a replacement by an equivalent, and it
produces an effect exceeding the expectations of a person skilled in the art, theinvolvement of an inventive step is found, otherwise the involvement of an inventive stepis denied. Also, if the differing composition is indicated in evidence, the involvement of
an inventive step is determined mainly from the perspective of whether or not the citedinvention contains a cause or motivation for making the claimed invention. Nevertheless,there was criticism that this criterion was too lax, and that inventions that cleared thisinventive step test were often denied the involvement of an inventive step by the courts.
Accordingly, in the Examination Guidelines as revised in 2000, not only the presence of“cause or motivation,” but also the “selection of optimum materials or workshop
77 For details, see Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 261 [written by
Kazuhiko Naitō and Jirō Sakai]; Yoshiaki Aida, “Hatsumei No Shinposei” (Inventive Step of an Invention),
Supervised by Minoru Takeda, Tokkyo Shinsa/Shinpan No Hōri To Kadai (Legal Principles and Challenges of Patent
Examination and Trials), p. 217.

145

§1. Creation of Right

modification” and “mere aggregation” were mentioned as grounds for the lack of an
inventive step, which resulted in a stricter determination and a higher rate of refusal of
applications. The presence of “cause or motivation” is determined from the following
perspectives: the relation of technical fields; close similarity of problems to be solved;
commonality of working or functions; and implications in the cited inventions.78[137]
Upon the 2003 revision of the Examination Guidelines, a revision was made to take
into account the state of the art at the time of the filing of the application in question.79
It is also possible to take into account a secondary consideration, such as thecommercial success or non-working of an invention over a long time, as a factor
supporting an inventive step. However, since commercial success does not result fromthe invention alone, but is also affected by other factors such as a sales force, design,
product price, advertising, capital strength, and economic conditions, as well as luck, it
can be treated as a secondary consideration only when the commercial success has
resulted from the features of the patented invention.80 In addition, the long-term nonworking of an invention and the failure of others can sometimes be used as referencematerials as well. In actuality, however, the commercial success or failure of other people
has hardly ever proved to be a decisive factor in the determination.
The determination of whether an invention can be made easily is, essentially,
ambiguous, and the determination became more difficult than before as new technology
emerged and the description of the scope of claims became more complicated. The
determination would have to rely on the empirical rules of the examiners, but even so,
there is a need to make an effort for the criteria to become more objective, which is thereason that the above-mentioned Examination Guidelines have been created. The
involvement of an inventive step is determined by following the above steps. The next
part studies such a determination in distinctive types of cases.81
Meanwhile, the involvement of an inventive step is determined for each claim.
D. Types of Determination concerning Involvement of an Inventive Step
78 In the Intellectual Property High Court Judgment, January 28, 2009, Hanji, No. 2043, p. 117/Hanta, No. 1299, p.
272 (the Circuit Connecting Member case), the court stated that "in order to make a determination that a person
ordinarily skilled in the art could have easily conceived of the relevant invention from the prior art, it is insufficientthat it can be presumed that such person would have made an attempt by which he/she could reach the characteristicsof the invention, but it is necessary that there is an implication or the like suggesting that he/she must have madesuch an attempt with the intention of reaching the characteristics of the invention."
79 This revision was made in order to comply with the PCT guidelines.
80 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 126; Kazuhiko
Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 144. The Examination Guidelines also
state that commercial successes are analyzed so as to positively support the presence of the inventive step “insofar
as the examiners are convinced by applicant-submitted assertions or proof that these facts are derived from thefeatures of the claimed inventions, not from other factors such as sales promotion techniques or advertisements.”
81 The next part was written using the following literature as reference: Nobuhiro Nakayama and Naoki Koizumi, ed.,Shin Chūkai Tokkyo Hō Jō, p. 291 [written by Kazuhiko Naitō, Taku Yamada, and Jirō Sakai]; Kōsaku Yoshifuji,
Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 119; Kazuhiko Takeda, Tokkyo No
Chishiki [Dai 8 Han], p. 151.

146

§1. Creation of Right

1) Mere aggregation of technology, change of optimum materials, change of design,
replacement/conversion
The mere aggregation of technology is determined as lacking the involvement of
an inventive step, but if the invention has the unexpected effect of exceeding the total of
the aggregated technology, the invention is recognized as involving an inventive step as
a combination invention.82 This is the general theory, but there are certain technical fields
where there are many inventions that combine publicly known art, and where the priorart contains suggestions on the overall combination. 83 In such cases, the question ofwhether or not the combination could be arrived at easily by a person skilled in the art
must be carefully studied. One point to note is that an invention which is a mere
aggregation often seems to be easy once it has been completed (i.e. Columbus’ egg), but
a determination must be made on whether it was easy for a person skilled in the art "atthe time of filing". This point is being generally recognized, but such determination is adifficult task in reality, as if looking at a magic show after finding out the secret of thetrick. In court, the task becomes even more difficult when a determination has to be madebased on the state of the art ten or twenty years ago.
[138]
An invention that changes an optimum material, changes a design, converts
publicly known art to another technical field, or replaces part of a publicly known art withanother known art is considered to involve an inventive step only if the change,
conversion or replacement was difficult for a person skilled in the art, and its effect wasdifficult to predict. Conversely, even if no “cause or motivation” were found in the citedinvention, the involvement of an inventive step is denied if the invention in question could
easily be arrived at by a person skilled in the art.
2) Use invention
A use invention is based on finding that a new attribute of a product 84 can be put
to a new use. If the use is novel, and the invention is highly effective with regard to thatuse, and the use was not easy for a person skilled in the art to find from know substances,
the invention is found to involve an inventive step. The finding alone would merely be
discovery and not an invention, but there is inventiveness in putting the product to a
82 In the Tokyo High Court Judgment, September 7, 1977, Mutai Saishū, Vol. 9, No. 2, p. 598 (the Three-dimensional
Scratching Equipment case), the court held that even where an invention comprises the aggregation of multiple
publicly known technologies, if it has a notable operation and effect through combination of the comprisingtechnologies, the invention involves an inventive step.
83 In the Tokyo High Court Judgment, April 15, 1971, Hanta, No. 263, p. 239 (the Infrared Electric Kotatsu [a small
table equipped with a heater] case), which is a well-known case, the electric kotatsu with an infrared lamp was
publicly known, and the fact that infrared lamps for heating also had a medical effect was well known. Under suchcircumstances, the court dismissed a claim insisting that the invention had a particularly superior mode of operationand effect as an apparatus for medical and heating purposes by using a medical infrared lamp, and denied theinventive step of the invention.
84 The product would be a known product in most cases. Theoretically, even an unknown product could be claimed
as a use invention, but normally, it would be claimed as a product invention in acquiring a patent.

147§1. Creation of Right

specific use. For example, if a person were to newly find that DDT, which was a publicly
known chemical substance, has an excellent insecticidal effect, it could constitute an
invention of an insecticidal method using DDT or a DDT-based insecticide. A use
invention is rarely established when the structure and use are combined with each other,such as in the case of a machine, but a use invention is made more frequently in the caseof fields such as the chemical field where the use cannot be identified easily from thestructure. Under Japan's Examination Guidelines, use inventions are categorized as
product inventions. There is a criticism that a product invention defined by the use of the
product cannot be clearly distinguished from a process invention, but if the use invention
were categorized as a process invention, there would be less significance in recognizing
use inventions due to the limited effects of a process invention. Thus, it is considered thatthe use invention was purposefully categorized as a product invention.85 While a productby-process claim is a claim defined in the form of a process of manufacturing (see 8.6.3.
Product-by-Process Claim), a use invention is a claim defined in the form of use, which
often becomes an issue in relation to the second use of medicines. If a medicine effective
for a specific disease (e.g., thalidomide as a hypnotic and sedative drug) is publicly known,
but it is found that the medicine is effective for another completely different disease (e.g.,multiple myeloma), it is patented as a use invention. In that case, if the invention isclaimed as a "medicine" effective against multiple myeloma, it can be considered to be a
product invention. According to the principle of the scope of right of a product invention,
the scope of right would seem to extend to that product in general, but since the chemical
substance and its manufacturing method are already publicly known, the right cannot
cover that scope. If so, the scope of right of a patent on a use invention would only coveruse of the medicine against multiple myeloma, and the patent right would be effective
only on an act of selling the medicine by labeling it as a medicine against multiple
myeloma (this is also known as the labeling theory).86 In that sense, the essence of a use
invention is close to that of an invention of a process for producing a product.87[139]

85 In the Intellectual Property High Court Judgment, March 23, 2011, Hanji, No. 2111, p. 100/Hanta, No. 1356, p.
217 (the Superoxide Anion Decomposer case), the court stated that there is room for a publicly known product to bepatented as an "invention of a product," and that this is determined from the perspective of whether or not thediscovery, etc. of the process (use) relating to the product can be regarded as a highly advanced creation of technicalideas, by examining, for each such invention on a case-by-case basis, the new substance, significance, and utility ofthe process (use) disclosed by the inventor, any possible influence on a third party that may arise if the invention isprotected by a patent, and the balance with the public interest (in this case, however, the court held that the invention
was not a new use, and that it lacked novelty). Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo
Hō Jō, p. 256 [written by Hisao Shiomi].
86 Rather than being an issue of specific labels, it would be an issue of whether the medicine is sold as a productintended for such use.
87 Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (The Role of Disclosure ThroughDescription under the Patent Act), p. 386.

148§1. Creation of Right

3) Selection invention88
A selection invention is an invention that has selected, as its constituent feature,subject matter expressed as a specific concept which is included, but not concretely
disclosed, in an earlier patent.89 With regard to the invention of a concept which is more
specific than an invention expressed as a generic concept, it is often easy for a person
skilled in the art to select an optimum element through experiments, and in such case, theinvention expressed as a specific concept lacks an inventive step. However, since theearlier invention expressed as a generic concept has a broad scope of claims, a selection
invention is regarded as involving an inventive step when the invention expressed as a
specific concept that was not concretely disclosed in the earlier invention has the effectof a different nature or a conspicuous effect90 that would not have been expected by aperson skilled in the art.91
There is a question of whether a selection invention should be regarded as using
the prior patent (Article 72) or whether a selection invention and a prior invention should
be regarded as separate inventions solving separate technical problems, with no use
relationship with each other. Academic theories are divided over this question. If a
selection patent is considered as a patent that has added some kind of new effect to a priorpatent, it would mean recognizing a use relationship,92 and the patent becomes subject toan arbitrary license (Article 92). In contrast, if a selection patent is considered to be a newinvention that is not disclosed in the prior patent (a hole in the prior patent), a use
88 See Akito Sakurai, “Sentaku Hatsumei” (Selection Invention), Supervised by Minoru Takeda, Tokkyo
Shinsa/Shinpan No Hōri To Kadai (Legal Principles and Challenges of Patent Examination and Trials), p. 273.
89 The Tokyo High Court Judgment, September 8, 1987, Mutai Saishū, Vol. 19, No. 3, p. 309 (the Iron Group Element
and Boron included Amorphous Alloy case).
90 In the Tokyo High Court Judgment, March 30, 1978, Hanta, No. 369, p. 393 (the Optical Brightener case), the court
held that, in the case of claiming a selection invention, its working effect must be different in kind from that of theprior invention, or the same kind but outstandingly better than that of the prior invention to a sufficient extent thatmakes the selection invention deserve to be protected as a separate invention independent from the prior invention.
91 A famous case is the Tokyo High Court Judgment, October 31, 1963, Gyōshū, Vol. 14, No. 10, p. 1844 (theInsecticide case). In this case, the court held that an invention that was merely a more specific concept of an
insecticide expressed by a general formula but which had a distinctive feature in its extremely low toxicity for warmblooded animals, constitutes a “novel industrial invention” as referred to in the old Patent Act. Other judgments
include the following: in the Tokyo High Court Judgment, September 18, 1970, Mutai Saishū, Vol. 2, No. 2, p.
457/Hanta, No. 225, p. 172 (the Hazardous Substance Restraining Composition case), the court held that, where aherbicidal component of which the active ingredient is a chemical compound expressed by a generic concept and aherbicidal, insecticidal, bactericidal, acaricidal component of which the active ingredient is a chemical compound
expressed by a specific concept are identified and distinguished from each other, the two are regarded as separate
inventions even where the latter is included in the chemical compound of a generic concept; in the Tokyo High Court
Judgment, February 25, 1975, Mutai Saishū, Vol. 7, No. 1, p. 14/Hanta, No. 324, p. 229 (the Polyurethane Resin
Stabilization Method case), the court held that an invention was not dramatically superior to the prior invention; in
the Tokyo High Court Judgment, March 30, 1978, Hanta, No. 369, p. 393 (the Optical Brightening Agent case), after
mentioning generalities about selection inventions, the court held that a person skilled in the art would have beenable to predict the invention in question easily; in the Tokyo High Court Judgment, November 5, 1981, Mutai Saishū,Vol. 13, No. 2, p. 816 (the Penicillin case), the court held that the effect of the invention was not superior to that of
the cited invention; and in the Tokyo High Court Judgment, September 8, 1987, Mutai Saishū, Vol. 19, No. 3, p. 309(the Amorphous Metal Alloy case), the court held that the effect of the invention was not found to be remarkably
superior.
92 In the Osaka District Court Judgment, January 24, 1975, Hanta, No. 323, p. 270 (the Edge Cutting and Transporting
Equipment case), the court recognized a use relationship, and held that the selection invention could not be worked.

149§1. Creation of Right

relationship will not be recognized. This question does not have an unambiguous answer,
and it is a question of an interpretation of the scope of the prior patent.93
4) Invention limiting numerical values, shape, etc./parameter invention
With regard to an invention (particularly a chemical invention) that has been madeby limiting or changing the numerical values, shape, arrangement, etc. constituting
publicly known technology or by limiting the scope thereof by using specific variables, it
is often the case that a person skilled in the art can easily confirm the numerical values,
etc. within that scope experimentally. Thus, such limiting of numerical values, etc.
involves no inventive step, in principle. However, if the effect resulting from such change
or limitation is different in nature from that of the publicly known art, or if the effect has
the same nature but is noticeably superior, and a person skilled in the art would not havemade the invention easily and would have had difficulty predicting its effects, theinvention is found to involve an inventive step.94 It can be considered as one type of
selection invention.
[142]5) Chemical substance invention
The involvement of an inventive step in a chemical substance is determined fromits chemical structure and the use/property of the chemical substance. If the chemical
structure of a chemical substance differs considerably from that of a publicly known
chemical substance, that is sufficient for finding an inventive step. The inventive step isalso recognized even where the chemical structure was similar to that of a publicly known
substance, as long as it has an unpredictable property or its property is outstandingly
superior.

93 See Kiyoko Tamura, “Sentaku Hatsumei” (Selection Invention), Supervised by Minoru Takeda, Tokkyo
Shinsa/Shinpan No Hōri To Kadai (Legal Principles and Challenges of Patent Examination and Trials), p. 291.
94 For instance, in the Tokyo High Court Judgment, November 5, 1992, Chiteki Saishū, Vol. 24, No. 3, p. 980 (theGas Treatment Method case), the court affirmed the involvement of an inventive step, stating that the limitation ofnumerical values had apparently made the invention better than the prior art, and the limitation had the technologicalsignificance of making the operation and effect of the art more prominent. In the Tokyo High Court Judgment,
October 16, 1997, Hanji, No. 1635, p. 138 (the Projection Television case), the court found that the invention
involved an inventive step, holding that, as a result of limiting the numerical values, the invention had gained a modeof operation and effect that go beyond and are different in nature from those attained by the cited invention.

150§1. Creation of Right[141]
Example of the Inventive Step Determination Procedure
Identify the claimed invention* Identify the claimed invention based on thedescription in the scope of claims, unless there
are special circumstances* May also use matters arrived at by taking
into account common general technicalknowledge as the basis for identifying thecited invention* Add an explanation if the description of thecited invention (the indicated description) andthe expressions used in the identified contents
differ from each other

Identify the cited invention

Identify where the two correspond or differ

yes[Evaluate the differences]
Is the constitution relating to the differencesindicated in the evidence?

Is it possible to combine or
replace the constitution
easily?
1) Connection of thetechnical fields
2) Close similarity to the
problem to be solved3) Close similarity to theoperation or function4) Suggestions in thecontents* Take into account common
general technical knowledge
and a well-known art

Does any element inhibit
thecombinationorreplacementof
theconstitution?
yes

Is the constitution relating to
the differences a design step,etc.?
1) Selection of the
optimum materials fromamong publicly known
materials
2) Making the scope ofnumerical values optimum
or preferable
3)
Replacementby
equivalents
4) Change of the design inline with the concrete
application of the art* Give sufficientconsideration to theviewpoint of not only
close similarly insuggestions and the
problem to be solved,
but also such similarity
inoperationandfunction

no

yes

no

Does it have aneffectbeyondexpectation?

Does it have a more-thanexpected effect?
nono

Involves an inventive step

Involves no inventive step

Involves an inventive step

* Also describe the reason why the
combination or replacement of theconstitution is not easy (element inhibiting
combination)

Source: Japan Patent Office, “Heisei 18 Nendo Shinposei Kentōkai Hōkokusho” (Report of the Study
Group on Inventive Step FY2006), p. 124.

151§1. Creation of Right[143]
1.3.2. Unpatentable Inventions (Article 32 of the Patent Act)
1.3.2.1. Act of 1959 (Before the 1975 revision)
Theoretically, there is no universal principle regarding what kinds of inventions
should be patented. The basic rule is not to grant a patent if a monopoly for the invention
through patenting is socially undesirable, but the determination mostly depends on theindustrial policy of an individual country. The industry policy differs according to thetimes, and there was a strong demand for protecting domestic industry in the past. For
instance, in Japan, when the technological level was lower than today, the Patent Act hadprovisions on unpatentable inventions until the 1975 revision. In recent years, the ideathat patents should be granted to inventions in all kinds of technical fields is becoming
more and more prevalent. In addition, the TRIPs Agreement obligates members to grant
patentability for inventions in all fields of technology. While inventions that are likely tocontravene public order and morality or be harmful to public health are unpatentable, thisis regarded as being based on natural reasoning, rather than based on an industrial policy
reason.
The old Act (Act of 1921) stipulated foods and beverages, luxury grocery items,
medicines and their mixing methods, chemical substances, and inventions that were likely
to contravene public order and morality or be harmful to public health as unpatentable
inventions, and substances obtained by nuclear transformation were added to this list
upon the 1959 revision (Article 32 of the Patent Act before the 1975 revision).
Foods, beverages and luxury grocery items are related to a very important field, thenational diet, so they were unpatentable since a monopoly in this field could become agreat obstruction in national life. Nevertheless, it is unlikely that people would starve if
patents for foods, beverages and luxury grocery items were granted in reality, so they
were excluded from unpatentable inventions upon the 1975 revision.
Medicines and their mixing methods are also closely related to people’s health, sothey were categorized as unpatentable since a monopoly for them was not desirable. In
the case of medicines, the research and development cost is extremely high in contrast to
the manufacturing cost. Therefore, if medicines or their mixing methods were treated as
unpatentable, people would be able to manufacture new medicines that have beendeveloped overseas by using a different method, and thereby produce medicines whichhave the same effect without investing vast development costs and be able sell those
medicines at low prices. Conventionally, many developing countries had not recognizedpatents on medicines, based on a policy of providing medicines to people at a low cost.
Conversely, if patents are not granted for medicines, companies’ motivation for152§1. Creation of Rightdeveloping new medicines will be diminished. There were fierce conflicts between
developed countries and such developing countries over this issue, but in the end,
inventions in all fields became patentable on the conclusion of the WTO’s TRIPs
Agreement in 1995, although there is a certain grace period. In the case of Japan, it was
judged that it was no longer necessary to include medicines in unpatentable inventions,and they were deleted from the list upon the 1975 revision. However, in order to prevent
confusion at medical treatment sites, it was stipulated that the patent rights should not beeffective against the act of the preparation of medicines by a physician, etc. (Article 69,
paragraph (3) of the Patent Act). If a monopoly produces an adverse effect, it would be
sufficient to use the arbitrary licensing system (Article 93).
[144]
Chemical substances (substances manufactured by a chemical method) had been
made unpatentable in order to protect domestic industry, just as in the case of medicines.
If a substance patent system were introduced at a stage when the domestic chemicalindustry is underdeveloped, it could allow competent foreign companies to monopolize
patents on substances themselves, depriving the domestic industry of opportunities for
growth. On the other hand, without a substance patent system, development efforts would
be focused on inventing new manufacturing methods for the new substances developedby others, and the incentive for basic research and development directed toward
developing new substances would be lost, which is unfavorable for industrial
development. Accordingly, whether or not a substance patent system should be
introduced in a particular country depends on the development status of that country’s
industry. If it is introduced when the level of technology is too low, it would stifle
domestic industry, but if the introduction is delayed despite the fact that technology has
developed to a certain level, it would be a disincentive for basic research. Since Japan
introduced the substance patent system in 1975 when the domestic chemical industry had
developed to a certain extent, the industry faced a great turning point, and the medical
and chemical companies showed remarkable progress. As for the practice for obtaining achemical substance patent, it is not enough to be able to merely confirm the existence ofthe substance, but its manufacturing method and utility must also be described in theapplication.
Nuclear transformation refers to the transformation of an atom into a different atomby nuclear fission, nuclear change or atomic fusion using an atomic furnace or otherequipment. Substances obtained by nuclear transformation in this context mean theelements and chemical compounds manufactured by such nuclear change and theirintermediate products. The methods and equipment (e.g. atomic furnaces) for153§1. Creation of Right

manufacturing them were not unpatentable in the past.1 However, with the establishmentof the TRIPs Agreement in 1995, inventions in all fields of technology became subject topatents. As the system for making substances obtained by nuclear transformation
unpatentable conflicted with the TRIPs Agreement, this provision was deleted upon the1994 revision.
[145]
1.3.2.2. Public Order and Morality / Public Health
The 1994 revision of the Patent Act abolished all the categories of unpatentable
inventions that had been based on fields of technology, only to leave inventions that arelikely to contravene public order and morality or be harmful to public health as
unpatentable (Article 32 of the current Act). Since it has been considered to be a matterof course to treat inventions that are likely to contravene public order and morality or beharmful to public health as grounds for unpatentability, a provision to this effect has beenin place since the establishment of Article 4, paragraph (3) of the Patent Monopoly Act
of 1885. Grounds for unpatentability are also provided as grounds for patent invalidation(Article 123, paragraph (1), item (ii)).
However, what has not been clarified is why such a provision is required. The
prevailing theory asserts that such an invention should not be patented because theworking of the invention is likely to contravene public order and morality or be harmful
to public health. This may be based on the idea that there is no need to allow the exclusive
working of an invention that contravenes public order and morality or is harmful to publichealth as a patented product, and considering that a patent has a de facto advertising power
as if it has been given a special endorsement by the government, the distribution of suchpatented product would compromise the authority of the patent system. Nevertheless, thisview is questionable.
First, the grant of a patent merely means that the examiner could not find any reason
to refuse that application (Article 51 of the Patent Act), and it is not the grant of anendorsement by the government. Also, the grant of a patent does not necessarily guaranteethat the invention can actually be worked (e.g. in the case of medicines), and an invention
that has been refused can be worked as long as it is not prohibited under other laws andregulations. The working of inventions that are likely to contravene public order and
1 Many countries have some kind of regulations with regard to nuclear energy, not just under patent law and not merely
for industrial reasons, but for national defense purposes. The Japanese Atomic Energy Basic Act also has thefollowing provisions on nuclear energy-related inventions: the provisions on the arbitrary license system under
Article 93 of the Patent Act may be applied when necessary in the public interest (Article 17); contracts on theoutflow of such inventions to foreign countries shall be concluded in accordance with government regulations(Article 18); and the government may provide financial incentives or prize money for patent applications relating to
nuclear energy (Article 19).

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morality or be harmful to public health is not desirable, but it is not the role of the Patent
Act to act as a deterrent.2 Conversely, making such inventions unpatentable would allow
anybody to work the inventions, in principle. Specifically, they are often cases relating to
medicines with strong side effects, 3 virility enhancing appliances, 4 and birth control
devices. These cases do not need to be treated as patentability issues, and even if theirpatent registrations were refused, it would have no effect whatsoever in deterring theworking of those inventions. Therefore, it would be enough to have other laws andregulations deal with the question of whether or not the working of those inventions
should be allowed. Also, there is no need to deny the patentability of inventions that are
not likely to contravene public order and morality or be harmful to public health inthemselves, but it may have such an effect depending on how they are used. 5 It issufficient to regulate such inventions by other laws and regulations, depending on themode in which the invention is worked.
[146]
Secondly, if a determination were to be made concerning public order and moralityor public health, the JPO and courts would be involved in issues which require a very
subjective and delicate determination, and which would consume a considerable amount2 This point is indicated in Keita Satō, Jurist, No. 940 (1989), p. 116 (Commentary on the Tokyo High Court Judgment,
December 25, 1986, Mutai Saishū, Vol. 18, No. 3, p. 579 [the Banknote case]).
3 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 141 states that theinvention of a medicine that is likely to cause an unacceptable disease due to its side effects is harmful to publichealth. However, the question of whether the manufacture and sale of medicines having such side effects is a question
for the Law on Pharmaceuticals and Medical Devices (the Pharmaceutical Affairs Act until 2014), and not a question
to be decided by the Patent Act. For example, there is such case as thalidomide, which is a hypnotic and sedative
drug with extremely serious side effects, but which was later be found to be effective for other diseases (Hansen'sdisease and multiple myeloma) and was approved.
4 In the Tokyo High Court Judgment, December 14, 1965, Hanta, No. 191, p. 223 (the Virility Enhancing Appliancecase), the court held that the virility enhancing appliance in question was harmful to public health and was likely to
disturb public order and morality, and in any case, it was found that the invention was not fit to be granted a patentright, which is an exclusive dominion, or to be given national protection.
5 In the Tokyo High Court Judgment, December 15, 1956, Gyōshū, Vol. 7, No. 12, p. 3133 (the Bingo Game case),
the court held that the invention of a game device, a bingo game, could not be considered likely to contravene publicorder and morality merely “based on the reason that the device could be used for an illicit act.” Textbooks often citea banknote counterfeiting machine as an example of an invention that contravenes public order and morality. Setting
aside whether a machine dedicated to banknote counterfeiting actually exists, it is simply the fact that if the Bank ofJapan uses the machine, the product is a regular banknote, but if any other party prints banknotes with it, it iscounterfeiting. Such an invention deserves a patent as a printing machine. Meanwhile, Tatsuki Shibuya, Tokkyo Hō(The Patent Act), p. 125 states that this matter has an aspect of being decided depending on the choice of the purposeof the invention, and that the invention would not be patented if it is filed as a banknote counterfeiting machine, butwould not be an unpatentable invention if it is amended as a precise printing machine. It is strange for the Patent Act,
which protects technical ideas, that the nature of contravening public order and morality is determined by the title ofthe invention and not the technical contents of the invention, even if they are the same invention. However, sincenobody would file an application under such a title as “banknote counterfeiting machine” or a “vest for smuggling,”
this does not present a problem in actuality. In the Tokyo High Court Judgment, December 25, 1986, Mutai Saishū,Vol. 18, No. 3, p. 579 (the Bank Note case), the court reversed the trial decision which stated that a device which isa banknote having punch holes for those who cannot see to identify the note could not be registered based on thelikelihood that it would contravene public order and morality, because “it would tempt illegal acts, if third parties ingood faith were to copy this device” (constituting the crime of “alteration of banknotes”). Then, the court stated that“the possibility of the government working this invention is not nil, and even if someone were to punch holes in abanknote that has not been punched by taking a tip from this device, that and the question of whether or not theinvention contravenes public order are completely different issues.” Since the refusal to grant a patent and theprohibition of working the invention are separate issues, this court decision is justifiable.

155§1. Creation of Rightof time and labor. A determination on obscenity, for instance, has extremely difficult
aspects, and the concept of obscenity changes with time, so the JPO will be saddled withan enormous burden. There is no need for the patent system to assume such burden, andthe JPO is not considered to be an appropriate organ to determine the concept of obscenity.
Even if an invention were refused on the grounds of being likely to contravene publicorder and morality or be harmful to public health, it would only mean that under the Patent
Act the invention would be available for any person to work, and it does no good inmaintaining public order in society. Since the JPO’s efforts in determining whether or not
the working of an invention contravenes public order and morality or is harmful to publichealth have hardly any meaning in actually preventing such harmful working of an
invention, the consumption of the time and labor in the making of such determinations is
not meaningful. There are also instances like the case of saccharine where its use was firstbanned as being carcinogenic, but then ban was lifted later as being low in carcinogenicity,or where technology for making saccharine harmless was developed later. It is impossible
for the JPO to make a determination by predicting such future changes of status.
Thirdly, the following point should also be taken into consideration. There is a viewthat a patent should not be granted for a medicinal invention that has a strong side effector an invention that uses a hazardous substance like PCB (in particular, dioxin), sincesuch an invention would be harmful to public health. However, an invention should not
be judged as being likely to be harmful to public health merely for such reasons as having
a strong side effect.6 One must not overlook the positive side of granting a patent so thateven a medicine with a strong side effect could serve as the basis for new technologicaldevelopment by publishing the invention. In addition, if such a medicine were rejected
merely for the reason that its side effect was strong, it would be difficult to obtain basic
patents for new medicines, which would run contrary to the purpose of the Patent Act.
Even if such a medicine were patented, it could not be manufactured or sold without theapproval of the Ministry of Health, Labour and Welfare. Since a medicine is not likely to
produce harmful effects (likely to be harmful to public health) through the mere
administrative disposition of granting a patent, there is no reason to deny the granting ofa patent for such an invention.
As long as Article 32 of the Patent Act exists, its provisions cannot be ignored in
making an interpretation, but it would seem to be better to apply the provisions in a

6 In the Tokyo High Court Judgment, November 27, 1958, Gyōshū, Vol. 9, No. 11, p. 2486 (the Internal Iodine
Preparation Manufacturing Method case), the court reversed the trial decision which held that the invention could
not be patented because an injection of calcium iodate is harmful. The court ruled that it was unreasonable to statethat the invention was likely to be harmful to public health by judging that all of the products obtained by the methodof the claimed invention were harmful. Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents[8th ed.]), p. 87 mentions that the JPO used to refuse any invention that has polychlorinated biphenyl (PCB) listed
in its description, but such interpretation and practice are incorrect.

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restrained manner. 7 Considering the above points, it would be enough to exclude
inventions from patentable inventions only if the grant of a right to a monopoly to suchinventions were likely to contravene public order and morality or be harmful to publichealth. Even if the provisions of Article 32 were to be applied for the reason that theworking of the invention would contravene public order and morality or be harmful topublic health, an invention should only be unpatentable when it is apparent that it hassuch harmful effects and where it cannot be used in any other way but to bring about such
harm, as in the case of an opium pipe.
[148]
One notable point is that although an invention that contravenes public order andmorality or is harmful to public health is not laid open to the public at present (Article 64,
paragraph (2) of the Patent Act), there will be a risk of such inventions becoming laid
open if Article 32 were deleted or applied in a restricted manner. An applicant is notprohibited from publishing his/her invention even if it were refused for the reason that it
contravenes public order and morality. Nevertheless, if the JPO applies Article 32 in a
restrictive manner and determines that the invention does not contravene public order andmorality, even an invention that cannot be published according to another law or
regulation would be published as long as a patent application for it has been filed. Such asituation is not desirable, so it may be necessary to make inventions unpatentable if the
publication of those inventions is likely to contravene public order and morality or beharmful to public health (e.g., a stimulant manufacturing method). However, prohibiting
the publication of an invention itself may, in some cases, conflict with academic freedom
or freedom of thought, and not many inventions are considered to be inventions of which
the publication itself should be prohibited.8 Also, as it is thus difficult to prevent theinventor from publishing an invention that contravenes public order and morality even if
the invention is unpatented, the significance of making such an invention unpatentable issmall. Nevertheless, while such an invention would not be published by operation of law
if it were not granted a patent due to contravening public order and morality, it would be
purposely published by the State if it were granted a patent. This is indeed not desirable,
so making such inventions unpatentable is considered to be reasonable to some extent.
The basic problem is the conflicting arguments over whether it is appropriate for the state
7 Naoki Koizumi, “Baiotekunorojī Seikabutsu No Hōteki Hogo No Hitsuyōsei” (Necessity of Legal Protection for
Biotechnological Achievements), Jurist, No. 990 (1991), p. 19 mentions that the “industrial property system should
not take on a policy aim that cannot be attained by that system alone and obstruct technological development as aresult.” For a similar opinion, see Hidetaka Aizawa, Baiotekunorojī To Tokkyo Hō (Biotechnology and Patent Law),
p. 50. In contrast, Makoto Saitō, “Shiken No Fuyo To Kōhō Jō No Kisei: ‘Baiotekunorojī To Hō’ Ni Kansuru
Oboegaki (Grant of Private Rights and Regulations under Public Statutes: Memorandum on ‘Biotechnology andLaw’)”, Tsukuba Hōsei, Vol. 15 (1992), p. 172, which, while avoiding being decisive, states that the provisions on
public order and morality under the Patent Act can fulfill their intended functions to some extent.
8 Possible examples include the method of growing marijuana and the method of manufacturing bombs. Nevertheless,such information floods the Internet nowadays, so there is little need to treat this issue under the Patent Act.

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power to lend a hand in such publication, and whether it is meaningful for the JPO to
expend the time and labor to make determinations on whether or not inventions
contravene public order and morality. In short, it is the conflict between an opinion
insisting that the State should not take part in a disposition to grant a right of monopoly
for an invention that contravenes public order and morality and an opinion insisting thatexamination on the contravention of public order and morality is not only practicallymeaningless, but also overly burdensome.
Inventions that are expected to present a great problem in the future in terms of therelation between public order and morality and patents are biological inventions. In
Europe, there are heated debates on whether patents for new animals should be recognizedand bioethical issues concerning inventions using fertilized human embryos or the like.
There are views which hold that the creation of a new animal is blasphemous and thatsuch inventions should not be patented from the viewpoint of animal protection. Also,
some countries oppose patenting inventions relating to embryo-stem cells, which are
made by destroying human embryos on the basis that they run against bioethics (e.g., EU).
However, even if the grant of a patent were prohibited, the Patent Act cannot prohibit theworking of such inventions. If blasphemous acts were to be prohibited by the State, there
is no meaning to making such inventions unpatentable, but they need to be prohibited byanother law or regulation. The limitations of the Patent Act should be recognized.
[149]
Unlike the case of an opium smoking device, which clearly contravenes publicorder, this issue is largely related to subjective elements, especially religious and ethnic
consciousness, which need to be treated delicately. Thus, it would be better for the Patent
Act not to be involved in making a determination on this matter. The rights and wrongsof creating a new animal should be discussed separately from the Patent Act, and if theState judges it necessary to regulate such technology, an independent regulation shouldbe established. It would only impose a futile burden on the Patent Act to try to determine
such matters through the interpretation of the Patent Act. The Patent Act has beenlegislated for an industrial policy purpose, so to bring in such an issue would only induce
unnecessary confusion and be waste of time. It is necessary to recognize the limitationsof the Patent Act as an economic law, and to interpret it so that it can fulfill its functions
fully. To bring ethical, consciousness-related or religious issues into the Patent Act is likedriving the Patent Act into a maze.
As the Patent Act has the effect of promoting technology, it is also considered
contradictory to grant a patent for a particular technology when the State hopes to preventthe development of that technology. However, if the study or working of such technology
is regulated by another law or regulation, such as in the case of the creation of humanclones, the grant of a patent for such technology would not have the effect of promoting158§1. Creation of Rightthe technology. Therefore, it would not cause actual harm. On the other hand, there would
be significant merit in the Patent Act having no need to debate such an issue. There isalso a problem in having the JPO, determine whether or not an invention is favorable ornot.
Incidentally, Article 4quater of the Paris Convention stipulates that a patent cannot
be refused or invalidated based on the reason that it is restricted under domestic law.9
This implies that regulation under domestic law and patent protection are not necessarily
the same, but there is an international consensus that any invention which is likely tocontravene public order and morality or be harmful to public health can be rejected
regardless of this provision of the Convention.

9 This provision was added upon the Lisbon amendment in 1958. It seems to have mainly assumed government
monopoly goods.

159§1. Creation of Right[150]
1.3.3. Inventions of which Patentability Becomes a Problem (Inventions in SpecificFields)1
Patents are granted for inventions in all fields of technology, in principle (Article
27 of the TRIPs Agreement). The Patent Act was likely to have been initially legislatedwith inventions like industrial products in mind, but no such limitation appears in theprovisions. However, recent technological development has resulted in the emergence of
inventions that do not necessarily comply with the conventional patent system, and thepatentability of those inventions has become a problem. The following part shall discuss
the most notable types of such inventions: “biological inventions” and “computer
software-related inventions.”
1.3.3.1. Biological Inventions2A. Point of Issue
Conventionally, in practice, organisms were considered to be nothing but“creatures,” and that did not satisfy patentability requirements. However, today, nobody
denies the patentability of biological inventions in general, but such cases are examined
individually to see if they fulfill the requirements under the Patent Act. Biologicalinventions can be roughly divided into the following two genres.3
The first includes inventions of organisms themselves. These include both theinventions of the genetically-novel organisms themselves4 (inventions of products) andthe inventions of their breeding methods (inventions of processes of manufacturing
products5).
[151]
The second includes inventions of novel production methods or uses of organisms,
though the organisms themselves are not genetically novel. Many inventions have been
1 See the Examination Guidelines, Part VII “Examination Guidelines for Inventions in Specific Fields.”
2 For a comprehensive study on this issue, see Hidetaka Aizawa, Baiotekunorojī To Tokkyo Hō (Biotechnology andPatent Law). Another reference is Special Feature “Baiotekunorojī Seikabutsu No Hōteki Hogo” (Legal Protection
for Biotechnological Achievements), Jurist, No. 990 (1991), p. 13. For research on JPO trial decisions and court
decisions relating to biotechnology, see Institute of Intellectual Property, Baiotekunorojī No Hōteki Hogo Ni Kansuru
Chōsa Hōkokusho (Investigation Report on the Legal Protection of Biotechnology) (1990).
3 See Yūsuke Hiraki, “Iwayuru Shokubutsu Tokkyo Ni Tsuite (Sono 1)” (So-called Plant Patents (Part I)), Tokkyo
Kanri (Patent Management), Vol. 23, No. 5 (1973), p. 504.
4 For example, patents have been granted to new plants in the classification of Artemisia: Pentayomogi andHexayomogi (Patent Publication No. 1983-3646; Patent Publication No. 1983-3647).
5 Conventionally, these inventions were refused, because no completely identical organisms can be reproduced.
However, more inventions of breeding methods for specific plant varieties and multiplication methods of plantvarieties have come to be patented with the release of the 1965 Examination Guidelines by Type of Industry,“Biseibutsu To Hakkou Seisanbutsu (Microorganisms and Fermentation Products),” the 1975 Examination
Guidelines by Type of Industry, “Shokubutsu Shin-Hinshu (New Plant Varieties),” and the 1993 Examination
Guidelines (Part VII, Chapter 2, “Biological Inventions”).

160§1. Creation of Rightpatented in this genre. They include methods for processing organisms posteriori (e.g., amethod of producing seedless grapes by using phytohormone "gibberellin") and methods
for manufacturing antibiotics by using organisms.
The first genre is the area that often involves patentability issues. In contrast, for along time now many inventions have been patented for the second genre, and patentability
is not a problem in this area. Since some aspects specific to organisms need to be taken
into consideration in the first genre, those aspects are discussed below.
In recent years, it is not the inventions of organisms themselves, but inventions at
the gene (DNA) level or at the protein level that have dramatically increased due to thedevelopment of biotechnology. Although such subject matter originally exists within thehuman body, etc., it is not refused merely on the grounds of being the discovery of a
product of nature. Instead, if such subject matter is artificially and individually extracted,
and is found to have a specific function, it is regarded as patentable given that it has beencreated through human intervention. However, such invention is often refused for a
failure to satisfy the disclosure requirement if a disclosure is not made in the description
in such a manner as to enable a person skilled in the art to work the invention without anexcessive burden (Article 36, paragraphs (4) and (6)). However, with the development ofbiotechnology, some of such upstream patents, like reach-through claims,6 have come toexert a powerful influence over downstream patents, which could negatively affectindustrial development. Thus, various questions remain to be solved in the future, suchas whether or not such inventions should be patentable, and if they were to be patentable,
what requirements the inventions should satisfy in order to be patented, and how theeffects of such patent rights should be restricted.7[152]
B. Repeatability
An invention must utilize a law of nature to be a statutory invention (Article 2,

6 Reach-through claims refers to claims of not the final product, but claims that include the outcome obtained througha certain screening method in the scope of the right. In the Intellectual Property High Court Judgment, May 10, 2010,
court website (the Antiplatelet Agent Screening Method case), the court held that the claims of the method of
manufacturing an antiplatelet pharmaceutical composition, comprising "a process for detecting ADP receptor P2T(AC) antagonists" and "a drug formulation process," did not satisfy the enablement requirement. Such claims include
compound candidates that might be gained through a screening method, and since genes are not replaceable, if reachthrough claims are allowed for a research tool using a new disease-related gene, the act of developing a new drug by
using that gene could constitute patent infringement. This is practically equivalent to covering chemical compounds
that can be identified by a basic screening method, and it would be the same as claiming for medicines which are yet
to be developed, which poses a risk of impeding the future development of technology.
7 With regard to this issue, see Hisao Shiomi, “Idenshi Kanren Hatsumei To Tokkyo Seido” (Gene-Related Inventions
and the Patent System), Jurist, No. 1405 (2010), p. 111.

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paragraph (1) of the Patent Act), which means that it must be repeatable. 8 The point inquestion is the phase at which repeatability should be examined in the case of organisms.
Since organisms have a self-multiplication function, a once-raised organism can itself be
reproduced by multiplication. Nonetheless, an invention of an organism itself does not
focus on such a multiplication process. As a matter of course, there are inventions related
to multiplication processes (such as an invention of a cultivation method), but they canbe regarded as the same as ordinary inventions, and they are unrelated to inventions of
the genetically-novel organisms discussed here. Be it the invention of a product or theinvention of a process relating to an organism, the point to be questioned should be thebreeding process of that new organism, so the repeatability in that process should be
examined.
The conventionally prevalent idea was that the breeding of an organism was notrepeatable, and thus did not constitute an invention utilizing a law of nature, and this idea
had also been supported by the Examination Guidelines in and before 1975. Indeed, inmany cases, the probability of success in breeding exactly the same organism is small,and it is true that a large number of individual differences exist depending on theenvironment, etc. even if a genetically-identical organism could be created. However,since repeatability is synonymous with the utilization of a law of nature, it should not be
determined based on whether the breeding is practically or economically repeatable, but
on whether it can be repeated in theory. An invention would be repeatable if it could be
confirmed in theory that the breeding of the organism could be repeated with a fixedprobability. In other words, the causality only needs to be clear for an invention to berepeatable. This causality is clear in some cases 9 and not in others10 as regards neworganisms, and the latter cases are determined as being unrepeatable.
[153]
C. Creativity
An invention needs to be the result of a creative act in order to be a statutory
invention (Article 2, paragraph (1) of the Patent Act). A mere discovery is not a statutory
invention. Therefore, a unique variety of organism that was accidentally found on aroadside is a mere discovery, which cannot be patented. In contrast, the breeding of a neworganism using a biotechnology such as genetic engineering or cell fusion is creative.
8 See “1.2.1.2. Utilization of the Laws of Nature.” Since Article 36, paragraph (4), item (i) of the Patent Act provides
that the detailed explanation of the invention must be stated in such a manner that it enables a person skilled in theart to work the invention, there is an idea that repeatability is an issue of disclosure (Hidetaka Aizawa, Baiotekunorojī
To Tokkyo Hō (Biotechnology and Patent Law), p. 58). Nevertheless, theoretically, repeatability is the nature of thesubject matter, while disclosure is an issue of whether the subject matter (the invention) is described clearly andsufficiently. Thus, they are separate issues. In practice, however, it is often difficult to discriminate between the two,and there seems to be no use in distinguishing between the application of the repeatability requirement and that ofthe disclosure requirement.
9 For instance, a case of breeding a new variety by using a biotechnology such as genetic engineering or a case of
breeding a new variety by using Mendel’s law.
10 For instance, a case of merely grafting a bud variation and a case of merely making a selection.

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Creativity will also be recognized, in principle, for a case where a new organism was bredby repeated crossbreeding based on Mendel’s law.
D. Procedural Issues
Even if genetically-novel organisms could be patented in theory either as
inventions of products or inventions of processes, various problems could occur in thespecific procedures for obtaining the patent.
A patent examination is conducted based on filed documents, so the determinationof all of the patentability requirements, including novelty and the involvement of an
inventive step, is solely dependent on the documents. However, unlike the invention of
an industrial product, the invention of an organism often cannot be examined by such
document-based procedure alone, due to great individual differences. Also, the fact thatthe genetic structure has yet to be elucidated for all of the genes of organisms makes theexamination more difficult, but as elucidation of genes makes progress, there would be
more cases in which determination would be made based on genetic identity. This was
one of the reasons why not many inventions of this kind had been patented in the past.
Incidentally, the Examination Guidelines set forth that the plant should be specified by,for example, a combination of any of the species, the distinctive gene of the plant,characteristics of the plant, etc. and may be further specified by the process for creating
the plants. At the same time, the Guidelines indicate that, as to an invention of a process
for creating a plant, the process for creating the plant should be described in the claim
step by step. They also state that, in the case where a selection is made, the characteristics
or the like necessary for the selection should be additionally described, and whereconditions such as environmental ones are necessary for creating the plant, suchconditions should be also described.
Next, there is a question of whether the technological content of the invention ofan organism can be disclosed in the patent description to the extent required for a person
skilled in the art to work the invention easily. In the case of inventions which have usedbiotechnology in recent years, it may be possible to disclose the technology to the extent
that a person skilled in the art can work the invention by looking at the description, in thesame manner as for inventions of industrial products. However, for many organismrelated inventions, a person skilled in the art cannot work the invention easily merely bylooking at the description. 11 This issue is resolved for inventions relating tomicroorganisms12 by adopting the deposit system. Specifically, an invention relating to

11 In the case of F1 (first filial generation) in particular, it is difficult to work the invention by merely looking at thedescription unless one obtains the parent organisms. However, if a cell culture is possible, the same kind of organism
could be created easily at least with regard to multiplication.
12 Examination Guidelines Part VII, Chapter 2 “Biological Inventions” defines “microorganisms” as meaning yeasts,
molds, mushrooms, bacteria, actinomycetes, unicellular algae, viruses, protozoa, etc. and further includes
undifferentiated animal or plant cells as well as animal or plant tissue cultures.

163

§1. Creation of Righta microorganism is deemed to have been disclosed by depositing the microorganism withan institution designated by the JPO, and attaching a certificate thereof to the application,
except in the case where a person skilled in the art can obtain the microorganism easily(Article 27-2 of the Patent Act Enforcement Ordinance). A person who intends to work
an invention relating to the deposited microorganism for testing or research may befurnished with a sample of the microorganism under specific conditions (Article 27-3 ofthe Patent Act Enforcement Ordinance). This system is adopted internationally (Article2(viii) of the Budapest Treaty on the International Recognition of the Deposit ofMicroorganisms for the Purposes of Patent Procedure and Regulations). However,different countries have different timings for the furnishing of samples.
[154]
E. Issue of Contravention of Public Order and Morality
The creation of a new organism always involves the problem of the contraventionof public order and morality, but this issue has been discussed in detail in “1.3.2.
Unpatentable Inventions (Article 32 of the Patent Act),” so it will be omitted here.
F. Relationship with the International Convention for the Protection of New
Varieties of Plants
The International Convention for the Protection of New Varieties of Plants13 towhich Japan accedes had provided that the same plant variety must be protected by asingle form of protection, and overlapping protection was prohibited. Therefore, therelationship between Japan’s Patent Act and the Plant Variety Protection and Seed Act
presented an issue.14 However, since this provision prohibiting overlapping protection
was deleted in the Convention as amended in 1991, which was also ratified in Japan, theproblem of the violation of the Convention by the overlapping protection under the Patent
Act and the Plant Variety Protection and Seed Act was resolved, and this overlapping
protection issue became an issue of domestic legislation policy. While the Plant Variety
Protection and Seed Act was fundamentally revised at the time of the amendment of theConvention, the revised Plant Variety Protection and Seed Act does not have any
provisions concerning overlapping protection. Also, the Patent Act does not have any
such provisions either. Accordingly, it is construed that overlapping protection is notprohibited under current law.
Today when biotechnology is making progress, a provision prohibiting overlapping
protection is considered to be unnecessary. There is a great difference between a patent
13 This is referred to as the UPOV (Union internationale pour la protection des obtentions végétales) Convention. The
Convention entered into force and the Union was inaugurated in 1968. The Convention was amended in 1978, andthis facilitated accession by Japan and the United States. Therefore, Japan signed the Convention in 1979 and ratified
it in 1982. Later, in 1991, the Convention was drastically amended. Japan ratified the amended Convention in 1998
and concurrently made a fundamental revision of the Plant Variety Protection and Seed Act (Act No. 83 of 1998).
14 The specific point of issue was how a registered patent for a new variety of Artemisia, Pentayomogi, should betreated in relation to the provision of the UPOV Convention prohibiting overlapping protection.

164§1. Creation of Right

right and a breeder’s right under the Plant Variety Protection and Seed Act. While abreeder’s right is registered for a specific variety, 15 a patent right is often granted for an
invention having either a broader scope16 or a narrower scope17 than a specific variety.
In such case, there is no problem in allowing both registrations. If any problem should
occur in the future, a provision merely needs to be established to coordinate the two rights.
[155]
1.3.3.2. Computer Software-Related Inventions
A. Point of Issue
Most parts of the modern social structure are managed by computers, and thosecomputers are operated by software.18 Today, most of the investment in computers isdedicated to software. While software development takes an enormous amount of timeand is very costly, software can be very easily reproduced or counterfeited at a low cost.
A considerable amount of capital investment would usually be required for counterfeitinga general industrial product, but little investment is required for reproducing software, sosoftware is extremely vulnerable to infringement if it is not protected under intellectual
property law.
Software is also protected by copyright law. Upon the 1980 revision of the U.S.
Copyright Act, computer programs were included in protected works. Subsequently, they
were also stipulated as protected works in Japan’s Copyright Act as revised in 1985. It
seemed that copyright law was the mainstream of legal protection for software. In recent
years, however, there has been growing recognition that copyright protection is not
sufficient for protecting software, and protection under patent law has gained increased
recognition, leading to an increasing number of people obtaining patents for softwarerelated inventions.
Conventionally, the Patent Act had been thought to be unsuitable for protecting
software. The main reasons were as follows:
1) software does not utilize a law of nature;2) the time-consuming patent examination does not suit the short life cycle of software;3) software counterfeiting is often difficult to discover, and the patent publication
system is likely to induce infringements instead;4) patent-related procedures are too detailed to deal with the frequent upgrading of

15 For instance, it is registered for a specific variety such as Koshihikari rice that is resistant to a certain disease.
16 For instance, it is granted for a claim such as a rice plant resistant to a certain disease.
17 For instance, it is granted for a claim such as DNA which is resistant to a certain disease.
18 “Software” could be boiled down to a use method or a calculation method for a computer. It includes not only the
program itself, but also the system design drawings, flowcharts, and manuals. For details, see Nobuhiro Nakayama,
Sofutowea No Hōteki Hogo (Legal Protection of Software), p.4.

165

§1. Creation of Rightsoftware;5) most software does not involve an inventive step; and6) the JPO cannot cope with the great number of applications under its present
processing capacity.
[156]
The appropriateness of these reasons may be subject to detailed study, but the point
about the law of nature in (i) should be the only one that presents a theoretical problem
regarding the patentability of software. The points from (ii) through (vi) are practicalproblems, so they may serve as reasons for inconvenience in using the patent system, but
not as theoretical grounds for denying patentability.
B. Utilization of Laws of Nature
The question regarding the patentability of a software-related invention is whether
or not it utilizes a law of nature. The details of this issue are as already mentioned in“1.2.1.2. Utilization of the Laws of Nature.” Not all of the results of people’s mental
creative activities are protected, and the Patent Act limits the scope of protected
inventions by the concept of the utilization of laws of nature. This approach might havebeen reasonable 100 years ago, but today, when new technology is emerging, thisrequirement of utilizing the laws of nature should be once again reviewed according to
the present status of technology. The direct application of conventional standards could
prevent new technology from being protected but, on the other hand, excessive expansionof a standard would even allow for a monopoly that runs counter to the benefits to society
in general, and could obstruct industrial development. It is important to decide on a newpatentability standard when new technology emerges.19
C. Effect of the Patent on a Computer Software-Related Invention
Since a medium claim had not been recognized in the past, a software-related
invention used to be registered either in the form of a product or a process. Thus, many
infringing parties often only stored the software part of the invention on a storage medium
and sold it, without infringing the entire claim, which was expressed in the form of a
product or a process. An argument arose about whether such an act constitutes an indirect
infringement, but it became possible to describe an invention as a “storage medium
having a program recorded thereon” in the scope of claims in 1997, so the act of producing
and selling such storage medium came to constitute a direct infringement, instead of an
indirect infringement. Later, with the 2002 revision of the Patent Act, it became possible
to register a computer program in the form of a product, and the provision of a computer
program was included in the concept of an assignment; thus, problems were reduced.
19 Kiyokazu Yamagami, “Sofutowea Kanren Hatsumei No Tokkyosei: Tokuni Hatsumei De Arukoto No Yōken Ni
Tsuite” (Patentability of Software-related Inventions: Focusing on the Requirements for Statutory Inventions),
Hongō Hōsei Kiyō (Hongo Journal of Law and Politics), No. 3 (1994), p. 357.

166

§1. Creation of Right

With regard to the patentability of computer programs, see "1.2.1.2. (3) Computer
software."[157]
In the future, however, businesses that allow users to use software online are
expected to develop. Particularly, as in the case of cloud computing, a business model inwhich a user does not need to store the program on his/her computer, but only obtains theresults by accessing the host computer online is expected to gain more popularity. Then
there would be a question of whether or not such user’s act constitutes an infringement,
especially when the host computer is located overseas. Also, though it would depend on
how the scope of claims is described, there would be a question of how one person’s act
should be evaluated when the working of an invention is completed by the acts of multiple
persons (e.g., an online payment system). As software-related inventions involve many
unsolved problems, they will likely continue to be subject to discussions in the future.

167§1. Creation of Right[158]
1.4. Legal Status before Registration
1.4.1. Nature of the Right to Obtain a Patent
A patent right becomes effective upon registration (Article 66, paragraph (1) of the
Patent Act), but one kind of right takes effect prior to registration. This right is called the“right to obtain a patent” under the Patent Act (Article 33 of the Patent Act). The right toobtain a patent has two aspects, one as a right to demand an administrative disposition of
granting a patent from the State and the other as a property right.1
In order for a patent right to be established, an examiner’s decision and registration,
which are administrative dispositions, are required. Theoretically, the patent system canbe designed to carry out no substantive examination and no registration, as in the case of
copyright law, but most countries around the world have a system that registers patents
after carrying out substantive examination. A system whereby an ownership-style privateright becomes effective through an administrative disposition is a unique system forproperty law, and that disposition can be considered to be a special kind of administrative
disposition; rights are granted through an administrative disposition in order to improve
convenience and stability. An administrative disposition of patent (a decision to grant apatent and patent registration) has a different purpose from that of ordinary administrative
dispositions, and when considering a patent right after registration in particular, the focus
should be placed on its aspect as an ordinary property right. An inventor has a right to filea patent application, which is an inherent right, and the State does not have discretion onwhether or not to register patents.
The Patent Act merely provides stipulations on transfers (Article 33, paragraph (1)),
the creation of a pledge (paragraph (2) of said Article), effectiveness against a third party(Article 34), provisional exclusive license (Article 34-2), and provisional non-exclusive
license (Article 34-3) regarding the right to obtain a patent. Therefore, the whole pictureof the right that the inventor originally acquires (the inventor’s right or the invention right)
needs to be made clear by academic theories and court decisions.
The inventor’s right is originally obtained by the inventor upon completion of theinvention (with regard to the inventor's right for an employee invention, see "1.1.3.
1 Conventionally, the nature of the right to obtain a patent was subject to two conflicting theories: one that viewed it
as a civil right and one that viewed it as a private right. However, there seems to be no use in a discussion that
determines the nature of the right a priori. The first thing to do is to decide on the specific content of the right toobtain a patent. It would be sufficient to say that the legal nature of the right has aspects both as a civil right and asa private right (Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law [New and Expanded
Edition]), p. 136). Also, in the Tokyo District Court Judgment, July 5, 1955, Kamin, Vol. 6, No. 7, p. 1303 (the Solid
Boiler Compounds case), the court stated that "an inventor’s right is a right to claim a patent, while at the same time
it is one mode of the right to obtain a patent, which is a substantive right which enables the inventor to freely use or
assign to other persons his/her own invention."168§1. Creation of Right

Employee Inventions (Article 35 of the Patent Act)"), but in order to gain protection under
the Patent Act, the inventor must file a patent application for the invention, to have thepatent registered after examination. However, the content of an invention at the time of
the completion of the invention, that of the scope of patent claims at the time of the filing,
and that of the scope of patent claims that was registered may not necessarily coincidewith each other. What had been considered as one invention could be divided into
multiple applications or filed in the form of multiple claims. Conversely, what had been
considered as multiple inventions could be filed as a single application. The description
and drawings can be amended after the filing, or an application may be divided into
multiple applications (Article 44 of the Patent Act). In addition, it is possible to convert
an application between a patent application, utility model application, and a design
application (Article 46 of the Patent Act, Article 10 of the Utility Model Act, and Article
13 of the Design Act).
[159]
This indicates that the content of an invention is always subject to change from thetime of the completion of the invention until the patent registration, and even after theregistration, it may further change through correction. Therefore, the relation between theinvention and the registration is different from that between the occurrence of the cause
and the recording or registration thereof in a change to a real right. It is not appropriate toassume the subsequent processes at the time of the completion of the invention, but thecompleted invention should be viewed retrospectively from the registered patent. If so, itwould not be necessary to discuss how many inventions or rights to obtain a patent there
were or whether it was a right to obtain a patent or a right to obtain a utility model at thetime of the completion of the invention. All of these matters only need to be determinedbased on the registered patent.
1.4.2. Details of the Right to Obtain a Patent
1.4.2.1. Creation of a Right
The right to obtain a patent is originally acquired by the inventor upon thecompletion of the invention (an employee invention (Article 35) is an exception). As amatter of course, whether or not a patent can be granted for the invention, that is, thepatentability of the invention, is not determined until the examination has been completed.
The Patent Act calls this right the “right to obtain a patent,” because it only has
stipulations regarding the filing of patent applications, but this right does not only enable
the acquisition of a patent, and should more appropriately be called the inventor’s rightconsidering the actual substance of the right.

169§1. Creation of Right

1.4.2.2. Enforcement of a Right
The inventor and his/her successor in title can work their invention, make a profit
from the invention, or assign the invention as long as the act is not prohibited by a law or
regulation and it does not infringe on another person’s right. It is only natural that they
can work their own invention unless they prejudice another person’s right, whether or not
the invention is patentable. They may also have another person work the invention, which
is a factual issue similar to know-how licensing, and which is different from patent
licensing. In other words, although a person having the right to obtain a patent can work
the subject invention by himself/herself, the person is not guaranteed the exclusive
working of the invention, he/she cannot stop another party’s acts,1 and he/she cannot
work the invention even by himself/herself if the working infringes on a third party’s right.
In short, no special right is created in relation to the working of an invention, even if aperson has the right to obtain a patent for it.
[160]
1.4.2.3. Provisional Exclusive License and Provisional Non-exclusive License(Articles 34-2 and 34-3 of the Patent Act)
(1) Use of a Right before Registration
In the past, no license could be granted under the Patent Act for a right to obtain apatent. Of course, as long as the invention was kept secret, it was possible to license knowhow, but that did not have the same effect as an exclusive license or non-exclusive license
being granted as provided under the Patent Act. Specifically, there was no way to makethe license on know-how effective against third parties, so when the right to obtain apatent was transferred to a third party, the licensee could not duly assert against the newright holder, and in the event that the holder of the right to obtain a patent went bankrupt,
the licensee faced the risk of having the license contract cancelled by the bankruptcy
trustee.
However, with the acceleration of the speed of the economy, there has been agrowing need to use the right before registration, in order to make a profit from theresearch and development results quickly. In particular, venture companies anduniversities (technology licensing organizations) which do not have many assets otherthan technology are facing the need to collect or raise funds by granting licenses on or
1 The Tokyo District Court Judgment, July 5, 1955, Kamin, Vol. 6, No. 7, p. 1303 (the Solid Boiler Compounds case).
This is a case where the court denied a claim for prevention of a nuisance based on a right prior to publication of thepatent application.

170§1. Creation of Rightcollateralizing the right before patent registration. With the 2004 revision of the Trust Act,
intellectual property was added to property entrustable as a business trust, and with the2006 revision of the Trust Act, it became possible to securitize a beneficial interest. Thesesystems are also useful for liquidating intellectual property. For a similar purpose, asystem for the establishment of a provisional exclusive license and grant of a provisional
non-exclusive license was introduced with the 2008 revision of the Patent Act.2[161](2) Basic Concept of the System
In the actual economy and in society, the right to obtain a patent had beenfunctioning as one kind of property even before registration, and there were problems in
the absence of a system for using such a right. However, except for the right to claim
compensation (Article 65), the right before registration had no substance, and it was only
an expectant right in that a patent right is likely to be obtained in the future. In particular,
before laying open an application, that is, before receiving provisional protection, theholder of the right to obtain a patent has no exclusive right, right to claim damages, orright to claim compensation against the working of the invention by a third party, andeven after laying open the application, he/she has no right if the application fails to beregistered.
Therefore, in 2008, in order to make it possible to license the right to obtain a patent
at the filing stage, the system of a provisional exclusive license and provisional nonexclusive license, which requires patent registration as a condition precedent, wasestablished.
Given that the right to obtain a patent is not a right to seek an injunction, before theregistration, a person who was working an invention by receiving a license from an ownerof the right to obtain a patent will not receive a demand for an injunction from the assigneeof the right to obtain a patent. However, with regard to working of the invention after thelaying open of the application, the licensee may receive a claim for compensation on thecondition that the patent becomes registered and may be accused of infringing on thepatent after registration. Thus, upon the 2008 revision, it was provided that a registeredprovisional exclusive license and a provisional non-exclusive license are effective against
a third party acquirer so as to ensure that the licensee will not receive a claim forcompensation or a demand for an injunction from the third party acquirer after the patentregistration. In this manner, it became possible to grant a license for the right for a pending
patent application, not in the form of a know-how license, but as a license that has
significance under the Patent Act.
2 Kōtarō Kimura, “Tokkyo Raisensu Keiyaku O Meguru Sho Mondai” (Practical Issues in Patent Licensing), Chizai
Kanri (Intellectual Property Management), Vol. 59, No. 6 (2009), p. 615; Minoru Takeda, “Shin Tsūjō Jisshiken Tō
Tōroku Seido No Gaiyō” (Outline of the New Registration System for Non-exclusive Licenses, etc.), L&T (Law &Technology), No. 40 (2008), p. 13.

171§1. Creation of Right(3) Provisional Exclusive License (Article 34-2 of the Patent Act)
With the 2008 revision of the Patent Act, it became possible for a person having
the right to obtain a patent to establish a provisional exclusive license for the patent rightto be acquired based on the right to obtain a patent, within the scope of the mattersdisclosed in the description, scope of claims, or drawings originally attached to theapplication (Article 34-2, paragraph (1) of the Patent Act). This is an exclusive license
for which a condition precedent is a registration establishing the patent right in question.
It is not an exclusive right since the patent right has not yet been established, but thelicensee can obtain the power to duly assert against third parties with regard to a right thatwould become an exclusive license if the patent is registered, and he/she can obtain an
outcome whereby the license will not be cancelled by a bankruptcy trustee in the case ofbankruptcy (Article 56, paragraph (1) and Article 53, paragraph (1) of the Bankruptcy
Act). A provisional exclusive license must be registered in order to be effective against
third parties (Article 34-4), and when the patent is registered, the JPO registers an
exclusive license for any provisional exclusive license, ex officio, at the time of theestablishment of the patent right.
[162]
While a right for a pending patent application sometimes changes its scope by
amendment, the applicant’s intent would be to establish an exclusive license for the patentright that is finally established, and even if an exclusive license were established on theright after the amendment, the amendment is made within the scope of the mattersdisclosed in the description, scope of claims, or drawings originally attached to theapplication (Article 17-2, paragraph (3) of the Patent Act), so there is no risk of causing
any unexpected harm to third parties as there is no risk for the broadening of the scope.
Accordingly, it was provided that registration of a provisional exclusive license that wasmade before amendment will continue to be effective after the amendment to the extent
permitted by the contract granting the license (Article 34-2, paragraph (2) of the Patent
Act). Based on a similar idea, it was provided that, in the case of division, a provisional
exclusive license is also deemed to have been established on the new patent application
to the extent permitted by the contract granting the license3 (Article 34-2, paragraph (5)of the Patent Act).
A provisional exclusive license may be transferred only where the businessinvolving the working of the relevant invention is also transferred or where the transfer
occurs as a result of general succession, apart from the case where the consent of thepatentee is obtained (Article 34-2, paragraph (3) of the Patent Act). This is similar to the
3 However, division has a slight problem. Where Invention A was stated in the original scope of claims and Invention
B was stated in the original description, but both Invention A and Invention B came to be stated in the scope ofclaims as a result of a division, the extent to which a provisional exclusive license would be effective is unclear.
Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 468 [written by Kōtarō Kimura].

172§1. Creation of Rightcase of an exclusive license (Article 77, paragraph (3) of the Patent Act). If a provisional
exclusive license is jointly owned, no joint owner may assign said joint owner's own shareor grant the provisional exclusive license without the consent of all the other joint owners(paragraph 5 of said Article).
If an applicant can freely waive or withdraw his/her application, it could undermine
the provisional exclusive licensee’s interests. Therefore, just as in the case of the waiverof a patent right (Article 97 of the Patent Act), an application cannot be waived orwithdrawn without the consent of the provisional exclusive licensee (Article 38-2 of the
Patent Act).
With regard to a provisional exclusive license, the provisions of Article 33,
paragraphs (2) through (4) are applied mutatis mutandis (Article 34-2, paragraph (8) of
the Patent Act). In fact, provisions on security rights should also be established, but only
provisions on licenses were revised. In particular, venture companies need to acquireloans by putting up their rights before patent registration as security, so the establishmentof a right of pledge on the right to obtain a patent is subject to future discussions.
[163](4) Provisional Non-exclusive License (Article 34-3 of the Patent Act)
Upon the 2008 revision, it became possible for a patent applicant to establish aprovisional non-exclusive license based on the right to obtain a patent, to the extent of thematters stated in the description, scope of claims, or drawings originally attached to theapplication for the patent right to be acquired (Article 34-3, paragraph (1)). The nature ofa provisional non-exclusive license is that it is a non-exclusive license of which a
condition precedent is a registration establishing the patent right in question. By operationof law, the licensee can obtain the power to duly assert against third parties, and obtainan outcome whereby the license will not be cancelled by the bankruptcy trustee in thecase of bankruptcy (Article 56, paragraph (1) and Article 53, paragraph (1) of the
Bankruptcy Act). Before the 2011 revision, only registered provisional non-exclusive
licenses were effective against third parties (Article 34-5 before the revision), but as theregistration system for non-exclusive licenses was abolished and non-exclusive licenses
became effective against third parties by operation of law, provisional non-exclusive
licenses also became effective against third parties by operation of law (Article 34-5 after
the revision). Incidentally, the revision Act also applies to provisional non-exclusive
licenses that existed since before the enforcement of the revision Act (Article 2, paragraph(3) of the Supplementary Provisions), so all non-exclusive licenses became effective
against third parties without registration.
With regard to the amendment and division of a patent application, a provisional
non-exclusive license continues to be effective after the amendment or division, in thesame manner as a provisional exclusive license. It more or less resembles a provisional173§1. Creation of Right

exclusive license in other aspects as well.
Before the 2011 revision, when there was a registered provisional non-exclusive
licensee, the applicant was able to waive or withdraw his/her patent application only withthe consent of said licensee (Article 38-2 before the revision), but since the non-exclusive
license registry was abolished, the consent of a non-exclusive licensee became
unnecessary when waiving or withdrawing a patent application (Article 38-2). Therefore,
it is desirable to decide on waiver and withdrawal by contract in advance between thepatent applicant and the provisional exclusive licensee.
Content of a provisional non-exclusive license is partially non-disclosed for thesame reason as that for a non-exclusive license due to the risk of undermining the interestsof interested parties, but since the registration system for non-exclusive licenses and its
registry were abolished upon the 2011 revision, the problem of disclosure was dissolved.
1.4.2.4. Right to File a Patent Application (Right to Obtain a Patent) (Articles 33 and34 of the Patent Act)
[164]
(1) Transferability
The right to file a patent application, which is part of the inventor’s right, can betransferred (Article 33, paragraph (1) of the Patent Act). It seems natural that the rightcan be transferred since the right is a property right, but historically this has not always
been a self-evident truth,4 so there is significance in stipulating this fact in a provision.
The transfer of the right to file a patent application does not have to be in aparticular form if it is carried out before the filing of the patent application, and only needs
to be agreed on between the parties concerned, but the patent application needs to havebeen filed in order to make the transfer effective against third parties (Article 34,
paragraph (1) of the Patent Act). After the filing of the patent application, the transfer ofthe right to obtain a patent must be reported to the JPO Commissioner in order to make it
effective against third parties (paragraph (4) of said Article).
The systems of provisional exclusive license and provisional non-exclusive license
were introduced with the 2008 revision, and it was provided that, where the right to obtaina patent is jointly owned, no joint owner may establish a provisional exclusive license or
grant a provisional non-exclusive license without the consent of all the other joint owners(Article 33, paragraph (4) of the Patent Act). The fact that the consent of all the other joint
owners is needed is the same as in the case of a jointly owned patent right.
Transfers are only recognized for property rights, so the inventor’s right to be
4 In Britain, the transfer of the right to file a patent application had not been recognized sincethe Statute of Monopoliesof 1624, but it was finally recognized in the Patent Act as amended in 1949. The United States, which inherited
British law, still does not recognize the transfer of the right to obtain a patent.

174§1. Creation of Right

credited, which is a personal right, cannot be transferred. Therefore, whoever theapplicant is, the inventor always has the right to give his/her name as the inventor in thefiling documents, etc. (Article 36, paragraph (1), item (ii) of the Patent Act).
(2) Establishment of a Security Right
A. Pledge
It is provided that the right to obtain a patent cannot be made subject to a pledge(Article 33, paragraph (2) of the Patent Act). However, the legislative purpose of thisprovision is not necessarily clear, and there remain some questions regarding its
appropriateness, so various different theories exist regarding this matter.5
The reasons for the provision under the current Act are assumed to include the factthat there is no method to publicly announce the right to obtain a patent and that there is
no provision as to the consent of the pledgee regarding the amendment of the description
or drawings of the pending patent application after establishing the right of pledge. 6
However, these kinds of arguments are unconvincing from a legislative viewpoint. It is
desirable to promote discussions toward at least allowing for the establishment of a pledge
on the right to obtain a patent after an application has been filed. 7 Since transfers areallowed for the right to obtain a patent, there should be no problem in allowing theestablishment of the right of pledge if provisions on the method for making a publicannouncement and the method for making an amendment of the pending application were
stipulated. With the 2008 revision of the Patent Act, provisions on a provisional exclusive
license and a provisional non-exclusive license were introduced, paving the way for using
the right prior to patent registration. Provisions on the establishment of the right of pledge
should also be introduced in the future, in order to pave the way for inventors to obtainloans.8[165]
B. Mortgage
There is no provision in the Patent Act concerning the establishment of a mortgage
on the right to obtain a patent, so there is no method for making a public announcement.
Thus, such establishment is not possible.
C. Mortgage by Transfer
The current Patent Act merely stipulates that the right to obtain a patent cannot bemade subject to a pledge, and does not particularly prohibit its use in a mortgage by
5 For the various theories and problems, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han] (Explanatory
Notes on the Patent Act Vol. 1 [3rd ed.]), p. 313 [written by Nobuhiro Nakayama].
6 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act, Rev. ed.), p.
147; Hisao Iijima, Jurist, No. 197 (1960), p. 83.
7 Takashi Hashiba, “Tokkyo O Ukeru Kenri No Shichiire Ni Tsuite” (Pledge of the Right to Obtain a Patent), Book
Commemorating the Sixtieth Birthdays of Jō Onogi and Hideo Saitō, Teitōken No Jikkō Ge (Exercise of a Mortgage,Vol. 2) (Yuhikaku, 1972), p. 386.
8 Institute of Intellectual Property, “Chiteki Zaisanken Tanpo Kachi Hyōka Shuhō Kenkyūkai Hōkokusho” (Report by
the Study Group on the Assessment Method of the Security Value of Intellectual Property Rights) (1995).

175§1. Creation of Right

transfer, so a mortgage by transfer is construed as being allowed.
While the old Act stipulated that the right to obtain a patent “could not be used as
security,” there was a court decision that held that the establishment of a mortgage bytransfer was effective.9 Given that the current Act only prohibits pledges, it is consideredthat a mortgage by transfer is not prohibited under the current Act. There are no
theoretical grounds for prohibiting the establishment of a security interest on the right toobtain a patent, and from the viewpoint of paving the way for using the right to obtain apatent as an asset for obtaining loans, it is, rather, desirable to work toward allowing theuse of the right as security as far as possible under the framework of the current Act.
D. Foundation Mortgage and Enterprise Mortgage
The specific factors that can constitute a foundation for a foundation mortgage are
stipulated in the respective mortgage laws. Article 11, paragraph (5) of the Factory
Mortgage Act and Article 2, paragraph (6) of the Mining Mortgage Act provide thatindustrial property can constitute a foundation. However, the meaning of industrial
property in this context is not necessarily clear. Whether or not the right to obtain a patentis included in such industrial property is a matter of interpretation.10
The significance of a foundation mortgage is in handling the entirety of a company
actually in operation as one group of assets, without breaking up the individual assets ofthe company, and using that as security. Therefore, it would be meaningless if a factory
or a mine could not be operated solely based on the constituents of the foundation. If theright to obtain a patent or know-how could not constitute the foundation, it could becomea serious obstacle for the operations of the company, so these factors should also beconstrued to be included in the industrial property rights constituting a foundation. Since
industrial property rights in the broad sense include the right to obtain a patent, there
would be no problem in interpretation either.
[166]
However, as the constituents of a foundation must be described in the foundation
inventory, the right to obtain a patent needs to be an objective asset. Know-how, which
has a considerable overlap with the right to obtain a patent, is traded as an objective

9 The Tokyo District Court Judgment, April 8, 1952, Kamin, Vol. 3, No. 4, p. 471 (the English Typewriting Practicing
Machine case). In the Tokyo District Court Judgment, September 24, 1956, Kamin, Vol. 7, No. 9, p. 2593 (the Super
Bearing case), the court stated that one reason for denying the right of pledge was that the novelty of the invention
would be lost by exercising the right of pledge, and held that a mortgage by transfer can be recognized due to being
free of such an outcome.
10 Under the old Act, there were theories stating that the right to obtain a patent could not constitute a foundation,
because the Act stipulated that it “could not be used as security” (Yasukazu Kagawa, Shintei Kōjō Oyobi Kōgyō
Teitō Hō (Newly Revised Factory and Mining Hypothecation Law) (Minato Shuppansha, 1965), p. 122).

176

§1. Creation of Rightasset, 11 so the right to obtain a patent needs to be objectified by a similar method.
However, at least the right to obtain a patent during the pendency of the application could
be regarded as an objective asset.
The Enterprise Mortgage Act makes the total assets of a stock company subject toan enterprise mortgage in order to secure its company bonds (Articles 1 and 2 of theEnterprise Mortgage Act), and the right to obtain a patent is included in such total assets.
(3) Compulsory Execution
Under the Civil Execution Act, there is no provision specifying a right to obtain apatent as a seizure-prohibited object. However, Article 131, item (xii) of said Act 12
mentions “any object pertaining to an invention or a copyright work that has yet to bemade public” as a seizure-prohibited movable.13 According to this, objects relating to
unpublished14 inventions (e.g. a machine that has not been made public) cannot be seized,
but since unpublished inventions themselves are not movable property, their seizure is
not directly prohibited by this provision.
[167]
The right to obtain a patent is not an object, so compulsory execution against it
would mean a compulsory execution against another property. This interpretation is
supported by some theories,15 but denied by others.16
The grounds for the theory recognizing compulsory execution include the fact that
it is not specifically prohibited under the Civil Execution Act, and that it is only naturalthat assignable property is subject to compulsory execution. On the other hand, thegrounds for the theory denying compulsory execution include the fact that the invention
would be made public by the compulsory execution, and there is no method for making a
11 Ken’ichirō Ōsumi, “Nouhau To Sono Jōto” (Know-how and Its Transfer), Business Law Articles Commemorating
the Seventieth Birthday of Professor Komachiya, (Yuhikaku, 1964), p. 1 states that know-how is also made subject
to a contribution in kind upon the incorporation of a company. (An opposite view is indicated in Mokichi Hasebe,“Iwayuru ‘Nouhau’ No Genbutsu Shusshi Ni Tsuite” (Use of ‘Know-how’ for Investment in Kind), Junkan Shōji
Hōmu (Business Law Affairs [issued every ten days]), No. 191 (1960), p. 4).
12 A similar provision was stipulated in Article 570, paragraph (1), item (xii) of the Code of Civil Procedure before
the 1979 revision, and the provision in the Civil Execution Act is a colloquial version thereof.
13 A similar provision is stipulated in Article 75, paragraph (1), item (xi) of the National Tax Collection Act, exceptthat “mono (things or objects),” which is written in kanji in the Civil Execution Act is written in hiragana in the
National Tax Collection Act. However, the literal provisions seem to imply that the Civil Execution Act targets
tangible objects, but the National Tax Collection Act targets subject matter that is not limited to “mono.”
14 The meaning of “unpublished” in this context is not quite clear. There is no doubt that if one describes an invention
in a publication without filing a patent application for it, the invention is published. However, if an object relates toa filed invention, there is a question of when it is deemed to be published: when the application is filed, when theapplication is laid open, or when the patent is registered. By considering the general meaning of “published,” aninvention probably should be regarded as being published when it is laid open to the public, but a system of
distinguishing the seizability between before and after the laying open of the application is questionable. It should
be appropriate to make at least an "object" relating to a pending application subject to compulsory execution.
15 Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan], p. 195; Bunzō Takino, Kōgyō Shoyūken Hō (Industrial Property
Law), p.30.
16 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho] (Industrial Property Law [New and Expanded Edition]), p.
140; Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act, Rev. ed.),p. 148; Hajime Kaneko and Yoshinobu Someno, Tokkyo/Shōhyō (Patent/Trademark), p. 25; Hisao Iijima, Jurist, No.
197 (1960), p. 84.

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§1. Creation of Right

public announcement; as well, the denial can be analogized from the fact that the right isprohibited from being put into a pledge, and can also be assumed from the purport ofArticle 131, item (xii) of the Civil Execution Act.
Compulsory execution against the right to obtain a patent poses difficult problems
in reality. For instance, there is a need to resolve issues such as specifying the subject of
a compulsory execution, determining the actual execution method, dealing with the factthat an invention has been published as a result of compulsory execution, and dealing
with the inventor’s right to be credited. On the other hand, since the main purpose of aprovision to prohibit the seizure of certain property is to secure the minimum standard ofliving and to protect the religious feelings and reputation of the obligor, it is unfair not torecognize the seizure of a property when it is the general property of the obligor.
Prohibiting the seizure of the right to obtain a patent means that the right will remain theproperty of the obligor and that it will not be included in a bankruptcy estate (Article 34,
paragraph (3) of the Bankruptcy Act), which is inappropriate. The right to obtain a patent,
as well as know-how, which has a considerable overlap with that right, are actually being
traded as property, so there is no reason to prohibit seizure of only the right to obtain apatent.
For these reasons, compulsory execution against the right to obtain a patent should,
basically, be allowed. The only question is the actual method. Interpretation should bemade in the direction of recognizing compulsory execution, but if there are any
difficulties, legislative measures should also be put in place to solve the problem.
The right to obtain a patent is categorized as “[an]other property right” under the
Civil Execution Act, so a compulsory execution would be conducted in the same manneras the execution against a claim (Article 167, paragraph (1) of the Civil Execution Act).
According to the Act, the execution court can order the transfer of the right to the obligee
at a price specified by the court in lieu of an auction, or can order its realization througha reasonable method (Article 161, paragraph (1) of the Civil Execution Act). Although
this provision would not have had the right to obtain a patent in mind, it would bereasonable to apply it to the right to obtain a patent. Use of the order to transfer the rightto the obligee could prevent a situation where an invention has been published due tocompulsory execution.
[168]
Next, the subject of a compulsory execution must be specified. There would
actually be considerable difficulty in specifying the subject of a compulsory execution
with regard to the right to obtain a patent before the filing of the application, just as in thecase of know-how. As there are no means of making a public announcement, the situation
would inevitably be unstable. The obligee cannot file the patent application merely by
seizing the right to obtain a patent, but he/she would be able to file the application if the178§1. Creation of Right

court orders the obligor to transfer the right to obtain a patent to the obligee at the pricespecified by the court. Thus, there is a high degree of difficulty and instability involved,
but this does not serve as a reason for denying the compulsory execution itself. The issueof specifying the subject of a compulsory execution is, to a certain extent, likely to beresolved through the accumulation of actual practices.
The Patent Act does not have any provisions concerning such a disposition for theright to obtain a patent after the filing of the application, so it would be processed by thesame method as in the case of the right before the filing. However, since the procedure isalready pending before the JPO in such a case, there should be a provision about a publicannouncement procedure. The right to obtain a patent may change its form even after
filing by amendment or division. In that sense, legislation may be quite difficult, but it isnecessary to get it settled in some way.
1.4.2.5. Inventor’s Right to be Credited
The inventor acquires the inventor’s right to be credited upon completion of theinvention. The inventor’s right to be credited is a moral right, which cannot be assigned
to another party. In the course of the application procedure, the inventor’s right to becredited is materialized in the form of having his/her name described in the application(Article 36, paragraph (1), item (ii) of the Patent Act), the patent gazette for laying open
the application (Article 64, paragraph (2), item (iii) of the Patent Act), the certificate ofpatent (Article 66, item (iv) of the Patent Act Enforcement Ordinance), and otherdocuments. 17 Therefore, it only has a latent existence before filing.
The inventor’s right to be credited is an extremely weak right compared to themoral rights of the author under the Copyright Act. Describing the name of a person who
is not the inventor in the filing documents as the inventor is neither a reason for a refusalof the patent application (not listed in the reasons for refusal under Article 49) nor a reason
for invalidation after the patent registration (i.e. it is not listed as a reason for invalidationin Article 123, paragraph (1) of the Patent Act). The filing of a patent application by aperson who does not have the right to file the application is regarded as a misappropriatedapplication, which constitutes a reason for invalidation (Article 123, paragraph (1), item(vi) of the Patent Act), but the application is invalidated because it has been filed by aperson who does not have the right to obtain a patent, and not because of an error in theinventor’s name. For example, in employee invention disputes, the inventor’s right to becredited sometimes becomes an issue, but in most cases, the employer has the right to filea patent application. In such a case, an application that gives the name of a person other

17 These are domestic law provisions corresponding to Article 4quater of the Paris Convention.

179§1. Creation of Right

than the true inventor is not regarded as a misappropriated application, and it does notconstitute grounds for invalidation. However, there can be a case where it will constitutea tort based on the employer's infringement of the inventor's right to be credited.
[169]
While an application is pending before the JPO, the applicant can amend the nameof the inventor (Article 17, paragraph (1)). Accordingly, the true inventor can request theapplicant to put in place an amendment procedure to change the name of the inventor in
the application based on the inventor’s right to be credited, which is his/her moral right.18
Nevertheless, after the examiner’s decision of refusal becomes final and binding, the true
inventor cannot request an amendment procedure to change the name of the inventor
based on the inventor's right to be credited.19 Since the inventor's right to be credited isa moral right recognized under the Patent Act, as long as the examiner’s decision ofrefusal has been made, there is no longer room for recognizing the inventor's moral right.
Meanwhile, after a patent registration, however, the erroneous description of the name of
the inventor does not constitute grounds for correction (Article 126, paragraph (1) of the
Patent Act), so the inventor cannot request a trial for correction, and the erroneous namewill remain as it is. There is also a view that the inventor can request a correction fromthe JPO based on a declaratory judgment to the effect that he/she is the true inventor,20
but this would be difficult given that the current Act limitatively lists grounds forcorrection, setting aside the possibility of recognizing such a request by revising thecurrent Act.21 Nevertheless, since the inventor’s right to be credited is considered as one
kind of moral right, an infringement of the right could constitute a tort.22

18 In the Osaka District Court Judgment, May 23, 2002, Hanji, No. 1825, p. 116 (the Santoku Rare Earth case), thecourt held that, if the inventor’s right to be credited has been infringed, the true inventor may request the infringer tostop the infringement based on the inventor’s right to be credited, which is his/her moral right, and ordered theapplicant to put in place an amendment procedure with the JPO (this was a case where no request for an examination
had been filed as of the time of the conclusion of oral arguments).
19 The Tokyo District Court Judgment, September 11, 2014, court website (the Slope Measurement Device case). In
this case, the plaintiff, who is written as one of the inventors in the application, claimed that the invention was theplaintiff's sole invention, and sought against the applicant of the application a primarily claim seeking an amendmentof the application and a secondary claim seeking the declaration of the fact that the invention is the plaintiff's soleinventor, as well as compensation based on a tort of infringement of the inventor’s right to be credited. In this case,an examiner's decision of refusal was issued against the application, and became final and binding. In the Intellectual
Property Judgment, March 11, 2015, court website, which was the second instance of this case, the appeal was
dismissed.
20 Ryūichirō Sengen, Tokkyo Hō Kōgi [Dai 4 Han] (Lecture on Patent Law [4th ed.]), p. 153. Kōsaku Yoshifuji,
Tokkyo Hō Gaisetsu [Dai 13 Han], p. 186; Ryō Shimanami, Tatsuhiro Ueno, and Hisayoshi Yokoyama, Tokkyo
Nyūmon (Introduction to Patents), p. 58.
21 A declaratory judgment does not obligate the JPO to allow correction. Also, Article 126 expressly provides that“such correction shall be limited to the following.” Thus, it would not be permissible to make a correction other thanthe corrections limitatively listed in that Article, merely based on a declaratory judgment alone. There is also a
possibility to include the correction of the name of the inventor in the grounds for correction under Article 126 byrevising the Act.
22 The Osaka District Court Judgment, February 18, 2010, Hanji, No. 2078, p. 148/Hanta, No. 1339, p. 193 (AntiCD20 Monoclonal Antibody case).

180§1. Creation of Right

1.4.2.6. Relationship with Third Parties
The right to obtain a patent is, although there is an exception for employee
inventions (Article 35, paragraph (3)) after the 2015 revision, originally acquired by theinventor upon the completion of the invention, in principle, and then, after the filing, thelaying open, and examination of the application, the patent right is finally established byregistration. During this process, the contents of the right to obtain a patent change ineach phase. This part studies the right to obtain a patent in relation to third parties.
[170]
The right to obtain a patent itself has no effect in the elimination of third parties,23
and the mere working of an invention by a third party does not constitute a tort. 24
However, an invention is often kept secret until the laying open of the application, so tothat extent, if the invention satisfies the requirements for a trade secret as provided under
the Unfair Competition Prevention Act, it could be protected as a trade secret, and an
infringing act committed in relation to such trade secret could constitute a tort. 25
However, when an application is laid open, a right to claim compensation from a person
who works the invention without authorization after the laying open of the application
and before the registration arises after the registration (Article 65 of the Patent Act). Since
there was a major revision to the true inventor's right to request the transfer of the patent
after patent registration upon the 2011 revision, see "7.4. True Right Holder's Right to
Seek Transfer of a Patent (Article 74 of the Patent Act)."

1.4.3. Requirements for Effectiveness Against Third Parties
It is clear from the provisions of the statute that the right to obtain a patent can be
assigned, but the requirements for its effectiveness against third parties change in eachphase from when the right arises to the lapse of the right upon patent registration. The
following part reviews such changes in each phase.
1.4.3.1. Before Filing
As for the right to obtain a patent before the filing of a patent application, there are
23 The Tokyo District Court Judgment, July 5, 1955, Kamin, Vol. 6, No. 7, p. 1303 (the Solid Boiler Compounds case).
24 In the Tokyo District Court Judgment, July 24, 1968, Hanta, No. 229, p. 231 (the Hard Substance Crushing Devicecase), the court stated that this fact was a very apparent truth under the Japanese Patent Act.
25 For unjust enrichment, see Masanobu Ono, “Tokkyo Tōroku Mae No Hatsumei Shingai Kōi To Futō Ritoku”(Infringement of an Invention and Unlawful Gain Before Patent Registration), Taniguchi Tomohei Kyōju Kanreki
Kinen, Futō Ritoku/Jimu Kanri No Kenkyū (1) (Essays in Honor of the Sixtieth Birthday of Professor Tomohei
Taniguchi: Study on Unjust Enrichment/Management Without Mandate (1)) (Yuhikaku, 1970), p. 228.

181

§1. Creation of Right

no means of making a public announcement before the filing since the application is not
pending before the JPO, and the right is not effective against third party acquirers of theright to obtain a patent unless the patent application is filed (Article 34, paragraph (1)).
Possession is regarded as the means of making a public announcement for tangible goods,
but since inventions are intangible goods, a concept of possession similar in sense to thatfor tangible goods cannot be applied. Therefore, the mere working of an invention or theowning of it cannot be considered as the basis for presuming a legitimate title to the right,
and therefore the fact of working the invention does not have the function of a publicannouncement, so that is not appropriate as a requirement for effectiveness against third
parties.
[171]
When the two assignees of a double assignment file an application on the same date,
only the one selected through consultation shall be the right holder (Article 34, paragraph(2) of the Patent Act).1 Since the earlier and later applications are determined based on
the date (Article 39 of the Patent Act), the same treatment was applied in the case of
double assignment.
1.4.3.2. After Filing
The succession to the right to obtain a patent after filing has no effect without
notification to the JPO Commissioner (Article 34, paragraph (4) of the Patent Act).2 The
old Act (the Act of 1921) had stipulated that such notification was required for making
the succession effective against third parties (Article 12, paragraph (3) of the old Act).
This revision was made along with a revision to make the registration of a transfer of apatent right, which had been a requirement for making the transfer effective against third
parties, a requirement for the transfer to take effect.
If the two assignees of a double assignment of the right to obtain a patent make a
1 The provision of Article 34, paragraph (2) of the Patent Act is described from the approach of effectiveness against
third parties. However, it is a matter of whom the JPO determines and registers as the right holder, so it is basicallynot a matter of effectiveness against third parties. For details, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō[Dai 3 Han] (Explanatory Notes on the Patent Act Vol. 1 [3rd ed.]), p. 328 [written by Nobuhiro Nakayama].
2 In the Tokyo High Court Judgment, November 17, 1983, Hanji, No. 1108, p. 128 (the Facsimile Transmitter Using
Telephone Line case), the court stated that, even if a person who has succeeded to the right to obtain a patent files
litigation for rescinding a trial decision, and subsequently makes a notification of the succession to the JPO
Commissioner, the litigation will be unlawful due to being filed by a person who is not eligible to be a plaintiff in an
action for rescinding a trial decision, and such a defect will not be amended by a subsequent notification. Meanwhile,in the Tokyo High Court Judgment, December 24, 1985, Mutai Saishū, Vol. 17, No. 3, p. 659/Hanta, No. 586, p. 81(the Colored Wood and Its Manufacturing Method case), the court held that, if a request for a trial against an
examiner's decision of refusal is filed by a person who has acquired the right to obtain a patent from the addresseeof the examiner’s decision of refusal through specific succession, within the period for making such a request asprescribed in Article 121, paragraph (1), and a notification of the succession is made to the JPO Commissioner withinthat period, the defect that the trial has been requested by a person who is not the addressee of the examiner’s decisionof refusal will be amended, but if the notification of the succession is made after that period, such defect will not be
amended, and the request for the trial will be unlawful.

182§1. Creation of Right

notification about the succession on the same date, only the one selected after consultation
between them shall be the right holder, which is the same as in the case before the filing(Article 34, paragraph (6) of the Patent Act).
A notification of change of the name of the applicant can be made independently
by the successor to the right in compliance with a specific format.3 Nevertheless, the JPO
Commissioner may order the submission of a document proving that the person making
the application is the successor in title, 4 if necessary (Article 5 of the Patent Act
Enforcement Ordinance).
[172]
In the case of an ordinary succession, notification is not required for the succession
to take effect (Article 34, paragraph (4) of the Patent Act), but the right is transferredconcurrently with the occurrence of grounds for succession. However, the successor intitle must notify the JPO Commissioner without delay (paragraph (5) of said Article). A
delay in the notification does not give rise to any special legal effect, but, in practicalterms, it could be detrimental in that the JPO would continue to contact the former rightholder regarding the right.
1.4.4. Joint Ownership of the Right to Obtain a Patent (Article 38 of the Patent Act)The joint ownership of a right to obtain a patent occurs in the case of a joint
invention, in the case of inheritance, or in the case where one person’s share of the rightto obtain a patent has been transferred.
In the case of joint ownership, the application must be filed by all the joint owners(Article 38 of the Patent Act). An application filed by only one of the joint owners will
be refused (Article 49, item (ii) of the Patent Act) or will serve as a reason for invalidationeven if a patent has been granted (Article 123, paragraph (1), item (ii) of the Patent Act).
Also, the system was revised with the 2011 revision so that, if one or some of the joint
owners acquire the patent, the other joint owners can request the transfer of their sharesin the patent (Article 74, paragraph (1)).
A person’s share of a jointly owned right can be freely assigned under the Civil
Code, but a person cannot assign his/her share of the right to obtain a patent without the

3 In the Tokyo District Court Judgment, June 29, 1988, Mutai Saishū, Vol. 20, No. 2, p. 260 (the Chureza case), which
was a case under the Trademark Act, the court stated that a request cannot be made to carry out the procedure forchanging the name of the patent applicant, because the procedure does not adopt a system requiring requests to be
filed by both parties. Since it is sufficient for a court judgment to order the minimum necessary, it does not need togo so far as to order a procedure for changing the name of the applicant. The demandant only needs to receive a
declaratory judgment and put the procedure in place independently.
4 For instance, a written sales agreement, a certified copy of the register concerning a merger of juridical persons, adeclaratory judgment of the right to demand a transfer, etc.

183

§1. Creation of Rightconsent of the other joint owners5 (Article 33, paragraph (3) of the Patent Act). This isbased on the same reason as that for a similar restriction on the assignment of a share ofa jointly owned patent right (Article 73, paragraph (1) of the Patent Act).
The fact that a person’s share cannot be assigned freely means that neither theestablishment of a mortgage by transfer nor compulsory execution by a third party can be
carried out without the consent of the other joint owners.
1.4.5. Lapse of the Right to Obtain a Patent
The right to obtain a patent lapses in the cases mentioned below. The term “lapse”
is used here for convenience, but apart from the original meaning of “lapse,” it also refers
to a case of confirming that no right existed in the first place or a case where the right toobtain a patent changed into a full right, that is, a patent right.
[173]1) Registration of establishment of a patent right
The right to obtain a patent lapses upon patent registration, but rather than actually
being lapsed, it can be considered as attaining its original purpose and being sublimed
into a fuller right.
2) Examiner’s decision of refusal becoming final and binding
There are various reasons for receiving an examiner’s decision of refusal (Article
49 of the Patent Act). They include cases where the right to obtain a patent did not exist
in the first place or where the right lapsed before patent registration. In some cases, theapplication is a misappropriated application, although the claimed invention has
patentability. The reason becomes clear in the end when the examiner’s decision ofrefusal becomes final and binding.
3) Absence of an heir
There is a stipulation providing that a patent right lapses when nobody claims theright as an heir (Article 76 of the Patent Act), but there is no such provision concerning
the right to obtain a patent. According to a principle of the Civil Code, property without
an heir belongs to the national treasury (Article 959 of the Civil Code), but there is nobenefit in having the right to obtain a patent belong to the national treasury. It is morereasonable to have the right lapse in the same manner as a patent right so that anybody
can work the invention, and such is the prevalent interpretation.
4) Loss of eligibility to enforce the right
When a foreign national having an individual eligibility to enforce patent-related
5 In a separate issue there are cases where other joint owners cannot express an objection to a joint owner’s act of
having assigned his/her share of the right to obtain a patent under the good faith principle among the joint owners.
The Osaka District Court Judgment, July 25, 2000, court website (the Chain Cover case).

184§1. Creation of Right

rights later loses such eligibility due to the abrogation of a treaty or for any other reason,
the right to obtain a patent also lapses.
5) Waiver185

§2. Obtaining a Patent[174]§2. Obtaining a Patent2.1. Filing2.1.1. Significance of Filing
The inventor (in the case of an employee invention, the employer under certain
conditions; Article 35, paragraph (3) of the Patent Act) originally acquires the right toobtain a patent upon completion of the invention. As the Patent Act has no provision on theactor eligible to be a patent applicant, it is construed that an inventor with eligibility to
enforce rights can be an actor according to the provisions of the Civil Code. A minor or an
adult ward can also file an application through his/her statutory representative (Article 7,paragraph (1) of the Patent Act), and a person under curatorship can file an application withthe consent of a curator (paragraph (2) of said Article). A foreign national can file anapplication as long as he/she is provided under Article 25 to be eligible to enjoy rights.
With regard to certain procedures with the JPO, an association or foundation which is nota juridical person but for which a representative or an administrator has been designatedcan file a request for examination, a request for a trial for patent invalidation, a request fora trial for invalidation of registration of a patent term extension, etc. in its name, but cannot
file an application (Article 6 of the Patent Act).
Filing for a patent is an act of submitting an application to the JPO Commissioner,
seeking a decision to grant a patent, as an objective indication of an intention to obtain apatent. The filing of a patent application prompts the JPO to start the procedures, and after
various procedures have been put in place, the invention is registered and becomes patented.
In spite of also being intellectual property, a copyright is originally acquired by the creator
upon the creation of the work without requiring any procedures or formalities (the nonformality principle), but a patent is different in that it comes into effect through an
administrative disposition.
The right to obtain a patent is a right under positive law. However, its content isambiguous at the time of the creation of the invention, and the object for which a patent issought is clarified through the act of filing. A patent right, being a right to a monopoly of atechnical idea, has a big influence on third parties, so its content needs to be clear. Thus,
the principle of documentary proceedings is adopted.

186§2. Obtaining a Patent

An overseas resident, 1 unless otherwise provided for by Cabinet Order, 2 cannot
undertake a procedure nor institute an action against an administrative disposition except
through a representative domiciled or resident in Japan (patent administrator) (Article 8,paragraph (1) of the Patent Act). This provision was established because it is cumbersome
for the JPO to put in place a procedure directly with an overseas resident. With regard to
an international patent application, an applicant who is an overseas resident may, prior to
the National Processing Standard Time, undertake procedures without being represented
by a patent administrator (Article 184-11, paragraph (1) of the Patent Act).
[175]
The right to obtain a patent is materialized through filing and its content changes
according to the procedure until the patent is registered, and is sublimated into a patent right,
attaining its purpose upon the patent registration.

1 An overseas resident refers to a person domiciled or resident (or, in the case of a juridical person, with a business office)outside Japan (Article 8, paragraph (1)).
2 An overseas resident (or, in the case of a juridical person, its representative) who has a patent administrator canundertake procedures such as an exception when the overseas resident (or the representative) is staying in Japan (Article
1 of the Patent Act Enforcement Order).

187§2. Obtaining a Patent2.1.2. Filing Documents (Article 36 of the Patent Act)2.1.2.1. Introduction
The method of preparation of filing documents had been stipulated in the Patent
Act Enforcement Ordinance under the old Act, but as it was considered to be a matter thatshould be provided by the Act, it is currently stipulated in Article 36 of the Patent Act.
In order to obtain a patent right, a person must file a patent application bysubmitting an application stating the prescribed items to the JPO Commissioner (Article
36 of the Patent Act). Today, a patent application is often filed on-line instead of on paper,
but the basic concept is the same as in the case of a paper application. Applicants are notallowed to submit the actual invented product nor file an application orally (principle of
documentary proceedings). The application must also include formal matters such as the
domiciles and the names of the applicant and the inventor (paragraph (1) of said Article).
The description, scope of claims,1 drawings (where required), and abstract are to
be attached to the application (paragraph (2) of said Article). The description functions
as a technical document disclosing the content of the invention and the scope of claims
has the function of defining the scope of the right. The description and the scope of claims
are subject to the later-discussed requirements (the enablement requirement, support
requirement, etc.). The abstract is required under the PCT and also in the United Statesand Europe, but it is merely for quickly understanding the contents of the description, andit cannot be taken into consideration in determining the technical scope (Article 70,
paragraph (3) of the Patent Act). The description system was adopted for the first time in
the world as a statutory law in the British Patents Act of 1852. Since then, it has been
adopted by various countries, and it is now an indispensable part of the patent system.
Conventionally, a patent application had to be filed in Japanese, and an application
containing a priority claim needed to have attached to it a Japanese translation thereof.
Since translating the filing documents within such a short space of time was extremely
burdensome for foreign applicants, and any amendments were strictly restricted, theapplicants were often at a disadvantage owing to mistranslations. Thus, with the 1994
revision, such an application came to be treated as a legitimate application if the applicant
attached a document in a foreign language 2 and drawing(s) (where required) whichcontain any descriptive text in the said foreign language to the application which had been
prepared in Japanese, in lieu of the description, scope of claims, drawings (where

1 In the past, the scope of claims was to be stated as part of the description, but it was separated from the description
upon the 2002 revision of the Patent Act.
2 Article 25-4 of the Patent Act Enforcement Ordinance provides that the foreign language shall be English, and atpresent, English is the only accepted language.

188§2. Obtaining a Patentrequired) and abstract (Article 36-2, paragraph (1) of the Patent Act). 3 The applicant
needs to submit the Japanese translation within one year and two months from the filingdate (paragraph (2) of said Article), if the translation is not submitted within the time limit,
the patent application is deemed to have been withdrawn (paragraph (3) of said Article).
With the 2011 revision, where the period for the procedure has passed and where there
are reasonable grounds, it became possible to submit the translation of the foreign
language documents and the foreign language abstract thereof to the JPO Commissioner
within two months from the date on which the grounds ceased to exist (paragraph (4) of
said Article). The translation of foreign language documents is deemed to be thedescription, scope of claims and drawings submitted with the application (paragraph (6)of said Article), and the examination is carried out based on the translation and the rightcomes into effect. However, the determination on earlier/later applications is made basedon the foreign language documents (the part in parentheses in Article 29-2 of the Patent
Act). If the addition of a new matter does not remain within the scope of the matters statedin the foreign language documents, a foreign language written application is refused(Article 49, item (vi) of the Patent Act), or a patent granted therefor is invalidated (Article
123, paragraph (1), item (v) of the Patent Act). When amending the description, scope ofclaims or drawings for the purpose of correcting an incorrect translation, the applicant
must submit a statement of correction for the incorrect translation (Article 17-2, paragraph(2) of the Patent Act). The scope of matters that can be amended covers the mattersdescribed in the translation (paragraph (3) of said Article). The scope of matters that canbe corrected after patent registration covers the matters described in the foreign language
documents (Article 126, paragraph (5) of the Patent Act).
[176]
The method of writing a detailed explanation of the invention is strongly dependent
on actual business practice, and the method differs for each technical field. For instance,a chemical substance patent must be backed by working examples to a certain extent, inorder to eliminate mere paper inventions. However, the extent to which the invention
must be exemplified involves detailed problems in practice. The details thereof shall beleft to discussions in other books.4[177]

3 With regard to the foreign language written application system, see Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13
Han] (Summary of Patent Law [13th ed.]), p. 367; Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge
of Patents [8th ed.]), p. 242.
4 For details, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han] (Explanatory Notes on the Patent Act
Vol. 1 [3rd ed.]), p. 380 [written by Yoshirō Hashimoto]; Yoshirō Hashimoto, Tokkyo Hō [Dai 3 Han] (Patent Act[3rd ed.]), p. 30; Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 611 [written by
Kazuhiko Naitō and Taku Yamada]; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han] (Summary of Patent Law[13th ed.]), pp. 251 ff.

189§2. Obtaining a Patent2.1.2.2. Description5
A description is a document indicating the technical content of the invention.
Specifically, the description must state (i) the title of the invention, (ii) a brief explanationof the drawing(s), and (iii) a detailed explanation of the invention (Article 36, paragraph(3) of the Patent Act). The title of the invention is needed for patent searches, and it must
indicate the content of the invention concisely. When an application contains a priority
claim under the Paris Convention, relevant documents need to be attached thereto (Article
43 of the Patent Act), and when the application is filed by an agent, a document proving
the authority of representation needs to be submitted (Article 4-3 of the Patent
Enforcement Ordinances). In addition, in order for the provisions on exception to lack ofnovelty to be applied, a document to that effect needs to be submitted (Article 30,
paragraph (3) of the Patent Act).
It is provided that the statement of the detailed explanation of the invention in a
description must be “clear and sufficient to enable a person ordinarily skilled in the art6of the invention to work the invention” “as provided by Order of the Ministry of Economy,
Trade and Industry” (Article 36 (4), item (i) of the Patent Act; this is called an“enablement requirement”). Meanwhile, Article 24-2 of the Patent Act Enforcement
Ordinance (Order of the Ministry of Economy, Trade and Industry) provides that it must
be described by stating “the problem to be solved by the invention and the means forsolving the problem and any other matters necessary for a person of ordinary skill in theart of the invention to understand the technical significance of the invention,” andobligates the applicant to describe matters necessary for understanding the significanceof the invention.
The statement of the detailed explanation of the invention does not fix the scope ofa right, but it does have an important role in disclosing the content of the technology. It
will be an important task for companies to utilize this database, filled with valuable
technical documents, as effectively as possible in the future.
2.1.2.3. Scope of Claims
Since an invention is an intangible technical idea and expressed literally, its scopeor outer limits are ambiguous and essentially unclear, unlike in the case of a tangible
object. Therefore, if the content of an invention were only described ambiguously, theeffective scope of the patent right would also be unclear, leading to low foreseeability.
5 Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role of Disclosure Played By a
Description under the Patent Act) discusses this issue in the most detailed and informative manner.
6 For the concept of a person ordinarily skilled in the art, see “1.3.1.4. Inventive Step (Article 29, paragraph (2) of the
Patent Act), B. Person Skilled in the Art.”190

§2. Obtaining a Patent

For both third parties and the patentee, this would result in legal instability of the rightand induces unnecessary conflicts. So, in order to clarify the concept of a patented
invention and the effective scope of the right, a statement of the “scope of claims” isobligated (Article 36, paragraphs (2), (5), and (6) of the Patent Act). The scope ofprotection of a patent right is the portion of the technical idea disclosed by the applicant
which the applicant describes in the scope of claims. The scope of claims is not only
subject to the determination of novelty, involvement of an inventive step, etc. by the JPO,
but also plays an important role in determining the technical scope of the patented
invention, and indicating the scope of a right to third parties (Article 70, paragraph (1) of
the Patent Act), similar to a borderline between parcels of land. However, regardless ofrequiring applicants to describe the scope of claims as clear-cut as possible,
ambiguousness cannot be completely wiped away as long as the invention, which istechnology, is expressed in writing, so there are endless disputes over the interpretationof the scope of claims. Yet, the presence of the system to require description of the scopeof claims undoubtedly contributes better to the stability of rights than having no such
system.
[178]
In the Act of 1987, the provision set forth that only matters indispensable for theconstitution of the invention for which the patent is sought should be stated in the scopeof claims (Article 63, paragraph (5), item (ii) at the time). 7 However, such description
requirement ran contrary to the international trend, and did not suit the recent
diversification of technology. Because the method of defining an invention by its
constitution had limitations, and there were cases where it was more desirable to define
the invention by its operation, function, property, or method of movement, a revision wasmade in 1994 to provide that the patent applicant “must state all matters that the applicant
finds to be necessary for defining the invention for which the patent is sought” (Article
36, paragraph (5) of the Patent Act), making it possible to state matters according to thediversity of the technology, instead of only matters indispensable for the constitution of
the invention. As a result, it became relatively easier for claims that define thecharacteristics of an invention by its physical structure or specific motion, but by function,action, nature, method, use, or the like,8 claims that define a product invention by its
manufacturing method (product by process claims; see “8.7.3. Product-by-Process Claim

7 That was stipulated in Article 36, paragraph (5) from 1959 to 1985, in Article 36, paragraph (4) from 1985 to 1987
due to the deletion of the paragraph on the patent of addition, in Article 36, paragraph (4), item (ii) from 1987 to1990 due to the introduction of the multiple claim system, in Article 36, paragraph (5), item (ii) from 1990 to 1994
due to the addition of the paragraph on the abstract, and in Article 36, paragraph (6), item (ii) from 1994 to thepresent. Attention should be paid to the fact that such frequent revisions had changed the position of this provision.
The transition of the provisions of Article 36 is listed later.
8 A claim that is stated not by the specific constitution of the invention, but by the function performed by the invention,such as the claim “a DNA that codes for a protein containing activated A.”

191

§2. Obtaining a Patent(PBP Claim)”), claims using alternatives for defining the invention, 9 and claims
described by a generic or comprehensive concept to be accepted. This revision brought
greater flexibility to claim drafting, but in reverse, it could make the scope of right unclear
and could impede legal stability, so the description requirements were made stricter as
discussed later. Incidentally, in infringement cases in the past, the scope of a right tended
to be strictly bound by the statement of the scope of claims in the claim interpretation,owing in part to the word “only” in the provision. However, it became easier to adopt thedoctrine of equivalents in terms of the wording of the provision with the 1994 revision.
[179]
As a description requirement for the scope of claims, the patent applicant must state
all matters that the applicant finds to be necessary for defining the invention for which
the patent is sought, separately for each claim, but in this case, an invention specified bya statement in one claim may be the same invention specified by a statement in anotherclaim (Article 36, paragraph (5) of the Patent Act).
Under the current Act, it has become possible to describe the scope of claims more
flexibly than before, so the applicant needs to describe it based on the applicant’s own
judgment and responsibility. In other words, the applicant can, based on the applicant’s
own responsibility, extract an invention described in the detailed explanation of theinvention arbitrarily, choose and describe the matters necessary for defining the invention
in the scope of claims, and make it the applicant’s scope of right. The examiner is not
required to examine whether or not all of the matters described in the detailed explanationof the invention are described in the scope of claims.
The provisions of Article 36, paragraph (4), item (i) and paragraph (6) of said
Article provide for matters that have a great effect on third parties, such as the publicationof the invention, and the clarity requirement, enablement requirement, and support
requirement for the invention, so violation of these provisions constitutes a reason forrefusal (Article 49, item (iv)) and a reason for invalidation (Article 123, paragraph (1),item (iv)). In contrast, the violation of paragraph (5) does not constitute a reason forrefusal (not provided as a reason for refusal in Article 49) or a reason for invalidation (notprovided as a reason for invalidation in Article 123, paragraph (1)).
2.1.2.4. Required Drawings
Although drawings are requisites for a utility model application (Article 5,
9 Such claims are called Markush claims. They are claims that recite multiple alternatives to define a part of theconstituent features, such as “selected from the group consisting of A, B and C,” and are frequently used in thechemical and pharmaceutical fields. As a matter of course, the scope of the claim would be vast, so there would bea question of whether the invention fulfills the enablement requirement and the support requirement in all the fields
covered by the claim.

192§2. Obtaining a Patentparagraph (2) of the Utility Model Act), they only need to be attached if needed in thecase of a patent application to assist the explanation of the invention. They are sometimes
unnecessary for chemical inventions. The attached drawings are explained in detail in the“detailed explanation of the invention,” so this part merely needs to state whether eachdrawing is a plan view, an elevation view, or a section view, and explain the reference
letters representing the major parts of the drawings (Form 29, Article 24 of the Patent Act
Enforcement Ordinance).
[180]
2.1.2.5. Abstract (Article 36, paragraphs (2) and (7) of the Patent Act)The attachment of the abstract was obligated upon the 1990 revision (Article 36,
paragraph (2) of the Patent Act).10 The abstract made it easier to understand the outlineof the invention and made it easier to use the publications of unexamined applications.
When there is a deficiency in the abstract, the applicant is ordered to make an amendment(Article 17, paragraph (3) of the Patent Act), and if no amendment is made, the application
is dismissed (Article 18, paragraph (1) of the Patent Act). However, since an abstract only
has the effect of indicating the outline of the invention for the convenience of users, anddoes not affect the technical scope of the invention, such deficiency does not constitute a
reason for invalidation after patent registration.
2.1.2.6. Description Requirements(1) Description requirements in general
The Act provides that the following are required: the applicant must state mattersin the description in such a manner to enable a person ordinarily skilled in the art of theinvention to work the invention (the enablement requirement; Article 36, paragraph (4),item (i) of the Patent Act); in the statement of the scope of claims, the invention for whicha patent is sought must be stated in the detailed explanation of the invention (the support
requirement; paragraph (6), item (i) of said Article); the invention must be clear (theclarity requirement; item (ii) of said paragraph); the statement must be concise (theconciseness requirement; item (iii) of said paragraph); and the statement is composed inaccordance with Ordinance of the Ministry of Economy, Trade and Industry (item (iv) of
said paragraph). Inventions which are not identical with each other, but have a certain
relationship (inventions fulfilling the requirements of unity) can be filed in a single
application (Article 37),11 and the contents of the claims may overlap with each other.
10 However, the attachment of an abstract had already been obligated for PCT applications before the revision.
11 For details on the revision Act of 1987, see Hiroaki Niihara, Kaisei Tokkyo Hō Kaisetsu.

193§2. Obtaining a Patent

The method of specifying the scope of claims is an issue related to the fundamentals of
the acquisition of a right, and the adoption of a system different from that in othercountries was not favorable from the viewpoint of the globalization of the patent system,
but the adoption of the multiple claim system, which is almost the same as the system
adopted in Europe and the United States, marked a large step forward in terms of the
globalization of the patent procedure system.
(2) Enablement requirement (Article 36, paragraph (4), item (i))12
The enablement requirement is a requirement that the statement in the “detailed
explanation of the invention” column of the description must be such that a person
ordinarily skilled in the art of the invention (a person skilled in the art) can work theinvention stated in the scope of claims without carrying out excessive trial and error or
sophisticated experiments. A patent is granted in return for laying open the technology tothe public, and if the description is such that a person skilled in the art cannot easily work
the invention, it cannot be regarded as the laying open of the technology in the practicalsense. Rather, it would be virtually equivalent to keeping the invented contents secret,and would not contribute to raising the level of technology in society. Violation of theenablement requirement serves as a reason for refusal of the application (Article 49, item(iv) of the Patent Act) or as a reason for invalidation even if a patent were granted (Article
123, paragraph (1), item (iv) of the Patent Act).
[181]
The Patent Act prior to the 1994 revision had stipulated that the detailed
explanation of the invention must “state the purpose, constitution, and effect of theinvention” (Article 36, paragraph (5), item (ii) of the Patent Act at the time). However,what is important in a description is that the content of the invention is disclosed to theextent that a person skilled in the art can easily work the invention, and it is sometimes
more reasonable to allow freedom in how it should be stated and make it possible toflexibly respond to the diversification of technology, rather than always requiring astatement of the purpose, constitution and effect of the invention. Thus, the provisions
were amended as mentioned below (Article 36, paragraph (4), item (i)). The point is that
it is sufficient for a third party who reads the description to be able to clearly identify andwork the patented invention, and a description of the purpose, constitution, and effect of
the invention is not necessarily required.
Furthermore, the 1993 revision strictly restricted the amendment of claims, andprohibited the addition of new matters to claims, so the purpose and effect could no longer
12 With regard to details of the enablement requirement, see Nobuhiro Nakayama and Naoki Koizumi, ed., Shin
Chūkai Tokkyo Hō Jō, p. 621 (written by Kazuhiko Naitō and Ryūgo Akahori), and Takeshi Maeda, Tokkyo Hō Ni
Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role of Disclosure Played By a Description under the Patent Act), p.
54.

194

§2. Obtaining a Patent

be added in a later amendment, in principle. As a result, it became unreasonable to requirethat the purpose, constitution, and effect of the invention should be stated in all patentapplications. What is more, Article 29 of the WTO’s TRIPs Agreement (which enteredinto force in 1995) only provides that the Member States should require an applicant to“disclose the invention in a manner sufficiently clear and complete for the invention to
be carried out by a person skilled in the art,” while the European Patent Convention also
has a similar stipulation. In addition to such situation in other countries, the foreign
language applications that were introduced in Japan with the 1994 revision of the Patent
Act could face a complex situation where the description requirements would differ
between applicants in and outside Japan. Because of these reasons, upon the 1994 revision,
the stipulation was revised to require the statement in the detailed explanation of theinvention to be “clear and sufficient to enable a person ordinarily skilled in the art of theinvention to work the invention” (Article 36, paragraph (4) at the time; current Article 36,
paragraph (4), item (i)). Specific contents of this requirement are stipulated by an
Ordinance of the Ministry of Economy, Trade and Industry (Article 36, paragraph (4),item (i) of the Patent Act).13 If the enablement requirement is applied too strictly on apromising invention (particularly a pioneer invention), the patent right on the invention
would lose its value, but if it is applied too loosely, a right to a monopoly would be grantedeven to parts that were not actually invented, so it is important to achieve a balance
between the two. Treatment of this issue has changed over time (changes in the provisionsof Article 36 are discussed later).
[182]
The enablement requirement applies to all of the claims, and it is required that theinvention can be identified from a single claim. If a part of the claim statement includes
a part of the invention that cannot be worked by a person skilled in the art without
excessive experiments or trial and error, the enablement requirement is not satisfied.14
As can be seen in cases of Markush claims at times, if the claims are stated in a too generalor abstract manner, the claims could include parts that cannot be worked, and the entire
13 For the 1994 revision, see Ken’ichi Kumagai, Chikujō Kaisetsu Kaisei Tokkyo Hō (Clause-by-Clause Explanationof the Revised Patent Act), p. 174; Legislative Affairs Office, General Affairs Division, General Affairs Department,
Japan Patent Office, Heisei 6 Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu (Explanation of the 1994 Revision ofIndustrial Property Acts), p. 100 and p. 106.
14 In the Tokyo District Court Judgment, November 26, 2008, Hanji, No. 2036, p. 125/Hanta, No. 1303, p. 289 (theHigh Purity Acarbose case), the claim was “a purified acarbose composition which has an acarbose content of about
93wt% or more,” and the court held that the description failed to meet the requirement that “the object, structure andeffect of the invention must be stated in a manner to enable a person ordinarily skilled in the art to which the invention
pertains to easily work the invention” with regard to an acarbose composition with a purity exceeding 98wt%.
Meanwhile, in the Intellectual Property High Court Judgment, September 2, 2009, court website (the case of
Polypeptide That Binds to Hepatitis C Virus Antibody), the court stated that “in light of the fact that a patent right isa system whereby, in the case of a product invention, the patentee can exclusively hold the right to work the invention
with regard to the ‘the product’ defined in the scope of claims in return for laying it open to the public, the description,
which supports the laying open of the invention, must naturally be stated to the extent that the invention can beworked with regard to the entirety of ‘the product,’ and it should not be construed to be sufficient to state a description
to the extent that the invention can only be worked with regard to a part of ‘the product.)”195§2. Obtaining a Patentinvention could be refused.
The term “working” under the Patent Act refers to the act of “producing or
15
using” in the case of a product invention, and in order to be regarded workable, theclaims need to be stated in such a manner that a product that fulfills the constituent
features of the invention can be produced16 and can be concretely used, or in other words,
that the intended operation and effect can be achieved. In the case of an invention of achemical substance, including a pharmaceutical, it is construed that mere clarification of
the presence of a substance is not enough, and some kind of utility must be clarified inorder to satisfy the enablement requirement.17
In the case of a process invention, the term “working” refers to an act of “using
the process” (Article 2, paragraph (3), item (ii)), and in the case of an invention of aprocess for producing a product, it refers to an act of “using the process” and “using the
product produced by the process” (Article 2, paragraph (3), item (iii)). In order for suchinventions to be regarded workable, the claims must be stated in such a manner that theintended operation or effect can be achieved by using that process in the case of a process
invention, and that the product can be produced by the process and the product can beconcretely used in the case of an invention of a process for producing a product.
[183]
Meanwhile, there are complicated problems regarding biological inventions, so
detailed explanations are provided in the Examination Guidelines (Examination
Guidelines “Part VII, Chapter 2, l.l.2.1 (1) 2)). The same applies to software-related
inventions (Examination Guidelines “Part VII, Chapter 1 “Computer Software-Related
Inventions”).
(3) Support requirement (Article 36, paragraph (6) item (i) of the Patent Act)The support requirement is a requirement that the statement in the scope of claims
must be such that “the invention for which the patent is sought is stated in the detailed
explanation of the invention” (Article 36, paragraph (6), item (i)). According to an

15 The provisions also include “ transferring, etc.,” but since a product that can be produced and used can also betransferred as a matter of course, it does not become an issue with regard to the enablement requirement in practice.
16 Except in a case where a person skilled in the art can easily produce and use the product based on the level oftechnology at the time by looking at the description, a description cannot be regarded as satisfying the enablement
requirement without including a statement of the manufacturing process of the product. For some inventions, the useof an invention is often obvious for a person skilled in the art.
17 In the Intellectual Property High Court Judgment, October 17, 2005, 2005 (Gyō Ke) No. 10013 (the Nucleic Acidand Protein case), which is a judgment concerning a gene-related patent, the court held that it is necessary to state
information such as the pharmacological data and show utility in the description. Takeshi Maeda, Tokkyo Hō Ni
Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role of Disclosure Played By a Description under the Patent Act), p.
66 states that the utility requirement is not an additional requirement imposed only on pharmaceuticals and chemical
substances, but that it is no different from determination of the ordinary enablement requirement. With regard topharmaceuticals and chemical substances, the utility requirement is not an additional requirement, but in more cases
than for other inventions, it would be unclear whether or not the invention can be worked unless its utility is shown.

196

§2. Obtaining a PatentIntellectual Property High Court Grand Panel judgment, 18 the support requirement“should be determined by the following scheme: claim recitations are first compared withthe detailed description of the specification; then the fulfillment is determined according
to whether the claimed invention was described in the detailed description of the invention,
whether the claimed invention can be regarded as though the skilled person in the art
could have figured out the invention based on its recitations, or whether the claimed
invention can be regarded as though the skilled person could have figured it out based oncommon technical knowledge at the filing date given that the recitations were notincluded nor suggested [in the detailed description of the specification].” The scope ofclaims frequently states matters described in the detailed explanation of the invention or
working examples in a more general manner, and this support requirement often comes
into question in the context of the extent to which such generalization should be allowed.
This is because, while the scope of claims demarcates the scope of the invention for which
the patent is sought, if its substance is not described in (supported by) the detailed
explanation of the invention, the invention cannot be worked based on the claim
statements alone, and it would mean granting a patent for an invention that has not beenlaid open in effect. In other words, whereas the enablement requirement is a description
requirement for the detailed explanation of the invention requiring the statement to besuch that enables a person skilled in the art to work the claimed invention without bearing
excessive burden, the support requirement is a description requirement for the scope ofclaims requiring that the claimed invention is substantially supported the description.
These two requirements are separate requirements with different objectives, but in

18 In the Intellectual Property High Court Grand Panel Judgment, November 11, 2005, Hanji, No. 1911, p. 48/Hanta,
No. 1192, p. 164 (the Polarizing Film Manufacturing Method case), the court stated that the support requirement isneeded because “a monopolistic and exclusive right will arise for an undisclosed invention, and it will deprive thegeneral public of the benefits of free use and will cause the likelihood of inhibiting the development of industry,
which goes against the aforementioned purpose of the patent system.” This judgment had a considerable effect on
subsequent patent practice.

197

§2. Obtaining a Patent

practice, their relationship is close to being two sides of the same coin.19[184]
The support requirement in the formal sense had been considered to be required
from the past,20 but it was sufficient for the matters stated in the scope of claims to beformally stated in the detailed explanation of the invention, and it was consideredsufficient to directly copy statements from the detailed explanation of the invention to theclaims. Whether or not the statements were described in such a manner that allows for theinvention to be actually worked was determined based on the enablement requirement inpractice. However, with the 1994 revision of the Patent Act, freer statements such asfunctional claims, parameter claims, and Markush claims became permissible.
Accordingly, it became possible to describe a broad scope of claims specified byfunctions or effects, which led to an increase in applications whose technical scope of theinvention was abstract, equivocal, and unclear, and giving rise to applications whose
scope of claims was not substantially supported by the description. Thus, with the 2003
revision of the Examination Guidelines,21 not only a formal correspondence between thescope of claims and the detailed explanation of the invention, but also a substantial

19 See Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role of Disclosure Played By a
Description under the Patent Act), p. 81. In contrast, in the Intellectual Property High Court Judgment, January 28,
2010, Hanji, No. 2073, p. 105/Hanta, No. 1334, p. 152 (the Flibanserin case), which was a case on a use inventionof a pharmaceutical, the court stated that “interpreting and determining compliance with the provisions of Article 36,
paragraph (6), item (i) of the Act by a method that is totally the same as that of determining compliance with therequirement under Article 36, paragraph (4), item (i) of the Act, apart from the purpose of Article 36, paragraph (6),item (i) of the Act, that is, ‘eliminating the granting of an excessively extensive exclusive right compared to thetechnical matters disclosed in the detailed explanation of the invention,’ could end up with determining the same
matter doubly. If it is permitted to make an interpretation based on the relationship in which the requirement under
Article 6, paragraph (6), item (i) of the Act is not fulfilled whenever the statement of the detailed explanation of theinvention does not fulfill the requirement provided for in paragraph (4), item (i) of said Article, there will be no
meaning to establishing the provisions of paragraph (4), item (i) of said Article as a separate, independent
requirement for patentability, in addition to paragraph (6), item (i) of said Article.” The court held that it should beconsidered sufficient to formally understand the technical matters stated and disclosed in working examples, etc. in
the “detailed explanation of the invention,” and that the aforementioned Intellectual Property High Court Grand
Panel Judgment (the Polarizing Film Manufacturing Method case) was a case of excessively broad claims on aparameter invention and differs from this case. In the Intellectual Property High Court Judgment, February 10, 2011,
court website (the Adhesive case), the court stated that “the determination in the JPO decision to the effect that thepatent ... does not fulfill the enable requirement and should be invalidated has no relation to the error in thedetermination concerning the support requirement in the JPO decision and is reasonable; therefore, the determinationin the JPO decision to the effect that the Patent does not comply with the support requirement” is inevitably rescinded.
Justice Toshiaki Iimura, who was the presiding judge for the judgment in the Flibanserin case, indicated the sameview also in his article, “Hatsumei Toha Nanika, Shinkisei, Shinposei, Kisaiyōken” (What is an Invention? Novelty,
Inventive Step, Description Requirements), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai
Chiteki Zaisan Hō Kōza II (Lecture on Modern Intellectual Property Law II), p. 26. See Seiji Ōno, “Paramēta Tokkyo
Jiken” (Parameter Patent Case), Jurist, No. 1475 (2015), p. 20.
20 The provision “the invention for which the patent is sought is stated in the detailed explanation of the invention”
had existed from the past (before the 1994 revision), so in that sense, the support requirement is considered to haveexisted at least formally (however, the term “support requirement” did not exist then).
21 Examination Guidelines for Patent and Utility Model in Japan, Part I, Chapter 1, 2.2.1.2(2).

198§2. Obtaining a Patentcorrespondence between them became necessary. 22 Specifically, an application isregarded as being in violation of the support requirement in such cases as follows: where
matters corresponding to the claims stated in the scope of claims are not stated orsuggested in the detailed explanation of the invention; where the invention defined in theclaims exceeds the contents stated in the detailed explanation of the invention (such as
the case where it cannot be read from the detailed explanation of the invention that all of
the claims stated in the form of Markush claims have the intended effect); where, due toa lack of consistency in the terminology, the correspondence between the claims and thedetailed explanation of the invention is unclear (this is also violation of the clarity
requirement); or where the specific means for solving the problem is not stated in thedetailed explanation of the invention.23 In other words, the invention stated in the scopeof claims must not only be formally stated in the detailed explanation of the invention,
but be substantially disclosed (supported) therein so as to enable a person skilled in theart to solve the problem to be solved by the invention or enable a person skilled in the art
to recognize that the problem to be solved by the invention can be solved based oncommon technical knowledge at the filing date even if such statement or suggestion were
not included in the detailed explanation of the invention. In the chemical field in particular,
applications are often filed by stating a broad scope of claims, so the support requirementof whether such contents are substantially indicated in the detailed explanation of theinvention bears an important meaning. The statement in the scope of claims needs to bebacked by experiment data, etc. in the description, but the specific extent to which thestatement needs to be backed by such materials presents a big problem in practice. The
support requirement itself had been considered as a natural requirement historically, butsince substantial support became a requirement, many applications have been refused dueto the violation of this requirement, and it has become an important requirement inpractice.
[185]
The subsequent supplementation of experiment results (certified experiment

22 The Intellectual Property High Court Grand Panel Judgment, November 11, 2005, Hanji, No. 1911, p. 48/Hanta,
No. 1192, p. 164 (the Polarizing Film Manufacturing Method case; a case concerning a parameter patent). In thisjudgment, the court endorsed the Examination Guidelines revised in 2003, and mentioned that whether or not thescope of claims substantially corresponds to the detailed explanation of the invention (whether the scope of claims
is supported) should be considered. This judgment can be regarded to have changed the support requirement from aformal requirement to a substantive requirement.
23 With regard to this issue, see Hisao Shiomi, “Tokkyo Hō Ni Oite Kaiji Yōken (Jisshi Kanō Yōken/Sapōto Yōken)Ga Hatasu Yakuwari” (The Role of Disclosure Requirement (Enablement and Support Requirements) under Patent
Law), Chiteki Zaisan Hō Seisaku Gaku Kenkyū (Intellectual Property Law and Policy Journal), No. 16 (2007), p.
131; Ryūta Hirashima, “Tokkyo Shutsugan Ni Okeru Hatsumei Kaiji To Jikkō Teki Hogo No Chōwa”(Harmonization between Disclosure of Invention in Patent Application and Effective Protection), Jurist, No. 1316
(2006), p. 23; Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō/Ge, p. 658 (written by Kazuhiko Naitō
and Kentarō Itō); Kōtarō Kimura, “Sapōto Yōken” (Support Requirement), Jurist, No. 1443 (2012), p. 70; Takeshi
Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role of Disclosure Played By a Description
under the Patent Act), p. 72.

199

§2. Obtaining a Patent

results) is not permitted if it only serves to remedy a lack of fulfillment of the support
requirement with regard to the scope of claims that had not been supported previously,24
but the supplementation of experiment results is not always rejected. For example, thesupplementation of experiment results for confirming that the working examples arecompatible with the contents of the invention or for confirming the effects that can bepredicted by a person skilled in the art are likely to be permitted in many cases.25 In short,supplementation of experimental results that would practically expand the scope of claims
to even cover matters that had not been supported until then would not be permitted. Thisissue is not only relevant to addition of experimental results, but to amendments in general.
The strict interpretation of the support requirement would result in insufficient protection
for pioneer inventions, but a loose interpretation would have the adverse effect of unjustly
expanding the scope of a monopoly, so their balance is important.
[186]
The support requirement has the function of eliminating inventions of which thestatements in the scope of claims are too broad compared to those in the detailed
explanation of the invention, whereas the enablement requirement has the function ofeliminating inventions that cannot be worked based on the statements in the description,so, conceptually, the two should require different determinations. However, since thesupport requirement has shifted from formal determination to substantive determination,
they can practically be considered to have a relationship similar to two sides of the samecoin. Both requirements are designed to realize the philosophy of the Patent Act to only
grant a monopoly for the part of an invention that has been substantively disclosed tosociety, and while the support requirement approaches from the aspect of the scope ofclaims, and the enablement requirement approaches from the aspect of the detailed
explanation of the invention, they are considered to overlap in many respects in actuality.
In practice, there has been a growing number of cases in which the court has used both
violation of the support requirement and violation of the enablement requirement as thebasis for its judgment, and the distinction between the two requirements is becoming

24 While there are many court judgments, in the Tokyo High Court Judgment, October 8, 2003, court website (theArtificial Nipple case; a case on internal priority), the court denied the priority on the basis that the addition of aworking example exceeded the technical matters disclosed in the original description, etc. In the Intellectual Property
High Court Grand Panel Judgment, November 11, 2005, Hanji, No. 1911, p. 48/Hanta No. 1192, p. 164 (thePolarizing Film Manufacturing Method case), the court stated that “under the objective of the patent system in which[sufficient] disclosure is assumed for any granted patent, it is not allowed that the [scope of the] detailed description
is expanded or generalized to what is recited in the claims for the purpose of satisfying the support requirements bysubmitting experimental data after the filing date, wherein the data is new matter that not disclosed in the detailed
description,” and did not allow addition of experimental data. Nobuhiro Nakayama and Naoki Koizumi, ed., Shin
Chūkai Tokkyo Hō Jō, p. 665 (written by Kazuhiko Naitō and Kentarō Itō).
25 In the Intellectual Property High Court Judgment, October 17, 2005, court website (the Nucleic Acid and Proteincase), the court held that neither the enablement requirement nor the support requirement were fulfilled, but the court
stated that the two requirements can be considered to be issues on two sides of the same coin. It is often the case thatthe claimed invention is neither supported nor workable.

200§2. Obtaining a Patent

unclear.26
Incidentally, with regard to the support requirement, the patent applicant bears theburden of proof.27[187](4) Clarity requirement (Article 36, paragraph (6), item (ii) of the Patent Act)28
Since the statement in the scope of claims demarcates the scope of the right, an
unclear statement would make the scope of the right unclear and would impede legal
stability. Therefore, with the 1994 revision, it was required that the invention for which apatent is sought must be clear, and that each single claim must clearly define the invention
for which a patent is sought.29 Before the revision, it was provided that “only mattersindispensable for the constitution of the invention” must be stated (Article 36, paragraph(5), item (ii) of the Patent Act at the time), and clarity had been secured by this provision.
However, upon the 1994 revision, this provision was deleted, and it was provided that theapplicant must “state all matters that the applicant finds to be necessary for defining theinvention for which the patent is sought” (Article 36, paragraph (5)). Accordingly, theclarity requirement and the conciseness requirement came to be stipulated independently.
Meanwhile, due to a Supreme Court judgment rendered on product-by-process
claims, it is expected that product-by-process claims will be judged to be in violation of
the clarity requirement in an increasing number of cases in the future. For product-byprocess claims, see “8.7.3. Product-by-Process Claim (PBP Claim).”(5) Conciseness requirement (Article 36, paragraph (6), item (iii) of the Patent Act)
Article 36, paragraph (6), item (iii) requires the statement for each claim to beconcise. Whereas the scope of claims has an important function to demarcate the right, aredundant claim statement, such as that with many overlapping parts, would obstruct
26 In the Intellectual Property High Court Judgment, July 15, 2010, Hanji, No. 2088, p. 124/Hanta, No. 1337, p. 236(the Sunscreen Composition case), the court held that it is permitted to take into account an experiment result, etc.
that was supplemented after the filing of the application as a premise of determining whether the invention has aninventive step, as this case is not a case where taking into account such result, etc. harms the equity between theapplicant and third parties.
27 The Intellectual Property High Court Grand Panel Judgment, November 11, 2005, Hanji, No. 1911, p. 48/Hanta,
No. 1192, p. 164 (the Polarizing Film Manufacturing Method case).
28 See Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role of Disclosure Played By a
Description under the Patent Act), p. 45.
29 In the Intellectual Property High Court Judgment, August 31, 2010, Hanji, No. 2090, p. 119/Hanta, No. 1341, p.
227 (the case of an Absorbent Article with an Elastic Top Sheet), the court stated that “whether or not the invention
for which a patent is sought is clear should be determined from the viewpoint of whether the statement in the scopeof claims is so unclear that it could cause unexpected detriments to third parties, by taking into consideration not
only the statement in the scope of claims, but also the statements in the description and drawings attached to thewritten application, and based on the common technical knowledge of a person skilled in the art at the time of thefiling.” The court further mentioned that it is not permissible to determine the clarity of an invention based on whether
its functions, characteristics, and technical significance in relation to the problem to be solved and the operation andeffect are indicated. These matters should be determined in relation to the enablement requirement; otherwise, itwould overlap with Article 36, paragraph (4).

201§2. Obtaining a Patentinterpretation. Thus, the conciseness requirement is regarded as an independent
requirement, along with the clarity requirement, and violation of the concisenessrequirement constitutes a reason for refusal (Article 49, item (v) of the Patent Act) and areason for invalidation (Article 49, item (v)).
(6) Obligation to disclose information on prior art documents (Article 36,
paragraph (4), item (ii) of the Patent Act)
Upon the 2002 revision, it was provided that, where an applicant has knowledge of
any invention(s) relating to said invention (the claimed invention) that has been known
to the public through publication 30 at the time of the filing of the patent application,
he/she must state the name of the publication, etc. in the detailed explanation of theinvention. While such efforts were only required before the 2002 revision, it was mademandatory with the revision. This obligation does not require the applicant to conduct
new searches, but it is sufficient to state the name, etc. of the publications he/she knows
at the time of the filing. 31 If prior art documents are not disclosed appropriately, theexaminer can notify the applicant thereof, and give the applicant an opportunity to submit
a written opinion (Article 48-7 of the Patent Act). This notice is not a notice of reasons
for refusal, but an advance notice which is given prior to refusal. If the failure to discloseprior art documents is directly stipulated as a reason for refusal, the examiner would
always have to examine the disclosure requirement, and that would cause a delay in
examination. 32 Following such notice, if the statement still remains insufficient after
making an amendment or submitting a written opinion, the application is refused (Article
49, item (v) of the Patent Act). However, the system of disclosing prior art documents
has been introduced in order to contribute to expeditious examination and to benefit third
parties in making the document searches easier, and it does not directly link to a defect in
the right. Therefore, an insufficient statement such as this does not constitute a reason forinvalidation (not listed in Article 123, paragraph (1) of the Patent Act). Another possible
approach would be to obligate applicants to disclose prior art documents and to makeviolation thereof a reason for refusal and a reason for invalidation, but this was shelved
due to the risk of imposing an overly heavy burden on applicants and inviting an excessive
number of requests for trials for patent invalidation.
[188]

30 Inventions known to the public through publication refer to inventions that were described in a distributed
publication, or inventions that were made publicly available through an electric telecommunications line (the part inparentheses in Article 36, paragraph (4), item (ii)).
31 With regard to the specific issue of what is meant by “has knowledge of,” see Nobuhiro Nakayama and Naoki
Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 611 (written by Kazuhiko Naitō and Taku Yamada). This becomes anissue for example in the case of an application filed by a juridical person, the case of an application with multiple
inventors, or the case where the right to obtain a patent has been assigned.
32 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 119.

202

§2. Obtaining a Patent(7) Other requirements (Article 36, paragraph (6), item (iv) of the Patent Act)The statement of the scope of claims must be composed in accordance with
Ordinance of the Ministry of Economy, Trade and Industry (Articles 24-3 ad 24-4 of the
Patent Act Enforcement Ordinance) (Article 36, paragraph (6), item (iv) of the Patent
Act). The Patent Act Enforcement Ordinance provides for the detailed form, etc. of thescope of claims, such as the method of line breaks and numbering, and the method of
citing references (Form 29-2 of the Patent Act Enforcement Ordinance).
(8) Transition of the provisions of Article 36 of the Patent Act
The provisions of Article 36 of the Patent Act were revised several times, and theirtransition is extremely complicated. New provisions were added, and the positions ofsome provisions were moved around. Since it is not easy to follow the transition of eachindividual provision, substantially important amended provisions of each law revision arelisted below for convenience.
[189]
Act of 1959 (came into effect in April 1960)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent, and in thecase of a juridical person, the name of the representative;(ii) the date of submission;(iii) the title of the invention; and(iv) the name and domicile or residence of the inventor(s).
(2) The description stating the following matters and drawings (where required) shallbe attached to the application:(i) the title of the invention;(ii) a brief explanation of the drawing(s);(iii) a detailed explanation of the invention; and(iv) the scope of claims.
(3) When intending to obtain a patent of addition, how the invention for which thepatent of addition is sought is related to the original invention shall be stated in thedescription.
(4) In the detailed explanation of the invention as provided in paragraph (2), item (iii)of the preceding paragraph, the purpose, constitution, and effect of the invention shallbe stated to such extent as to enable any person ordinarily skilled in the art to which203§2. Obtaining a Patentthe invention pertains to work the invention.
(5) In the statement of the scope of claims as provided in paragraph (2), item (iv), only
matters indispensable for the constitution of the invention stated in the detailed
explanation of the invention shall be stated.
(6) When filing a patent application for two or more inventions under the same
application pursuant to the provisions of the proviso to Article 38, the scope of claims
set forth in paragraph (2), item (iv) shall be stated by dividing it into sections for eachof the respective inventions.
The 1975 Revision (came into effect in January 1976)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent, and in thecase of a juridical person, the name of the representative;(ii) the date of submission;(iii) the title of the invention; and(iv) the name and domicile or residence of the inventor(s).
(2) The description stating the following matters and drawings (where required) shallbe attached to the application:(i) the title of the invention;(ii) a brief explanation of the drawing(s);(iii) a detailed explanation of the invention; and(iv) the scope of claims.
(3) When intending to obtain a patent of addition, how the invention for which thepatent of addition is sought is related to the original invention shall be stated in thedescription.
(4) In the detailed explanation of the invention as provided in paragraph (2), item (iii)of the preceding paragraph, the purpose, constitution, and effect of the invention shallbe stated to such extent as to enable any person ordinarily skilled in the art to which
the invention pertains to work the invention.
(5) In the statement of the scope of claims as provided in paragraph (2), item (iv), only
matters indispensable for the constitution of the invention stated in the detailed
explanation of the invention shall be stated; provided, however, that this does notpreclude the applicant from also stating the embodiment of the invention.
(6) The statement of the scope of claims under the provisions of the preceding
paragraph shall be made as provided for by Ordinance of the Ministry of International
Trade and Industry.

204§2. Obtaining a Patent[190]
The 1985 Revision (came into effect in November 1985)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent, and in thecase of a juridical person, the name of the representative;(ii) the date of submission;(iii) the title of the invention; and(iv) the name and domicile or residence of the inventor(s).
(2) The description stating the following matters and drawings (where required) shallbe attached to the application:(i) the title of the invention;(ii) a brief explanation of the drawing(s);(iii) a detailed explanation of the invention; and(iv) the scope of claims.
(3) In the detailed explanation of the invention as provided in item (iii) of the preceding
paragraph, the purpose, constitution, and effect of the invention shall be stated to suchextent as to enable any person ordinarily skilled in the art to which the invention
pertains to work the invention.
(4) In the statement of the scope of claims as provided in paragraph (2), item (iv), only
matters indispensable for the constitution of the invention stated in the detailed
explanation of the invention shall be stated; provided, however, that this does notpreclude the applicant from stating together the embodiment of the invention.
(5) The statement of the scope of claims under the provisions of the preceding
paragraph shall be made as provided for by Ordinance of the Ministry of International
Trade and Industry.
[191]
The 1987 Revision (came into effect in January 1988)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent, and in thecase of a juridical person, the name of the representative;(ii) the date of submission;(iii) the title of the invention; and205

§2. Obtaining a Patent(iv) the name and domicile or residence of the inventor(s).
(2) The description stating the following matters and drawings (where required) shallbe attached to the application:(i) the title of the invention;(ii) a brief explanation of the drawing(s);(iii) a detailed explanation of the invention; and(iv) the scope of claims.
(3) In the detailed explanation of the invention as provided in item (iii) of the preceding
paragraph, the purpose, constitution, and effect of the invention shall be stated to suchextent as to enable any person ordinarily skilled in the art to which the invention
pertains to work the invention.
(4) The statement of the scope of claims as provided in paragraph (2), item (iv) shallcomply with each of the following items:(i) the invention for which a patent is sought is stated in the detailed explanation of
the invention;(ii) the statement is a paragraph or paragraphs in which only matters indispensablefor the constitution of the invention for which a patent is sought are stated (hereinafterreferred to as a “claim” or “claims”); and(iii) the statement is composed in accordance with Ordinance of the Ministry ofInternational Trade and Industry.
(5) The provisions of the preceding paragraph do not preclude the statement of thescope of claims where an invention specified by a statement in one claim is the same
invention specified by a statement in another claim.
The 1990 Revision (came into effect in December 1990)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent, and in thecase of a juridical person, the name of the representative;(ii) the date of submission;(iii) the title of the invention; and(iv) the name and domicile or residence of the inventor(s).
(2) The description, drawings (where required), and abstract shall be attached to theapplication.
(3) The description as provided in the preceding paragraph shall state the following:(i) the title of the invention;(ii) a brief explanation of the drawing(s);206§2. Obtaining a Patent(iii) a detailed explanation of the invention; and(iv) the scope of claims.
(4) In the detailed explanation of the invention as provided in item (iii) of the preceding
paragraph, the purpose, constitution, and effect of the invention shall be stated to suchextent as to enable any person ordinarily skilled in the art to which the invention
pertains to work the invention.
(5) The statement of the scope of claims as provided in paragraph (3), item (iv) shallcomply with each of the following items:(i) the invention for which a patent is sought is stated in the detailed explanation of
the invention;(ii) the statement is a paragraph or paragraphs in which only matters indispensablefor the constitution of the invention for which a patent is sought are stated (hereinafterreferred to as a “claim” or “claims”); and(iii) the statement is composed in accordance with Ordinance of the Ministry ofInternational Trade and Industry.
(6) The provisions of the preceding paragraph do not preclude the statement of thescope of claims where an invention specified by a statement in one claim is the same
invention specified by a statement in another claim.
(7) The abstract as provided in paragraph (2) shall state a summary of the invention
disclosed in the description or drawings, and any other matters as provided by
Ordinance of the Ministry of International Trade and Industry.
[192]
The 1994 Revision (came into effect in July 1995)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent, and in thecase of a juridical person, the name of the representative;(ii) the date of submission;(iii) the title of the invention; and(iv) the name and domicile or residence of the inventor(s).
(2) The description, drawings (where required), and abstract shall be attached to theapplication.
(3) The description as provided in the preceding paragraph shall state the following:(i) the title of the invention;(ii) a brief explanation of the drawing(s);(iii) a detailed explanation of the invention; and207§2. Obtaining a Patent(iv) the scope of claims.
(4) The statement of the detailed explanation of the invention as provided in item (iii)of the preceding paragraph shall, in accordance with Ordinance of the Ministry of
Economy, Trade and Industry, be clear and sufficient as to enable any person ordinarily
skilled in the art to which the invention pertains to work the invention.
(5) The scope of claims as provided in paragraph (3), item (iv) shall state a claim or
claims and state for each claim all matters necessary to specify the invention for which
the applicant requests the grant of a patent. In such case, an invention specified by astatement in one claim may be the same invention specified by a statement in anotherclaim.
(6) The statement of the scope of claims as provided in paragraph (3), item (iv) shallcomply with each of the following items:(i) the invention for which a patent is sought is stated in the detailed explanation of
the invention;(ii) the invention for which a patent is sought is clear;(iii) the statement for each claim is concise; and(iv) the statement is composed in accordance with Ordinance of the Ministry ofInternational Trade and Industry.
(7) The abstract as provided in paragraph (2) shall state a summary of the invention
disclosed in the description or drawings, and any other matters as provided by
Ordinance of the Ministry of International Trade and Industry.
[193]
The 1998 Revision (came into effect on June 1, 1998)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent; and(ii) the name and domicile or residence of the inventor(s).
(2) The description, drawings (where required), and abstract shall be attached to theapplication.
(3) The description as provided in the preceding paragraph shall state the following:(i) the title of the invention;(ii) a brief explanation of the drawing(s);(iii) a detailed explanation of the invention; and(iv) the scope of claims.
(4) The statement of the detailed explanation of the invention as provided in item (iii)of the preceding paragraph shall, in accordance with Ordinance of the Ministry of208§2. Obtaining a Patent

Economy, Trade and Industry, be clear and sufficient as to enable any person ordinarily
skilled in the art to which the invention pertains to work the invention.
(5) The scope of claims as provided in paragraph (3), item (iv) shall state a claim or
claims and state for each claim all matters necessary to specify the invention for which
the applicant requests the grant of a patent. In such case, an invention specified by astatement in one claim may be the same invention specified by a statement in anotherclaim.
(6) The statement of the scope of claims as provided in paragraph (3), item (iv) shallcomply with each of the following items:(i) the invention for which a patent is sought is stated in the detailed explanation of
the invention;(ii) the invention for which a patent is sought is clear;(iii) the statement for each claim is concise; and(iv) the statement is composed in accordance with Ordinance of the Ministry ofInternational Trade and Industry.
(7) The abstract as provided in paragraph (2) shall state a summary of the invention
disclosed in the description or drawings, and any other matters as provided by
Ordinance of the Ministry of International Trade and Industry.
[194]
The 2002 Revision (came into effect on July 1, 2003)(Patent applications)
Article 36 (1) A person requesting the grant of a patent shall submit an application to
the Commissioner of the Patent Office stating the following:(i) the name and domicile or residence of the applicant(s) for the patent; and(ii) the name and domicile or residence of the inventor(s).
(2) The description, scope of claims, drawings (where required), and abstract shall be
attached to the application.
(3) The description as provided in the preceding paragraph shall state the following:(i) the title of the invention;(ii) a brief explanation of the drawing(s); and(iii) a detailed explanation of the invention.
(4) The statement of the detailed explanation of the invention as provided in item (iii)of the preceding paragraph shall comply with each of the following items:(i) in accordance with Ordinance of the Ministry of Economy, Trade and Industry,
the statement shall be clear and sufficient as to enable any person ordinarily skilled in
the art to which the invention pertains to work the invention; and(ii) where the person requesting the grant of a patent has knowledge of any

209§2. Obtaining a Patentinvention(s) (inventions as provided in Article 29(1)(iii), hereinafter the same shallapply in this item) related to the said invention, that has been known to the publicthrough publication at the time of filing of the patent application, the statement shallprovide the source of the information concerning the invention(s) known to the publicthrough publication such as the name of the publication and others.
(5) The scope of claims as provided in paragraph (2) shall state a claim or claims andstate for each claim all matters necessary to specify the invention for which theapplicant requests the grant of a patent. In such case, an invention specified by astatement in one claim may be the same invention specified by a statement in anotherclaim.
(6) The statement of the scope of claims as provided in paragraph (2) shall comply witheach of the following items:(i) the invention for which a patent is sought is stated in the detailed explanation of
the invention;(ii) the invention for which a patent is sought is clear;(iii) the statement for each claim is concise; and(iv) the statement is composed in accordance with Ordinance of the Ministry of
Economy, Trade and Industry.
(7) The abstract as provided in paragraph (2) shall state a summary of the invention
disclosed in the description, scope of claims or drawings, and any other matters asprovided by Ordinance of the Ministry of Economy, Trade and Industry.
[190]

210

§2. Obtaining a Patent[195]
2.1.3. Multiple Claim System (Second Sentence of Article 36, paragraph (5) of the
Patent Act)
From the establishment of the Japanese patent system until before the enactment of
the Act of 1921, the multiple claim system had been adopted for specifying the scope ofclaims in the same manner as many other countries. However, Japan adopted the single
claim system,1 which was a system unique to Japan, in the Act of 1921, under which twoinventions having a particularly close relationship could be included in a single
application as an exception, and the system was maintained in the Act of 1959 (Article
38 of the Patent Act before the 1987 revision). However, because the multiple claim
system was prevalent in other countries, in 1975, Japan adopted an irregular multiple
claim system which allowed the applicant to describe embodiment claims in addition toindispensable features claims (the proviso to Article 36, paragraph (5) at the time) 2 aspart of Japan’s globalization effort to join the Patent Cooperation Treaty (PCT). This wasnever intended to be more than a transitional system. After the public became familiar
with the multiple claim system, a fully-fledged multiple claim system (an improved
multiple claim system) whereby the applicant can describe multiple claims in a single
application and which was the global mainstream, was adopted upon the 1987 revision(Article 36, paragraphs (4) and (5) at the time; Article 36, paragraph (5) of the current
Act).
Under the current multiple claim system, an invention can be described in multiple
claims by using free expression, either in the form of independent claims or dependentclaims, as long as they fulfill the requirements of unity of invention (Article 37). The
validity (novelty, inventive step, etc.) of the invention is determined independently foreach patent claim, the determination of invalidity is also made for each claim (Article 123,
paragraph (1)), and a correction can also be made for each claim (Article 126, paragraph(3)). In addition, an invention specified by a statement in one claim may be the same
invention specified by a statement in another claim, in other words, claims withoverlapping contents could also be registered (the second sentence of Article 36,
paragraph (5) in the current Act). As a result, it became easier to state the scope of claims,
and there was no longer any need for an overlapping examination of the respective claims.
1 Article 38 of the old Patent Act Enforcement Ordinance had provided that “only matters indispensable for theconstitution of the invention shall be stated in a single claim,” but the phrase “in a single claim” was deleted in the
Act of 1959, and there was no longer a statutory binding to use the single claim construction. However, the single
claim system was used in practice. The phrase “in a single claim” seems to have a meaning to deny the practice atthe time requiring the scope of claims to be stated in a single sentence without using a period. See Japan Patent
Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 124.
2 As an exception to the one application for one invention system, there was the following provision: “provided,
however, that this does not preclude the applicant to additionally state the embodiment of the invention.”211§2. Obtaining a Patent[196]
2.1.4. Unity of Application (Article 37 of the Patent Act)
Two or more inventions can be filed in a single application if they can be
categorized as a group of inventions that satisfy the requirements of the unity of invention.
Specifically, two or more inventions are categorized as a group of inventions that satisfy
the requirements of the unity of invention if they have a technical relationship as specified
in Ordinance of the Ministry of Economy Trade and Industry (Article 25-8 of the Patent
Act Enforcement Ordinance)3 (related inventions), and such inventions can be filed in asingle application. Even if an application has been refused on the basis of the violation of
the unity requirement, the reason for refusal is likely to be resolved by dividing theapplication in many cases.
With the adoption of the unity system, the number of inventions in a single
application expanded to match western levels (Article 37 of the Patent Act), 4 and it
became possible to file multiple inventions in a single application. This system is usefulfor applicants as they can collectively file a single application for multiple related
inventions, and can also carry out transactions of rights more easily. In addition, it makes
it easier for third parties to acquire information on related inventions, and efficient for the
JPO as it can examine all the related inventions together. Further, with the 2003 revision,
the requirements for close similarity, which had been stipulated in Article 37, were moved
to Ordinance of the Ministry of Economy, Trade and Industry. It is up to the applicant tochoose between filing a single application or multiple applications for multiple inventions.
The requirements of unity were not inevitable in theory, but were adopted for theconvenience of applicants, the JPO’s examination processing and third party searches.
However, as a result of the adoption, it became possible to deal with the increasing
complexity and sophistication of inventions. Since unity is a requirement adopted for
3 Article 25-8 of the Patent Act Enforcement Ordinances provides as follows:(i) The technical relationship designated in Ordinance of the Ministry of Economy, Trade and Industry, as referred
to in Article 37 of the Patent Act, means a technical relationship in which two or more inventions, due to having an
identical or corresponding special technical feature, relate with each other so as to form a single, general inventive
concept.
(ii) The special technical feature prescribed in the preceding paragraph means a technical feature that clearly indicatesthe contribution that the invention makes to prior art.
(iii) The presence or absence of the technical relationship prescribed in paragraph (1) shall be determined irrespectiveof whether the two or more inventions are described in separate claims or described as alternatives in a single claim.
4 Even the principle of one application for one invention cannot serve as a standard for making a concrete decision on
the scope of an application, because the content of one invention is not necessarily definite. Many countries had astipulation on one application for one invention (e.g., Germany, the United Kingdom, and the United States), but as
the concept of one invention was broader than that in Japan, it was practicably quite different from the one applicationfor one invention system in Japan. This suggests that it was also possible to gain the same outcome as the 1987
revision by switching from the concept of one invention, but since changing Japan’s long-established concept of one
invention could cause confusion, the legislation was enacted to allow for the filing of one application for two or moreinventions under certain conditions; that is, to abandon the one application for one invention system.

212§2. Obtaining a Patent

convenience, its violation is not a substantive defect. Therefore, the violation constitutes
a reason for refusal (Article 49, item (iv) of the Patent Act), but not a reason forinvalidation (not listed as a reason for invalidation in Article 123, paragraph (1) of the
Patent Act). This is because, even if a patent in violation of the requirements of unity
existed, it would hardly affect third parties.
[197]
The scope of two or more inventions that can be filed in a single application is quite
broad, and according to Ordinance of the Ministry of Economy, Trade and Industry, many
inventions that that are related to each other from a common-sense viewpoint can be filed
in a single application. This contributes to achieving international harmonization as wellas to reducing the burden of filing and examination.
With the 2006 revision, an act of making an amendment in violation of unity after
receiving a notice of reasons for refusal became a reason for refusal (after receiving thefinal notice of reasons for refusal, the amendment is dismissed) (Article 49, item (i) of
the Patent Act). In other words, it was provided that amendment of the scope of claims
must fulfill the unity requirements (Article 17-2, paragraph (4) of the Patent Act), andthis is known as the prohibition of a “shift amendment.”5 This limitation is not applied
to an amendment that is made before receiving the first notice of reasons for refusal or to
the amendment of the description and drawings (said paragraph of said Article).
Shift amendment refers to an amendment of the scope of claims made after
receiving an examination which does not satisfy the requirements of unity of invention,and such amendment will be refused. It means that, after an examination, the examinedinvention and the amended invention must have identical or corresponding special
technical features. Specifically, any amendment that would change an already-examinedinvention into another invention with different technical features is not permissible.
Conversely, a shift amendment can be made before the first notice of reasons for refusal
is served. Before the 2006 revision, an amendment of the scope of claims made uponreceiving the first notice of reasons for refusal did not necessarily have to fulfill therequirements of unity, so by making a shift amendment, it was possible to circumvent therequirements of unity, and to receive examinations for two inventions in effect. However,this was prohibited because it would be unfair on those who had abided by therequirements of unity from the start and those who had made a shift amendment, and if
the technical features of an invention were changed after refusal, it would increase theexamination workload. However, even where a shift amendment is not allowed, anapplication can be divided in many cases; in such a case, the virtual difference would be
5 The requirements are extremely complicated in practice. See Article 25-8 of the Patent Act Enforcement Ordinanceand Examination Guidelines for Patent and Utility Model in Japan “Part I, Chapter 2 Requirements for Unity ofInvention.”213§2. Obtaining a Patentthe difference in workload and the examination fee.
[198]
2.1.5. Effect of Filing (Article 39 of the Patent Act)The inventor originally acquires the right to obtain a patent upon completion of theinvention, and the act of filing is regarded as a concrete indication of the inventor’s intent
to obtain a patent. The right to obtain a patent comes into objective existence throughfiling, and the right then takes on various legal effects. When the patent application isreceived by the JPO, the application is pending before the JPO, and a patent application
number is given to the application, after which the applicant is notified thereof (Article
28 of the Patent Act Enforcement Ordinance). As for the effect of the filing, the filingdate becomes fixed, the requirements such as novelty and inventive step will be
determined based on the time of the filing, and the period for laying open the applicationand other periods will be calculated based on the filing date. Any procedure that is
unlawful and not amendable is dismissed (Article 18-2, paragraph (1) of the Patent Act).
When an application is dismissed, it loses its status as a prior application (Article 39,
paragraph (5)).
Conventionally, a substantive examination had been conducted for all applications
received, but with the 1970 revision, only those applications for which a request for
examination was made within seven years from the filing date came to be examined (thesystem of request for examination of application). Later, with the 1999 revision, theperiod for requesting an examination was shortened to three years (Article 48-2 andArticle 48-3, paragraph (1) of the Patent Act).1
The most notable effect of filing is that it creates the status of a prior application,and empowers the application to eliminate later applications (Article 39, paragraph (1) of
the Patent Act). In the past, an application could not acquire the status of a priorapplication if it was withdrawn or dismissed, but the status of a prior application wasrecognized if it was abandoned. However, since it is not appropriate to give an
undisclosed application the status of a prior application, it was stipulated upon the 1998
revision that, if an application has been waived, withdrawn, or dismissed or when an
examiner’s decision of refusal or a trial decision of refusal has become final and binding
for an application, the application is deemed never to have been filed, and it does not

1 Upon the 2014 revision, it was provided as follows: “If ... there are reasonable grounds for failing to have filed arequest for the examination of the patent application ..., the applicant of the patent application may file a request for
examination only within two months from the date on which the grounds ceased to be applicable, but not later than
one year following the passage of the period prescribed in said paragraph” (Article 48-3, paragraph (5)).

214§2. Procedures for Obtaining a Patentacquire the status of a prior application right (Article 39, paragraph (5) of the Patent Act).2
Therefore, when an applicant who has waived his/her application files an application
again, unless the waived application had been laid open, his/her later application will not
be refused based on his/her prior application.
As an exception to the provisions on the status of prior application, if an examiner’s
decision of refusal or a trial decision of refusal becomes final and binding due to a failure
to reach an agreement by consultation with regard to applications filed on the same date,the status of prior application remains in force (the proviso to Article 39, paragraph (5)of the Patent Act). Also, conventionally, a misappropriated application did not acquire
the status of a prior application (Article 39, paragraph (6) of the Patent Act before the2011 revision), but the true right holder’s right to request the person who filed themisappropriated application to transfer the patent right was stipulated (Article 74) upon
the 2011 revision. In line with this, misappropriated applications came to acquire thestatus of a prior application (Article 36, paragraph (6) was deleted, and subsequentparagraphs were moved up). As a result, the status of prior application is also recognized
for the application for a patent that has been transferred to the true right holder.
[199]
2.1.6. Division and Conversion of an Application
2.1.6.1. Division of an Application (Article 44 of the Patent Act)
When an application which is pending before the patent office contains more thanonce invention, the Paris Convention allows the applicant to divide it into two or more
applications later (Article 4, Section G of the Paris Convention). In Japan, too, anapplicant may extract one or more new patent applications out of a patent application
containing two or more inventions (Article 44, paragraph (1) of the Patent Act), and thedivided applications are examined independently.
Division can be used when an applicant receives a notice of reasons for refusal
stating that the application does not satisfy the requirement of the unity of application, orthat it lacks the involvement of an inventive step, to remove such defect, as well as when
an applicant intends to divide an application so as to dispute the claim which is subject toa reason for refusal in a trial against an examiner’s decision of refusal, and to acquire a

2 The withdrawal of an application is an indication to the JPO of the applicant’s intent to cancel the filing procedure,
while the waiver of an application is an indication to the JPO of his/her intent to waive the application. In the past,
it had been said that there was meaning in distinguishing between the two because a withdrawn application does notacquire the status of a prior application but a waived application does. However, in the 1998 revision, it was stipulated
that neither a withdrawn application nor a waived application acquires the status of a priority application. Therefore,
there is no longer any meaning in undergoing the trouble of distinguishing between the two.

215§2. Procedures for Obtaining a Patentpatent registration at an early stage for the remaining claims. At the time when a one
application for one invention system had been adopted, the division of an application
provided a remedy in many cases, but as the system was abolished with the 1987 revision,
the need for the division decreased accordingly. It is also possible to divide a divided
application further.
The divisional application is treated as a new separate application from the original
application, and even if the original application were to become extinct due to a waiver,withdrawal, dismissal, or receipt of an examiner’s decision of refusal, the divisional
application is not affected, and the procedure taken for the original application does not
automatically apply to the divisional application. However, exceptions are recognized forsuch procedures that help simplify the procedure for the divisional application and that
do not affect third parties. 1 Specifically, statements or documents which have been
submitted for the original application in relation to the exception for lack of novelty,
priority claim based on a patent application, etc., or priority claim under the Paris
Convention are deemed to have been submitted along with the divisional application(Article 44, paragraph (4) of the Patent Act).
[200]
The filing date of a divisional application retroacts to the filing date of the original
application, in principle (Article 44, paragraph (2) of the Patent Act). Therefore, thenovelty, involvement of an inventive step, and the status of a prior application aredetermined based on the time and date of the filing of the original application. However,since there are harmful effects in recognizing the retroaction in all aspects, there are
exceptions. The filing does not retroact (the proviso to Article 44, paragraph (2) of the
Patent Act) with regard to the exceptional expansion of the scope of a prior application(Article 29-2 of the Patent Act), the time limit for submitting a translation in relation toforeign language documents (Article 36-2, paragraph (2) of the Act), submission of adocument for seeking application of exception to lack of novelty (Article 30, paragraph(3) of the Patent Act), and priority (Article 41, paragraph (4) and Article 43, paragraph(1) of the Patent Act).
According to conventional court decisions, the invention to be claimed in thedivisional application did not always need to be included in the scope of claims of theoriginal application, but it was sufficient if two or more inventions were included in the

1 In the Tokyo High Court Judgment, February 28, 1983, Mutai Saishū, Vol. 15, No. 1, p. 210 (the Illumination Devicecase), the court held that a procedure for the division of an application taken during the pendency of litigation forrevocation of a trial decision given in a trial against an examiner's decision of refusal will not violate the provisionsof Article 44, paragraph (2) of the Patent Act and be unlawful even if the trial decision becomes final and binding,retroactive to the time before the procedure for the division of an application due to the withdrawal of the action.

216

§2. Procedures for Obtaining a Patentscope of claims, the description, or the drawings.2 With the 1993 revision, however, theaddition of any new matter upon amendment was prohibited. Therefore, a similarly strict
restriction should be imposed on division as well, in order to achieve balance, 3 and inthat respect, the above-mentioned Supreme Court decision should be considered ashaving been corrected.4 There is no express restriction on division as that for amendment,
but practically speaking, the division of an application has a similar function to making
an amendment. Therefore, under the current Act where making an amendment is strictly
restricted, it is necessary to construe the Act so that division will not be used as an evasive
mechanism for an amendment. Specifically, the filing date of a divisional application that
adds any new matter will be the date on which the divisional application was filed,without retroacting to the filing date of the original application. As a result, if the original
application has been laid open, the divisional application could be refused due to lack ofnovelty, and if not, it could be refused for being a later application unless the original
application has been waived, etc.
[201]
Incidentally, for the case where a reason for refusal has already been notified in theexamination of the original application and where the reason which the applicant has
already recognized remains applicable, the 2006 revision provided that the examiner will
notify the applicant to that effect in the notice of refusal when issued for the first time forthe divisional application, and that such notice will be treated as the “first notice of refusal”
2 In the Supreme Court Judgment, December 18, 1980, Minshū, Vol. 34, No. 7, p. 917/Hanji, No. 991, p. 71/Hanta,
No. 433, p.83 (the Half-size Movie Film Recording Device case), the court held that even if a divisional application
were to relate to an invention disclosed not in the scope of claims, but in the detailed explanation of the invention or
the drawings, if a person skilled in the art can understand precisely and work easily all of the technical matters that
constitute the gist of the invention, the division is permissible. The same view is indicated in the Supreme Court
Judgment, March 13, 1981, Hanji, No. 1001, p. 41/Hanta, No. 441, p. 86 (the Butadiene Polymerization Methodcase). The idea behind the Supreme Court decision is assumed to be that a patent right is granted in return for laying
open an invention, so even a matter that is not described in the scope of claims should be subject to division if it has
been disclosed in the description or drawings. The Tokyo High Court Judgment, August 30, 1978, Mutai Saishū,Vol. 10, No. 2, p. 420 (the Permanent Magnet Manufacturing Device case); the Tokyo High Court Judgment, April
17, 1986, Tokkyo To Kigyō (Patents and Enterprises), No. 210, p. 47 (the Variable Safe Ball Receiver Opening
Device case).
3 Examination Guidelines for Patent and Utility Model in Japan “Part V, Chapter 1 Division of Application” states asfollows: “Whether or not matters described in the description, claims or drawings of a divisional application arewithin the scope of matters described in ‘the description, claims or drawings of the original application immediately
prior to being divided’ or in the ‘description, claims or drawings of the original application as of the filing’ shall be
determined in the same way as a determination on a new matter.”
4 In the Tokyo District Court Judgment, December 21, 1999, court website (the Ear Hanging Equipment for Cultured
Shellfish case), the court stated that the division of an application needs to be carried out within the amendable scopeof the original application, because, the retroactive effect of the filing date of the divisional application induces animproper result where it becomes possible in practical terms, to make an impermissible amendment by using themethod of the division of an application. Also, in the Tokyo District Court Judgment, April 23, 2004, Hanji, No.
1877, p. 116/Hanta, No. 1187, p. 321 (the Clasp case), the court denied infringement as a result of interpreting thescope of claims in such a manner as to satisfy the requirement s of a divisional application, taking into consideration
the background that the claim had been patented through a division of application. In the Intellectual Property High
Court Judgment, May 30, 2007, Hanji, No. 1986, p. 124/Hanta, No. 1254, p. 298 (the Ink Tank case), the court
determined that, because an element that is stated as an indispensable structure in the original description of theoriginal application is not stated as an indispensable structure in the divisional application, the filing date does not
retroact to the time of the filing of the original application, but is the actual filing date of the divisional application,and held that the invention lacks novelty and thus there is a ground for invalidation.

217§2. Procedures for Obtaining a Patentsubject to the same amendment restrictions as those for the first notice of refusal (the partin parentheses in Article 17-2, paragraph (5) and Article 50-2 of the Patent Act). Thismeasure aims to prevent the abuse of dividing the same invention repeatedly inanticipation of extending the time for granting a patent or for having another examiner
make a different determination by filing a divisional application for an invention forwhich a notice of reasons for refusal has been issued in the original application, withoutchanging the content of the invention.
The conventional Examination Guidelines had imposed a requirement whereby adivisional application and the original application after the division should not be thesame, and if they were judged to be the same, the divisional application was refusedthrough the application of Article 39, paragraph (1) (exclusion of a later application).5
With the 1994 revision of the Examination Guidelines, this requirement was deleted, andArticle 39, paragraph (1) was no longer applicable to such cases. If a divisional
application and the original application were found to be the same, they were deemed tohave been filed on the same date (Article 39, paragraph (2) of the Patent Act), and if theoriginal application were withdrawn, the divisional application survived. In particular, as
the 1998 revision provided that a waived, withdrawn, dismissed, or refused application
would lose the status of prior application (Article 39, paragraph (5) of the Patent Act), a
divisional application would no longer receive an examiner’s decision of refusal because
it was identical to the original application even where the applicant has withdrawn theoriginal application or received an examiner’s decision of refusal therefor.
The division can be made within the following periods: the permitted time or time
limit for amendments to the description, scope of claims or drawings attached to theapplication (Article 44, paragraph (1), item (i) of the Patent Act); within 30 days from thedate of the service of a certified copy of the examiner's decision to grant a patent6 (item(ii) of said paragraph); and within three months7 from the date of the service of a certified
copy of the examiner's initial decision of refusal (item (iii) of said paragraph). The latter
two were added upon the 2006 revision in order to loosen the period during which adivision can be made.8 The purpose of item (ii) is to eliminate a possibly detrimental
effect whereby, if no amendment is allowed and no opportunity for a division is given
after the examiner's decision to grant a patent, applicants may secure the opportunity fora division after such decision by intentionally adding a matter that would constitute a
5 The Tokyo High Court Judgment, December 2, 1986, Mutai Saishū, Vol. 18, No. 3, p. 507 (the Optical Transmission
Device case); the Tokyo High Court Judgment, September 10, 1997, Chiteki Saishū, Vol. 29, No. 3, p. 819/Hanji,
No. 1615, p. 10 (the Kilby case).
6 Here, the examiner's decision to grant a patent means the initial decision to grant a patent, and does not include a
decision in a pretrial reexamination or that given in a further examination carried out after requesting a trial against
an examiner's decision of refusal (the part in parentheses in Article 44, paragraph (1), item (ii) of the Patent Act).
7 The period was 30 days in the Act as revised in 2006, but it was changed to three months with the 2008 revision.
8 For the 2006 revision, see Yoshinori Ishibashi, “Bunkatsu Shutsugan Seido No Kaisei” (Amendment to System ofDivisional Application), Patent, Vol. 60, No. 9 (2007), p. 3.

218§2. Procedures for Obtaining a Patent

reason for refusal. Item (iii) was introduced so as to reduce the burden on the applicant
and the JPO. Conventionally, an applicant needed to request a trial against the examiner's
decision of refusal in order to divide an application after an examiner’s decision of refusal,
but if the division becomes possible after such a decision, requests for such a trial would
be unnecessary. After a trial has been requested, an amendment can be made when anotice of reasons for refusal is given, therefore a division will be allowed only in such acase. If a divisional application cannot be filed under Article 44, paragraph (1), item (ii)(division within 30 days from the date on which a certified copy of an examiner's decision
to the effect that a patent is to be granted is served) or item (iii) (within three months fromthe date on which a certified copy of an examiner's initial decision to the effect that theapplication is to be rejected has been served) due to reasons beyond the applicant’s control,
the applicant may file the new patent application within 14 days (if the applicant is anoverseas resident, within two months) from the date on which the reasons ceased to be
applicable, but not later than six months following the passage of the period (Article 44,
paragraph (7) of the Patent Act). It should be noted that the period stipulated in the Act
before the 2006 revision applies to applications filed on or before March 31, 2007.
[202]
2.1.6.2. Conversion of an Application (Article 46 of the Patent Act)
An applicant may convert the form of his/her application from a patent application
to a utility model application or a design application or the reverse, if the original
application is pending before the JPO and it is the same applicant both before and after
the conversion, and as long as the requirements for the resulting application are met(Article 46, paragraph (1) of the Patent Act; Article 10, paragraph (1) of the Utility Model
Act; Article 13, paragraph (1) of the Design Act). When an application has been converted,
the original application is deemed to have been withdrawn (Article 46, paragraph (4) of
the Patent Act; Article 10, paragraph (5) of the Utility Model Act; Article 13, paragraph(4) of the Design Act). Since an applicant may find it difficult to decide which application
he/she should file, and he/she may wish to convert it later, being able to convert any of
the three forms of application is convenient for him/her. Furthermore, the conversion
cannot expand the application beyond the statements in the initial application (prohibitionof addition of new matters), so no unexpected harm is caused to third parties either. An
application that has already been registered, withdrawn, or waived is no longer pending
before the JPO, so it cannot be converted. The conversion is allowed because patents andutility models are creations of technical ideas, and designs can also have an aspect astechnical creations in consequence.
[203]

219

§2. Procedures for Obtaining a Patent

The conversion can be made within the following periods: when converting a utility
model application into a patent application, within three years from the filing (Article 46,
paragraph (1) of the Patent Act)9; and when converting a design application into a patentapplication, within three months from the date of service of a certified copy of theexaminer's initial decision of refusal or within three years from the filing (paragraph (2)of said Article). Meanwhile, a request for examination may be filed even after the period
for requesting examination of application (three years from the filing date) has passed, if
filed with respect to a new patent application arising from the division of a patentapplication (Article 44, paragraph (1)), a patent application in question in the conversionof an application (Article 46, paragraph (1) or (2)), or a patent application based on autility model registration (Article 46-2, paragraph (1)), but only within 30 days after the
relevant division or conversion of the patent application, or the filing of the patentapplication based on the utility model registration (Article 48-3, paragraph (2)). If an
applicant who intends to convert an application is unable to do so within the above period
due to reasons beyond the applicant's control, the applicant may file the new patentapplication within 14 days (if the applicant is an overseas resident, within two months)
from the date on which the reasons ceased to be applicable, but not later than six months
following the passage of that period (Article 46, paragraph (5)). In order to protect third
parties without knowledge in such a case, the Act provides for a statutory non-exclusive
license (Article 48-3, paragraph (8)).
The most notable effect of the conversion is that the filing date retroacts to the filingdate of the original application (Article 46, paragraph (6) of the Patent Act). However,the filing date does not retroact with regard to the submission of a document for seeking
application of exception to lack of novelty or the procedure for making a priority claim,
and the date of the conversion is used (Article 46, paragraph (6) and Article 44, paragraph(4) of the Patent Act). This is because, if retroaction is recognized for these procedures,the period may have already passed by the time of the conversion. If the content of theapplication is not the same, the retroaction of the filing date is not recognized. The datedoes not retroact either with regard to the provisions on the expanded scope of a priorapplication (Article 29-2 of the Patent Act) for the new application (the proviso to Article
44, paragraph (2) of the Patent Act).
Until the 1985 revision, there was a system of patent of addition (Article 31 of the
Patent Act; missing under the current Act due to deletion), and an application could also
be converted between that for an independent patent and that for a patent of addition(Article 45 of the Patent Act; missing under the current Act due to deletion), but no such
9 As the Utility Model Act currently adopts a de facto non-substantive examination system, an application is registeredin a short period of time, and will not be pending before the JPO for three years from the filing. Since no conversion
is allowed after registration, the later-mentioned patent application based on a utility model registration is often used.

220§2. Procedures for Obtaining a Patent

conversion exists today because the system of patent of addition has been abolished.
2.1.6.3. Patent Applications Based on Utility Model Applications (Article 46-2 of the
Patent Act)In the past, the number of utility model applications used to exceed that of patentapplications, but the number gradually decreased and, especially after the non-substantive
examination system was adopted, the decrease accelerated unexpectedly, and the utility
model system was nearly unrecoverable. It could have been possible to adopt a measure
to abolish the Utility Model Act, but measures were taken under the 2004 revision tobolster the Act instead, and the system of patent applications based on utility model
registration was introduced as part of such measures. The measure enables an applicant
first to register a utility model right by a simple procedure, and later to shift to a more
powerful patent right of a longer duration. It had already been possible to file a utility
model application first and then convert it into a patent application by using theconversion system (Article 46 of the Patent Act). However, because the Utility Model
Act adopted a de facto non-substantive examination system, a utility model right was
registered within a few months of the filing, and the period for converting the application
often passed quickly, so the system was difficult to use. On the other hand, the system ofpatent applications based on utility model registration, which is a system for filing a patentapplication after utility model registration, could be used as an alternative means ofconversion in practice.
[204]
A patent application can be filed based on utility model registration under thefollowing requirements: three years have yet to lapse from the filing of the utility model
application 10 (Article 46-2, paragraph (1), item (i) of the Patent Act); a petition
requesting the utility model technical opinion has not been filed 11 (item (ii) of said
paragraph); 30 days have yet to lapse from the date of receipt of the initial noticepertaining to a petition requesting the utility model technical opinion that has been filed
by a non-right holder (item (iii) of said paragraph); and where a utility model registration
invalidation trial has been requested, the initial time limit for submitting a written answer

10 While a patent examination can be requested within three years from the filing, if applicants were allowed to file apatent application based on a utility model registration even after three years from the filing of the utility model
application, there was a risk that the system might be used to evade the three-year period for requesting a patentexamination. However, if an applicant is unable to convert the application within three years due to reasons beyond
the applicant's control, the applicant may file the new patent application within 14 days (if the applicant is an overseas
resident, within two months) from the date on which the reasons ceased to be applicable, but not later than six months
following the passage of that period (Article 46, paragraph (5)).
11 If a patent application can be filed for a utility model for which a technical opinion has been requested, it will double
the examination burden on the JPO in practice.

221§2. Procedures for Obtaining a Patent

has yet to expire12 (item (iv) of said paragraph).
If a patent application has been filed based on a utility model registration, the utility
model right must be waived (the second sentence of the principal sentences of Article 462, paragraph (1) of the Patent Act). A procedure for filing a patent application andconcurrently waiving the utility model right (registration of cancellation) is provided forin an Ordinance of the Ministry of Economy, Trade and Industry. The content of thispatent application must fall within the scope of the matters stated in the description, scopeof claims or drawings attached to the utility model application, and its filing date retroacts
to the filing date of the utility model application, in principle (paragraph (2) of said
Article). The period for requesting an examination and the matters for which the filingdate does not retroact are the same as those for the conversion of an application. Also,
when certain parties have an interest in the utility model registration, a patent application
cannot be filed based thereon without the consent of such parties (paragraph (4) of said
Article).
[205]
2.1.7. International Applications
2.1.7.1. Significance of International Applications
As every country had a separate, independent patent system in the past, a person
who intended to acquire a patent right in various countries needed to file an application
and undergo a patent examination in each country. While a patent needs to be filed as
quickly as possible under the first-to-file system, it was difficult to file applications inmany countries simultaneously in different languages. Since technology has no national
borders, the need for the international harmonization of the patent system had beenrecognized a long time ago. In 1883, the Paris Convention for the Protection of Industrial
Property was established, and priority claim became recognized, which made filing inforeign countries easier.
Recently, however, there has been a growing need to acquire patents in many
countries amid the trend for economic globalization, and the economic burden to that end
has also been increasing. Conventionally, an application containing a priority claim under
the Paris Convention was only permitted a one-year grace period, and the cost of the filing
was no different from that of filing individual applications. In order to remedy thisinefficiency, an international patent application system, the Patent Cooperation Treaty(PCT), was established in 1970.
12 If it is possible for a patent application to be filed after a utility model registration invalidation trial has proceeded
to some extent, the trial proceeding would be wasted.

222§2. Procedures for Obtaining a Patent

The PCT is intended to increase efficiency in the filing procedures, which had been
carried out separately in the relevant countries in an overlapped manner, by recognizing
an application that has been filed in a member country according to a specific formality
as a national application in other member countries. As a future challenge, the possibilityof establishing a substantive patent law treaty (SPLT) is being explored. Ideally, a world
united patent law and world united patent office should be established, but that is toomuch to hope for in the immediate future.
2.1.7.2. Application Containing a Priority Claim under the Paris Convention (Paris
Route)The Paris Convention for the Protection of Industrial Property was established in
1883. It is a union treaty centered on the principle of the independence of patents, national
treatments, and the priority system. With the principle of the independence of patents
alone, an applicant would need to file an application individually in each country.
However, an enormous amount of work was required to be able to file an application
quickly in each country with different languages, laws and procedures, putting aconsiderable burden on applicants in terms of workload and costs. Thus, the Paris
Convention set up a provision whereby, if a national or a person who is deemed to be anational (Article 3 of the Paris Convention) of a member country makes a regular filingor files the first application in a member country, and files an application based on it inanother member country within one year1 from such filing, the subsequent filing will not
be invalidated by reason of any acts accomplished in the interval (Article 4 of the Paris
Convention). This is called the priority system. A regular national filing, which is to be
defined by the national law of each country, is any filing that is adequate for establishingthe date on which the application was filed in the country concerned, whatever may be
the subsequent fate of the application (Article 4, Section A, paragraph (3) of the Paris
Convention). Even a waived, withdrawn, or refused application can constitute a regularnational filing. Also, with the establishment of the WTO Agreement in 1995, it became
possible for a national who is not a national of a Paris Convention member country, but
who is a national of a WTO member country, to make a priority claim (Article 43-2 ofthe Patent Act).
[206]
A priority claim can only be made based on a first application, and cannot be basedon a divisional application or a converted application. If the latter two applications were
1 Upon the 2014 revision, it was provided as follows: “excluding if there are reasonable grounds for failing to file thepatent application within one year from the filing date of the earlier application and the patent application is filed
within the period provided by Ordinance of the Ministry of Economy, Trade and Industry” (Article 41, paragraph(1), item (i)).

223§2. Procedures for Obtaining a Patent

allowed, it would be possible to evade the one-year priority period. An application
containing a priority claim cannot be used as the basis for another priority claim. After apriority arises, the first application filed in a foreign country and another application filed
in the second country (Japan) are independent, and even if the first application has been
assigned to another party, it does not affect the application in Japan.
The Paris Convention provides that any subsequent filing shall not be invalidated
by reason of any acts accomplished in the interval (between the first filing date and thefiling date in the second country), and such acts cannot give rise to any third-party rightor any right of personal possession (Article 4, Section B of the Paris Convention).
Although not expressly stipulated, the filing date of the subsequent application is notconstrued so as to retroact to the filing date of the first application, unlike in the case of
the later-mentioned PCT application. However, if the application filed in the second
country includes elements that were not included in the first application, the applicant canenjoy the benefits of priority based on the subsequent application with regard to suchelements (Article 4, Section F of the Paris Convention). A country’s obligation under theconvention is only to treat the subsequent filing as if it were the first national filing, to theextent mentioned above.2 Specifically, it will be sufficient to recognize the retroaction of
the filing date for the following: the reason for becoming publicly known (Article 29),
the prior application status (Article 39), products which are in existence in Japan prior to
the filing of the patent application (Article 69, paragraph (2), item (ii)), dependent
inventions (Article 72), prior users’ rights (Article 79), non-exclusive licenses after the
expiration of the duration of a design right (Articles 81 and 82), the presumption of a
producing process (Article 104), and independent patent requirements (Article 126,
paragraph (5)). For other matters, the filing date in Japan will be regarded as the filingdate. The treatment concerning Article 29-2 (expanded scope of prior application) is
subject to argument, and the treatment differs by country. As for the interpretation in
Japan, considering the purpose of the convention, the filing date of the first application(priority date) should be construed to be the filing date under Article 29-2.3 The first
application and the subsequent application need to have the same contents, but it is

2 In the Tokyo High Court Judgment, March 13, 1997, Chiteki Saishū, Vol. 29, No. 1, p. 434/Hanji, No. 1611, p. 122(the Treatment Agent for Blood Sludging case), the court stated that the provisions on exception to lack of novelty(Article 30, paragraph (2) of the Patent Act) should be considered as being based on the application filed in Japan.
Otherwise, the remedial period (six months according to Article 30, paragraph (1) of the Patent Act) is very likely tohave lapsed by the time the application is filed in Japan, and this runs counter to the purpose of the law.
3 The Tokyo High Court Judgment, July 19, 1990, Mutai Saishū, Vol. 22, No. 2, p. 402/Hanji, No. 1363, p. 133 (theVinyl Chloride Aqueous Suspension Polymerization Method case). In the case where an application containing apriority claim was withdrawn due to the expiration of the period for requesting an examination, the applicant filed
an application in a foreign country, after which the JPO rendered a trial decision whereby the invention claimed insaid application before being laid open was the same as the invention disclosed in the description initially attachedto the prior application, and therefore it cannot be patented. The court held that, because the extinction of the effectof the priority claim does not retroact to before the laying open of said application, it is not exempted from theapplication of Article 29-2, paragraph (1).

224§2. Procedures for Obtaining a Patentsufficient for this identicalness to be determined not only from the scope of claims, butalso from the description, drawings, etc. (Article 4, Section H of the Paris Convention).
[207]
The national procedure for filing an application containing a priority claim is left
to the national law of each country. While the specific procedure is stipulated in Articles
43 and 43-2, there are no substantive provisions, so according to the provisions of Article
26 (effect of treaties), the provisions of the convention apply.
2.1.7.3. Application under the Patent Cooperation Treaty (PCT Route)
Before the establishment of the PCT, many applications filed in foreign countries
used the Paris route. However, applicants had to bear a considerable burden because anapplication had to be filed in each country, conforming to the procedure under the nationallaw of each country, including the preparation of the description, etc., and the priority
period of one year was short in light of the language and geographical barriers. In orderto reduce this burden and to reduce the examination-related administrative work ofnational patent offices, the PCT was established in 1970. Japan ratified the treaty in 1978,and Japanese nationals became eligible to file international applications under the PCT.
This treaty is a special agreement as recognized under Article 4 of the Paris Convention,and it is treated as a regular filing under the Paris Convention (Article 8 of the PCT).
Therefore, a PCT application can serve as the basis for a priority claim under the Paris
Convention. An applicant can submit a written application according to the PCT to enjoy
the effect of having filed a national application in all PCT member countries (Article
4(1)(ii) of the PCT; deemed designation of all member countries 4 ) simultaneously(Article 11(3) of the PCT). Apart from such procedural provisions, the PCT also has its
own examination system. The JPO currently serves as a receiving office, an international
searching authority, and an international preliminary examining authority. International
filing under the PCT is divided into the international phase and the national phase.
[208]1) International phase
A resident or a national5 of a Contracting State can file an international application
with a receiving office (the national patent office of that country or the WIPO, in
principle) according to the prescribed form and in a language recognized by the receiving

4 Until the 2002 amendment of the PCT (effective as of 2004), an applicant could secure the filing date only for thecountries he/she designated, but under the current PCT, the effect extends to all member countries (Article 4). If an
applicant does not desire a patent registration in any of the member countries, he/she only needs to refrain fromfollowing the subsequent national procedure.
5 When there are two or more applicants, it is sufficient for at least one of the applicants to be a resident or a nationalof a Contracting State (Rule 19.2 of the PCT Regulations).

225§2. Procedures for Obtaining a Patentoffice (Japanese and English, in the case of the JPO). An international searching authority(the JPO and some other national patent offices are designated) carries out a search for
all applications, in order to see whether an application has been filed for a similar
invention in the past (international search). The authority prepares an international search
report (search report; a list of citations that may affect the patentability of the invention
in question) and a written opinion of the international searching authority on thepatentability (the authority’s opinion on novelty, inventive step, and industrial
applicability), and sends it to the applicant. With this, the applicant can obtain information
for determining whether to withdraw the application or to proceed to the subsequent
procedure. After having received the international search report, the applicant is entitledto one opportunity to amend the scope of claims within a prescribed time limit (Article
19 of the PCT). Further, if the applicant demands a preliminary examination, he/she may
receive an international preliminary examination report (examination for a preliminary
determining novelty, inventive step, and industrial applicability). While an international
search only lists related documents, an opinion on novelty, inventive step, and industrial
applicability is indicated in an international preliminary examination (written opinion of
the international preliminary examining authority), though it does not bind national patentoffices (Article 33(1) of the PCT).
If an application is not withdrawn, the documents are also sent to the International
Bureau, and the international search report concerning the international application is
published, but the international preliminary examination report is not published. An
applicant who has filed an international application can secure the filing date in all
member countries. The International Bureau sends the search report to the patent officesof the member countries, and each national patent office may use the report as a reference
for examination, though it is not binding. It is also possible to file a PCT international
application within 12 months from the filing date of the basic application by making apriority claim under the Paris Convention.
While the priority period in the Paris route is one year, and filing applications inmany countries within this period results in a heavy workload, in the PCT route, the filingdate can be secured in all member countries by one international application, and theapplicant need only submit a translation within 30 months from that date. Compared to
the Paris route, using the PCT route, an applicant only needs to move to the national
procedure within 30 months from the priority date, and during that time, he/she can makea careful study of the countries in which he/she should enter the national phase byreferring to the international search report, etc.
[209]
The Act on International Applications under the Patent Cooperation Treaty (ActNo. 30 of 1978) was established in Japan for handling procedures for the national phase.

226§2. Procedures for Obtaining a Patent2) National phase
PCT international filing is an international procedure, and when an international
applicant wishes to acquire a patent in certain countries by referring to the international
search report, etc., he/she needs to follow the procedures in each country to enter thenational phase. In order to move to a national procedure, an applicant needs to submit to
the patent office of the desired country a translation in the language recognized by thatcountry and pay a fee within 30 months from the priority date. When filing an application
directly in each country, the applicant needs to make amendments and put in place otherprocedures in individual countries, but in the case of a PCT application, the effect of aprocedure put in place at the international phase extends to all Contracting States, inprinciple, so the procedures can be managed more easily. After that, each country carries
out an examination according to that country’s own patent law. Since national patentoffices can avoid overlapping examinations to some extent due to the existence of theinternational search report, the written opinion of the international searching authority
and the international preliminary examination report, their examination workload will
also be reduced.
A patent that has been established through a national examination procedure is apatent of that country, and does not have the same nature as an international patent. The
national phase procedure is stipulated in Chapter IX of the Patent Act (Articles 184-3
through 184-20, etc.)
2.1.8. Internal Priority System (Article 41 of the Patent Act)6
As technology becomes ever more complicated, people find it more convenient tobe able to acquire one comprehensive patent right for inventions that satisfy therequirement of unity of invention, and they have a strong desire to make an application
more complete or more comprehensive through ex post facto supplementation. When theinvention of an improvement was made at a later date, there had been no option but tomake an amendment or to file a separate application, but the amendment was sometimes
not accepted due to being regarded as an addition of new matters,7 and later applications
were sometimes refused for not being able to acquire prior application status as a resultof the applicant’s own patents.
[210]

6 For details on the internal priority system, see Haruo Gotō, Kokusai Shutsugan To Kokunai Yūsenken (International
Applications and Internal Priority); Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han] (Explanatory Notes
on the Patent Act Vol. 1 [3rd ed.]), p. 445 [written by Haruo Gotō/Masaaki Arisaka].
7 With the 1993 revision, the addition of a new matter was prohibited, making the amendment more difficult, but at
the time when the internal priority system was introduced, an amendment had been allowed unless it changed thegist of the invention.

227§2. Procedures for Obtaining a PatentThus, in the 1985 revision, an internal priority system was established (Article 41of the Patent Act).8 The system allows the filing date of a later application filed based ona prior Japanese application to retroact to the filing date of the prior application, in
principle. The Paris Convention has a priority system and the claiming of partial priority
and multiple priorities is also recognized (Article 4, Section F of the Paris Convention).
The internal priority system is a result of introducing a similar system on a national level.
While the system under the Paris Convention was established to reduce the time and laborconsumed for filing foreign applications, the internal priority system was legislated for adifferent purpose, but the contents of the two systems are similar to each other.
It is possible to make a more comprehensive application by combining multiple
applications into one or by adding a new matter to an application under the Paris
Convention. On the other hand, in the past, an act of filing such further application with
the JPO based on an application originally filed in Japan entailed the risk of being
regarded as an amendment to add new matters or the risk of the original application being
regarded as having prior application status. Thus, there had been a de facto inequality
between Japanese applicants and foreign applicants.9 There was also the inconvenienceof not being able to make a priority claim by self-designation 10 in a PCT (Patent
Cooperation Treaty) application. In order to remedy this situation, Japan also adopted theinternal priority system,11 which had also been introduced in many other countries, upon
the 1985 revision of the Patent Act. A PCT application designating Japan is deemed to bean application that was filed in Japan on the filing date of the PCT application (Article
184-3, paragraph (1) of the Patent Act), and is subject application of the provisions of theinternal priority system. This system has facilitated the filing of comprehensive orsystematic patent applications, and has made the patent system more suited to modern
industry with its advancing technology.
In order to make an internal priority claim, the prior application (either a patent or

8 This provision was introduced as Article 42-2 in 1985, moved to Article 41 in 1993, and was later revised into its
present form due to the abolition of the system for the publication of examined applications, abolition of the
opposition system, and introduction of the three-dimensional trademark system.
9 It was not a problem if a Japanese applicant first filed the application with another member country of the Paris
Convention, and then filed the application in Japan, by making a priority claim based thereon, but since such a
procedure was labor-consuming and troublesome, there was a de facto inequality between Japanese applicants andforeign applicants. However, some pharmaceutical companies seem to have filed foreign applications first, and then
filed the applications in Japan by making a priority claim (Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han]
(Knowledge of Patents [8th ed.]), p. 250).
10 Self-designation is an act of filing a PCT application naming Japan as the designated country by making a priority
claim based on an application originally filed in Japan. (According to Article 8(2)(b) of the PCT, the requirements
for and effects of the priority claim are dependent on the national law of each country.)
11 Some countries stipulate the system as an internal priority system, but similar functions are performed by theprovisional specification system in the United Kingdom and by the continuation-in-part system in the United States.

228§2. Procedures for Obtaining a Patentutility model application, but not a design application) must be pending before the JPO,12
and the applicants for the prior and later applications must be the same (in the case of a
joint application, the names of all the applicants must be the same), the later applicationmust be filed within one year from the filing of the prior application, and the priorapplication must not relate to a converted or divisional application (Article 41, paragraph(1), item (ii) of the Patent Act). This requirement is to avoid the JPO’s examination burden
pertaining to the determination of whether or not the division or conversion satisfies therequirements, and for avoiding third parties’ burden in carrying out searches.13[211]
The effect of the internal priority claim is mostly the same as the effect of the claim
for priority under the Paris Convention, and the determination of the patentability of any
invention disclosed in the description, scope of claims, or drawings (foreign language
documents in the case of a foreign language written application) originally attached to theprior application on which the internal priority is based is deemed to have been made at
the time of filing the prior application (Article 41, paragraph (2) of the Patent Act). 14 A
priority claim is not recognized for any new matters added to the description, scope ofclaims, or drawings of the later application; these matters are determined based on thetime of the filing of the later application (said paragraph of said Article). Priority isdetermined for each claim, so the basic time taken for determining patentability may
differ for each claim. The determination on whether or not the invention is the one statedin the application for the prior application would be the same as a determination onwhether or not an amendment is acceptable. Otherwise, the internal priority system would
provide a loophole for the prohibition to add new matters as an amendment. In otherwords, the internal priority system can be regarded to be similar to amendment, and it
should not be used as a means to circumvent amendment, so the principle of prohibiting
12 An application is not pending before the JPO if the prior application has been waived, withdrawn or dismissed, oran examiner’s decision or a trial decision has become final and binding (Article 41, paragraph (1), items (iii) and (iv)of the Patent Act). An internal priority claim cannot be recognized for an application that is no longer pending,because that would be the same as recognizing the revival of a once-extinguished application. Incidentally, after
filing an application by making an internal priority claim, the application is no longer affected even if the priorapplication is no longer pending before the JPO.
13 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 18 Han] (Clause-byClause Explanation of Industrial Property Acts [19th ed.]), p. 147.
14 While the provisions under the Paris Convention are more ambiguous due to being matters agreed upon where
national laws differ, the provisions under the Japanese Patent Act clearly stipulate the effect of an internal priority
claim. The specific matters for which the date or time of filing retroacts are set forth in Article 41, paragraph (2) ofthe Patent Act. They are as follows: novelty/inventive step (Article 29), expanded scope of prior application (themain clause of Article 29-2), exception to lack of novelty (Article 30, paragraphs (1) and (2)), status of the priorapplication (Article 39, paragraphs (1) through (4)), limitations of patent right (Article 69, paragraph (2), item (ii)),
relationship of conflicts with another party’s patent right, etc. (Article 72), prior users’ rights (Article 79),
presumption of the production process (Article 104), and the principle of the independence of a patent in a trial forcorrection (Article 126, paragraph (7)). The time of filing of the later application serves as the basis for other matters,such as the calculation of the period for requesting an examination and the duration of the patent. In other words, theinternal priority has the effect not of an overall retroaction of the filing time/date, but of a restrictive retroaction
regarding the matters listed in the provisions. Under the Paris Convention, the filing date does not retroact to that of
the first application with regard to exception to lack of novelty (Article 30 of the Patent Act).

229

§2. Procedures for Obtaining a Patent

addition of matters needs to be applied to this system as well.
[212]
The prior application on which a priority claim is based will be deemed to havebeen withdrawn when the period specified by Ordinance of the Ministry of Economy,
Trade and Industry lapses from the filing date of the prior application, unless the priorapplication has been waived, withdrawn or dismissed, or the examiner's decision ordecision on the trial or appeal for the prior application has become final and binding(Article 42, paragraph (1)), and the priority claim is deemed to be withdrawn at the sametime (paragraph (3) of said Article). As the main purpose of the internal priority system
is to allow for the establishment of a new, comprehensive patent right that incorporates
the newly made invention of an improvement, recognizing its coexistence with the priorapplication would only induce overlapping examinations. Accordingly, it was decided
that the prior application should be deemed to have been withdrawn, and this provision
was put in place in order to prevent two applications with the same content from bothbeing pending examination. However, if no other measure is taken, the prior application
will lose its prior art effect (Article 29-2), which would substantially undermine the effectof the internal priority system. Accordingly, it was provided that the prior application will
be deemed to have been laid open when an application containing an internal priority
claim was laid open, etc. (Article 41, paragraph (3) of the Patent Act), thereby recognizing
a prior application status for the prior application. However, the applicant may notwithdraw the internal priority claim after the lapse of the period specified by Ordinanceof the Ministry of Economy, Trade and Industry from the filing date of the priorapplication (Article 42, paragraph (2) of the Patent Act).
With the introduction of the provisional exclusive license system (Article 34-2 ofthe Patent Act) and provisional non-exclusive license system (Article 34-3) upon the 2008
revision, it was provided that a priority claim cannot be made without the consent of theprovisional exclusive licensee or the registered provisional non-exclusive licensee, if suchlicensee exists (the proviso to Article 41, paragraph (1) of the Patent Act). This is because
the prior application will be deemed to have been withdrawn and it will affect the interestof the provisional exclusive licensee or the registered provisional non-exclusive licensee.
However, the consent of a provisional non-exclusive licensee became unnecessary since
the registration system and the registry of provisional non-exclusive licenses wereabolished with the 2011 revision. As an alternative measure, a provisional non-exclusive
licensee is deemed have been granted a provisional non-exclusive license for theapplication containing an internal priority claim (Article 34-3, paragraph (5)).
If the prior application contains a priority claim under the Paris Convention, theapplicant cannot make a further internal priority claim. This is because if cumulative
claims were recognized, it would have the same effect, in practice, as recognizing an230

§2. Procedures for Obtaining a Patent

extension of the one-year time limit for the priority claim under the Paris Convention.15[213]
The following are some specific methods for use of the internal priority claim.
(i) There is the case of merging an invention that was made after the filing of the priorapplication and that can be merged (that fulfills the unity requirements) into one
application. An example is the case where an inventor first invents a certain product, andthen invents a “process of manufacturing that product,” or makes an invention of a process
first, and then invents “machines, instruments or equipment used directly for the working”
of that invention.
(ii) It can be used for extracting a generic concept. This is a case where a person files
applications for individual ideas, and later summarizes them into a generic concept andfiles a new single application for it. However, it should be noted that internal priority
cannot be claimed for an application for a more specific concept that does not comprise
an invention of the generic concept.
(iii) It can be used for supplementing working examples. This method, which is ofparticular importance in the field of chemistry, is a case where a person conducts
experiments and adds working examples after filing an application for the generic conceptthat had not been exemplified by working examples. Such supplementation is rarely
approved as an amendment, but there are cases where internal priority can be used.
However, it should be noted that the addition of working examples could make theinvention exceed the technical scope of the prior application in some cases.16
These are all methods of use that add something to the prior application, but it isalso possible to transfer the content of the prior application “as is” into a later application.
As the duration of a patent containing an internal priority claim is calculated based on thefiling date of the later application, it has the effect of extending the base date forcalculating the time of the extinction of the patent right by up to one year. Such mode ofuse may not have been originally intended by the legislators, but it is not prohibited.

15 Cumulative priority claims are also prohibited under the Paris Convention. Georg Bodenhausen, Chūkai Pari
Jōyaku (Guide to the Application of the Paris Convention for the Protection of Industrial Property as Revised at
Stockholm in 1967) (AIPPI Japan, 1976), p. 31; Yoshirō Hashimoto, Tokkyo Kankei Jōyaku [4 Han] (Patent Related
Treaties [4th ed.]), p. 43.
16 The Tokyo High Court Judgment, October 8, 2003, court website (the Artificial Nipple case) was a case where a
new claim was added to the original claim, and a new working example was also added. In this case, the court held
that, even if the scope of claims of the subsequent application is the same as that of the prior application, if the gistof the invention of the subsequent application exceeds the scope of the technical matters stated in the prior application
as a result of adding a new technical matter (working example), the priority claim will not be effective with regard
to the portion in excess (a case where the subsequent application was judged to be unpatentable since there is a riskthat an application stating an invention comprising the added working example has been filed between the filing of
the prior application and the filing of the subsequent application). This case suggests that one must be careful when
making a supplementing-type priority claim.

231§2. Procedures for Obtaining a Patent[214]
2.2 Laying Open of the Application (Article 64 Onward of the Patent Act)2.2.1. Reasons for and Significance of Introducing the System of Laying Open the
Application
In the past, basically all patent applications had been examined, and those for whicha decision of publication of examined application was given were published. However,as companies could not find out about their competitors’ applications until the publicationof the examined applications, they risked making overlapping investments, and theirbusiness activities could be destabilized with the sudden emergence of publication of
examined patent applications. Thus, with the 1970 revision, the system of laying open an
application was introduced along with the system for requesting an examination, whereby
all applications pending before the JPO are laid open to the public one year and six months
after their filing dates, excluding those for which a gazette containing the patent has
already been issued (the first sentence of Article 64, paragraph (1) of the Patent Act),1
those that may contravene public order and morality, those for which a request for laying
open the application has been filed (the second sentence of said paragraph of said Article),and the later-mentioned patent applications under the US-JP agreement and patentapplications indirectly subject to the US-JP agreement) (Article 64 onward of the Patent
Act). In the case of a foreign language written application, the application is laid open in
a foreign language (Article 64, paragraph (2), item (vi) of the Patent Act).
If an applicant works an invention claimed in the application prior to laying it open
to the public, there is a risk that the invention may be counterfeited, but no measure wasavailable to address this issue in the past. Accordingly, with the 1999 revision, it wasprovided that an applicant can file a request to lay open his/her application even before
one year and six months from the filing date (Article 64-2, paragraph (1) and Article 64,
paragraph (1) of the Patent Act), so as to give rise to a right to claim compensation. A
request for laying open an application cannot be withdrawn (Article 64-2, paragraph (2)of the Patent Act).
With regard to an international patent application under the Patent Cooperation
Treaty (PCT), an early publication system has been adopted from the past. In order toachieve a balance with domestic law, even where an international application had been
published internationally before one year and six months from the filing date, the right toclaim compensation only arose one year and six months from the filing. However, thiswas also revised in the 1999 revision so that the right to claim compensation will arise
1 Due to the huge examination backlog, patents were not registered within one year and six months from the filingdate in reality, but with the introduction of the preferential examination system, patents are registered quickly.

232§2. Procedures for Obtaining a Patent

after international publication (Article 184-10 of the Patent Act). The one-year-and sixmonth period is more or less the common period among the countries adopting this system.
The laying open is implemented through the publication of unexamined patentapplications containing the matters specified in Article 64, paragraph (2) of the Patent
Act.
The laying open of an application is a compulsory publication, and is conducted
regardless of whether or not the application will be examined. Originally, the patent
system had granted the right to a monopoly in return for publishing the invention, but thesystem of laying open the application has caused a slight change to that principle. In otherwords, the direct link between the grant of a right of monopoly and the publication has
become more vague, and the patent system has come to focus more on the merits ofpromoting industry brought about by the laying open of the application. Meanwhile, asystem for the right to claim compensation was established in order to deal with any ofthe detrimental effects suffered by the applicant caused by compulsory publication.
[215]
The significance of introducing the system of laying open the application includes
the following.
1) Conventionally, in Japan, delays have been observed in examinations due to therapid increase in the number of patent applications, and in some cases the delay of patentexaminations has a critically adverse effect on the patent system. Examinations were
expected to speed up through the introduction of the system of laying open applications
and the system for requesting examinations. With the introduction of these procedures, aperson could search other people’s published applications at an early stage, and refer tothe results to determine whether or not to request an examination for his/her own
application, or if he/she had not yet filed an application, determine whether or not to filesuch an application. In this way, the introduction of these procedures would help to keep
down the number of applications to be filed and the number of applications to be
examined.
2) Since inventions would be published at an early stage, the introduction of such asystem would contribute to improving the technical standards of society and have theeffect of reducing any overlap in research investment by allowing people to find out thestatus of other people’s technology at an early stage.
3) With the system for requesting examinations, which has been introduced
concurrently, an examination is only conducted when requested by an applicant or a third
party, and the timing of the examination can be freely selected as long as it is within three
years from the filing date. In this way, the applicant would be able to manipulate thetiming of publication of the technology intentionally. By laying open applications within
one year and six months from the filing date, fairness can be maintained, wasteful233§2. Procedures for Obtaining a Patentexaminations can be prevented, and examinations will be sped up. With this measure,applications are no longer examined in the order of filing.
4) The early publication of inventions would facilitate examinations of the seniority
status of applications as well as information gathering, so more adequate examinations
could be conducted. After the laying open of an application, anybody is allowed to offer
information as long as the application is pending before the JPO (Article 13-2 of the
Patent Act Enforcement Ordinance); therefore it is easier to gain the cooperation of third
parties, and because the application is no longer a secret, it is easier to make a request for
an investigation to the relevant administrative organs, etc. (Article 194, paragraph (2) ofthe Patent Act).
5) The system of laying open applications is adopted by many countries, even by theEuropean Patent Convention and the PCT, so adoption of the system was essential for
Japan for achieving international harmonization. Even if Japan had not adopted thesystem and applications were kept secret in Japan until the publication of examined
applications, as long as many other countries adopted the system of laying open
applications, information on the applications would often be leaked in the patent gazettesof other countries; so in many cases there would be no point in keeping the inventions
secret. In particular, many Japanese companies also filed foreign applications forimportant inventions, and there was no sense in only keeping such applications secret in
Japan until the publication of examined applications.
[216]
Meanwhile, the secret patent system has been adopted in most countries, and was
also adopted in Japan before World War II, but the system is no longer adopted in Japan,
so all applications except for those that are likely to contravene public order and morality
or be harmful to public health are laid open to the public. Nevertheless, the protocol ofagreements between the Japanese government and the United States government whichfacilitate the exchange of technical knowledge and patent rights for defense purposes (theso-called 1956 Agreement; Treaty No. 12 of 1956) stipulates that when technicalknowledge provided to the other government for defense purposes is subject to a secretpatent in the country that provided the knowledge, the patent application in the othercountry shall be treated in a similar manner (Article 3 of the agreement). As Japan has nosecret patent system, this was basically a provision for protecting U.S. secret patents inJapan, and as long as the patent in the United States is kept secret, the patent cannot be
published in Japan either. This agreement was not implemented in practice for a while,
but due to strong demands from the United States in 1988, detailed procedural regulations
for the implementation were created. According to the regulations, this provision shall beapplied to the following: (i) a U.S. secret patent application that has been provided to theJapanese government in order to have a patent or utility model application filed for it in234§2. Procedures for Obtaining a Patent

Japan (a patent application under the US-JP agreement), and (ii) a national application
filed by an interested party in the private sector who has learnt about the content of a U.S.
secret patent application from the Japanese government and a Japanese government
official that has received materials on a U.S. secret patent application for defense purposes,
which would disclose the patent application under the US-JP agreement (a patentapplication indirectly subject to the US-JP agreement). After the JPO receives such an
application and examines its formalities, it suspends the entire procedure concerning theapplication, and does not lay open the application to the public while the application is
kept secret in the United States. The JPO resumes the procedure when it receives a noticefrom the United States government that the application is no longer secret. Accordingly,
the provision on the laying open of an application under the Patent Act is considered tohave been virtually revised to that extent. In terms of formality, treaties have a higher
priority than laws, so the Patent Act can be regarded as having been revised by the treaty.
Since the system of laying open the application did not exist at the time of the conclusionof this agreement, there were fewer problems then than at present.
When an invention identical to that claimed in a patent application under the USJP agreement or a patent application indirectly subject to the US-JP agreement (priorapplication) is filed as an unrelated later application, as the procedure for the priorapplication is suspended pursuant to the agreement, the later application could be
published and registered first. If the secrecy of the prior application is unlocked later, theprior application will be processed in the same way as an ordinary application, so a patent
will be granted for it as long as it has patentability. In such a case, the later application
will include a reason for invalidation due to the effect of the patent application under the
US-JP agreement or the patent application indirectly subject to the US-JP agreement(prior application) (pursuant to Article 123, paragraph (1), item (ii) of the Patent Act,violation of the provision of Article 39 (prior application) constitutes a reason forinvalidation). When the patent granted for the later application is invalidated, the patenteeof the later application merely obtains a non-exclusive license based on use prior to thedemand for an invalidation trial (Article 80, paragraph (1), item (i) of the Patent Act).
Such an incidence is likely to be rare in reality, considering the number of applications
on U.S. secret patents filed in Japan, the time taken until the secrecy is unlocked, the timerequired for examination, and other factors.
[217]
2.2.2. Effects of Laying Open an Application
Due to the introduction of the system of laying open an application, the direct link
between the publication of the invention and the grant of a right to a monopoly grew235

§2. Procedures for Obtaining a Patentvague, and applicants faced the disadvantage of having the invention published before
obtaining a right for it. Therefore, a need arose to recognize the special effects of laying
open the application. These effects are reviewed below.
2.2.2.1. Right to Claim compensation (Article 65 of the Patent Act)
Before the 1994 revision, the Patent Act adopted a system of the publication of
examined applications, and recognized the right to seek an injunction from the time an
examined application was published (Article 52 of the Patent Act before the 1994
revision). However, the system has been abolished under the current Act, and although
an application is laid open to the public without completing the examination in one year
and six months from the filing date, the right to seek an injunction becomes effective after
the examination has been completed and a patent is registered (Article 66, paragraph (1)of the Patent Act). Considering that about half of the applications are later refused, it is
not legislatively reasonable also from a policy viewpoint to recognize the right to seek an
injunction regarding laid-open applications for which examinations have not been
completed. Without taking any measures, however, inventions are made public with thelaying open of applications, making it possible for third parties to copy the inventions.
This has the risk of making applicants suffer damage, and makes them hesitate to fileapplications. Accordingly, it was stipulated that an applicant may claim, against a person
who worked the applicant’s invention after it has been laid open, the amount ofcompensation equivalent to the amount the applicant would be entitled to receive for theworking of the invention if the invention were patented (Article 65, paragraph (1) of the
Patent Act). The right to claim compensation may not be exercised until after patentregistration (paragraph (2) of said Article)
A claim for compensation can only be made against a person who knowingly works
an applicant’s invention (Article 65, paragraph (1) of the Patent Act). With regard to aclaim for compensation, provisions on patent infringement (Article 101, Articles 104
through 104-3, Article 105-2, etc. of the Patent Act) are applied mutatis mutandis (Article
65, paragraph (6)). It should be noted that, since the 2004 revision, it has become possible
to invoke a defense of invalidation against a claim for compensation (Article 104-3 of the
Patent Act).
The provisions on presumption of negligence (Article 103 of the Patent Act) are
not applied mutatis mutandis because the exercise of the right to claim compensation
requires that a warning has been given or that the claimee knowingly worked theinvention. Such a requirement means that third parties working the invention are notobligated to search publications of unexamined applications. This is because the scope ofa patent right may still change before the patent registration, and it is too harsh on third236

§2. Procedures for Obtaining a Patentparties to require them to search an enormous amount of documents before the patentright becomes effective. Therefore, when an applicant claims compensation, he/she needs
to give a warning thereof, indicating the content of the laid-open invention, to the person
who worked the invention, except where that person has knowingly worked the invention(Article 65, paragraph (1) of the Patent Act). If further changes are made to the content
of the claim due to an amendment after the warning, the applicant would need to give awarning again, in principle, because the amendment would retroact to the filing date, andthe application would be treated as if it had been laid open with the amendment included.
However, if the scope of the claim has merely shrunk, the product worked by the third
party falls within the scope of claims both before and after amendment, and the second
warning is not considered to be necessary.1 Since amendments are strictly restricted atpresent, there are fewer cases where the second warning becomes an issue.
[218]
The amount of compensation is “the amount the applicant would be entitled toreceive for the working of the invention” (Article 65, paragraph (1) of the Patent Act).
This wording is the same as under the provision for compensation that can be claimed
against infringement (Article 102, paragraph (3) of the Patent Act), and would beinterpreted in the same manner.
The exercise of a right to claim compensation does not preclude the exercise of apatent right (Article 65, paragraph (4) of the Patent Act). In other words, the right to seek
an injunction and the right to claim damages after patent registration are not affected byexercising the right to claim compensation, and even if a third party pays compensation,
it does not make that party’s working of an invention after patent registration lawful.
Paying compensation means that, during the period from the laying open of an application
until patent registration, the party will be treated in the same way as if receiving a license,
and it does not mean that the party will acquire a license similar to a prior user’s rightafter the patent registration.
There is a question of whether an act of using, etc., after patent registration, aproduct manufactured during the laying open of the application would constitute an
infringement. If a person manufactures a product during the laying open of the application
by paying compensation for it, and uses it after patent registration, such an act should not
be regarded as infringement. Where, originally, an applicant does not have the right toclaim damages before patent registration, and a third party’s act of working an invention
1 The Supreme Court Judgment, July 19, 1988, Minshū, Vol. 42, No. 6, p. 489/Hanji, No. 1291, p. 132/Hanta, No.
681, p. 117 (the Ground Strap case; a utility model case); the Osaka District Court Judgment, May 31, 1989, Mutai
Saishū, Vol. 21, No. 2, p. 470 (the Pillar Protecting Tool case). However, Nobuhiro Nakayama and Naoki Koizumi,ed., Shin Chūkai Tokkyo Hō Jō, p, 969 [written by Hiroaki Sakai and Tadashi Terasaki] states that, since it is notalways easy to determine whether or not a product falls under the scope of claims, one approach would be to consider
that a notice should be given to the other party advising that the intention to warn is continuing even after there has
been a change to the subject matter as a result of amendment.

237

§2. Procedures for Obtaining a Patentis lawful, the Act specially recognized the claim for compensation. Thus, as long as athird party pays compensation, the third party’s act during the period from the laying openof an application until patent registration should not present a problem under law. The
amount of compensation is the amount equivalent to a license fee, and in practice, it is
the same as having acquired a license for manufacturing the product during that period,
and an act of using, after the expiration of the license, a product, which has been
manufactured during the license period, should be construed to be subject to applicationof the exhaustion theory as far as that product is concerned.2[219]
If an application is granted a patent, there is no need to pay compensation to a party
who has the status of being able to duly assert against the rights pertaining to theapplication during its pendency (a prior user, the employer in the case of an employee
invention, a provisional exclusive licensee, a provisional non-exclusive licensee, etc.).
Next, there is the issue of the legal nature of the right to claim compensation. This
point has not been clearly set forth in the legislative process.3 There are roughly twotheories. One is to consider that, because an unexamined application cannot be regarded
as a right, a third party’s act does not constitute a tort; therefore, the right to claim
compensation is a special right to make a claim that has been exceptionally recognizedunder the Patent Act.4 The other theory considers that, because a patent applicant alreadyhas certain rights (the right to obtain a patent) even before the examination of theapplication, the third party’s act constitutes a tort as an infringement of those rights;

2 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han] (Knowledge of Patents [8th ed.]), p. 256; Shigetoshi Matsumoto,Tokkyo Hatsumei No Hogo Han’i [Shinpan] (Scope of Protection of a Patented Invention [New ed.]), p. 93. As an
opposing view, Japan Patent Office ed., Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han],
p. 215 states that the product can be used by paying compensation until the registration of the establishment of thepatent right, but its use after the registration constitutes infringement. However, if exhaustion is not recognized,
considerable inconveniences are likely to occur.3 For discussions concerning the legislation process, see Kyōnosuke
Sasaki, “Hoshōkin Seikyūken No Hōteki Seikaku Ni Tsuite” (Legal Nature of the Right to Demand Compensation),
Kigyō Hō Kenkyū (Study on Business Law), Vol. 183 (1970), p. 4.
3 For discussions concerning the legislation process, see Kyōnosuke Sasaki, “Hoshōkin Seikyūken No Hōteki Seikaku
Ni Tsuite” (Legal Nature of the Right to Demand Compensation), Kigyō Hō Kenkyū (Study on Business Law), Vol.
183 (1970), p. 4.
4 Yoshirō Hashimoto, Tokkyo Hō [Dai 3 Han] (Patent Act [3rd ed.]), p. 84; Mitsue Toyosaki, Kōgyō Shoyūken Hō[Shinpan/Zōho] (Industrial Property Law [New and Expanded Edition]), p. 190; Yasushi Aoki and Tsuneteru
Aragaki, Shinpan Tokkyo Tetsuzuki Hō, p. 154; Haruo Gotō, Kaisei Tokkyo Hō No Kaisetsu (Explanation of the
Revised Patent Act), p. 160. Shigetoshi Matsumoto, Tokkyo Hatsumei No Hogo Han’i [Shinpan] (Scope ofProtection of a Patented Invention [New ed.]), p. 90 states that an applicant has the legal benefit of having his/hersecrets protected, and it is unfair to neglect the protection of a right because an examination has not been carried out.

238§2. Procedures for Obtaining a Patent

therefore, the right to claim compensation is a right to claim damages.5
In general, information can be freely used by anybody. Therefore, legal grounds
would be required to claim some protection for certain information. In order to exercise
the right to seek an injunction or the right to claim damages regarding technicalinformation, the right must be exercised based on the Patent Act. A patent right can only
be exercised after it has been registered, so during the period from laying open theapplication to registration, there is basically no right that is effective against third parties.
All applications are laid open one year and six months after the filing date, as a rule,
without any protection, so without taking any measures, the inventions become available
for free working by third parties. Under the old Act, an applicant could keep thetechnology as a trade secret until the publication of the examined application, so, it israther harsh on the applicant to have the invention compulsorily laid open withoutcompensation. Accordingly, there was a need to establish a special provision under the
Patent Act concerning the working of an invention by a third party after the laying openof an application.
[220]
Certain rights centering on the right to obtain a patent exist even before patentregistration (Articles 33 and 34 of the Patent Act), but they cannot serve as the basis forclaiming damages as a result of a tort. An infringement on the right to obtain a patent
could constitute a tort, but that is an issue determined by the mode of the tort. Even if thetechnology subject to a right to obtain a patent was worked by a third party, that is notenough to regard such act as a tort. After the laying open of the application, in particular,a third party can lawfully learn the content of an invention, so the third party’s workingof the invention does not constitute a tort, in principle.
If the working of an invention by a third party after the laying open of theapplication were considered to constitute a tort on the basis that the inventor has the rightto obtain a patent even before laying open the application, the same should apply for theworking by a third party who has somehow learned about the content of the application
before the laying open of the application. However, the right to claim compensation is

5 Osamu Takura, “Hoshōkin Seikyūken To Tokkyo O Ukeru Kenri” (The Right to Demand Compensation and the Right
to Obtain a Patent), Tokkyo Kanri (Patent Management), Vol. 22, No. 1 (1972), p. 8; Osamu Takura, “Kaisei Tokkyo
Hō Ni Okeru Hoshōkin Seikyūken Ni Tsuite” (The Right to Demand Compensation under the Revised Patent Act),
Kigyō Hō Kenkyū (Study on Business Law), Vol. 183 (1970), p. 14. Another similar theory considers that aninvention is a kind of property right, and a certain substantive right is recognized for it even before examination, so
the right to claim compensation is the right to claim damages in relation to the infringement of that right (Kyōnosuke
Sasaki, “Hoshōkin Seikyūken No Hōteki Seikaku Ni Tsuite” (Legal Nature of the Right to Demand Compensation),
Kigyō Hō Kenkyū (Study on Business Law), Vol. 183 (1970), p. 4). In the meantime, Tomoko Takii, “Kaisei Tokkyo
Hō Ni Okeru Hoshōkin No Seikaku (Nature of Compensation under the Revised Patent Act),” Kigyō Hō Kenkyū(Study on Business Law), Vol. 183 (1970), p. 21 states that the revised Act is based on a view that the working of
an invention by a third party after the laying open of the application is legitimate, but the right to claim compensation
should be considered to be the same as the right to claim damages, and it would be sufficient to allow its exercise at
the time of publication of the examined application.

239

§2. Procedures for Obtaining a Patent

not recognized for the right to obtain a patent before the laying open of the application. If
an act of a third party were in such a mode as to constitute a tort or to violate the Unfair
Competition Prevention Act, it can simply be handled under the respective laws. Theremight be a case where the act does not correspond to either of them, for instance, the casewhere an applicant leaks the content of the technology by negligence and a third party
who saw it works the invention, but there is no measure available to deal with such a case.
However, unless some restriction is imposed on at least the working of the invention bya third party after the laying open of the application, the patent system cannot be
maintained. Therefore, the right to claim compensation should be considered as having
been specially established under the Patent Act in order to prevent applicants from
suffering any detrimental effects, while securing the social benefit of having theinventions published at an early stage. Accordingly, such an act by a third party should
not be considered as a tort. It should be construed that the provisions on the tort (Articles
719 and 724 of the Civil Code) are applied mutatis mutandis to the case of exercising theright to claim compensation (Article 65, paragraph (5) of the Patent Act). Even though
the right to claim compensation is a right specially recognized under the Patent Act,
Article 724 (Restriction of Period of Right to Demand Compensation for Damages inTort) of the Civil Code is applied mutatis mutandis, so the prescription is three years,
although the prescription runs from the day on which the establishment of the patent rightis registered (Article 65, paragraph (6) of the Patent Act).
Furthermore, if the right to claim compensation were considered to be a right toclaim damages, it would not be possible to exercise the right against a person who has
developed the technology independently. If the applicant were to suffer any damage, itwould be damage caused by having the invention compulsorily laid open and having theinvention copied by a third party as a result; but a person who has developed the invention
independently has created the same technology autonomously from the applicant, so there
is no causal relation between them. Nevertheless, the Patent Act does not stipulate any
restrictions on the parties from whom compensation can be claimed, so compensation canactually be claimed regardless of whether or not the third party has developed theinvention independently, as long as information on the invention has been provided to thethird party by, for example, issuing a warning.6[221]
2.2.2.2. Investigation Commissioning System (Article 194, paragraph (2) of the Patent
Act) and Information Offering System (Article 13-2 of the Patent Act Enforcement

6 This theory is subject to opposition. An opposing theory is introduced in Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu[Dai 13 Han] (Summary of Patent Law [13th ed.]), p. 405.

240

§2. Procedures for Obtaining a Patent

Ordinance)
Since the laying open of applications basically publishes all applications, andunlocks the secrecy of the applications to that extent, the JPO Commissioner or theexaminer may commission related administrative agencies or other organizations to
conduct the investigation necessary for an examination (Article 194, paragraph (2) of the
Patent Act). In addition, anybody may voluntarily offer information while the applicationin question is pending before the JPO, regardless of whether or not a request for
examination has been made and even without being requested to do so by the JPO
Commissioner or the examiner (Article 13-2 of the Patent Act Enforcement Ordinance).
This is a mere offer of information, so the provider of the information does not have theright to receive a report on the result. As a result of these measures, the JPO can obtainmaterials and raise the quality of its examinations.
2.2.2.3. Special Provisions on International Applications
The Patent Cooperation Treaty (PCT) provides that the publication of aninternational application must have the same effect as the publication of an unexaminednational application (Article 29(1) of the PCT). Therefore, the right to claim
compensation also arises with regard to the publication of an international application.
Nevertheless, as the PCT stipulates that special provisions can be established in nationallaw concerning the time when the international publication comes into effect due to thedifference in language (Article 29(2) of the PCT), the Japanese Patent Act stipulates thatthe right to claim compensation arises after national publication with regard to
applications in a foreign language (Article 184-10 of the Patent Act).

241

§2. Procedures for Obtaining a Patent[222]
2.3. Amendment
2.3.1. Introduction
An amendment refers to an act of making a supplementation or revision of any
illegitimacy in proceedings with the JPO, or any deficiency in the documents while thecase is pending before the JPO.1 It is divided into a formality amendment and substantive
amendment. Sometimes, an amendment is made voluntarily (Article 17, paragraph (1) of
the Patent Act), but in other cases, an amendment is made by order (paragraph (3) of said
Article). The JPO Commissioner may order an amendment (Article 17, paragraph (3) ofthe Patent Act) when the applicant violates the provision on the capacity to proceed or on
the authority of representation, when the proceeding violates the prescribed formality, or
when fees which are due are not paid (Article 18, paragraph (2) of the Patent Act). If theapplicant fails to make an amendment, the Commissioner may dismiss the procedure(Article 18, paragraph (1) of the Patent Act). The Commissioner is not required to orderan amendment in these cases, and does not need to give an order when the deficiency isslight.
When an amendment cannot be made due to an unlawful procedure, such as where
the application to be amended is not identifiable or where the name of the applicant ismissing, the procedure is dismissed after being received. In such a case, the person who
undertook the procedure must be given a notice of the reason for the dismissal and an
opportunity to submit a document giving an explanation, while designating an adequate
time limit (Article 18-2 of the Patent Act). In the case where there was a material andirreparable defect, such as a failure to attach the description, the application had beenfound to be unacceptable under conventional practice, although there was no express
provision on such a case.2 However, after the 1996 revision, such an application had been
dismissed after receiving the filing documents. This revision was made in order to clarify
the legal basis of the disposition as well as to provide a procedural guarantee. When theprocedure is dismissed, the application is deemed not to have been filed.
While an amendment can be carried out at any time while the application is pending
1 Before the 1970 revision, it had been stipulated that an amendment can be made while a case is pending examination,a trial, or a retrial, and under the system where all applications were examined, any application filed was regarded
as “pending in examination.” However, with the adoption of the system for requesting an examination, an application
could no longer be regarded as pending in examination before an examination was requested. In order to make anamendment possible in such case as well, the wording was revised to “pending before the JPO”.
2 Article 10-2 of the Ordinance for Enforcement of the Patent Act of 1921 had provided for a disposition of nonacceptance, but no provision exists under the current Act. A detailed explanation on the disposition of non-acceptancecan be found in Note (1) of the former edition, Industrial Property Law, Volume 1, Patent Act [2nd, Revised andEnlarged Edition], p. 295. The explanation is omitted here, because such a disposition is no longer being issued dueto the establishment of Article 18-2 upon the 1996 revision.

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before the JPO, in principle (the first sentence of Article 17, paragraph (1) of the Patent
Act), there are restrictions on the period and contents of an amendment with regard to theamendment of the description, scope of claims, drawings, and abstract, which are the mostimportant documents that can be amended, due to their relationship with third parties andrelationship with the first-to-file system (the proviso to Article 17, paragraph (1) of the
Patent Act).
[223]
Although it is more desirable for the filing documents to be complete from the
beginning, the filing procedure is complicated, and as the first-to-file system requires theapplicant to file the application as soon as possible, it is often difficult to prepare complete
documents from the start. Allowing no amendment after the filing is too severe for theapplicants and runs counter to the appropriate protection of inventions. It would diminish
inventors’ motivation to file applications, resulting in a risk that there is a smaller chanceof technology being published. The more pioneering the invention is, the more difficult
it is to require a complete description, scope of claim, drawings, and abstract upon filing,
and this may lead to offering insufficient protection. Therefore, many countries that adopt
the substantive examination system recognize amendments after filing, and Japan also
allows such amendments to a certain extent. With regard to the period and content of anamendment, it is essential that the amendment does not obstruct an expeditious procedurefor granting patents, that fairness is maintained among applicants, and fairness ismaintained between the applicant and third parties. These matters are not determinedtheoretically, and policy-oriented determinations are made while also watching the statusof filings and current international trends.
As an amendment has a retroactive effect,3 an unlimited amendment would run
contrary to the first-to-file principle and harm the interests of third parties. Also, it could
make the procedures more complicated and increase the JPO’s burden unnecessarily.
Therefore, an amendment can be made during the period from the filing until thecompletion of an examination and while it is pending in a trial or a retrial, as a rule, but
an amendment of the description, scope of claims, drawings, and the abstract attached tothe application is restricted in respect of the amendable period and scope according to theprogress and status of the filing procedure. After patent registration, an amendment
cannot be made since the procedure is no longer pending before the JPO, so the applicant
may request a trial for correction (Article 126 of the Patent Act) or may request acorrection in an invalidation trial (Article 134-2 of the Patent Act). The part below
3 Although there is no provision on the retroactive effect, amendment would be meaningless if the retroactive effectis not recognized, so it is regarded as a matter of course. According to Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō
Jō [Dai 3 Han] (Explanatory Notes on the Patent Act Vol. 1 [3rd ed.]), p. 133 [written by Haruo Gotō/Masaaki
Arisaka], the establishment of a provision on the retroactive effect was considered when legislating the current Act,but it was decided to address this matter through the interpretation of the Act.

243§2. Procedures for Obtaining a Patent

reviews the crucial part of the amendment, which is an amendment of the description,scope of claims, drawings, and the abstract, according to the progress and status of thefiling procedure.
Conventionally, the admissible scope of an amendment in Japan was broader
compared with that of other countries. This was considered to be because Japan had
adopted the single claim system, in which it was often difficult to disclose a complete
claim upon the initial filing. However, due to the present adoption of the multiple claim
system, which has made it relatively easier to disclose a comprehensive claim from the
beginning, and the internal priority system, there is less need to recognize the broad scopeof an amendment as in the past. In addition, as the recognition of the broad scope of anamendment had caused a considerable delay to examinations in the past, there was a needto take some drastic measures. Furthermore, while a third party needs to pay attention to
the amendments of other people’s applications because the right to claim compensationarises after the laying open of the applications, monitoring alone was creating an
excessive workload due to the enormous number of applications filed today. Such aworkload was expected to be reduced by restricting the scope for amendments.
Accordingly, the amendment system was drastically revised in 1993 and 1994, greatly
restricting the scope for which amendments could be made.4[224]
In a report by the Industrial Property Council in 1992, the Council recommended arevision of the amendment system and a shift from the pre-grant opposition system to thepost-grant opposition system. Some of the recommendations from this report(rectification of amendment, simplification of the trial system, etc.) were accomplishedin the aforementioned 1993 revision. Despite the fact that a shift of the opposition system
was recommended in the report, the government retained it as a diplomatic resort fornegotiations with the United States and was waiting for the right timing to make a revision.
The post-grant opposition system was finally established upon the 1994 revision (cameinto effect on January 1, 1996), and the system of the publication of examined
applications was abolished in line therewith. Since the publication of examined
applications (more precisely, the service of a certified copy of a decision to the effect thatexamined applications should be published) had granted the applicant a right ofprovisional protection, which had a similar effect as a patent right, the publication served
as an important process that divided the period and scope in which an amendment could
4 For explanations on the revised provisions, see Legislative Affairs Office, JPO, “Tokkyo Hō/Jitsuyō Shin’an Hō No
Kaisei Ni Tsuite (1)” (Amendment of the Patent Law/Utility Model Law (1)), Hatsumei (Invention),Vol. 90, No. 7(1993), p. 24; Yoshinobu Murofushi/Makoto Kamogari, “Kaisei Tokkyo Hō Ni Okeru Hosei No Toriatsukai Ni
Tsuite”(Handling of Amendment in the Revised Patent Act), Patent, Vol. 46, No. 5 (1993), p. 73; Fumiaki Ōtsuka,“Tokkyo Hō Oyobi Jitsuyō Shin’an Hō No Kaisei” (Amendment of the Patent Law and Utility Model Law), Patent,Vol. 46, No. 6 (1993), p. 9; Ken’ichi Kumagai, “Tokkyo Hō/Jitsuyō Shin’an Hō No Kaisei Ni Tsuite” (Amendmentof the Patent Law/Utility Model Law), Jurist, No. 1029 (1993), p. 111.

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be made. The 1993 revision restricted the admissible scope for amendment, and the 1994
revision simplified the admissible period for amendment, establishing a new amendment
system as a result.
Before the 1993 revision, an applicant could dispute the dismissal of an amendment
in a trial against an examiner’s ruling to dismiss an amendment, and if the amendment
were judged to be illegal in a trial, the application only returned to its original status prior
to the amendment. After the revision, however, a ruling dismissing an amendment cannot
be made subject to appeal (Article 53, paragraph (3) of the Patent Act), and there is no
way to dispute the dismissal independently, so the applicant will receive an examiner’s
decision of refusal (Article 49, item (i) of the Patent Act), and if dissatisfied, dispute thecase in a trial against the examiner’s decision of refusal. However, where a request for a
trial against an examiner's decision of refusal (Article 121, paragraph (1) of the Patent
Act) has been filed, this shall not apply to the appeal made in the proceeding in the said
trial (the proviso to Article 53, paragraph (3) of the Patent Act). The demandant of thetrial may dispute over the illegality of the ruling to dismiss amendment in litigation for
rescinding the trial decision.5[225]
2.3.2. Period for Amendment
The applicant for a patent may amend the description, scope of claims, or drawings
attached to the application, before the service of the certified copy of the examiner's
decision notifying that a patent is to be granted, but when the applicant receives the noticeof reasons for refusal provided for in Article 50, he/she may make an amendment only inthe cases specified in said Article (Article 17-2, paragraph (1) of the Patent Act).
Before the Act revised in 1994 (the part that entered into force in 1996),1 a rightof provisional protection similar to a patent right had been granted after the publicationof the examined application. Therefore, an amendment of the description (the“description” at the time included the “scope of claims,” but the two were separated upon
the 2002 revision) and drawings after the publication of the examined application had
been strictly limited both in terms of period and content, in relation to third parties. Since
the patent system grants a monopoly for an invention, the scope of that right to a
5 The Tokyo High Court Judgment, February 25, 1970, Mutai Saishū, Vol. 2, No. 1, p. 32/Hanta, No. 248, p. 159 (theDrawer Partitioning Equipment case).
1 The first notice of reasons for refusal refers to reasons that are pointed out to the applicant for the first time. Therefore,
even if a notice is formally the second notice, if a reason for refusal which should have been pointed out in the first
notice failed to be included in the first notice, or if a reason for refusal in the first notice was inappropriate, and an
appropriate reason for refusal is notified again, it is treated as the first notice of reasons for refusal. There can becases where the applicant is subsequently notified of yet another reason for refusal, and makes amendment inresponse to it.

245§2. Procedures for Obtaining a Patentmonopoly must be fixed at some point in relation to third parties. Before the introductionof the system of laying open applications, the time of the publication of the examined
application was recognized as the first time the invention became public, and it was also
the time of the commencement of the right to a monopoly, so the publication of theexamined application carried a very important meaning.
However, with the abolition of the system of publication of examined applications
and the introduction of the system of laying open applications, a gap occurred between
the time of laying open an application and the time of the commencement of the right toa monopoly. Therefore, the allowable period and scope of amendment inevitably became
complicated. There is still a gap between the time of laying open an application and thetime of the commencement of the right to a monopoly, but the amendment system was
simplified as a result of the abolition of the system of publication of examined
applications. Before the 1993 revision, an applicant could dispute a ruling to dismiss anamendment at a JPO trial (Article 122 before the 1993 revision). Thus, the examiner was
unable to issue a decision of refusal of the application until 30 days had passed from theservice of a certified copy of a ruling to dismiss an amendment (Article 53, paragraph (3)before the 1993 revision), and if a trial had been requested against a ruling to dismiss anamendment, any examination was suspended until the trial decision became final andbinding (paragraph (4) of said Article before the 1993 revision), so it was one of thecauses that delayed examination. When an applicant receives a notice of refusal, he/she
can make amendments as many times as he/she wants, but because an examination needs
to be redone every time, and this causes a delay in examinations, and it is unfair for those
who make the effort to prepare a complete description from the start, the current Act
provides that an applicant can only make an amendment against the final notice of refusal
to an extent that does not waste the examination which has already been conducted (thespecific scope is discussed in “2.3.3. Admissible Scope of Amendment”).
[226]
Prior to the 1994 revision, there was restriction on the period for amendment after
one year and three months from the filing date. If amendments on an “as required” basis
were admitted after the laying open of the application, the examination procedure would
have to stop each time an amendment was made, and this would increase the examination
workload and would delay examinations, as well as increasing the monitoring workloadof third parties, so this restriction was established in order to facilitate the implementationof the procedure. However, after the introduction of the system of foreign language
written applications, where an application containing a priority claim under the Paris
Convention has been filed from another country, an amendment could only be madewithin one year and three months from the filing date of the first application. Since suchan application was often filed immediately before the expiration of the priority period,246§2. Procedures for Obtaining a Patent

the applicant only had three months for making an amendment in practice, and could only
make an amendment at the time of making a request for an examination. Therefore, there
were calls for the relaxation of the restriction on the period for amendments. However, if
the restriction were relaxed only for the applications containing a priority claim, there
would be impartiality between national applicants and foreign applicants. Therefore, withthe 1994 revision, the time limit of one year and three months from the filing date wasabolished, and, in principle, it became possible to amend the description and drawings
attached to the application before the service of a certified copy of the examiner's decisionnotifying that a patent is to be granted (Article 17-2, paragraph (1) of the Patent Act), andamendment after receiving a notice of reasons for refusal became subject to a severe
restriction as discussed later (the proviso to said paragraph).
For cases where a notice of reasons for refusal has been given under Article 50, theperiod for an amendment of the description, scope of claims, and drawings is restricted(the proviso to Article 17, paragraph (1) and Article 17-2, paragraph (1) of the Patent Act),and an amendment can only be made in the cases shown in 1) through 5) below. An
amendment is only allowed during periods where amendment may truly be necessary inconsideration of the third party burden of carrying out searches and the JPO’s examination
burden and in order to achieve equity between applicants who repeatedly makeamendments and those who do not. Specifically, if a notice of reasons for refusal or adecision of refusal has been given, an amendment can be made only during the following
periods (the proviso to Article 17-2, paragraph (1) of the Patent Act):
1) Where the applicant has received the first notice of reasons for refusal (the notice ofthe reasons for refusal indicated to the applicant for the first time), an amendment can bemade within the time limit designated thereby (Article 17, paragraph (1), item (i) of the
Patent Act). In this case, an amendment can be made freely unless it adds new matters(Article 17-2, paragraph (3)) or it is a shift amendment (paragraph (4) of said Article).
The designated time limit is 60 days for applicants residing in Japan and 30 days forapplicants residing in a foreign country.
2) Where the applicant has received a notice of reasons for refusal, and subsequently
received a notice advising that the disclosure of information on prior art documents is
insufficient (Article 48-7 of the Patent Act), an amendment can be made within the time
limit designated thereby (Article 17, paragraph (1), item (ii) of the Patent Act) (added
upon the 2002 revision). This provision was introduced upon the 2002 revision in linewith a revision to obligate applicants to state information on inventions that have been
known to the public through publication which the applicant knows at the time of thefiling. Similar to the case of item (i) above, the addition of new matters and shiftamendments are prohibited.
[227]

247

§2. Procedures for Obtaining a Patent3) Where the applicant has received the final notice of reasons for refusal (usually, itis the second notice of reasons for refusal, which need to be notified based on theamendment made in response to the first reasons for refusal), an amendment can be madewithin the time limit designated thereby (Article 17, paragraph (1), item (iii) of the Patent
Act). Similar to the case of item (i) above, the addition of new matters and shiftamendments are prohibited. In addition, an amendment of the scope of claims is limited
to the deletion of claims, correction of errors, clarification of an ambiguous statement,
and restriction of the scope of claims where the industrial applicability and the problem
to be solved as regards the invention stated in the claims prior to the amendment are
identical with those after the amendment (Article 17-2, paragraph (5)). This provision isintended to prevent wasting the results of an examination which has already been
conducted.
4) Where the applicant files a request for a trial against an examiner’s decision ofrefusal, an amendment can be made at the time of filing the request for a trial (Article 17,
paragraph (1), item (iv) of the Patent Act). This provision was established to meet ademand from those engaged in patent practice whereby, even when an amendment has
been made in response to the final reasons for refusal, but a decision of refusal has been
given, and a request for a trial against that decision has been filed, they want yet anotheropportunity to make an amendment in response to the examiner’s final determination.
Before the 2008 revision, an amendment could be made within thirty days from the dayon which a JPO trial was requested, but since the time limit for filing a request for a trial
against an examiner's decision of refusal was extended to three months from the serviceof a certified copy of the reasons for refusal, with the 2008 revision, it became necessary
to make an amendment at the time of filing a request for a trial.
5) Where a trial for patent invalidation that has been filed, the demandee (patentee) can
amend the corrected description, scope of claims, or drawings attached to the written
request for correction within the time limit designated in Article 17-5, paragraph (2).
The demandant of a trial for correction can make an amendment within the period up until
a notice of the conclusion of the proceedings is issued. The time restriction is stricter fora trial for invalidation than for a trial for correction (Article 17-5, paragraph (3) of the
Patent Act). This is because a trial for invalidation adopts an adversarial system, and if afree amendment were allowed, the subject matter of the proceedings would change andthe proceedings would take longer.
6) The abstract, which was introduced upon the 1990 revision to facilitate access by
third parties, is unrelated to the scope of protection, so it can be amended only within one248

§2. Procedures for Obtaining a Patentyear and four months from the filing date as in the past (Article 17-3 of the Patent Act;2
Article 11-2-2 of the Patent Act Enforcement Ordinance). However, when a request forlaying open the application has been made within one year and three months from thefiling date, no amendment can be made after the application has been laid open (the partin parentheses in said Article of the Patent Act Enforcement Ordinance).
[228]
2.3.3. Admissible Scope of Amendment
Inadmissible amendments had been dealt with by establishing complex stipulations,so as to prevent the applicant from being disadvantaged within an extent that would notcause unfair damage to third parties, through taking various measures. Accordingly, theprovisions under the Patent Act have become complicated. Further, there have been
drastic changes in relation to this matter upon the 1993 and 1994 revisions, so the relatedtransitional measures are also complicated.
Before the 1993 revision of the Act, an amendment made before the publication of
the examined application that was found to change the gist of the application 1 after thepatent registration did not invalidate the patent, but the patent application was deemed tohave been filed upon submission of the written amendment (Article 40 of the Patent Act
before the 1993 revision). In short, by moving the filing date to a later date, the patent
could remain effective without damaging third parties who had worked the invention
since before the amendment unfairly. However, due to such change of the filing date, thedeterminations on novelty, inventive step, prior use, etc. would also be made based on thetime the amendment was made. Therefore, if the invention had become publicly known
during the period from the filing to the amendment, the patent could become invalidated,
and the application could also become publicly known by laying open the applicant’s own

2 With the 1994 revision, the one-year-three-month restriction was lifted for amendment of the description (which
included the scope of claims at the time) and drawings, but the conventional provisions were maintained foramendment of the abstract. Upon the 2014 revision, the period for amendment was delegated to Ordinance of the
Ministry of Economy, Trade and Industry.
1 Before the 1993 revision, the Patent Act used the phrase “change of the gist” but it did not have a definition therefor.
Thus, there was confusion as to what should be regarded as an amendment that changes the gist of the application.
Before the publication of the examined application, an increase, decrease, or change of the scope of claims within
the extent of the statements in the description (which included the scope of claims at that time) or drawings originallyattached to the application was not considered to be a change of the gist of the application. Meanwhile, theExamination Guidelines had set forth that when, as a result of amending the description or drawings, the technicalmatters stated in the scope of claims no longer fell within the extent of the statements in the description or drawings
originally attached to the application, the amendment was considered to have changed the gist of the description.
Conversely, as long as the amendment was made within the same scope as the invention that was disclosed in thedescription, etc. at the time of the filing—that is, within a scope that does not change the essence of the invention—even the addition of new matter was allowed. For details on prohibition of addition of new matters under the
Examination Guidelines, see Takeshi Maeda, Tokkyo Hō Ni Okeru Meisaisho Ni Yoru Kaiji No Yakuwari (Role ofDisclosure Played By a Description under the Patent Act), p. 89.

249

§2. Procedures for Obtaining a Patentapplication.2[229]This point was substantially revised upon the 1993 revision of the Act. Under therevised Act, an inadmissible amendment made before the publication of the examined
application (amendment to add new matters) was not dismissed, but was regarded as
constituting a reason for refusal. An amendment in response to the final notice of reasons
for refusal was dismissed, and if it were not dismissed due to a mistake, it constituted areason for invalidation (Article 123, paragraph (1), item (i) of the Patent Act). With regard
to an amendment in response to the final notice of reasons for refusal, the scope of theamendment was not only subject to the prohibition of adding new matters, but it was also
severely restricted in other respects (Article 17-2, paragraph (5) of the Patent Act).
With regard to an inadmissible amendment after the decision of the publication of
the examined application, no change was made upon the 1993 revision of the Act, andthe patent was deemed to have been granted as if the patent application had not been
amended (only the place of the provision changed from Article 42 before the 1993
revision to Article 40 after that revision). However, the admissible scope of amendment
was changed after 1993 as mentioned earlier (it was changed from a prohibition to change
the gist of application to a prohibition to add new matters). As the system for the
publication of examined applications was abolished by the 1994 revision, Article 40 of
the Act that had stipulated that the above measure should be deleted, and the provision
was made consistent with the contents of the measures for amendment before thepublication of the examined application.
With regard to the admissible scope of an amendment, before the 1993 revision of
the Act, there was no restriction on the scope of an amendment that could be made prior
to publication of the examined application, as long as it did not change the gist of theapplication (Article 41 before the 1993 revision). However, the 1993 revision prohibited
an amendment that adds new matters, from the viewpoint of the international
harmonization of patent systems. Prohibition against adding new matters is a restrictionthat consistently applies to both amendment and correction. Specifically, an amendmentof the scope of claims became allowed only with regard to matters that are expressly
stated in the description and matters that are obvious from the statement in the description.
Since the single claim system had been adopted as the method for stating the scope ofclaims in the past, it was difficult to acquire a patent for the complete invention, so thebroad scope of an amendment had been recognized. Even after the multiple claim system
was adopted in 1988, the scope of an amendment remained unrevised until 1993.
2

In the Tokyo High Court Judgment, November 29, 1978, Mutai Saishū, Vol. 10, No. 2, p. 594 [the Diamond
Composition Method case], the court held that a patent was invalidated because the application had become publicly
known by a description in a printed publication as a result of the change of the filing date to a later date.

250

§2. Procedures for Obtaining a Patent

In the Act revised in 1993, an examination is carried out first with regard to all thereasons for refusal listed in Article 49, and the first notice of reasons for refusal is issued
based on the result. An amendment of the description, scope of claim, and drawings in
response to that notice is allowed, in principle, as long as no new matter is added (anamendment is admitted in Article 17-2, paragraph (1) of the Patent Act and its scope isstipulated in paragraph (3) of said Article). It is provided that, except in the case ofsubmitting a statement of correction regarding an incorrect translation, any amendmentof the description, scope of claims or drawings shall be made within the scope of thematters described in the description, scope of claims or drawings originally attached tothe application (Article 17-2, paragraph (3) of the Patent Act). This principle, which wasintroduced with the Act as revised in 1993,3 is referred to as a “prohibition against adding
new matters.” This is because, if an amendment to add new matters were recognized, itwould encourage the corrupt practice of filing an ill-prepared description first and making
an amendment later, causing impartiality between an applicant who files an underprepared application and makes an amendment later and an applicant who makes efforts
to prepare a sufficient description from the start, and a possible risk of causing unexpected
damage to third parties who have taken actions on the assumption of the scope of theinvention disclosed at the time of the filing. In addition, the recognition of the wide scopeof an amendment would delay the examination procedure, and also Japan’s conventional
system was peculiar in relation to the rest of the world as many advanced countries did
not allow amendments adding new matters.4 Then again, it is difficult to file a complete
application from the start, so an excessively strict restriction on an amendment is
disadvantageous for pioneer inventions, and there are strong calls from applicants for achance to make amendments. How these aspects should be balanced in the amendment
system is a difficult policy question.
[230]
New matters in this context were strictly interpreted under the Examination
Guidelines at the time of the 1993 revision, and the amendable limit was “matters thatcan be derived directly and unambiguously from the original description, etc.”5 However,

3 As a similar provision, Article 34(2)(b) of the PCT provides “The amendment shall not go beyond the disclosure in
the international application as filed.” Article 17-2, paragraph (3) of the Patent Act was stipulated with reference tothis provision of the PCT.
4 The Intellectual Property High Court Grand Panel Judgment, May 30, 2008, Hanji, No. 2009, p. 47/Hanta, No. 1290,
p. 224 (the Solder Resist case); the Intellectual Property High Court, January 28, 2010, Hanji, No. 2089, p. 128/Hanta,
No. 1329, p. 218 (the case of a Heat Storage Type Floor Heating System Using Midnight Electric Power).
5 According to the Implementing Guidelines for amendment of Description and Drawings (1993), amending the“elastic body” that is stated in the description into “rubber” is not admissible because, as “elastic body” includes not
only “rubber,” but also “springs,” “rubber” is not derived directly and unambiguously from “elastic body.” However,if “rubber” were stated as an example of “elastic body” in the detailed explanation of the invention at the time of thefiling, such amendment is admissible. Such determination on amendment has an advantage of shortening theexamination time and reducing variations in the determination among the examiners, but it lacked specificappropriateness.

251§2. Procedures for Obtaining a Patent

this was criticized for being too formal and strict, and failing to protect inventions
appropriately, so upon the 2003 revision of the Examination Guidelines, it was provided
that it is admissible to make an amendment not only to “matters explicitly stated in theoriginally attached description, etc.” but also to “matters obvious from the statement in
the originally attached description, etc.” that are not explicitly stated.6 The gist of thisstatement is that an amendment can only be made to the extent of the contents originallydisclosed at the time of the filing, and that the amendment must not introduce newtechnical matters.7[231]
The content of an amendment that can be made in response to the final notice of
reasons for refusal8 or in requesting a trial against an examiner’s decision of refusal islimited to be within a scope that does not have to waste the examination carried out up tothat point and that does not require the search of a new prior art. There is no problem interms of the procedure, because the applicant has already been given an opportunity torespond at the time of the first refusal, and the system is expected to contribute topreventing the repetition of examination and amendment, and to promoting efficient andexpeditious examinations. Meanwhile, a trial is a procedure for disputing theappropriateness of the examination, so no new amendment is allowed in a trial.
Specifically, an “amendment of the scope of claims” can only be made in the following

6 Amending “elastic body” into “rubber” would be regarded as a proper amendment if “rubber” is obvious to a person
skilled in the art from the statement of “elastic body.”
7 In the Intellectual Property High Court Grand Panel Judgment, 2008, May 30, Hanji, No. 2009, p. 47/Hanta, No.
1290, p. 224 (the Solder Resist case), the court held that “We can understand that, by stipulating that any amendment
must be made ‘within the scope of the matters stated in the description or drawings attached to the application,’ the
Act aims to have the applicants disclose their inventions sufficiently from the time of the filing, so as to ensure theexpeditious grant of rights, to secure fair treatment between applications which disclose inventions insufficiently andthose that disclose the inventions sufficiently from the start, and to make sure that third parties who have acted on
the premise of the scope of the invention disclosed at the time of the filing do not suffer any unexpected disadvantage,
while also, by consistently setting the same requirements for any correction to be made after the grant of the patentright, the Act aims to make sure that the invention is sufficiently disclosed at the time of the filing, thereby
substantively ensuring the principle of the first-to-file system.” The court further stated that “with regard to ‘thematters stated in the description or drawings,’ given that an invention, which is an advanced creation of a technicalidea, is disclosed to third parties as a condition for obtaining a monopoly through a patent right, the ‘matters’ in thiscontext should be premised to be technical matters concerning the invention which were disclosed by the description
or drawings, but ‘the matters stated in the description or drawings’ are technical matters that can be derived by aperson skilled in the art by comprehensively reading all the statements in the description or drawings, so when anamendment does not introduce new technical matters in relation to the technical matters so derived, such amendment
is regarded as having been made ‘within the scope of the matters stated in the description or drawings.’ This was acase concerning a correction, but since prohibition of adding new matters is a principle that is consistently adopted
for both an amendment and a correction, it also applies to amendment.
8 The final notice of reasons for refusal is “a notice of reasons for refusal notifying only reasons for refusal necessitatedby amendments made in response to a ‘non-final notice of reasons for refusal’” (Examination Guidelines Part IV,
4.3.3.1), and it is usually the second notice of reasons for refusal. This means that, after the applicant makes anamendment on the reason for amendment given in a non-final notice, the application is refused yet again based on
the same reason. Refusal based on a reason that differs from that given in the non-final notice of reasons for refusal
is not a final notice of reasons for refusal.

252§2. Procedures for Obtaining a Patent

cases (Article 17-2, paragraph (5) of the Patent Act); 9 as a matter of course, no newmatters can be added:
1) Deletion of a claim(s) (Article 17-2, paragraph (5), item (i) of the Patent Act). Thisis admissible because it does not require a new examination. Formality amendments thatare required in line with the deletion of a claim, such as changing the citation number,are, of course, admissible.
[232]2) Restriction of the scope of claim(s) (limited to cases where the restriction is torestrict the matters required to identify the invention stated in a claim(s), and the industrial
applicability and the problem to be solved by the invention as stated in the said claim(s)before the amendment are identical to those after the amendment) (Article 17-2,
paragraph (5), item (ii) of the Patent Act).10 This amendment is admitted so as to enable
the effective use of the results of an examination which has already been conducted. In
the case of restricting the scope of claims, the invention after the restriction must be onethat can be independently patented (independent patent requirement; Article 17-2,
paragraph (6) and Article 126, paragraph (7) of the Patent Act).
3) Correction of errors (Article 17-2, paragraph (5), item (iii) of the Patent Act). An
amendment which is formally a correction of an error but which substantively expands
the scope of claims is inadmissible.11
4) Clarification of an ambiguous statement (Article 17-2, paragraph (5), item (iv) of
the Patent Act). However, if this clarification is allowed with no limit, it could cause adelay in an examination, so any amendment is limited to clarification in relation to mattersstated in the notice of reasons for refusal.
When an amendment against the final notice of reasons for refusal is found to be
unlawful (violation of Article 17-2, paragraphs (3) through (6)) before the service of theexaminer's decision to the effect that a patent is to be granted, the examiner must, insteadof giving a notice of reasons for refusal and giving the applicant an opportunity to submit
a written opinion while designating an adequate time limit (the proviso to Article 50),

9 In the Intellectual Property High Court, September 20, 2007, court website (the Holographic Grating case), the court
held that an amendment aimed at changing the original claim for an “invention of a product” into a claim for an“invention of a process” falls under none of the items in Article 17-2, paragraph (4) (Article 172, paragraph (5) of
the current Act), because it means a claim for rights that have an effect that differs from that of the rights for an“invention of a product.”
10 In the Intellectual Property High Court Judgment, April 25, 2005, court website (the Fire-Resistant Structure case),
the court held as follows: It is reasonable to construe that the provision of Article 17-2, paragraph (5), item (ii)provides for an amendment in such a mode that, by restricting a claim(s) by limiting the matters required to identify
the invention stated therein, the claim(s) is maintained as it is as an amended claim(s). It does not intend an
amendment in such a mode as to add a new claim by deleting a claim, or to add a new claim by dividing the invention
stated in a claim into two or more claims.
11 See the following judgments, although they are cases concerning a trial for correction: Supreme Court Judgment,
December 14, 1972, Minshū, Vol. 26, No. 10, p. 1888 (the Phenothiazine Derivative Manufacturing Method case);
Supreme Court Judgment, December 14, 1972, Minshū, Vol. 26, No. 10, p. 1909 (the Small Rice Crackers
Manufacturing Method case).

253§2. Procedures for Obtaining a Patent

make a ruling to dismiss the amendment (Article 53, paragraph (1)).
Since an appeal cannot be filed independently against a ruling dismissing an amendment,
an applicant who is dissatisfied with the ruling needs to dispute it in a trial against theexaminer’s decision of refusal (Article 53, paragraph (3) of the Patent Act). The purpose
is to prevent the repetition of an examination. As a result of the restriction of theadmissible scope of an amendment and the abolition of a trial against a ruling dismissing
an amendment, the examination procedure has been streamlined and expedited.
Specifically, an amendment made during a period for amendment (Article 17-2,
paragraph (1), items (i) and (iii) of the Patent Act) is dismissed (Article 53, paragraph (1)of the Patent Act), if the amendment is found to be one that adds new matters (Article 172, paragraph (3) of the Patent Act), one that violates the requirement of unity (shiftamendment) (paragraph (4) of said Article), a non-statutory change of the contents of theinvention (one that deviates from the admissible scope of an amendment) (paragraph (5)of said Article), or one that violates the independent patent requirement (paragraph (6) of
said Article). As a result of the dismissal, the amendment is deemed never to have beenmade. If a notice of reasons for refusal has already been given, the examiner’s decisionof refusal will be rendered at the same time, in an ordinary case (Article 49, item (i)).
Among the matters stipulated as reasons for refusal, the only matter that is also stipulated
as a reason for invalidation is the addition of new matters. The other matters are stipulated
as reasons for refusal so as to meet the requirements of examination practice, and they do
not constitute substantive defects that are grave enough to invalidate a patent.
[233]
With the 2006 revision, an amendment after the issuance of a notice of reasons forrefusal whereby the contents of the invention underwent a considerable change before
and after the amendment was prohibited. Specifically, an amendment that changes thecontent into an invention that does not fulfill the requirements of unity (Article 37 of the
Patent Act) with the invention disclosed in the examined claims (the so-called “shiftamendment”) is not admissible (Article 17-2, paragraph (4) of the Patent Act).12 Before
the revision, it was possible for an applicant to shift the scope of claims into anotherinvention after receiving the first notice of reasons for refusal, and to receive an
examination for a substantively different invention, and the shift amendment had beenused quite frequently.13 However, today, there are many cases where an amendment isdismissed as a result of being regarded as a shift amendment. A shift amendment is

12 See Takashi Tomizawa, “Iwayuru ‘Shifuto Hosei No Kinshi’ No Shinsa Kijun Ni Tsuite” (Regarding Examination
Standards for the So-Called “Prohibition of Shift Amendment”), Patent, Vol. 60, No. 9 (2007), p. 12.
13 It had been pointed out that, if a shift amendment was allowed, there would be a disparity between those who madea shift amendment and those who filed their applications by making a claim based on a well-focused invention fromthe start. It has also been indicated that applicants can save application fees by, in effect, filing two applications in asingle application procedure by making a shift amendment.

254§2. Procedures for Obtaining a Patentprohibited after the notice of reasons for refusal has been given, but it is admissible before
the notice of reasons for refusal as long as it does not add new matters (Article 17-2,
paragraph (4)).
In the case of making an amendment at the same time as filing a request for a trial
against an examiner's decision of refusal, the scope of such an amendment is also under
the same restriction as that for an amendment against the final notice of reasons for refusal(Article 17-2, paragraph (5)).
The period for filing a divisional application is limited to within the period formaking an amendment of the description, etc. If a reason for refusal that has been notified
for the original application has not been resolved in the divisional application, an
amendment is subject to the same restriction as an amendment made in response to thefinal notice of reasons for refusal, because the reason for refusal has already been notified(Article 50-2 of the Patent Act).
[234]

255

§2. Procedures for Obtaining a Patent2.4. Examination1
2.4.1. Substantive Examination System and Non-substantive Examination System
There are two methods of granting a patent: a substantive examination system anda non-substantive examination system (notification system). The substantive examination
system not only conducts a formality examination, but also a substantive examination,and grants a patent if an application is judged to satisfy the patentability requirements
including novelty and inventive step. On the other hand, the non-substantive examination
system registers the application merely through a formality examination, and any disputes
on the patentability are examined ex post at the court.
The substantive examination system has an advantage that the patent right is highly
credible and legally stable because the validity of the patent has been examined by the
JPO, but it has a detriment that the examination consumes considerable labor and time.
The non-substantive examination system has the advantage of granting the rightspeedily, but many registered patents would naturally include reasons for invalidation, so
the right would be not as stable legally and would increase the number of infringementcases. As a result, the value of the patent right as a property right would be considerably
reduced.
Traditionally, the non-substantive examination system had been adopted by France
since the French Revolution, but an increasing number of countries are shifting from thenon-substantive examination system to the substantive examination system, and now
most of the world adopts the substantive examination system. Since the delay of
examinations is the detriment of the substantive examination system, Japan takes various
measures to rectify the defect, such as the adoption of the system for early publication of
applications, adoption of the system for requesting an examination, the introduction ofcomputers, and international worksharing activities for examination of applications. Evenso, the number of applications has notably increased worldwide due to recent
technological progress and the surge in the number of applications filed in China, and theexamination burden is a problem faced by patent offices around the world. Thus, how thisburden can be reduced is an important issue to be discussed in the future.
Incidentally, as regards the utility model system, a non-substantive examination
system was adopted in principle upon the 1993 revision. This system has also been
adopted by the Act on the Circuit Layout of Semiconductor Integrated Circuits (Act No.
43 of 1985).
1 For the legal nature of examinations, see Kaoru Kobashi, “Tokkyo Fuyo Tetsuzuki No Sai Kōsatsu” (Reconsiderationof the Patent Granting Procedure), Nakayama Nobuhiro Kanreki Kinen, Chiteki Zaisan Hō No Riron To Gendaiteki
Kadai (Theories of Intellectual Property Law and Modern Issues), p. 161.

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§2. Procedures for Obtaining a Patent257

§2. Procedures for Obtaining a Patent[235]
2.4.2. Formality Examination
For each and every patent application that is filed, an examination is conducted firston whether or not the filed documents satisfy the formality requirements. If the filed
documents have a considerable deficiency and lack the essential requirements for an
application, the Commissioner does not make a disposition to refuse the receipt thereof,
but dismisses the procedure while notifying the applicant of the reason therefor and giving
the applicant an opportunity to provide an explanation (Article 18-2 of the Patent Act).
If an application is deficient in formality, the person undertaking the procedure
before the JPO can make an amendment voluntarily (Article 17, paragraph (1) of the
Patent Act), or the JPO Commissioner can give an order to make an amendment(paragraph (3) of said Article). If no amendment is made in response to an order to amend,
the JPO Commissioner can dismiss the procedure (Article 18, paragraph (1) of the Patent
Act). When an amendment is made, its effect retroacts to the filing date, and theapplication is deemed not to have had a defect from the start.
Before the 2014 revision, an action seeking to overturn a disposition to dismiss a
procedure could only be filed after undergoing an opposition (Article 184-2 of the Patent
Act before the revision). However, as Article 184-2 of the Patent Act before the revision
was deleted in response to amendment of the Administrative Appeal Act, it became
possible to directly file such action with the court without undergoing an opposition(Article 8, paragraph (1) of the Administrative Case Litigation Act).
When the formality examination is completed, all the applications are laid open to
the public, in principle, one year and six months after the filing date (Article 64, paragraph(1) of the Patent Act). As an exception, if an application contravenes public order andmorality, its description, scope of claims, drawings, and abstract are not laid open, andonly information including the name and domicile of the applicant and the application
number is published in the patent gazette (the proviso to paragraph (2) of said Article).
Also, though this is not based on the provisions of the Patent Act, patent applications
under the US-JP agreement and patent applications indirectly subject to the US-JP
agreement are neither laid open to the public nor examined until the secrecy is unlocked,
pursuant to the Japan-US agreement on detailed procedural regulations for the
implementation (1988) of the agreement between the Japanese government and theUnited States government which facilitates the exchange of technical knowledge andpatent rights for defense purposes (Treaty No. 12 of 1956). This does not mean the
introduction of a secret patent system, but merely a measure for not laying open or
examining the application. With regard to this issue, see “2.2.1. Reasons for andSignificance of Introducing the System of Laying Open the Application.”258

§2. Procedures for Obtaining a Patent2.4.3. System of Request for Examination (Deferred Examination System) (Article
48-2 of the Patent Act)
Conventionally, a substantive examination has been conducted for all theapplications that have undergone a formality examination, but the system for requesting
an examination was adopted upon the 1970 revision of the Patent Act, and a substantive
examination came to be conducted only after a request therefor had been made (Article
48-2 of the Patent Act). The applicant does not always wish to have all of the filed
applications registered. If an application were filed for a defensive purpose to obstructregistration by other parties, it is sufficient to be able to prevent others from acquiring thepatent, and an application may no longer need to be registered due to changes intechnology or due to the applicant’s relationship with his/her competitors. If an
examination does not have to be conducted for such applications, the number ofapplications to be examined would decrease, which could speed up the examination ofother applications and raise examination quality.
[236]
Conventionally, a request for examination could be filed within seven years fromthe filing date, but it was revised to within three years upon the 1999 revision (Article 483, paragraph (1) of the Patent Act). When a request for examination is not filed within
three years, the application is deemed to have been withdrawn (paragraph (4) of said
Article). At the time when the system for requesting an examination was introduced, theseven-year period was a standard period worldwide. Later, however, the European Patent
Office and the United Kingdom revised the period to two years, China and Russia to three
years, and South Korea and Canada to five years. Germany still adopts a seven-year
period for requesting an examination (Section 44(2) of the German Patent Law), but sinceapplicants are encouraged to file a request at an early stage by being required to pay a fee
for maintaining the application even without requesting an examination, a highpercentage of applicants request an examination in the initial year. In Japan, however,before the 1999 revision, most applicants had requested examinations in the seventh year,
which meant that third parties were bearing a large burden in monitoring the situation ofrequests for examination and amendment, and the relationship between rights remained
unstable for a long time. This became a problem with a situation where an examination
was requested and a patent was granted quickly for an invention in major foreigncountries, but an examination for the same invention had not even started in Japan. Thereis no decisive factor for determining the period for requesting an examination, because
industries and individual companies have different interests. From 2001, the period forrequesting an examination was shortened to three years, but because of this, temporarily,259

§2. Procedures for Obtaining a Patent

there was a sharp increase in the requests for examination (often referred to as a “bumpin requests”), and this led to a delay in carrying out examinations. The after effects
lingered for quite some time. Today, however, the effect of the shortening of the period
has diminished, and the bump in requests has been cleared.
With regard to the division or conversion of an application, or a patent application
based on utility model registration, the filing date retroacts. Thus, three years may havealready passed by the time of filing such an application. In order to prevent theinconvenience where a division, etc. is possible, but a request for examination is notpossible, it is provided that an examination can be requested for 30 days from the day on
which such an application was filed (Article 48-3, paragraph (2) of the Patent Act).
Any person can make a request for an examination (Article 48-3, paragraph (1) of
the Patent Act), as long as he/she pays the fee therefor (Article 195, paragraph (2) of the
Patent Act). 1 Even so, however, the examination procedure is undertaken by theapplicant, and a request for an examination by a third party only triggers the examination.
Once a request for an examination has been made it cannot be withdrawn (Article 48-3,
paragraph (3) of the Patent Act). This is because there is no merit in allowing for thewithdrawal of a request for an examination alone, as an application can be withdrawn
even after requesting an examination.
[237]
Applications are examined in the order the request for examination has been made.
However, the preferential examination system exists as an exception. While the right toclaim compensation arises upon the laying open of an application, a claim cannot be
exercised until after patent registration (Article 65, paragraph (2) of the Patent Act), andthere are cases where the effectiveness of a patent would be lost unless an act is suspended
quickly. Also, a third party who has received a warning may want to escape from an
unstable situation quickly where the registrability of the relevant application continues tobe unknown. Thus, where it is recognized that a person other than the applicant is working
the invention as a business after the laying open of the application, the Commissioner of
the Patent Office may, where it is deemed necessary, cause the examiner to examine thepatent application in preference to other patent applications (Article 48-6 of the Patent
Act). On such an occasion, the applicant or the third party working the invention can
submit a written explanation of the circumstances describing the status of working theinvention, etc. to the JPO Commissioner (Article 31-3 of the Patent Act Enforcement
Ordinances), but if a preferential examination is not permitted, they cannot file an appeal
against this measure. This is because, the applicant is not granted the right to claim apreferential examination, but the preferential examination is carried out at the discretion
1 Under the Patent Act, the fee is 168,600 yen per case plus 4,000 yen per claim. However, there is a measure to reduceor exempt the fee for a person with insufficient funds (Article 195-2 of the Patent Act).

260

§2. Procedures for Obtaining a Patentof the JPO Commissioner.2
Also, in order to minimize any detrimental effects from a delay in an examination,
it is allowable in practice to carry out an accelerated examination, upon the request of theapplicant. According to the Guidelines for the Accelerated Examination and Accelerated
Appeal Examination for Patent Applications (2013), an application that satisfies any of
the following requirements is subject to an accelerated examination:
1) Applications filed by SMEs, individuals, universities, public research institutes etc.;
2) Internationally-filed applications;
3) Working-related applications;4) Green-technology related applications; or5) Applications relating to the support for post-earthquake-disaster reconstruction (forthe time being, starting on August 1, 2011; extension of the period to be considered asnecessary).
An accelerated examination can only be requested by the applicant or his/her
representative, and no third party may file such a request.

2 For example, if an applicant intentionally has a third party work his/her invention in order to receive a preferential
examination, the JPO Commissioner may refuse to carry out such preferential examination. For matters that should
be considered in determining the need for a preferential examination, see Nobuhiro Nakayama, ed., Chūkai Tokkyo
Hō Jō [Dai 3 Han] (Explanatory Notes on the Patent Act Vol. 1 [3rd ed.]), p. 570 [written by Haruo Gotō/Masaaki
Arisaka].

261

§2. Procedures for Obtaining a Patent[238]
2.4.4. Examination Procedure and Registration
2.4.4.1. Examiners
Patent applications are filed first with the JPO Commissioner (Article 36, paragraph(1) of the Patent Act), and the Commissioner shall direct the examination of the patentapplications by an examiner (Article 47, paragraph (1) of the Patent Act). An examinermust, though this requirement is not as strict as for a court judge, avoid interventions byothers and implement his/her duties independently.1 To that end, the qualifications of an
examiner are stipulated by Cabinet Order (paragraph (2) of said Article)2 and there is aprovision on the exclusion of examiners with regard to the procedure for granting a patent(Article 48 of the Patent Act). There are various theories concerning the independence of
examiners, but it should be construed that they serve as an administrative authority thatgives administrative dispositions independently from the JPO Commissioner with regard
to examinations.3
2.4.4.2. Examination Procedure
An examination is conducted entirely through documents (documentary examination
system). The examiner does not investigate the actual invented product or conduct an onsite investigation. However, the examiner sometimes holds interviews with the applicant(or his/her representative).4 The examination is conducted by a single examiner.
An examiner determines whether or not the application relating to the invention
1 Katsumi Takabayashi, “Tokkyo Chō Shinsakan/Shinpankan No Hōteki Seikaku” (JPO Examiners - the Legal Natureof Examiners), Gakkai Nenpō (Annual of Industrial Property Law), No. 12 (1989), p. 35.
2 Article 4 of the Patent Act Enforcement Order stipulates the qualifications of an examiner.
3 The Tokyo District Court Judgment, August 30, 1976, Hanji, No. 845, p. 46 (the Waste Textile Separating Device case)is a case where the plaintiff demanded revocation of a notice which stated that retroaction of the filing date cannot berecognized for a divisional application, by making the JPO Commissioner the defendant. It became an issue as towhether or not the JPO Commissioner was eligible to be a defendant. The court rejected the demand by denying theeligibility of the JPO Commissioner as a defendant, stating that an examiner does not exercise the examination powerof the JPO Commissioner on his/her behalf, but serves as an administrative authority having the power to giveadministrative dispositions independently from the Commissioner. In the second instance of the same case, the court
dismissed the appeal, denying the nature of the notice as an administrative disposition, without mentioning the natureof an examiner as an administrative authority (the Tokyo High Court Judgment, November 15, 1978, Hanta, No. 383,
p. 146). The same view is indicated in Katsumi Takabayashi, “Tokkyo Chō Shinsakan/Shinpankan No Hōteki
Seikaku”(JPO Examiners - the Legal Nature of Examiners), Gakkai Nenpō (Annual of Industrial Property Law), No.
12 (1989), p. 35;Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai (Annotations on the New Patent Act,
Rev. ed.), p. 34. (However, while mentioning that examiners serve as administrative authorities, the author denied the
independent nature of their duties; p. 242 of the same book.) An opposite view is indicated in Yasushi Aoki andTsuneteru Aragaki, Shinpan Tokkyo Tetsuzuki Hō (New ed., Patent Procedural Law), p. 64; Nobuhiro Nakayama, ed.,Chūkai Tokkyo Hō Jō [Dai 3 Han] (Explanatory Notes on the Patent Act Vol. 1 [3rd ed.]), p. 528 [written by Yasushi
Aoki].
4 See “Mensetsu Gaido Rain” (Interview Guideline), (Japan Patent Office).

§2. Procedures for Obtaining a Patentcontains any of the reasons for refusal listed in Article 49 of the Patent Act. He/she has noroom for discretion, and cannot refuse an application based on any reason other than thoselisted in Article 49.
[239]
An examination is made for each claim, and the notice of reasons for refusal clearly
describes the reason for each claim. If an application were determined to contain reasons
for refusal as a result of the examination, the examiner would give a decision to refuse theapplication (Article 49 of the Patent Act), but before giving this decision, he/she must notify
the applicant of the reasons for refusal and give the applicant an opportunity to submit awritten opinion, by designating an adequate time limit5 (Article 50 of the Patent Act). The
applicant is then permitted to make an amendment before that time limit (Article 17-2,
paragraph (1) of the Patent Act). The examiner carries out an examination again after
looking at the written opinion. If he/she judges that the reasons for refusal still have notbeen resolved, he/she gives a decision of refusal. If the examiner finds no reason for refusal,
he/she gives the decision to grant a patent (Article 51 of the Patent Act).
2.4.4.3. Examiner’s Decision6 and Registration
The examiner first identifies the gist of the invention. The gist of the invention refers
to the technical contents of the filed invention at the time of determining its novelty andinvolvement of an inventive step as compared to prior art in the examination phase. The
identification of the gist of the invention serves as an important process also in a trial or
litigation rescinding a trial decision, or in a defense of invalidation in infringement
litigation.7
5 Under the JPO practice, the time limit is usually sixty days from the dispatch of the notice of reasons for refusal, andthree months in the case where the applicant resides overseas.
6 For the meaning of an examiner’s decision in the context of administrative law, see Yukio Okitsu, “Gyōsei Sayō To
Shite No Tokkyoken Hassei To Tokkyo Mukō: Tokkyo Hō 104 Jō No 3 To Gyōsei Hō Dogumāteiku” (Administrative
Effect of Emergence of a Patent Right and Patent Invalidation: Article 104-3 of the Patent Act and Administrative Law
Dogmatics), Chiteki Zaisan Hō Seisakugaku Kenkkyū (Intellectual Property Law and Policy Journal), No. 38 (2012), p.
43.
7 In contrast, determination of the technical scope in the infringement phase is often referred to as “claim interpretation”
or “determination of the technical scope.” Whether these two are the same or different is controversial, but today whena defense of invalidation has been recognized in infringement litigation, “identification of the gist of the invention” and“determination of the technical scope” should be considered to be the same. Toshiaki Iimura, “Hatsumei Toha Nanika,
Shinkisei, Shinposei, Kisaiyōken” (What is an Invention? Novelty, Inventive Step, Description Requirements), Ryū
Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza II (Lecture on Modern
Intellectual Property Law II), p. 11. In contrast, Toshiaki Makino, "Kurēmu Kaishaku Oboegaki" (Memorandum on
Claim Interpretation), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza
IV (Lecture on Modern Intellectual Property Law IV), p. 64 states that, while identification of the gist of the invention
in an examination, invalidation trial, and defense of invalidation is a process of comparison between the technical idea
which a person skilled in the art can identify based on publicly known products and processes and the technical idea
which is the patent claim, the determination of the technical scope in infringement litigation is a process of comparison
between the technical idea which is the invention and specific products or processes, and the two differ in terms ofphilosophy and orientation of determination.

§2. Procedures for Obtaining a Patent

The final judgment of the examiner is expressed in writing, while specifying thereason for refusal in the case of a decision of refusal (Article 50 of the Patent Act), andstating that “no reason for refusal is found” in the case of a decision to the effect that apatent is to be granted (Article 52 of the Patent Act), and the JPO Commissioner shall servea certified copy of the examiner's decision on the applicant (paragraph (2) of said Article).
If a decision to grant a patent is given (Article 51 of the Patent Act), the JPO Commissioner
registers establishment of a patent right by the commissioner's own authority (Article 16,
item (i) of the Patent Registration Order), and the patent right comes into effect byregistration of its establishment (Article 66 of the Patent Act). Meanwhile, where there are
multiple claims, all claims are examined, in principle, in the examination phase, and anotice of reasons for refusal is given if such reasons are found. If any one of the reasons forrefusal remains unsolved, a decision of refusal is issued.8[240]
There is no system for filing an appeal under the Administrative Appeal Act against
an examiner’s decision of refusal. If an applicant is dissatisfied, he/she may file for a trial
against the examiner’s decision of refusal within three months from the date the certified
copy of the examiner's decision of refusal has been served (Article 121 of the Patent Act).
If the applicant pays the annual patent fees (Article 107 of the Patent Act) for the firstto third years or receives the grant of a reduction thereof or an exemption therefrom (Article
108, paragraph (1) and Article 109 of the Patent Act) within thirty days from the date thecertified copy of the examiner's decision or a trial decision to grant a patent has been served,
the patent is registered (Article 66, paragraph (2) of the Patent Act), whereon theregistration is recorded in the patent registry and published in a patent gazette. An applicant
who will receive the registration of the establishment of a patent right needs to pay annual
fees, but even after the expiration of the time limit for the payment, a late payment can bemade by also paying a patent surcharge in the same amount as the patent fees within six
months from such time limit (Article 112, paragraphs (1) and (2) of the Patent Act). If no
payment is made within that period, the application is deemed to have been extinguishedretroactively (paragraph (4) of said Article). The annual patent fees for the fourth andsubsequent years must be paid by the end of the previous year (Article 108, paragraph (2)of the Patent Act). With the 2011 revision, a revision was made so that, when there are
justifiable reasons for not being able to pay the fees, the applicant can make a late payment

8 In the Tokyo High Court Judgment, January 31, 2002, Hanji, No. 1804, p. 108 (the Combined Bearing Motor case), thecourt held that, due to the need to examine a large number of applications expeditiously, the system allows an examiner
to give a decision of refusal for the entire application if he/she finds a reason for refusal in one of the claims, but it ispossible to respond appropriately to the inventions disclosed in the other claims by using the system of notice of reasons
for refusal or the systems for amendment and divisional applications during the prescribed periods before or after thedecision, so a sufficient procedural guarantee is being provided.

§2. Procedures for Obtaining a Patent

within two months from the date on which the reasons ceased to exist, but not later than
one year following the expiration of that time limit, and restore the extinguished patent right(Article 112-2 of the Patent Act). There is also a provision restricting the effects of therestored patent right (Article 112-3 of the Patent Act).
However, there is a measure to reduce or exempt the fees for a person withinsufficient funds (Article 109 of the Patent Act). An interested person may pay the patent
fees even against the will of the person by whom the patent fees are to be paid, and may
request the reimbursement of the expenses arising therefrom to the extent of the actual
benefit obtained by the person by whom the patent fees were to be paid (Article 110 of the
Patent Act). Such interested person includes a licensee or a pledgee.
While a patent covering two or more claims is treated as a single patent, in principle,
the patent shall be deemed to have been granted for each claim when there are special
provisions under Article 185 of the Patent Act, such as in the case of a trial for invalidation
or a trial for correction.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention[241]§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a
Patented Invention
3.1. Opposition System
3.1.1. Conventional Opposition System
The pre-grant opposition system was introduced by the Patent Act of 1921 and wasmaintained upon the 1959 revision. Under this system, anybody could file an opposition
within three months from the publication of an examined application (Article 57 of the
Patent Act before the 1994 revision). The examiner could make the final decision byreferring to such opposition. Under the pre-grant opposition system, information could begathered widely from the general public, which contributed to reducing the registration of
defective patents that contained reasons for invalidation and to increasing its legal stability.
However, the greatest drawback of this system was that filing an opposition prolonged theexamination procedure, and often required a longer time for the patent to be registered. It
was not unusual for an examination to be considerably delayed when multiple oppositions
were filed. In fact, it had been said that oppositions were filed abusively in order to prolong
the examination procedure in not a few cases. Since not many countries adopted the pregrant opposition system, the Japanese system had been criticized internationally as being
the cause for delaying examinations.
The report by the Industrial Property Council on the 1994 revision had set out that“there is a need to clarify the relation between the opposition system and the system of atrial for invalidation, and to have the two systems coexist,” and the pre-grant opposition
system was abolished with the 1994 revision and the post-grant opposition system wasintroduced while maintaining the system of a trial for invalidation. The system of a trial forinvalidation is mainly used for settling disputes between interested parties, so it adopts theadversary system. Meanwhile, the opposition system invites the general public to file
oppositions for the purpose of having the JPO re-determine the appropriateness of granting
a patent so as to secure the credibility of the patent right. As the two systems had thesedifferent proceeding structures, their proceedings could not be jointly conducted.
Accordingly, a trial for invalidation was sometimes requested after an opposition had been
filed, and the patentee had to deal with both of these proceedings. This caused a delay inthe resolution of a case, and prevented resolution of a dispute through a single proceeding.
However, since the post-grant opposition system practically overlapped with thesystem of a trial for invalidation in that it extinguishes an established patent, it was§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

abolished in 2003, and the system of a trial for invalidation was reformed at the same time.
It had been predicted that quite a number of opposition cases would shift to trials forinvalidation as a result, but the number of requests for trials for invalidation only increased
temporarily, and returned to the original level. In other words, against the prediction, postgrant oppositions were not absorbed by trials for invalidation. It was said that patentapplications which would have been extinguished as a result of post-grant oppositions in
the past survived as defective patent rights that contain reasons for refusal, and this caused
a decline in the credibility of patent rights and triggered unnecessary patent disputes.1 The
opposition system, which was basically a procedure carried out by the JPO itself, was not
so costly for the patent opponent, but since the system was integrated into the system of
trials for invalidation, the cost for the trials for invalidation imposed a large financial burden
particularly on small- and medium-sized enterprises and universities.
[242]
3.1.2. Opposition System Introduced by the 2014 Revision
Today, prior art documents, particularly those in foreign languages, have increased
dramatically, so it has become difficult for the JPO to conduct accurate patent examination
by itself. There is a need to also make use of information held by third parties. After theabolishment of the post-grant opposition system, the use of the system in which third parties
offer information on prior art before the grant of a patent (Article 13-2 of the Patent Act
Enforcement Ordinances) increased and has contributed to securing high-quality
examination, but due to the acceleration of examination in recent years, a growing numberof patents have come to be granted before the laying open of the applications (more than
5,000 patents per year), and the system of offering information before the grant does not
function for such patents. Due to such changes in circumstances, the opposition system of1994 was improved to establish a system of opposition to a granted patent (a post-grant
review system) with the 2014 revision (Chapter V, Articles 113 through 120-8 of the Patent
Act).
The post-grant opposition system is a review procedure after the establishment of a
1 Among the 3,055 cases for which conclusions were reached in the opposition proceedings under the conventional postgrant opposition system during 2003, patents were maintained without correction in 671 cases (22%), patents weremaintained after correction in 1,186 cases (39%), and patents were revoked in 1,136 cases (37%). Given that a large
proportion of the patents subject to opposition have been revoked or maintained after correction, it is assumed that similar
defective patents continue to exist as they are under the current system (Report by the Patent System Subcommittee,
Intellectual Property Committee, Industrial Structure Council, “Tsuyoku Antei Shita Kenri No Sōki Settei Oyobi Yūzā No
Ribensei Kōjō Ni Mukete” (Toward Early Establishment of Strong and Stable Rights and Improvement of Conveniencesof Users) [September 2013], p. 15). Incidentally, because a defense of patent invalidation became allowed with the 2004
revision (Article 104-3 of the Patent Act), the need for third parties (suspected infringers) to wipe out patent rights inadvance by filing oppositions has declined compared to the past.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

patent right, so it is not a procedure to conduct examination once again, but a panel ofadministrative judges carry out the procedure as proceedings (Article 114, paragraph (1) of
the Patent Act). From the viewpoint of preventing defective patent rights, an opposition canbe filed by any person, but the grounds for the opposition are limited to those for the public
interest, which are restrictively listed in Article 113, items (i) through (v) (e.g., a lack ofnovelty or an inventive step, or illegal amendment). Conversely, grounds concerning
ownership of the right (e.g., a misappropriated application or a violation of joint
application) do not constitute grounds for opposition. This is because it is not appropriate
to allow a third party to file an opposition about the ownership of another person’s right.
[243]
The Act as revised in 2014 provides that any person may file with the JPO
Commissioner an opposition to a granted patent, but no later than six months2 following
the day of issuance of the patent gazette containing the patent (the first sentence of the mainclause of Article 113 of the Patent Act). In this case, if the patent has two or more claims,
an opposition may be filed for each claim (the second sentence of the main clause of said
Article), and a ruling on an opposition becomes final and binding for each case of
opposition (Article 120-7 of the Patent Act). While a trial for invalidation is conducted byoral proceedings, in principle, (Article 145 of the Patent Act), the proceedings of an
opposition are conducted by documentary proceedings (Article 118, paragraph (1) of the
Patent Act). Persons with an interest in the patent right may intervene in the opposition
proceedings (Article 119). An amendment of the statement of opposition must not change
the gist thereof, in principle (Article 115, paragraph (2) of the Patent Act).
Where the chief administrative judge intends to render a revocation decision, thechief administrative judge must notify the patentee and the intervenors of the reasons
therefor and give them an opportunity to submit a written opinion, designating an adequate
time limit for such purpose (Article 120-5, paragraph (l) of the Patent Act). Within the time
limit, the patentee may file a request for correction of the description, scope of claims, ordrawings to a certain extent (paragraph (2), items (i) through (iv) of said Article). If thepatentee files a request for correction, the chief administrative judge must give the patent
opponent an opportunity to submit a written opinion (paragraph (5) of said Article). A
request for a correction trial may not be filed from the time the relevant opposition to a
2 Many other countries set this period to be within nine months (the period for filing a post-grant opposition under theEuropean Patent Convention, a post-grant review in the United States, and a post-grant opposition under the amendment
bill in Germany). Report by the Patent System Subcommittee, Intellectual Property Committee, Industrial Structure
Council, “Tsuyoku Antei Shita Kenri No Sōki Settei Oyobi Yūzā No Ribensei Kōjō Ni Mukete” (Toward Early
Establishment of Strong and Stable Rights and Improvement of Conveniences of Users) [September 2013], p. 16 states
that, since the burden on patent opponents has been reduced in Japan in light that the parties’ written assertions can besupplemented by ex officio proceedings by a panel of administrative judges, it is appropriate to make this period six months
from the viewpoint of reducing the burden on patentees and achieving early stabilization of rights.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

granted patent has become pending before the JPO to the time the ruling on the opposition
has become final and binding (Article 126, paragraph (2) of the Patent Act).
An administrative judge must make a ruling that the patent is to be revoked(revocation decision) if the administrative judge recognizes that the patent has a ground for
opposition (Article 114, paragraph (2) of the Patent Act), and if not, the administrative
judge must make a ruling that the patent is to be maintained (paragraph (4) of said Article).
No appeal may be made under the Administrative Appeal Act against a revocation decision(Article 195-4 of the Patent Act), so a person who is dissatisfied with the decision files anaction with the Tokyo High Court (the Intellectual Property High Court) (Article 178,
paragraph (l) of the Patent Act). If a revocation decision becomes final and binding, thepatent right is deemed never to have existed (Article 114, paragraph (3) of the Patent Act).
This is the same as when a trial decision to the effect that a patent is to be invalidated
becomes final and binding (Article 125 of the Patent Act). A patent opponent may not makean appeal under the Administrative Appeal Act against a ruling that a patent is to be
maintained (Article 114, paragraphs (4) and (5) of the Patent Act), so if dissatisfied, thepatent opponent files a request for an invalidation trial.
[244]
The Act of 2014 basically adopts the ex officio principle, and proceedings are
conducted only for the patent claims for which the opposition is filed, but grounds notpleaded by the patentee, the patent opponent, or the intervenor may also be examined in the
opposition proceedings (Article 120-2 of the Patent Act). Since the Act of 1994 had not
given the patent opponent an opportunity to state his/her opinions in the opposition
proceedings, and this aspect was considered to require improvement, the revised Act allows
the parties concerned to participate in the proceedings more deeply. It has improved thesystem for the patent opponent’s participation in the procedure. Instead of relying solely on
the JPO’s ex officio proceedings, it gives the parties an opportunity to state their opinions
through an easy procedure (Article 120-5, paragraph (l) of the Patent Act), and within thetime limit designated at that time, it gives the patentee an opportunity to make a correction,
and allows the patent opponent to further submit a written opinion if the opponent so wishes(paragraph (5) of said Article). In order to achieve dispute resolution through a single
proceeding and acceleration of proceedings, if two or more motions of an opposition havebeen filed, the proceedings are jointly conducted unless there are special circumstances(Article 120-3, paragraph (1) of the Patent Act). While the former Act had already provided
for suspension of examination and court proceedings, the revised Act made it possible tosuspend the examination procedure not only until a trial decision becomes final and binding,§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

but also until a ruling on an opposition becomes final and binding3 (Article 54, paragraph(1) of the Patent Act).
With the 2014 revision, the post-grant opposition system and the invalidation trial
system have come to coexist, similar to the situation under the Act of 1994, in principle.
Since it is possible to request an invalidation trial during opposition proceedings, the twoproceedings may become pending at the same time. However, since the system of theparties’ participation in the procedure has been improved from that under the Act of 1994,
concurrent pending of proceedings is expected to be rare in actuality. Nevertheless, even if
it is rare, concurrent pending of proceedings is said to be more likely to occur for important
cases that need to be examined expeditiously, so there remains a concern about whether the
new system will not cause the detriment of concurrent pending of proceedings, which was
the reason that the post-grant opposition system was abolished upon the 2003 revision. Yet,the recent revision is hoped to reduce the burden on users and enable early establishmentof stable rights.
In line with the recent introduction of the post-grant opposition system, theinvalidation trial system was also revised. While a request for a trial for invalidation could
be filed by any person until 2014 (Article 123, paragraph (2) of the Patent Act before therevision), it can now be filed by interested persons only, in principle (Article 123, paragraph(2) of the revised Patent Act), as a result of the revision. For details, see “3.2.3.2.(2)Standing of demandants and standing of demandees.”[245]
Although there have been rapid changes in the environment surrounding the patent
system, we cannot deny that the patent opposition system has been revised at a dizzying
pace without a consistent policy, starting with the introduction of a pre-grant opposition
system, the shift to a post-grant opposition system, abolishment of the opposition system
and integration with the invalidation trial system, and revival of the post-opposition system
in less than ten years from the abolishment of the system. It is hoped that the recent revision
will finally be able to attain the long-pursued purpose of “early establishment of strong andstable rights and improvement of convenience for users.”
3.2. Trials

3 Japan Patent Office, ed., Kōgyō Shoyūken Hō Chikujō Kaisetsu [19 han] (Clause-by-Clause Commentary on Industrial
Property Law [19th ed.]), p. 202 provides examples of cases, such as a case where invalidity of a representative’s action
carried out with the JPO is disputed in litigation on the basis of a lack of the right of representation and a case whereinvalidity of transfer of the right to a patent is disputed in litigation.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

3.2.1. Purpose and Significance of the Trial System
A trial is regarded as a quasi-juridical authority established under the JPO (though
there is an opposite view), whose mission includes the re-examination of the final
disposition given by the examiner and the revocation or correction of a defective patent.
Also, there are supplementary trials, such as a trial for the exclusion of or challenge to atrial examiner and a trial for intervention in a trial.
Although the trial system is established under an administrative organ (the JPO), thetrial decision is required to be as fair as a court judgment, so trials are conducted through aprocedure resembling that of court proceedings. Also, since litigation for rescinding a trial
decision is filed directly with the Tokyo High Court (the Intellectual Property High Court)
by omitting the first instance, a trial is regarded as a quasi-judicial authority. The reason formaking it an objection system, which is different from the system governing ordinary
administrative cases, is said to be based on the technical character of industrial property
rights. In general, a person who is dissatisfied with an administrative disposition may file arequest for review (Article 2 of the Administrative Appeal Act), or immediately file anaction for the revocation of the administrative disposition with a court (Article 8, paragraph(1) of the Administrative Case Litigation Act). In contrast, the Patent Act provides that no
appeal may be made against a disposition (an examiner's decision, etc.) (Article 195-4 of
the Patent Act), and an action with regard to a matter for which a request for a trial may bemade may be instituted only against a trial decision (Article 178, paragraph (6) of the Patent
Act). This is because, since a high level of technical expertise is required for processing thematters to be examined in a trial, it is more reasonable to have the JPO, which has expertisein technology, examine the case in advance, rather than have the case filed directly with acourt.4[246]
Since the trial system was first established in the Patent Bylaws of 1888, the system
has undergone various changes up to the present. Under the Act of 1921, the system of atrial on appeal against an examiner's decision or a trial decision (Kokoku trial) existed as aprocedure to be followed after the trial system in order to take extra care in carrying out aprocedure, but the system has been abolished under the current Act to simplify and expedite
a procedure. Since not only carefulness, but also speed is important for patent-related
4 Whereas the trial system was first introduced in the Japanese patent system by the Patent Bylaws of 1888 (Imperial
Ordinance No. 84), a similar comment is found in the autobiography of Korekiyo Takahashi who drafted the bylaw,
Korekiyo Takahashi, Takahashi Korekiyo Jiden (Autobiography of Takahashi Korekiyo) (Tonan Shoin, 1936), p. 294(see Shōkō Seisaku Shi [History of Commercial and Industrial Policy] [Ministry of International Trade and Industry,1964], Vol. 14, “Patent,” p. 550, “Takahashi Korekiyo Ikōshū Kara” [Extracts from the Posthumous Writings of Korekiyo
Takahashi],” ‘Shinpan Oyobi Shinsa Ni Kansuru Genkon No Seido Narabini Sono Tokushitsu Wo Ronzu [Discussions
on the Current Trial and Examination Systems and Their Advantages and Disadvantages]’ [p.647]).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

procedures, this simplifying measure is considered to have contributed to attaining the
purpose of the system.
3.2.2. Legal Nature of Trials
Since the establishment of the trial system, the legal nature of the system has been
subject to arguments. Although the history of the system is an interesting topic for study,
a more detailed look at its historical development shall be left to other books.1
A trial under the current Act is considered to be one kind of administrative
contestation, in principle.2 Since a trial decision is an administrative disposition, and an
administrative authority cannot conduct a trial of the final instance (Article 76, paragraph(2) of the Constitution of Japan), a person who is dissatisfied with a trial decision cannaturally appeal to a court. If it were an ordinary administrative disposition, it should beunder the jurisdiction of the district court of the location of the government agency thathas made the trial decision (the JPO in the case of such disposition on a patent) (Article
12, paragraph (1) of the Administrative Case Litigation Act), but due to the peculiarity ofthe trial, it is processed under the exclusive jurisdiction of the Tokyo High Court (Article
178, paragraph (1) of the Patent Act).3 This is because, where the trial is a quasi-judicial
authority in which a trial examination is made by a procedure resembling that of a court,
if a lawsuit against the trial decision were examined in the district court first as for othergeneral administrative cases, it would not always be profitable for the parties concerned
considering the time and labor consumed for the court proceedings.4[247]
A trial is conducted by a panel of three or five trial examiners (Article 136,
paragraph (1) of the Patent Act), and the panel makes its decision by a majority vote(paragraph (2) of said Article). The JPO Commissioner must designate the trial examiners
1 Historical development of the trial system is explained in Tetsuya Ōbuchi, Tokkyo Shinketu Torikeshi Soshō Kihon
Kōzōron (Basic Structure of an Appeal Suit against an Administrative Trial Decision on Patents) (Yuhikaku, 2003),
p. 131; Makoto Amino, “Waga Kuni No Kōgyō Shoyūken Hō Ni Okeru Shinpan Seido No Enkaku” (History of the
Trial System in the Japanese Industrial Property Law), Zoku Shōhyō Hō No Shomondai (Various Problems in theTrademark Act II) (Tokyo Nunoi Publishing, 1983).
2 Ryūichi Murabayashi, “Tokkyo Mukō Shinpan To Teisei Shinpan” (Trials for Invalidation of a Patent and Trial for
Correction), Ishiguro Junpei Tsuitō Kinen, Mutai Zaisanken Hō No Shomondai (Various Problems in Intangible
Property Law), p. 277 mentions that although an inter-partes trial can be considered as a quasi-judicial procedure, an
ex-parte appeal does not involve any legal dispute, so the latter is an administrative procedure even though it adopts
a careful trial procedure.
3 The cases are handled by the Intellectual Property High Court, which is a special branch of the Tokyo High Court(Article 2, item (ii) of the Act for Establishment of the Intellectual Property High Court).
4 A system where the first instance is omitted and the high court has exclusive jurisdiction is not exclusive to industrial
property law, but is also observed in litigation for rescinding such administrative dispositions as former decisions of
the Fair Trade Commission (the system of decisions of the Fair Trade Commission was abolished in 2013, and aperson who is dissatisfied with a cease and desist order rendered by the Fair Trade Commission is to directly seek theTokyo District Court to rescind the order) and determination of the Japan Marine Accident Inquiry Agency.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

for each case (Article 137, paragraph (1) of the Patent Act), and designate one of them as
the chief trial examiner (Article 138, paragraph (1) of the Patent Act). In order to securea fair trial, there are systems for the exclusion of and challenge to trial examiners similar
to those for court trials (Articles 139 through 144 of the Patent Act).
A request for a trial may be withdrawn until a trial decision becomes final andbinding. Until 1987, withdrawal was not allowed after a notice of conclusion ofproceedings was given, so as not to waste proceedings that have already been conducted.
Accordingly, a person who wished to seek a settlement after receiving a notice ofconclusion of proceedings went through a roundabout method of filing a lawsuit for
rescinding the trial decision, obtaining a judgment rescinding the trial decision without
making any claims or producing any evidence as plaintiff, and withdrawing the request
for the resumed trial. Thus, the relevant provisions were revised.
With respect to the relationships between a trial and a court action, the main issue
is whether or not a fact that did not appear in the trial can be claimed in a court action, so
this topic shall be discussed in the part about lawsuits. See “4.3. Relationship Between
Litigation and Trials (Scope of Proceedings in Litigation for Rescinding a Trial Decision).”
3.2.3. Types of Trials and Their Details
3.2.3.1. Trial against Examiner’s Decision of Refusal (Article 121 of the Patent Act)
(1) Request for a trial and the time limit for the request
While a person dissatisfied with a general administrative disposition may appeal toa court, given that an examiner's decision of refusal (including a decision of refusal of an
application to register an extension of the duration of a patent right) under the Patent Act
is a peculiar administrative disposition, a special appeal system (the trial system) has been
established therefor, and no appeal may be made under the Administrative Appeal Act(Article 195-4 of the Patent Act). A person who has received an examiner's decision ofrefusal can file a request for a trial within three months1 from the date the certified copyof the examiner's decision has been served (Article 121, paragraph (1) of the Patent Act).
As an exception, the period for filing the request for a trial can be extended upon requestor ex officio for a person in a remote area or an area with transportation difficulties(Article 4, paragraph (1) of the Patent Act). If a request for a trial cannot be filed due toreasons beyond the control of that person, he/she can file the request within fourteen days
(where he/she is an overseas resident, within two months) from the date on which the
1 It was within thirty days prior to the 2008 revision.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

reasons ceased to be applicable, but not later than six months following the expiration of
the said time limit (Article 121, paragraph (2) of the Patent Act). No other appeal can bemade, and also no action can be filed directly with a court seeking the rescission of theexaminer's decision of refusal. In the case of a joint application, the subject matter of thetrial should be determined in a single form for all joint owners, so the request for a trial
must be filed by all joint owners (necessary joinder of inherent parties) (Article 132,
paragraph (3) of the Patent Act).
[248]
The request for a trial can be filed by a person who has received an examiner's
decision of refusal (Article 121, paragraph (1) of the Patent Act), but not by an third party.
Therefore, a third party who is dissatisfied with the examiner's decision will take theprocedure of a trial for invalidation. Although the provisions of the Act only mention aperson who has received an examiner's decision of refusal as an eligible requester of atrial, a successor in title who has made a notification to the JPO can also request a trial.
Meanwhile, a person who has received a decision to the effect that a patent is to be granted
normally would not be dissatisfied with the decision.2(2) System of reconsideration by examiner before trial (Article 162)
An applicant usually wants to avoid making an amendment to the extent possible,
so an amendment used to be often made after receiving a decision of refusal. In most of

2 The former Act stipulated that a person who was dissatisfied with an examiner’s decision could request a trial on
appeal against an examiner's decision or a trial decision (Kokoku trial), so, formally, a person who received a decision
to the effect that a patent is to be granted was also considered to be able to request a trial, but since there was hardly
any benefit in doing so, in actuality no such trial seems to have been requested. However, the current Act (Article
195-4) provides that no appeal may be made against an examiner’s decision, so, formally, it would not be possible to
make an appeal under the Administrative Appeal Act against a decision to the effect that a patent is to be granted, andthe judicial remedy route would be taken directly. Meanwhile, the Tokyo District Court Judgment, March 7, 2014,
court website (the Arylpiperazine Derivative case) was a case where an opposition was filed under the Administrative
Appeal Act seeking rescission of a decision to grant a patent, because the representative of the applicant made anamendment to make the claims extremely narrow by mistake, and a decision to grant a patent was rendered for suchclaims. In this case, the court rescinded the decision to grant a patent, holding that, when the reason for refusal andthe contents of the written amendment are inconsistent and the amendment is not considered to be based on theapplicant’s true intention, and when this is apparent to the examiner in charge, the examiner’s decision is not deemed
to be one against which no appeal may be made under the Administrative Appeal Act. In its appellate instance, theIntellectual Property High Court Judgment, June 10, 2015, court website, the court stated that “the Act intended to
exclude examiners’ decisions, including a decision to grant a patent, from the subject of administrative appeal,” anddismissed the objection, holding that “an examiner’s decision to grant a patent is a disposition for which another Act
provides that no request for review or objection may be filed against it, as stipulated in the proviso to Article 4,paragraph (1) of the Administrative Appeal Act, and therefore no objection may be made under the Administrative
Appeal Act against the examiner’s decision to grant a patent in question.” Incidentally, the court stated that “it issufficient for an examiner to determine whether or not the invention described in the abovementioned document
pertaining to the application filed by the applicant satisfies the patentability requirements, and the examiner is not
obliged to go beyond this and confirm whether or not the contents of the application filed by the applicant areconsistent with the true intention of the applicant,” so “the claim of invalidity of the examiner’s decision to grant apatent in question, which has been made on the assumption that the amendment in question is invalid due to an error,
is groundless.” Setting aside cases where there was an extreme violation of the procedure, such as where the examiner
did not carry out examination at all or where it should be regarded as the same as if the examiner did not carry out
examination in practice, there would be a problem in rescinding a decision to grant a patent in a case like this where
the decision was rendered in accordance with the amendment by the applicant.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

the trials against an examiner’s decision, an amendment was actually made after thedecision of refusal. When an applicant makes an amendment after receiving a decision ofrefusal and filing a trial against that decision, a procedure similar to an examination had
to be repeated in the trial phase, which was one of the causes for the delay in examinations.
Therefore, this system of reconsideration by the examiner before a trial was establishedwith the 1970 revision to have the original examiner,3 who knows the content of thetechnology well, re-examine the application when an amendment is made to thedescription (at that time, the scope of claims was included in the description) or drawings
after a decision of refusal has been issued (Article 162 of the Patent Act). The system wasestablished so that the human resources of the JPO as a whole can be utilized more
efficiently.4 However, in 1970 when the system was established, any amendment could
be made as long as it did not change the gist of the invention. Thus, there were often cases
where examinations needed to be conducted almost all over again in the reconsideration
procedure. However, as any amendment that adds new matter was prohibited with the1993 revision, the system of reconsideration became more effective than before.
[249]
An examination in the reconsideration procedure is conducted using the sameprocedure as an ordinary examination. When the examiner determines that the reason forrefusal has been overcome by the amendment, he/she rescinds the decision of refusal andrenders a decision to the effect that a patent is to be granted (Article 164, paragraph (1)of the Patent Act). If the decision of refusal still cannot be rescinded after the examination,
the examiner reports the examination results to the JPO Commissioner (paragraph (3) of
said Article), the Commissioner designates the trial examiners (Article 137, paragraph (1)of the Act), and the trial is commenced. When the examiner finds a reason for refusal thatdiffers from that in the original decision, he/she gives another notice of reasons for refusal(Article 163, paragraph (2) of the Patent Act).
(3) Amendment
When filing a request for a trial against an examiner's decision of refusal, anamendment of the description, scope of claims or drawings may be requested upon5 filingthe request for a trial (Article 17-2, paragraph (1), item (iv) of the Patent Act). In making
the amendment, no new matter may be added (excluding the statement of correction of
an incorrect translation) (paragraph (3) of said Article), the requirements of unity of
3 The original examiner who is more familiar with the original decision more than anyone else undertakes theexamination in practice, but this is not required under law, so a different examiner may undertake the examination
when the original examiner has been transferred or has resigned.
4 Ken’ichi Matsuka, “Shinsa Zenchi Shugi” (System of Reconsideration by the Examiner Before an Appeal), Tokkyo
Kanri (Patent Management), Vol. 22, No. 4 (1972), p. 303.
5 Under the former Act, an amendment could be made within thirty days from the filing of a request for a trial, but anamendment came to be permitted only upon filing a request for a trial with the 2008 revision.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

invention must be fulfilled (paragraph (4) of said Article), and the amendment is limited
to deletion of a claim or claims, restriction of the scope of claims, correction of errors, orclarification of an ambiguous statement (paragraph (5) of said Article).
When an amendment is made upon the filing of a request for a trial, the JPO
Commissioner must direct the examiner to examine the request for amendment (Article
162 of the Patent Act) as reconsideration by examiner before trial as mentioned above.
Amendments in general are described in detail in “2.3. Amendment.”[250](4) Trial examination and trial decision
The point of a trial examination in a trial against an examiner’s decision of refusal
is not the appropriateness of the decision of refusal, but whether or not a patent should be
granted for the application.6 The trial examination does not have the nature of a new
examination where the examination is completely redone, but of a continued examination
as an extension of the original examination. Thus, any procedure taken during theexamination procedure is also effective in the trial (Article 158 of the Patent Act). 7 For
example, when rendering a trial decision to the effect that the request for a trial is invalid
based on the same reason as that in the notice of reasons for refusal, the trial examiners
do not need to send another notice of reasons for refusal.8 Also, the production of any
new evidence that had not been submitted in the examination phase is allowed in the trial
procedure without limitation. A trial against an examiner’s decision of refusal, which,unlike a trial for invalidation, does not adopt an adversary structure, is carried out throughdocumentary proceedings, in principle (Article 145, paragraph (2) of the Patent Act).
In a trial, if a request is groundless, the request is dismissed, and the original
examiner's decision of refusal is maintained. If new reasons for refusal are discovered asa result of the proceedings, the trial examiners give the applicant a notice of reasons forrefusal and an opportunity to submit a written opinion, designating an adequate time limit
for such purpose (Article 50 as applied mutatis mutandis pursuant to Article 159,
paragraph (2) of the Patent Act), and if they determine that the application still needs tobe refused, the request for the trial is dismissed based on the invalidity of the request, andthe original examiner's decision is maintained. If a request has grounds, it is possible torescind the original examiner's decision and render a trial decision to the effect that thepatent application should be further examined (remand) (Article 160, paragraph (1) of the
Patent Act). In that case, the determination in the trial decision binds the examiner with

6 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han] p. 1327 (written by Tsuneteru Aragaki).
7 The examination here includes reconsideration by the examiner before trial. Japan Patent Office, Kōgyō Shoyūken
Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 443.
8 The Tokyo High Court Judgment, March 31, 2003, court website (the Fender case).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

regard to that case (paragraph (2) of said Article). However, cases are hardly everremanded,9 and in most cases trial proceedings are further continued and the question ofwhether or not a patent should be granted is investigated ex officio. If no reason for refusal
is found, the original examiner's decision is rescinded, and a decision to the effect that apatent is to be granted is rendered (Article 159, paragraph (3) of the Patent Act).
[251]
3.2.3.2. Trial for Invalidation of a Patent (Article 123 of the Patent Act)
(1) Significance of a trial for invalidation of a patent
Although a patent is granted after examination by an examiner, it is practicallydifficult for an examiner to search all technical documents around the world, so theestablishment of defective patent rights cannot be completely avoided. However, to leavea defective patent right as is would mean allowing the monopoly of an invention that canbasically be worked by anybody, and it would hinder the development of industry anddamage the credibility of the patent system. Thus, there is a need for a procedure to nullify
a defective patent right after registration, and such procedure is the trial for invalidationof a patent and the opposition system (described earlier). If a trial decision of invalidation
becomes final and binding, the patent loses its effect retroactively, and is deemed neverto have existed, whereby the invention becomes available for all people to work. However,in the case of double patenting, the senior patent would still remain effective even if thejunior patent were invalidated, so the invention would not become available for anybody
to work, but that is a rare case (Article 80 of the Patent Act). Also, if a patent is invalidated
due to reasons for invalidation that occurred after the grant of the patent (Article 123,
paragraph (1), item (vii) of the Patent Act), the patent is deemed not to have existed fromthe time such reasons occurred (the proviso to Article 125 of the Patent Act).
The system for invalidating a patent differs by country, but in Japan only the JPO
has been authorized to determine the validity of a patent since the Meiji era (from the late
19th century to early 20th century). Therefore, the courts cannot be regarded as being able
to determine the validity of a patent, which means that naturally one cannot claim theinvalidation of a patent in an infringement litigation procedure or a criminal procedure
relating to an infringement, and cannot appeal for confirmation of the invalidity of apatent. Although courts have been regarded as having no authority to invalidate a patent,
they have the authority to interpret the scope of protection of a patent right. Accordingly,

9 A case may be remanded when, for instance, an examiner has rendered a decision of refusal based on a formal reason,such as where there was an error in the indication of a cited invention, but the correct invention to be cited is unknown.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

they have made interpretations equivalent to practically denying the effectiveness ofpatent rights in the name of interpreting the scope of protection. As a result, it has beenrare for defective patents to have real power. The determination of the validity of a patent
here means a determination that affects the public, which is different from the issue of
whether a court can determine the validity of a patent only within a particular suit. Since
courts were not permitted to determine patent invalidity, there were various arguments10
as to how patents containing reasons for invalidation should be treated in an infringement
suit. Nevertheless, it became possible to assert a defense of patent invalidation in an
infringement suit with the 2004 revision (Article 104-3 of the Patent Act), and this put an
end to prolonged argument that had continued since the Meiji era.
[252]
A trial for invalidation takes the style of a dispute between two parties, which
seemingly resembles civil litigation. However, a trial for invalidation not merely
contributes to the interests of private persons, but is a procedure for nullifying the rightto a monopoly, which has been granted for art for which such right should not be granted,
and its effects affect the interests of everybody (public interest). A patent right whichcontains reasons for invalidation should not be kept valid, and the Patent Act has beenlegislated in such a manner as to eliminate such patent right. Such a stance can be seen in
the ex officio system adopted in a trial for invalidation (see Article 150 onward of the
Patent Act). Thus, a trial for invalidation is also considered to have a strong function ofadministrative control for ensuring that the administration complies with its original
purpose and relevant law.11 Despite the fact that the administrative authority that madethe disposition concerning the grant of a patent is not a party and is excluded from thedispute, the true subject of the dispute is the illegality of the administrative disposition,
which is the grant of the patent. So a trial of invalidation relating to the public interest
formally adopts an adversary system, but has the nature of an administrative lawsuit rather

10 Nobuhiro Nakayama, “Tokkyo Shingai Soshō To Kōchi Gijutsu” (Patent Infringement Litigation and Publicly
Known Technologies), Journal of the Jurisprudence Association, The University of Tokyo, Vol. 98, No. 9 (1981), p.
1115.
11 As the function of administrative control becomes stronger, this will result in the scope of the conditions for
qualifying as a plaintiff in an appeal suit also expanding (see Ichirō Ogawa, “Uttae No Rieki To Minshū Soshō No
Mondai -- Shukanteki Uttae No Rieki No Kakudai To Sono Genkai Ni Kansuru Ippan Riron E No Shiron” [Issuesof the Interests in Appeal and Popular Actions -- Trial Discussion on the General Theory Concerning Expansion andthe Limit of Interests in Subjective Action], Tanaka Jirō Koki Kinen, Kōhō No Riron Chu [Essays in Honor of theSeventieth Birthday of Professor Jirō Tanaka, Theory of Public Law, Vol. 2] [Yuhikaku, 1976]; Toshimasa Sugimura
and Masashi Kaneko, Gyōsei Tetsuzuki/Gyōsei Sō Hō [Administrative Procedures/Administrative Contestation Law],[Chikuma Shobo, 1973], p. 297; Naohiko Harada, Uttae No Rieki [Interests in Appeal] [Koubundou, 1973], p. 9).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

than that of a civil lawsuit.12 Therefore, unlike the adversary system under the Code ofCivil Procedure, it is a formal adversary system, and the ex officio system is adopted, inprinciple. Accordingly, the trial examiners may examine or preserve evidence ex officio(Article 150, paragraph (1) or (2) of the Patent Act), carry out proceedings ex officio(Article 152 of the Patent Act), be unbound by facts admitted by a party (Article 151 of
the Patent Act), and examine grounds that are not pleaded by a party (Article 153,
paragraph (1) of the Patent Act). However, they may not examine any object of claim notclaimed by the demandant of the trial (paragraph (3) of said Article).
With the 1993 revision, it was provided that a trial for correction cannot berequested while a trial for invalidation is pending, but that, in return, a request forcorrection can be made in the trial for invalidation. Meanwhile, it was provided that, whenlitigation for rescinding a trial decision is filed against a trial decision of invalidation, a
trial for correction may be requested within 90 days from the filing of the litigation, but
as a result of the 2011 revision, a trial for correction may not be requested from the timethe invalidation trial becomes pending before the JPO to the time the trial decision
becomes final and binding (Article 126, paragraph (2) of the Patent Act). With regard to
this point, see “3.2.3.3. Trials for Correction (Article 126 of the Patent Act).”[253](2) Standing of demandants and standing of demandees
Provisions on the standing of demandants of invalidation trials have undergone
major changes. Under the Act of 1921, the standing of the demandant of a trial forinvalidation was limited to “an interested party or an examiner” (Article 84, paragraph(2) of the former Act). The interpretation of the specific scope of interested parties could
vary, but that is only an argument of procedural law in general; in abstract, the scope ofthe demandants was clear. However, this limitation was deleted upon the 1959 revision,and the provision was set out in a passive sentence without a subject (Article 123,
paragraph (1) of the Patent Act before the 2003 revision). Thus, a problem arises as towhether any person can now request a trial due to the deletion of the limiting requirement,or, since the provision does not specifically set forth that any person can request a trial,
only the interested parties should be allowed to request a trial in accordance with the civil
12 A trial for invalidation can be considered to be something like an inter-partes trial under public law, but in substanceit can be regarded as something like an appeal suit filed by a third party (formal inter-partes trial). Similar proceedings
resembling a lawsuit include those under Article 133, paragraph (3) of the Compulsory Purchase of Land Act, Article
69, paragraph (7) of the Road Transportation Act, and Article 97, paragraph (2) of the Mining Act. However, thesubject of these proceedings is not the illegality of a disposition itself, but a dispute over the compensation awarded
by the disposition. Yukio Okitsu, “Tokkyo Fuyo/Mukō Shinpan/Shingai Soshō” (Patent Grant/Invalidation
Trial/Infringement Litigation), Patent, Vol. 64, No. 10 (Separate Volume No. 6) (2011), p. 1 states that a ground forpatent invalidation is not an illegal ground for registration establishing a patent (it is not illegal as long as theexaminer did not find a reason for refusal in examination), and that an invalidation trial is an administrative procedure
which has the nature of initial proceedings for extinguishing a substantively improper patent.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

litigation principle whereby a person having no interest in the matter cannot request atrial.13
The JPO practice immediately after the 1959 revision was not to conduct an
examination regarding the presence or absence of an interest,14 but the Tokyo High Court
consistently reversed this practice, and recognized that only interested parties could
request a trial.15 Accordingly, the practice of allowing only interested parties to request
an invalidation trial became established. Most theories interpreted that a demandant musthave an interest, based on the civil litigation principle that a person without an interest
has no cause of action,16 but there were also opposite views.17
With the 2003 revision, it was stipulated that any person can file a request for a trial
for invalidation, in principle (Article 123, paragraph (2) of the Patent Act), but that only
an interested person can file a request for a trial for patent invalidation on grounds thatthe patent was granted in violation of the provisions on a joint application (Article 38 of
the Patent Act) or granted for a misappropriated application (Article 123, paragraph (1),item (vi) of the Patent Act) (the proviso to Article 123, paragraph (2) of the Patent Act
before the 2011 revision). This was a measure to abolish the system of oppositions which
could be filed by anybody, and in its place, relaxed the requirements for the standing of ademandant as regards a trial for invalidation and limited the standing of a demandant as
regards a trial for patent invalidation filed on grounds of the ownership of the right, suchas that the patent was granted in violation of the provisions on a joint application or
granted for a misappropriated application to interested persons. Then, with the 2011
revision, the right of a true right holder to request transfer of the patent right was
introduced, and in line with this, the provision which stated that only an interested person
may file a request for a trial for patent invalidation on grounds that the patent was granted
13 With regard to this issue, see Nobuhiro Nakayama, “Tokkyo Mukō Shinpan Ni Okeru Seikyūnin Tekikaku”(Conditions for a Demandant of a Trial for Invalidation of a Patent), Toyosaki Mitsue Tsuitō Kinen Ronbun Shū,Mutai Zaisan Hō To Shōji Hō No Sho Mondai (Various Problems Relating to Intangible Property Law and Business
Law), p. 195; Minoru Takeda, “Mukō Shinpan Seikyū No Rieki” (Merits in Demanding a Trial for Invalidation),
Hatsumei (Invention), Vol. 87, No. 1 (1990), p. 54; Yōichirō Komatsu, “Mukō Shinpan To Rigai Kankeinin” (ATrial for Invalidation and Interested Parties), Patent, Vol. 36, No. 8 (1983), p. 15.
14 Trial No. 292 of 1961, Published Trial Decisions, No. 445, p. 3; Trial No. 666 of 1961, Published Trial Decisions,No. 341, p. 47; Trial No. 7806 of 1967, Published Trial Decisions, No. 756, p. 19.
15 In the Tokyo High Court Judgment, September 27, 1966, Gyōshū, Vol. 17, No. 9, p. 1119 (the Closed Agitation
Device case), the court held that the representative of a company does not have standing as a demandant because therepresentative does not have interest in the patent as an individual, and in the Tokyo High Court Judgment, February
25, 1970, Mutai Saishū, Vol. 2, No. 1, p. 44 (the Vinyl Chloride Stabilizer case), the court held that a patent attorney
does not have standing as a demandant.
16 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu (Dai 13 Han), p. 596; Mitsue Toyosaki, Kōgyō Shoyūken Hō(Shinpan/Zōho), p. 283; Yoshirō Hashimoto, Tokkyo Hō (Dai 3 Han), p. 127; Kazuo Morioka, Kōgyō Shoyūken Hō
Gaisetsu (Dai 4 Han), p. 113.
17 Nobuhiro Nakayama, “Tokkyo Mukō Shinpan Ni Okeru Seikyūnin Tekikaku” (Conditions for a Demandant of a
Trial for Invalidation of a Patent), Toyosaki Mitsue Tsuitō Kinen Ronbun Shū, Mutai Zaisan Hō To Shōji Hō No
Sho Mondai (Various Problems Relating to Intangible Property Law and Business Law), p. 195; Sueaki Oda andYoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 444; Yasushi Aoki and Tsuneteru Aragaki, Shinpan Tokkyo
Tetsuzuki Hō (Patent Procedural Law, New ed.), p. 282.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

in violation of the provisions on a joint application or granted for a misappropriatedapplication was revised so that only “a person having the right to obtain a patent for theinvention pertaining to said patent” may file such request (the proviso to Article 123,
paragraph (2) of the Patent Act).18 Along with this, it became possible for persons otherthan a person having the right to obtain a patent to submit allegations and evidence(allegations of invalidation due to misappropriation, etc.) in an infringement suit (Article104-3, paragraph (3) of the Patent Act). Allowing a third party to make a defense of patent
invalidation does not affect the true right holder, because the patent right is regarded tohave no effect only in that litigation. However, after the transfer to the true right holder,etc. has been registered, a third party may not assert a defense of patent invalidation (thepart in parentheses in Article 123, paragraph (1), item (ii) and the part in parentheses initem (vi) of said paragraph). This is natural because the patent right has been returned tothe true right holder and the defect has been cured. The standing of demandants as regards
trials for invalidation and the submission of allegations and evidence in an infringement
suit became separated, allowing the demandee to submit a defense of patent invalidation
for all reasons for invalidation in an infringement lawsuit. In contrast, a trial forinvalidation that is more of a dispute over the attribution of a right has a strong nature ofa dispute over the attribution of a private right rather than a dispute over the illegality ofthe disposition by the JPO. In such a case, the patent itself does not go against the public
interest, and the trial is rather similar to an ordinary civil action. As this type of dispute ismore suited to a civil action than to an invalidation trial at the JPO, the standing of ademandant should also abide by the civil action principle. With the 2011 revision, it wasprovided that only a person having the right to obtain a patent may file a request for a trial
for invalidation on grounds that the patent was granted in violation of the provisions on a
joint application or granted for a misappropriated application.
[254]
Then, with the 2014 revision, the post-grant opposition system (see “3.1.
Opposition System”) was revised, and any person became able to file an opposition, so
the standing of the demandant of an invalidation trial became limited to interested parties(Article 123, paragraph (2) of the revised Act). If non-interested third parties are able torevoke or invalidate a patent without a time limit, it could harm the stability of the patentright, destruct the various relationships established based on that patent, and cause
investments to be wasted. Accordingly, the stability of the patent right has been secured
by limiting the opposition period for all parties to six months, and allowing only interested

18 With the 2014 revision, the provision was revised so that only “a person having the right to obtain a patent” mayfile such request, but this is not a substantive change.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

parties to request an invalidation trial at any time. The opposition system and theinvalidation trial system have been changed rapidly to date. It is hoped that the recent
revision will function sufficiently well.
[255]
Next, there is a question of whether or not the abandonment of a right to request aninvalidation trial based on a contract will be effective. This question is generally raised in
the form of whether or not a no-contest contract between a patentee and a licensee is valid.
Such a contract should basically be considered to be valid due to the principle of freedomof contract, but the validity of the contract may sometimes be denied due to contraventionof public order and morality, etc. 19 This determination will be made for individual
contracts.
In relation to this, there is a problem of whether or not a licensee can request a trial
for invalidation. Some theories hold the view that a licensee cannot request a trial byreason of its going against the doctrine of good faith or in accordance with the doctrineof estoppel. 20 However, there should be cases where a person concludes a license
contract believing a patent is valid, but where reasons for the invalidation of the patentare discovered later. Therefore, even if a party has concluded a license contract, that alone
would not necessarily mean that the party has recognized the patent to be valid.21 If so,
19 The following are cases where the court ruled that the demandant loses his/her standing to request a trial when
he/she withdraws the request pursuant to a settlement before the conclusion of the proceedings of a trial forinvalidation: the Tokyo High Court Judgment, November 28, 1979, Tokkyo To Kigyō (Patents and Enterprises), No.
133, p. 31 (the Automatic Saw Mill case); the Tokyo High Court Judgment, December 23, 1980, Tokkyo To Kigyō(Patents and Enterprises), No. 146, p. 62 (the Airtight Gland Packing case); the Tokyo High Court Judgment, March
30, 1983 Tokkyo To Kigyō (Patents and Enterprises), No. 173, p. 31 (the Automatic Control Device case). As a similar
judgment on a case concerning the Design Act is the Tokyo High Court Judgment, July 30, 1985, Mutai Saishū, Vol.
17, No. 2 p. 344 (the Faucet Splice Fitting Design case). In this case, the court held that "if a person who was granted
a non-exclusive license from an exclusive licensee cannot justifiably request a trial for invalidation of the registered
design for which the license was granted, that person would have the disadvantage of having to continue paying thelicense fee even when using a registered design that is judged to include reasons for invalidation, and as there is norational reason to allow such a situation, it does not go against the doctrine of good faith even for a non-exclusive
licensee to request such trial for invalidation unless there are special circumstances." A similar court judgment is theTokyo High Court Judgment, January 31, 1963, Gyōshū, Vol. 14, No. 1, p. 95 (the Synthetic Resin Decorative
Laminate case). Theories setting forth the same idea are as follows: Nobuo Mon'ya, ed., Chūshaku Tokkyo Hō, p. 273(written by Kazufumi Dohi).
20 Ken’ichirō Ōsumi, “Gijutsu Teikei” (Technological Tie-up) Keiei Hōgaku Zenshū (Collected Treatises on Business
Law), Vol. 11 (Diamond, 1967), p. 137; Yoshimitsu Noguchi, “Tokkyo Jisshi Keiyaku” (Patent License Contract),
Hara Masuji Hanji Taikan Kinen, Kōgyō Shoyūken No Kihonteki Kadai Ge (Basic Issues of Industrial Property Rights
Vol. 2), p. 1043; Partially added and corrected by Yoshimitsu Noguchi and Masayasu Ishida, Kokunai Jisshi Keiyaku
No Jitsumu (Practical Affairs of Domestic License Contracts) (Japan Institute of Invention and Innovation, 2002) p.
195. While these state that the common theory considers a licensee to be justifiably obligated not to dispute according
to the doctrine of good faith, they also point out that there is also the problem relating to antitrust law. Meanwhile,
Masahiko Amemiya, Tokkyo Jisshi Keiyaku Ron (Discussions on Patent License Contracts), (Nihon Kogyo Shimbun
Co Ltd, 1980) p. 133 reveals a view that when a licensee requests a trial for invalidation, the licensor should beallowed to exercise the right of cancellation, and in that sense, the licensee has an obligation not to dispute even
without special provisions. Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan] (Detailed Explanation of Patent Law[New ed.]), p. 530 states that it goes against the doctrine of good faith for an exclusive licensee to dispute the validityof the patent later.
21 In the Tokyo High Court Judgment, July 30, 1985, Mutai Saishū, Vol. 17 No. 2 p. 344 (the Faucet Splice Fitting
Design case), the court held that, if a licensee cannot request a trial, it would be seriously disadvantageous for the
licensee, compared to the fact that any person may freely enjoy the contents of the patent if the patent were invalid.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

even if a licensee requests a trial for invalidation, it should be construed that such act
alone would not constitute a violation of the doctrine of good faith or the doctrine ofestoppel. 22 If there is a case where a trial for invalidation cannot be requested, thegrounds therefor would be either a contract or violation of the doctrine of good faith or
estoppel. The application of these legal theories should be determined for individual cases.
For instance, when the licensor and licensee are in an extremely close relationship similar
to an association, the request for a trial for invalidation may be judged to go against thedoctrine of good faith, and when the parties have an explicit contract to not dispute thepatent, the request for invalidation may not be allowed as an outcome of the contract.
These are the issues concerning the standing of the demandants as regards a trial forinvalidation, and they should be separated from the issue of the breach of an obligation
between the parties concerned.
[256]
When there are two or more demandants who make a request for a trial forinvalidation (the same applies to the case of a trial for invalidation of the registration ofextension of the duration), they can either file the request individually or jointly, and suchjoint request will be the necessary joinder of similar parties (Article 132, paragraph (1) of
the Patent Act). However, in the case of jointly filing a request, the suspension or
termination of the procedure will be effective for all of the demandants (paragraph (4) of
said Article).
The demandee in a trial for invalidation must be a patentee registered in the patentregistry. If a patent right is jointly owned, all of the joint owners must be the demandees(paragraph (2) of said Article); otherwise, the request for a trial is dismissed by a trial
decision as an unamendable defect (Article 135 of the Patent Act). This should not be
determined simply based on a formal viewpoint of whether or not the names of all
demandees are written in the relevant column. The determination should be made basedon the status of all objects of claim in the written request, and an amendment should beordered if possible as long as it does not affect third parties.23 In practice, the JPO takes
22 Though it is an old law case, the Tokyo High Court Judgment, January 31, 1963, Gyōshū, Vol. 14, No. 1, p. 95 (theSynthetic Resin Decorative Laminate case).
23 In the Tokyo High Court Judgment, March 30, 1978, Mutai Saishū, Vol. 10, No. 1, p. 130/Hanta, No. 369, p. 390(the Photograph Displaying Tool case), the court held that the person who should be the demandee in a trial forinvalidation is the administrative agency which has made the disposition (registration), but since it is not reasonable
to ignore the right holder who has a direct interest, the procedure is to be carried out with such person as a party to
the trial, therefore the demandee is only a procedural party and the amendment of an erroneous indication of thedemandee is not regarded as a change to the gist of the written request as set forth in former Article 131, paragraph(2). Though it is not a case of an invalidation trial, in the Tokyo High Court Judgment, October 25, 1978, Mutai
Saishū, Vol. 10, No. 2, p. 471/Hanta, No. 373, p. 160 (the Taxi Rooftop Indicator Light case) the court held that
where a representative, who has been entrusted with the filing of a request for a trial against an examiner's decisionof refusal from all of the joint owners, has indicated only some of the joint owners as the demandants, if the request
is found to have been filed by all of the joint owners, the chief trial examiner should order the amendment of the
deficiency.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

a severe attitude toward erroneous indications, but with regard to the indications of theparties in general, such erroneous indications should be flexibly interpreted unless theycause actual damage to third parties.24[257](3) Period for filing a request for a trial for invalidation
A trial for invalidation can be requested at any time, even after the lapse of a patentright (Article 123, paragraph (3) of the Patent Act). Even after the lapse of a patent right,
compensation could be claimed for any continuing damage, so a request for aninvalidation trial must be allowed as a means to counter such a claim. However, if theright to claim compensation for damage or the right to claim the return of unjust
enrichment becomes barred by prescription, it should be considered that there is no longer
a merit in filing a request for a trial for invalidation. 25 Since nobody would receive
damages because of the mere fact that such a patent right had existed in the past, further
trial decisions would be meaningless, and it would impose an unnecessary burden on thepatentee after the lapse of the right as well as impose a useless burden on the JPO and thecourts.
While a five-year period of exclusion was stipulated for all of the reasons forinvalidation under the Act of 1921 (Article 85, paragraph (1) of the Act of 1921), the fiveyear exclusion period was only maintained as an exception to the request for aninvalidation trial based on disclosure in a “printed publication only distributed in a foreigncountry” in the Act of 1959 (Article 124; currently deleted). However, the provision on
the exclusion period was deleted upon the 1987 revision, so the period of exclusion was
uniformly abolished for all of the reasons for invalidation. This is because, in the present
advanced information era, there is no longer a need to provide special treatment only for
printed publications distributed in a foreign country.
(4) Reasons for invalidation
The reasons for invalidation are listed in a limited manner, and are restricted tothose that are stipulated in the provision (Article 123, paragraph (1) of the Patent Act). If
a reason for invalidation applies to two or more claims, a trial for invalidation can berequested for each claim (the second sentence of the principal sentences of said
paragraph).
The reasons for invalidation are often the same as the reasons for the refusal of an
24 While it is a case of litigation for rescinding an examiner’s decision of refusal, in the Intellectual Property High
Court Judgment, November 19, 2009, Hanji, No. 2072, p. 129/Hanta, No. 1333, p. 237 (the case of Lithium
Secondary Battery and Manufacturing Method Thereof), the court stated that when a representative, who has been
entrusted by all of the joint owners to carry out procedures, submits a written request for a trial indicating that therequest is made on behalf of only part of the joint owners, it is appropriate to presume that the request has been madeon behalf of all of the joint owners.
25 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 446.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

application. However, a violation of the requirements for a statement of inventions known
to the public (Article 36, paragraph (4), item (ii) of the Patent Act), a violation of an
Ordinance of the Ministry of Economy, Trade and Industry (Article 36, paragraph (6),item (iv) of the Patent Act; Article 24-3 of the Patent Act Enforcement Ordinance), and a
violation of the requirements of the unity of an application (Article 37 of the Patent Act),
which are reasons for a refusal, are not stipulated as reasons for invalidation. These are
only procedural defects, and not substantive defects, so once the patent has been granted,
they are not so critical as to invalidate the right ex post facto.
Reasons for invalidation include cases where, after the grant of the patent, theforeign national owning the right has become unable to hold a patent right or the patent
is found to be in violation of a treaty (Article 123, paragraph (1), item (vii) of the Patent
Act). Since these reasons for invalidation did not exist in the patent examination phase,they do not constitute reasons for refusal.
[258]
The reasons for invalidation are explained below in accordance with the respective
items of Article 123, paragraph (1) of the Patent Act.
1) Item (i) of the paragraph: A patent that has been granted on a patent application with
an amendment that does not comply with the requirements as provided in Article 17-2,
paragraph (3) of the Patent Act. In the past, an amendment that changes the gist of theapplication was not a reason for invalidation, but it was processed by moving the filingdate to a later date. However, with the 1993 amendment, a patent granted without noticingthat an amendment adding a new matter had been made was stipulated as a reason forrefusal (excluding a foreign language written application) (for details, see “2.3.
Amendment”).
2) Item (ii) of the paragraph: A patent granted contrary to the provisions on the enjoymentof rights by foreign nationals (Article 25 of the Patent Act), industrial applicability,
novelty, or inventive step (Article 29 of the Patent Act), or prior art effect (Article 29-2of the Patent Act); a patent granted for an unpatentable invention (an invention that is
likely to harm public order, morality or public health; Article 32 of the Patent Act); apatent granted for a joint application that had not been filed jointly by all of the joint
owners of the right to obtain a patent (Article 38 of the Patent Act); a patent granted
contrary to the provisions on the first-to-file rule (Article 39 of the Patent Act). However,it was stipulated upon the 2011 revision that a trial for invalidation may not be requested
for a patent granted in violation of the requirements for a joint application of which thetransfer of patent right has been registered under Article 74, paragraph (1) of the Patent
Act (the part in parentheses in Article 123, paragraph (1), item (ii) of the Patent Act).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention3) Item (iii) of the paragraph: A patent granted in violation of a treaty (Article 25 of the
Patent Act).
4) Item (iv) of the paragraph: A patent granted for an application that includes insufficient
disclosure (Article 36, paragraph (i) of the Patent Act) and a deficiency in the descriptionof the claim (paragraph (6) of said Article).
5) Item (v) of the paragraph: A patent granted for a foreign language written application
where the features disclosed in the description, the scope of claims, or the drawings do
not remain within the scope of the features disclosed in the foreign language documents.
6) Item (vi) of the paragraph: A patent granted for an application filed by a person who
does not have the right to obtain a patent (a patent on a misappropriated application).
However, it was stipulated upon the 2011 revision that a request for a trial for invalidation
cannot be filed for a patent on a misappropriated application of which the transfer ofpatent right under Article 74, paragraph (1) of the Patent Act has been registered (the partin parentheses in Article 123, paragraph (1), item (vi) of the Patent Act).
7) Item (vii) of the paragraph: A patent where, after the grant of the patent, the foreign
national owning the right has become unable to hold a patent right (Article 25 of the
Patent Act) or the patent is found to be in violation of a treaty.
8) Item (viii) of the paragraph: A patent in which an inadmissible correction has beenmade. This point used to be disputed in a trial for the invalidation of a correction in thepast, but with the 1993 revision, the trial for the invalidation of a correction was abolished,
and this provision was added for the purpose of disputing any inadmissible corrections ina trial for invalidation of a patent.
The reasons for invalidation are restricted to these matters, so even if the name ofa person who is not the inventor were found to be described as the inventor, the patent
would not be invalidated.
[259](5) Effect of a trial decision of invalidation
When a trial decision to the effect that a patent is to be invalidated becomes final
and binding, the patent right is deemed not to have existed from the start (Article 125 of
the Patent Act). Since most of the reasons for invalidation derive from original defects, a
trial decision of invalidation has a retroactive effect and is effective against the public. If
the reason for the defect has occurred after the filing, the patent is deemed not to haveexisted from the time that the defect occurred (the proviso to Article 125 of the Patent
Act). Specifically, this refers to a case where a foreign national patentee has become
unable to hold a patent right due to the provisions of Article 25, or the patent is found to
be in violation of a treaty ex post facto (Article 123, paragraph (1), item (vii) of the Patent§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented InventionAct), but such case would be extremely rare in reality.
Conventionally, when a trial decision of invalidation was registered, no one could
request a trial on the basis of the same facts or the same evidence, but with the 2011
revision, it was provided that “the parties and intervenors” may not request a trial forinvalidation, the trial decision was no longer effective against the public, and it became
possible for third parties to request a trial for invalidation even on the basis of the samefacts or the same evidence (Article 167 of the Patent Act; with regard to this point, see“3.2.4.3. Trial Decisions”).
After the 2011 revision, parties were no longer able to assert the fact that a trial
decision of invalidation had become final and binding in a retrial after the final judgment
has been rendered in an infringement suit. With regard to this issue, see “8.5. Retrials(Article 104-4 of the Patent Act).”
When a trial for invalidation is requested, the patentee often requests a trial forcorrection to counter it. A trial for invalidation and a trial for correction have
conventionally been treated as separate proceedings, but the system of a request forcorrection was established upon the 1993 amendment. The details shall be introduced in“3.2.3.3. Trials for Correction (Article 126 of the Patent Act).”(6) Trial proceedings and formalities
A trial for invalidation and a trial for the invalidation of the registration of an
extension of the duration correspond to an inter-partes trial in which the parties oppose
each other in the form of a person claiming the invalidation of a patent requesting a trial
against the patentee. The trial proceedings are conducted orally in principle, but they canbe conducted by documentary proceedings on a motion by a party or ex officio (Article
145, paragraphs (1) and (2) of the Patent Act). In the past, documentary proceedings had
been mainly conducted, but improvements have been made with the recent recognition ofa need for oral proceedings. Examination by oral proceedings must basically be conductedin public (paragraph (5) of said Article).
Although provisions in the Code of Civil Procedure are basically applied mutatis
mutandis to the trial procedure (Article 151 of the Patent Act), the trial adopts the ex
officio principle, so those provisions that pertain to the part relating to the adversary
system are not applied mutatis mutandis. Accordingly, the procedure is not bound by facts
that are admitted by a party (said Article).26 In addition, it is possible to examine evidence
ex officio in a trial (Article 150, paragraph (1) of the Patent Act), and although trial
proceedings cannot be conducted regarding a point outside the gist of a request filed by
26 Although Article 151 of the Patent Act applies mutatis mutandis to Article 179 of the Code of Civil Procedure
concerning the admission of facts, it replaces the phrase "Facts admitted by a party before a court and obvious facts"
to "Obvious facts," and does not apply mutatis mutandis to the portion concerning the facts admitted.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

the demandant (for instance, trial proceedings cannot be conducted regarding patentclaims for which a trial has not been requested), they can be conducted ex officio
regarding reasons that have not been pleaded by the parties, within the scope of the gistof the request for the trial (Article 153 of the Patent Act). However, as such ex officio
proceedings are not compulsory, there is no obligation even to examine documents thathave not been submitted by the parties, and the trial decision would not necessarily beillegal even if such documents were not examined. 27 If trial proceedings have been
conducted as to grounds that had not been pleaded by the parties, the results must be
notified to the parties to give them an opportunity to present their opinion on the results(procedure for inviting opinions) (paragraph (2) of said Article). 28 The same applies
when evidence is examined ex officio (Article 150, paragraph (5) of the Patent Act). As
the patent trial procedure is practically equivalent to the trial of first instance of a lawsuit,
it is important to prevent any of the parties concerned from being surprised.29[260]
When there are multiple demandants as regards a trial for invalidation, they caneither individually request a trial or jointly request a trial (Article 132, paragraph (1) of
the Patent Act). Also, as is the common rule for trials in general, trial proceedings for two
or more trials can be conducted jointly or separately (Article 154 of the Patent Act).
Furthermore, any person who can request a trial for invalidation can intervene in apending trial as a demandant until the conclusion of the trial proceedings (Article 148,
paragraph (1) of the Patent Act).
[261]
When a trial is requested, it is published in the patent gazette (Article 193,
paragraph (2), item (vi) of the Patent Act). In addition, an announcement of theregistration of the request is made (Article 3, item (iv) of the Patent Registration Orderand Article 38 of the Patent Registration Order Enforcement Ordinance), and a notice
thereof is given to the exclusive licensee and any other persons who have registered rights
27 In the Tokyo High Court Judgment, March 15, 1990, Mutai Saishū, Vol. 22, No. 1, p. 158 (the Socks Finishing
Board Design case), the court held that although the appropriate measure may have been to demand an answer onwhether or not to claim another reason for invalidation based on a new fact about the design being publicly known,
instead of or in addition to the existing reason for invalidation, this claim could easily have been made by thedemandant, and even if the trial decision became final and binding, the demandant could demand another trial forinvalidation based on this reason, so the procedure to rescind the trial decision was not illegal.
28 The Tokyo High Court Judgment, July 29, 1993, Chiteki Saishū, Vol. 25, No. 2, p. 420 (the Kotobuki-ryu
Trademark case) is a case concerning Article 56 of the Trademark Act which applies mutatis mutandis to Article 153of the Patent Act. In this case, the court held that a trial decision rendered with regard to reasons for the invalidationof a trademark which have not been asserted by the trial demandant, without giving the demandee an opportunity topresent his/her opinion, is illegal unless there are special circumstances where the trial decision would not come asa surprise to the parties.
29 In the Tokyo High Court Judgment, December 21, 1981, Mutai Saishū, Vol. 13, No. 2, p. 933 (the Tape Recording
and Playing Device case), the court mentioned that the illegality of not notifying the results of the examination ofevidence conducted ex officio by the parties cannot constitute a reason for the rescission of the trial decision unlessthe defect is critical. In short, the important point is whether or not the act came as a surprise to the parties in substance.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

relating to that patent right (such as a pledgee) (Article 123, paragraph (4) of the Patent
Act). Since the system of registration of non-exclusive licenses was abolished with the2011 revision, no notice is given to non-exclusive licensees. The final and binding trial
decision is also published in the patent gazette (Article 193, paragraph (2), item (vii) of
the Patent Act).
3.2.3.3. Trial for Correction (Article 126 of the Patent Act)
(1) Significance of the trial for correction30
A trial for correction is a trial requested by the patentee to voluntarily correct a
description, the scope of claims, or drawings attached to the application after patentregistration (Article 126, paragraph (1) of the Patent Act). Unlike the amendment
procedure prescribed as part of the examination procedure, a correction is made on an
already fixed patent right after patent registration. Therefore, it is carried out through thecareful procedure of a trial which resembles litigation. From the viewpoint that a trial forcorrection, which is a procedure through which the patentee voluntarily requests a
correction, does not have the nature of a dispute, it is difficult to categorize it as a quasijudicial procedure. However, its actual procedure is almost the same as that for other trials,
so in that sense, it has the appearance of a quasi-judicial procedure.
Since the scope of a patent right becomes fixed upon registration, the modificationof its content should not be allowed arbitrarily. However, it may be revealed after
registration that the patent includes reasons for invalidation, or includes erroneous orambiguous statements. It would be too harsh to the applicant to invalidate the entire patentright due to a defect in a part of the patent right, and normally, the applicant would want
to separate the invalid portion and leave the remaining portion valid. Also, it would not
be desirable for third parties if an unclear and ambiguous patent with an ill-defined scopeof right is left “as is.” Thus, provisions on a trial for correction have been established toachieve a balance between the interests of the patentee and of society.31 Since the effectof a correction retroacts (Article 128 of the Patent Act), and an act of broadening thescope of a patent right ex post facto is equivalent to changing the borderline of a piece ofland as one pleases, attention needs to be paid so as not to expand the scope of the right.
30 With regard to correction, see Minoru Takeda, “Teisei Shinpan” (Trial for Correction), Hatsumei (Invention), Vol.
87, No. 7 (1990), p. 61; Ryūta Hirashima, “Teisei Shinpan No Hōteki Seishitsu To Kakutei Teisei Shinketsu No
Sokyūkō” (Legal Nature of the Trial for Correction and Retroactive Effects of the Final and Binding Trial Decisionof Correction) Patent 2011 Bessatsu (Separate Volume) No. 7, p. 1. Trial and Appeal Department, Japan Patent
Office, “Heisei 23 Nen Kaisei Hō Ni Okeru Mukō Shinpan Oyobi Teisei Shinpan No Jitsumu No Kangaekata”(Concept of the Practice of Invalidation Trials and Correction Trials under the Act as Revised in 2011) (Japan
Institute for Promoting Invention and Innovation, 2012).
31 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1358 (written by Tsuneteru Aragaki).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

A patentee may voluntarily request a trial for correction but most corrections arerequested in order to counter a request for a trial for invalidation or an opposition. Under
the current Act, however, a patentee cannot file a request for a trial for correction while apatent opposition or an invalidation trial is pending (Article 126, paragraph (2) of the
Patent Act), so the patentee files a request for correction (Article 134-2 of the Patent Act).
With regard to this point, see “3.2.3.3.(5) Relation to a trial for invalidation.”[262](2) Period for making a correction
At the time of legislation of the current Act, a trial for correction and a trial forinvalidation were separate independent trials, and a trial for correction of the description(the scope of claims was included in the description at that time) and drawings attachedto the request could be requested at any time. Thus, there were cases where patentees
requested a trial for correction after the filing of litigation for rescinding a trial decisionof invalidation, and a trial decision of correction became final and binding during
pendency of litigation for rescinding the trial decision of invalidation. When a trial
decision of correction becomes final and binding during the proceedings of litigation for
rescinding a trial decision of invalidation, because the correction has a retroactive effect(Article 128 of the Patent Act), the subject matter of the litigation will be changed, andthe trial decision of invalidation will be rescinded as a result. 32 Then a trial forinvalidation will be resumed for the corrected patent. This will cause the procedure to go
back and forth between litigation and trials, which not only requires long hours to settle
a single dispute, but also imposes a useless burden on the parties and wastes the resourcesof the JPO and the court. Accordingly, major reforms on corrections were made upon the
1993, 2003, and 2011 revisions. With regard to this point, see “(5) Relation to a trial for

32 In the Supreme Court Judgment, March 9, 1999, Minshū, Vol. 53, No. 3, p. 303/Hanji, No. 1671, p. 133/Hanta, No.
999, p. 234 (the Large Square Steel Tube case), which is a case concerning the Patent Act before the 1993 revision,
the court held that, if a trial decision of correction narrowing the scope of patent claims became final and binding
during the pendency of litigation for rescinding a trial decision of invalidation, said trial decision of invalidationmust be rescinded. This is because, since the narrowed claims include new elements, the determination cannot bemade without comparing the claims not only with the prior art they were compared with before the correction but
also with other prior art. In contrast, in its original instance, the Tokyo High Court Judgment, August 3, 1995, Hanji,
No. 1550, p. 110, the court stated that, if the same conclusion as the trial decision is reached due to the same reason
as in the trial decision after identifying the invention in accordance with the gist of the corrected invention andcomparing it with the cited prior art, the error that originally existed in the invention does not affect the conclusionof the trial decision in any way, so the trial decision cannot be rescinded as being illegal. The following judgments
also held that the trial decision would be rescinded by operation of law based on the same view: the Supreme Court
Judgment, April 22, 1999, Hanji, No. 1675, p. 115/Hanta, No. 1002, p. 126 (the Roll Calendar case); the Supreme
Court Judgment, October 31, 2003, Hanji, No. 1841, p. 143 (the Light-emitting Element Composed of a Gallium
Nitride Compound Semiconductor case; a case in which the court quashed and remanded the case, holding that, if atrial decision of correction of the patent description becomes final and binding during the pendency of the final
appellate instance and the scope of claims becomes narrow, the administrative disposition which served as the basisof the original judgment is deemed to have been changed by a subsequent administrative disposition); and theSupreme Court Judgment, October 18, 2005, Hanji, No. 1914, p. 123 (the Cleaning Fabric Manufacturing Methodcase).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

invalidation.”
A correction during the pendency of an opposition or an invalidation trial is now
processed within the procedure of the opposition or invalidation trial (see “3.1.2.
Opposition System Introduced by the 2014 Revision” and “(5) Relation to a trial forinvalidation”). A request for a trial for correction may not be filed until the time when all
the rulings on the opposition or trial decisions have become final and binding in the casewhere the opposition or the request for a trial has been filed for each claim (the part inparentheses in Article 126, paragraph (2) of the Patent Act).
[263]
A request for a trial for correction may not be filed until a trial decision ofinvalidation becomes final and binding, but it may be filed at any other time, even after
the lapse of the patent right (Article 126, paragraph (8) of the Patent Act). This is because,
given that a claim for damage compensation may be filed after the expiration of theduration of a patent right for damage caused during the duration of the patent right, there
may be a need for requesting a trial for correction in advance so as to circumvent a defenseof patent invalidation in litigation for claiming compensation for damage.
When the chief administrative judge finds that a request for a trial for correction
fails to satisfy the requirements for correction, the chief administrative judge notifies thedemandant of the reasons therefor and gives the demandant an opportunity to submit awritten opinion, designating an adequate time limit (Article 165 of the Patent Act). In
response, the demandant may amend the corrected description, scope of claims ordrawings attached to the written request for correction (Article 17-5, paragraph (2) of the
Patent Act).
While a defense of patent invalidation is often made in infringement litigation, it ispossible for the suspected infringer to request a trial for invalidation separately and thepatentee may request correction in that procedure.
(3) Scope of correctable matters
Since a correction has a retroactive effect (Article 128 of the Patent Act), the scopeof correctable matters is strictly restricted so as not to cause harm to third parties. The
matters that can be corrected are the following within the description, scope of claims ordrawings attached to the application (Article 126, paragraph (1) of the Patent Act): (i)restriction of the scope of claims, (ii) correction of errors or incorrect translations; (iii)
clarification of an ambiguous statement; and (iv) correction of a statement of claims citing
another statement of claims into a statement which does not cite said other statement ofclaims.
The description, scope of claims or drawings attached to the application refer to§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

those as of the time of requesting a trial for correction, and if the application has alreadybeen amended or corrected, the description, scope of claims or drawings attached to theamended or corrected application may be corrected. Correction of errors or incorrecttranslations, however, can only be made within the scope of matters stated in thedescription, scope of claims or drawings attached to the original application (the part inparentheses in paragraph (5) of said Article).
So as not to cause any unexpected damage to third parties, the correction of thedescription, scope of claims or drawings must not substantially enlarge or alter the scopeof claims (paragraph (6) of said Article).33 This is for the same purpose as in the case ofamendment where addition of new matters is prohibited. Also, in the case of making thecorrections set forth in item (i) or (ii) above, an invention constituted by the mattersdescribed in the corrected scope of claims must satisfy the requirements for an
independent patent (paragraph (7) of said Article).
[264]
The specific matters subject to correction are as follows (paragraph (1) of said
Article).
1) Restriction of the scope of claims (item (i))
Restriction will only make the scope of right narrower, so it would not cause
unexpected damage to third parties. However, it is often difficult to determine whether or
not a correction is restriction or enlargement in reality.34 At any rate, whether or not acorrection substantially enlarges or modifies the claim is examined. In other words, it isnecessary to avoid a situation where a third party's act, which did not constituteinfringement before the correction, constitutes infringement after the correction. Even if
the wording of the scope of claim has not been corrected, the scope of claims claim could
be narrowed by correcting the description or drawings.35
2) Correction of errors in the description (item (ii))
Correction of errors in the description is allowed, but the claim must not be
substantially enlarged or modified in the name of correcting errors in the description, as

33 In the Tokyo High Court judgment on June 29, 1971, Mutai Saishū, Vol. 3, No. 1, p. 254 (the Non-aqueous Monoazo
Dye Manufacturing Method case), the court stated that the prohibition of the substantive enlargement andmodification of the claim is not only intended to prevent a potential disadvantage whereby an act of a third party that
had not been an infringement would become an infringement by the correction, but also to prevent the adverse
possibility that a person who had obtained a patent or filed an application for an invention identical to the invention
after the correction would have his/her patent or application invalidated or refused, thereby thoroughly maintaining
the first-to-file principle.
34 This issue must be determined based on the facts. For a detailed explanation of specific case examples, see Nobuhiro
Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1374 (written by Tsuneteru Aragaki).
35 In the Supreme Court Judgment, March 19, 1991, Minshū, Vol. 45, No. 3, p. 209/Hanji, No. 1381, No. 108/Hanta,
No. 755, p. 101 (the Clip case), the court held that when the scope of claims has not changed, but the wording in thescope of claims is not distinctly clear, the scope of claims may be narrowed in some cases by partially deleting thedetailed explanation of the invention or drawings.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

mentioned in 1) above.36
3) Clarification of an ambiguous description (item (iii))
The important point here is again the question of whether the correction would
substantially enlarge or modify the claim. In making this type of correction, correction isoften made to the features described in the detailed explanation of the invention in thedescription, in line with restriction of the scope of claims.37[265]4) Correction of a statement of claims citing another statement of claims into a statement
which does not cite said other statement of claims (item (iv))
Since it became possible to file a trial for correction for individual claims (the first
sentence of Article 126, paragraph (3) of the Patent Act) with the 2011 revision as
explained below, there are cases where a certain claim is deleted or corrected and anotherclaim dependent on said claim also needs to be corrected. When correcting two or moreclaims, correction can be made for each claim. However, in order to make the description
viewable at a glance, it was provided that, for groups of claims having a dependent
relationship or any other relationship specified by Ordinance of the Ministry of Economy,
Trade and Industry, a request for correction must be filed separately for each such group(the second sentence of said paragraph), and that when requesting correction for anindividual claim, all claims related to that claim must also be corrected (paragraph (4) of
said Article).
Conventionally, a patent right had not been considered to have been established foreach claim, but was established as a single and inseparable right for each application, andwhen exceptionally treating a patent right by each claim, provisions to that effect had
been put in place (Articles 123 and 185). Opinions were divided as to whether, when
having requested a trial for correction for multiple matters at a time, it is possible to allow
correction of only some of such matters. However, a Supreme Court judgment38 in 1980
36The Supreme Court Judgment, December 14, 1972, Minshū, Vol. 26, No. 10, p. 1888 (the Phenothiazine Derivative
Manufacturing Method case). In this case, which was a case about an invention relating to a method of manufacturingphenothiazine derivatives, the court stated that a correction from “A is an alkylene group that has branches” to “A isan alkylene group that may have branches” is not permissible, because it will also include “an alkylene group that
does not have branches” and will enlarge the scope of claims. Meanwhile, in a case for which a decision was renderedon the same date, the Supreme Court judgment on December 14, 1972, Civil Court judgments by the Supreme Court
Judgment, December 14, 1972, Minshū, Vol. 26, No. 10, p. 1909 (the Rice Crackers Manufacturing Method case),
the court stated that the correction from “3 to 5 degrees Fahrenheit” to “3 to 5 degrees Celsius” in an invention of arice cracker manufacturing method was not permissible, because it substantially modified the claim. See Nobuhiro
Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1378 (written by Tsuneteru Aragaki).
37 See Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1382 (written by Tsuneteru Aragaki); Kiyoshi
Kadowaki, “Teisei Shinpan Ni Okeru Teisei Kyoyō No Genkai To Teisei Shinpan Seido No Mondaiten (1)(2)”(Permissible Limits of Correction in a Trial for Correction and Problems in the System of Trial for Correction (1)(2)) Tokkyo Kanri (Patent Management), Vol. 19, No. 7 (1969), p. 499 and No. 9, p. 751.
38 In the Supreme Court Judgment, May 1, 1980, Minshū, Vol. 34, No. 3, p. 431 (the Tiller Trailer case), which is acase of a utility model, the court held that it is unreasonable to construe that a trial for correction has been requested
by deeming correction of multiple parts to be multiple independent matters to be corrected.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

held that partial correction is not allowable, in principle. This principle had been
established as JPO practice even after the one application for one invention system wasabolished in 1987. After the introduction of the multiple claim system, however, the court
began to rule that, in the case of a request for correction (Article 134-2 of the Patent Act),the admissibility of correction should be determined for each claim, 39 and with asubsequent Supreme Court judgment,40 partial correction also became admissible for arequest for correction. A trial for correction was often requested as a means to eliminate
grounds for invalidation, and in that sense, it faced a similar circumstance as in the caseof a request for correction. Thus, it was provided upon the 2011 revision that, whenrequesting a trial for correction for two or more claims, correction can be requested foreach claim (the first sentence of Article 126, paragraph (3) of the Patent Act).
[266]
When withdrawing a trial for correction, if a request for a trial for correction has
been filed for each claim or each group of claims, the withdrawal of the request must be
made for all those requests from the viewpoint of making the description viewable at a
glance (Article 155, paragraph (4) of the Patent Act). A similar restriction is imposed also
for a request for correction in an invalidation trial (Article 134-2, paragraph (7) of the
Patent Act). Although a request for correction is a procedure incidental to an opposition
or a request for an invalidation trial, it resembles a request for a trial for correction in
substance, so it is natural that a similar restriction is imposed on it.
Although correction can be made for individual claims, a patent right is considered
to be established for a single application under the current Act. Thus, if a reason for refusal
exists for one of the claims, the whole application is refused. While the 2011 revision
may have indicated a trend of patent rights gradually coming to be recognized forindividual claims, it has also provided measures to ensure that the description is viewable
at a glance since such an aspect is also important (Article 126, paragraph (1), item (iv)
39 In the Tokyo High Court Judgment, October 31, 2002, Hanji, No. 1821, p. 117/Hanta, No. 1110, p. 102 (the Power
Transmission Chain case), the court held that, under a system where invalidation is determined for each claim in atrial, a request for correction can be understood to be separate and independent for each claim, and no particular
problem is found in determining whether or not correction is admissible for each claim.
40 In the Supreme Court Judgment, July 10, 2008, Minshū, Vol. 62, No. 7, p. 1905/Hanji, No. 2019, p. 88/Hanta, No.
1279, p. 110 (the LED Module case), the court held that a Supreme Court judgment in 1980 had been “determination
concerning a request for a trial for correction where multiple matters to be corrected were included in the scope ofclaim for a utility model registration, which cannot be deemed to contain more than one claim,” so its purport does
not apply to a case of questioning whether the admissibility of a correction should be determined separately for
individual claims. Then, the court stated that, when a request for the correction of multiple claims is filed during thependency of an opposition to the grant of a patent, the admissibility of the correction should be determined separately
for individual claims to be corrected, and it is not permissible to deny the entire correction solely due to the reason
that a correction pertaining to a part of the claims to be corrected does not satisfy the requirements for correction.
However, the court stated in its obiter dictum that “a request for a trial for correction seeking correction of multiple
claims is intended to be treated as an inseparable whole, similar to the procedure of a patent application pertaining
to multiple claims,” and a trial for correction was outside the scope of application of this judgment. While this wasa case of a request for correction that was filed to counter an opposition, a request for correction filed to counter atrial for invalidation has the same structure.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

and Article 134-2, paragraph (1), item (iv) of the Patent Act).
(4) Final and binding trial decision of correction and its effect
A trial decision of correction for an entire patent right becomes final and bindingfor each patent right (the principal sentence of Article 167-2 of the Patent Act). However,when a request for correction is filed for groups of claims, a trial decision of correction
becomes final and binding for each group of claims (the proviso to said Article).
When a trial decision to approve a correction becomes final and binding, the effectof the decision retroacts to the time of filing, and the various procedures after the filingare deemed to have been taken on the basis of the corrected description and drawings(Article 128 of the Patent Act).
[267]
A trial decision of correction becomes final and binding when a copy of thedecision is served.41
A person who is dissatisfied with a trial decision that allows correction (thesuspected infringer) may dispute by filing a request for a trial for invalidation. Meanwhile,a person who is dissatisfied with a trial decision that does not allow correction (thepatentee) may dispute through litigation for rescinding the trial decision.
(5) Relation to a trial for invalidation
Until the 1993 revision, there was no link between trials for invalidation and trials
for correction, and they were to be conducted separately and independently.42 While atrial for invalidation has an inter-partes structure where a patentee and a demandant of thetrial for invalidation confront each other, a trial for correction has a structure whereby apatentee requests a correction to the JPO and it has no dispute nature. Also, in a trial forinvalidation, both parties can file a lawsuit for rescinding a trial decision, in a trial forcorrection, only a patentee whose request has been rejected. Due to such a difference instructure, the prevalent view was that a trial for invalidation and a trial for correction
could not be combined into one trial (Article 154, paragraph (1) of the Patent Act).43
However, as a trial for correction was actually often used as a means to counter a trial forinvalidation, it had been said that there was a practical problem in handling the two as

41 The Tokyo High Court Judgment, September 26, 1969, Gyōshū, Vol. 20, No. 8/9, p. 1119 (the Method of
Manufacturing Hollow Articles from Organic Plastic Materials case).
42 As the only exception, the two trials were linked to each other in the case of a patent pertaining to a patentapplication in a foreign language (Article 184-15, paragraph (2) of the Patent Act before the 1993 revision).
43 An opposite view is indicated in Tomoko Takii, Minshōhō Zasshi (Journal on Civil and Commercial Law), Vol. 93,
No. 6 (1986), p. 884.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

separate trials. 44 A problem had arisen whereby if a trial for invalidation was stayed
during the proceedings of a trial for correction, the overall proceedings would be delayed,and if the two trials were conducted separately, an inconsistency could arise between thetrial decision that became final and binding first and the subsequent trial decision.
Conventionally, when a trial decision of correction narrowing the scope of claims
became final and binding during the pendency of litigation for rescinding a trial decisionof invalidation, the trial decision of invalidation was rescinded due to the retroactive
effect of the trial decision of correction, on the basis that the trial decision of invalidation
contained an error in the identification of the claimed invention (i.e. on the basis that thepatented invention subject to the trial for invalidation has changed).45 The underlying
judgment was a Supreme Court judgment (the Knitting Machine case).46 In this judgment,
the court upheld the original judgment which held that grounds for invalidation that were
not examined and determined in a JPO trial cannot be asserted in litigation for rescindinga trial decision. The court held that, without examining the grounds for invalidation
concerning a cited reference which had not been examined and determined in the trial,
the validity of the corrected patent right cannot be determined, for which reason there isa need to resume the trial and re-examine the validity of the corrected patent right.
[268]
However, this system had a harmful effect of allowing for the procedures to go
back and forth between trials and litigation endlessly, and causing disputes to take a long
44 For general discussions on this problem, see Zenzō Matsunaga, “Mukō Shinpan No Taikō Shudan To Shite No
Teisei Shinpan” (Trial for Correction as a Means to Counter a Trial for Invalidation), Tokkyo Kanri (PatentManagement), Vol. 23, No. 10 (1973), p. 1097; Osamu Takura, “Tokkyo Mukō Shinpan To Teisei Shinpan” (Trial
for Invalidation of a Patent and a Trial for Correction), Hanta, No. 344 (1977), p. 87; Seiji Nakajima, “Teisei Shinpan
Ni Yoru Kōsei Yōken No Tsuika To Teisei Shinpan Mae Ni Nasareta Mukō Shinketsu No Tōhi (Addition ofConstituent Elements in a Trial for Correction and Appropriateness of a Trial Decision of Invalidation Given Before
the Trial Decision of Correction), Uchida Osamu Koki Kinen, Hanrei Tokkyo Soshō Hō (Case Law on Patent
Litigation), p. 319.
45 In the Supreme Court Judgment, March 9, 1999, Minshū, Vol. 53, No. 3, p. 303/Hanji, No. 1671, p. 133/Hanta, No.
999, p. 234 (the Large Square Steel Tube case), the court held as follows: "When the scope of patent claims has been
narrowed by a trial decision of correction, the grounds for invalidation of the corrected invention cannot be
determined unless the grounds for invalidation in relation to cited inventions that were not examined in the trial are
examined, so the trial decision of invalidation should be rescinded and the trial procedure at the JPO should becontinued in order to carry out such an examination and make the necessary determination. In addition, if thecorrected invention contains the same grounds for invalidation as those examined in the trial for invalidation, thetrial decision of correction is unlawful due to a failure to satisfy the requirement for correction that the corrected
invention should be one which could have been patented independently. In such a case, the Patent Act provides aprocedure first to invalidate the correction by a trial for invalidation of correction, and it is not intended under the
Patent Act that a corrected patent in litigation for rescinding a trial decision of invalidation should be invalidated
without undergoing this procedure." On such a basis, the court stated that the trial decision of invalidation must be
rescinded without fail when a trial decision of correction becomes final and binding. Further, in the Supreme Court
Judgment, April 22, 1999, Hanji, No. 1675, p. 115/Hanta, No. 1002, p. 126 (the Roll Calendar case), the court
mentioned that the same applies even after the 1993 revision. The same view is indicated in the Supreme Court
Judgment, October 31, 2003, Hanji, No. 1841, p. 143/Hanta, No. 1138, p. 76 (the Light-emitting Element Composedof a Gallium Nitride Compound Semiconductor case); the Supreme Court Judgment, October 18, 2005, Hanji, No.
1914, p. 123/Hanta, No. 1197, p. 114 (the Cleaning Fabric Manufacturing Method case).
46 The Supreme Court Judgment, March 10, 1976, Minshū, Vol. 30, No. 2, p. 79/Hanji, No. 806, p. 13/Hanta, No.
334, p. 113 (the Knitting Machine case).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

time to be resolved. Therefore, with the 1993 revision, it was provided that an independent
trial for correction cannot be requested while a trial for invalidation is pending before theJPO (Article 126, paragraph (2) of the Patent Act as revised in 1993), and that thedemandee in a trial for invalidation (the patentee) can file a request for correction only
within the time limit for submission of a written reply in the proceedings of the trial forinvalidation or within the time limit for submission of a written opinion on the trial
decision where ex officio proceedings have been carried out (Article 134-2, paragraph (1)of the Patent Act). In line with this, the system of a trial for invalidation of a correction
was abolished, and a correction came to be processed through a request for correction ina trial for invalidation. When a request for correction is filed, the chief administrative
judge serves the corrected description, scope of claims or drawings to the demandant of
the trial for invalidation (paragraph (4) of said Article), and may request submission of awritten refutation (Article 47-3, paragraph (1) of the Patent Act Enforcement Ordinance).
If reasons for the invalidation are not resolved even after the correction, a trial decisionof invalidation is rendered (Article 123, paragraph (1), item (viii) of the Patent Act). The
question of whether or not the corrected patent satisfies the requirement of being an
independent patent is not determined upon a request for correction in a trial forinvalidation, but is determined in the procedure of a trial for invalidation, but such aquestion is determined in the procedure for requesting a correction when a correction ismade to a claim for which a trial for invalidation has not been requested (Article 126 isapplied mutatis mutandis by replacing some terms pursuant to Article 134-2, paragraph(5) of the Patent Act).
With the 1993 revision, a request for a trial for correction was only prohibited whilea trial for invalidation was pending before the JPO, and it was possible to request a trial
for correction during the pendency of litigation for rescinding a trial decision ofinvalidation. If a trial decision of correction became final and binding at that stage, thetrial decision of invalidation would be rescinded.47 As a result, the going back and forth
between trials and litigation was not resolved.
[269]
In order to solve this problem, in the 2003 revision it was provided that a request
for correction could not be made during the period from when a trial for patent
invalidation was pending before the JPO until the trial decision became final and binding
in that procedure. In other words, a trial for correction could not be requested during thependency of litigation for rescinding a trial decision, but as an exception, a trial forcorrection could be requested within 90 days from the filing of litigation for rescinding a
47 The Supreme Court Judgment, March 9, 1999, Minshū, Vol. 53, No. 3, p. 303 (the Large Square Steel Tube case).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

trial decision of invalidation48 (the proviso to Article 126, paragraph (2) of the Patent Act
before the 2011 revision). When, in litigation for rescinding a trial decision, the court
finds it reasonable to have the case further examined in a trial for patent invalidation, thecourt was able to rescind the trial decision of invalidation by a ruling in order to returnthe case to the trial examiners (Article 181, paragraph (2) of the Patent Act that has been
deleted by the 2011 revision). When the case is remanded to a trial based on a ruling ofrescission, the request for a trial for correction is changed into a request for correction,and trial examiners carry out further proceedings and render a trial decision (Article 181,
paragraph (5) of the Patent Act before the 2011 revision). Since a trial decision ofcorrection could become final and binding during the pendency of litigation for rescindinga trial decision, it became possible to avoid wasting the past proceedings. However, it
was not prohibited for the patentee to request correction in a trial for invalidation that has
been requested by a third party during the pendency of litigation for rescinding a trial
decision, so there was a chance that correction would become final and binding during
the pendency of litigation for rescinding a trial decision in such case. Even after thisrevision, there were still many cases where a request for a trial for correction was filed
within 90 days from filing a lawsuit for rescinding a trial decision and the case wasremanded to a trial for invalidation. Thus, the going back and forth between litigation andtrials could not be eliminated by this revision.
Accordingly, with the 2011 revision, the system to rescind a trial decision by aruling for making correction that had been introduced in 2003 was abolished (deletion of
Article 181, paragraphs (2) through (4) of the Patent Act before the 2011 revision), and apatentee became unable to request a trial for correction during the period from when atrial for invalidation or a patent opposition (a system that was introduced by the 2014
revision) is pending before the JPO until a trial decision or a ruling becomes final andbinding in that procedure (Article 126, paragraph (2) of the Patent Act). As an alternative
measure, the system of advance notice of a trial decision was introduced. Specifically,
when the case has reached the point at which a trial decision may be rendered in theprocedure of a trial for invalidation, if the chief trial examiner finds that the request for a
trial is well-grounded (if he/she finds reasons for invalidation) or in any other casespecified by Ordinance of the Ministry of Economy, Trade and Industry (Article 50-6-2
of the Patent Act Enforcement Ordinance), he/she must give advance notice of the trial
decision, disclosing the determination made by the panel in advance (Article 164-2 of the
Patent Act), to the parties and intervenors. In doing so, he/she designates a reasonable

48 A desirable period is to hold proceedings on at least one trial date and hear the opinions of both parties in thelitigation for rescinding a trial decision, and it is considered that about 90 days are required to that end.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

period for the demandee (the patentee) to file a request for correction (paragraph (2) of
said Article). This advance notice is not merely the disclosure of the trial examiner's
impression, but it assumes the disclosure of a determination that is almost the same as thetrial decision.49 The patentee is given an opportunity to request a correction by looking
at that advance notice (Article 134-2, paragraph (1) of the Patent Act). A similar
procedure was also established for the patent opposition procedure that was introducedby the 2014 revision (Article 120-5 of the Patent Act). With the introduction of thissystem, the only opportunity for the right holder to correct his/her application, during theperiod until the ruling on an opposition or the trial decision of invalidation becomes final
and binding, became a request for correction filed in response to an advance notice of thetrial decision. Correction was contained within the framework of a trial for invalidation,and there was no longer an unstable situation caused by correction after the filing of
litigation for rescinding a trial decision of invalidation. For this reason, it became possible
to prevent cases from going to and from the two procedures to a certain extent. On theother hand, the patentee's opportunity for correction has been limited, and the patentee
faces the need to concentrate his/her efforts on requesting a correction after the advancenotice of the trial decision. The patentee may request a trial for correction at any time ifno trial for invalidation has been requested, but his/her opportunity to make a correction
is limited, as mentioned above, when a trial for invalidation has been requested.
Nevertheless, it is possible for the patentee to request correction in a trial forinvalidation that has been requested by a third party during the pendency of litigation for
rescinding a trial decision of invalidation, so there can be cases where a trial decision ofcorrection becomes final and binding during the pendency of litigation for rescinding a
trial decision. If a patentee and a third party request a trial for invalidation by collusion,and the patentee requests correction in response, it would run contrary to the purport ofthe law to prohibit correction during the pendency of litigation for rescinding a trial
decision, so the correction may be ignored in the litigation for rescinding a trial decision
based on the principle of conducting litigation in good faith.50[270]
49 The advance notice of a trial decision contains the conclusion (equivalent to the main text of the trial decision) and
its reason, similar to the trial decision.
50 Ryōichi Mimura, “Heisei 23 Nen Kaisei Tokkyo Hō Shikō Go Ni Okeru Tokkyo Kankei Soshō No Genjō To
Ryūiten” (Situation of Patent-Related Litigation After the Patent Act as Revised in 2011 Became Effective and Pointsof Attention) (L & T, No. 60 (2013), p. 22) stated that it is appropriate to construe that the procedural relative effect,that is, the effect of the correction in question should not be taken into consideration in the preceding litigation for
rescinding a trial decision, or to construe that it is inadmissible to assert the effect of correction as a reason for rescission
in litigation for rescinding a trial decision due to violation of the principle of conducting litigation in good faith. See
the statement by Ryōichi Mimura in Roundtable Discussion, “Kaisei Tokkyo Hō No Kadai” (Challenges of the Revised
Patent Act,” L&T, No. 53 (2011), p. 13.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

3.2.3.4. Trial for Invalidation of Registration of an Extension (Article 125-2 of the
Patent Act)
Upon the 1987 amendment, a new provision on the extension of the duration of apatent was established (Article 67-2 of the Patent Act). With regard to an extension of thepatent term, see “11.2. Extension of Duration (Article 67, paragraph (2) of the Patent
Act).” Since third parties would be greatly affected by any illegal extension of theduration, they can request a trial for invalidation of the registration of an extension(Article 125-2 of the Patent Act) when the extension does not meet the statutory
requirements (Article 67-3, paragraph (1) of the Patent Act). Meanwhile, with the 2014
revision, only interested parties became able to file a request for a trial for invalidation of
the registration of extension of duration (paragraph (2) of said Article). This measure wastaken in line with a revision to only allow interested parties to file a request for aninvalidation trial (Article 123, paragraph (2) of the Patent Act). As in the case of a patent
invalidation trial, a trial for invalidation of the registration of extension of duration may
be filed even after the lapse of a patent right whose duration has been extended (Article
123, paragraph (3) of the Patent Act as applied mutatis mutandis pursuant to Article 1252, paragraph (3) of the Act).
[271]
A request for a trial for invalidation may be filed for each claim, but a request fora trial for invalidation of the registration of an extension may not be filed for each claim(such request is not listed under Article 185). When there are multiple claims, the durationof the whole patent right is extended as long as any one of the claims satisfies therequirements for the extension, but its effect only extends to the “product which is the
subject of a disposition.”
A trial decision of invalidation of an extension has a retroactive effect, so theextension is deemed never to have existed from the start (Article 125-2, paragraph (4)),
but when a trial decision of invalidation of an extension is given based on the reason thatthe extended duration exceeds the period during which the patented invention could not
be worked, the extension is deemed not to have existed for the time span exceeding thesaid period (the proviso to said paragraph).
3.2.3.5. Trial for Invalidation of Correction and Trial Against an Examiner’s
Decision to Dismiss Amendment
Before the 1993 amendment, there was the system of a trial for invalidation of a§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

correction, but in order to streamline the trial system, that system was abolished.
Conventionally, a patentee who is dissatisfied with the dismissal of an amendment could
request a trial against the decision to dismiss the amendment, but that was only anintermediate measure. Even so, it was processed by an independent trial system, causing
an unnecessary delay in the examination, so the trial against a decision to dismiss anamendment was abolished along with the reform of the amendment system, with the 1993
revision.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

3.2.4. Trial Procedure
3.2.4.1. Start and End of a Trial
A trial starts when a demandant of a trial submits a written request to the JPO
Commissioner. When a request is filed, the JPO Commissioner designates the trial
examiners and the chief trial examiner (Article 137, paragraph (1) and Article 138,
paragraph (1) of the Patent Act). In order not to take third parties by surprise, anannouncement of the registration of the trial is made when a request for a trial forinvalidation of a patent, trial for invalidation of the registration of an extension, or trial
for correction is filed (Article 3, item (iv) of the Patent Registration Order).
When there are two or more demandants making a request for a trial for invalidation
or a trial for invalidation of the registration of an extension, they can jointly file therequest (necessary joinder of similar parties; Article 132, paragraph (1) of the Patent Act).
At the same time, when the patent right is jointly owned, all of the joint owners must be
the demandants or the demandees (necessary joinder of inherent parties; paragraphs (2)and (3) of said Article).
[272]
When a request for a trial is unlawful, and the unlawfulness cannot be amended,
the request may be dismissed by a trial decision without giving the demandee anopportunity to submit a written reply (Article 135 of the Patent Act). A trial ends either
by the withdrawal of the request for the trial (Article 155 of the Patent Act) or by a trial
decision (Article 157 of the Patent Act).
The question of whether or not to recognize the freedom of withdrawing from a
trial is an issue that relates to the fundamentals of the trial system, and if a freer dispositionis allowed, the system would get closer to civil litigation. It may be possible to consider
that such withdrawal is inadmissible based on the idea that if a trial is a system forprotecting the public interest, a request for a trial merely prompts the start of a trial.
Withdrawal was allowed under the Patent Bylaws of 1888 to the Patent Act of 1909, but
the Act of 1921 provided that withdrawal is not allowed after a notice of conclusion of
the trial proceedings is given, so as not to waste the past proceedings. This system wasalso maintained under the Act of 1959, and continued until the 1987 revision. However,there were often cases where the parties to the trial reached a settlement after a notice ofconclusion of the trial proceedings was given, and wished to withdraw the request for thetrial. In such case, a roundabout approach was often taken, filing litigation for rescinding§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

a trial decision and admitting to facts in the litigation.1 However, though it depends on
the kind of the trial, the trial system undeniably has a function whereby it also protects
private interests to some extent, so it is unreasonable not to allow such a withdrawal. In
addition, even if a request for a trial has been withdrawn, third parties may request a trialof their own, so allowing withdrawal does not affect the public interest so much. Thus,
the Patent Act as amended in 1987 provided that a request for a trial can be withdrawn
before the trial decision becomes final and binding (Article 155, paragraph (1) of the
Patent Act), but if the opponent submits a written reply, the request can no longer bewithdrawn without the consent of the opponent (paragraph (2) of said Article).
When a case is mature enough to have a trial decision, the chief trial examiner
notifies the conclusion of the trial proceedings to the parties concerned and the intervenors(Article 156, paragraph (1) of the Patent Act), and renders the trial decision within twenty
days from the notice, in principle (paragraph (4) of said Article). 2 After this notice, theparties can no longer submit any new means of attack or defense, or intervene in the trial(Article 148, paragraph (3) of the Patent Act). However, the chief trial examiner canresume the trial even after the notice on a motion or ex officio, if necessary (Article 156,
paragraph (3) of the Patent Act).
[273]
3.2.4.2. Trial Proceedings(1) Oral proceeding and documentary proceeding
There are two kinds of trial proceedings: oral proceedings and documentary
proceedings.
The oral proceedings are adopted for a trial for invalidation and a trial forinvalidation of the registration of an extension of the duration, in principle, but the chief
trial examiner can adopt documentary proceedings on a motion or ex officio (Article 145,
paragraph (1) of the Patent Act). These are inter-partes trials in which the parties oppose
each other, in a manner similar to a civil lawsuit, so the oral proceedings are

1 Although it is no longer meaningful since it is an issue concerning the system before the revision, this issue is referred
to in Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1547 (written by Osamu Takura and HiroakiNiki).
2 This notice system was not established to give an opportunity to resume the trial examination. Instead, it is considered
to be a declaratory stipulation for promoting the trial proceedings and preventing a delay in concluding the trial.
Therefore, even if a trial decision is given before the sending of the notice or before it reaches the parties, it does notconstitute a reason for rescission of the decision. An example case of a trial for invalidation is the Tokyo High Court
judgment on March 10, 1966, Court judgments in Administrative Cases, Vol. 17, No. 3, p. 254 (the Petroleum Coke
Manufacturing Method case), and cases of a trial against an examiner’s decision of refusal include the Tokyo High
Court Judgment, March 23, 1971, Mutai Saishū, Vol. 3, No. 1, p. 109 (the Dry-Cleaning Composition case); and theTokyo High Court Judgment, November 21, 1972, Hanta, No. 288, p. 220 (the Polymerization Method case).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

fundamentally adopted in a manner similar to a civil lawsuit. Oral proceedings arefundamentally conducted in public (paragraph (5) of said Article). However, as describedin detail in the part about a trial for invalidation, the nature of all the trials are notnecessarily uniform, so not all of the trials for invalidation have the nature of a civil
lawsuit. At least a trial for invalidation relating to a dispute over the attribution of a rightshould be principally conducted by oral proceedings. For example, in a trial forinvalidation requested on the basis of misappropriation, the essence of the dispute is nota defect in the patent right itself, but the question of who owns the right. 3 Such a
determination has a relative resemblance to that of ordinary civil litigation over rights,
although some technical issues could arise. For such cases, oral proceedings are more
appropriate than documentary proceedings.
Trials other than a patent invalidation trial and a trial for invalidation of theregistration of extension of duration are fundamentally conducted by documentary
proceedings, but oral proceedings can be used on a motion by a party or ex officio (Article
145, paragraph (2) of the Patent Act). These are ex parte trials which have the nature ofan extension of an examination or re-examination. Many of them involve thedetermination of the technological issues concerning the content of the patent, andsimilarly to an examination, they have an aspect of being more compatible with
documentary proceedings.4[274](2) Ex officio principle
The trial system does not adopt the hearing principle, but the ex officio principle.
In an ordinary civil case, it does not matter even if a decision is reached by collusion aslong as the parties concerned are satisfied, but the trial system not only has a function tocoordinate the rights of the parties but, also, the decision is effective against the publicand greatly influences third parties. Therefore, it is not reasonable to decide the content
of the trial decision merely from the claims made by the parties. Although provisions of

3 In the Intellectual Property High Court Judgment, June 29, 2009, Hanji, No. 2104, p. 101 (the case of Substrate
Processing Device and Method Therefor, and Method for Manufacturing Substrate), the court dismissed the trial
decision that had dismissed the request for the trial, holding that proceedings of a trial for invalidation filed on the basisof misappropriation should be conducted through oral proceedings in light of the contents and characteristics of its
specific points of dispute, and that the practice of examining the case by switching to documentary proceedings ex
officio considerably lacks fairness and such procedural defect is an error that affects the conclusion of the trial decision.
4 As a legislative approach, there is a question of whether it is appropriate to conduct a trial that is suited to oralproceedings in the JPO in the first place, or whether it is better to entrust it to an ordinary court. The reason for
conducting a trial examination for these cases at the JPO by omitting the proceedings of first instance is because it isappropriate to establish a reasonable procedure at the JPO to have it first review the technological issues. So, whether
or not such a system should be applied even to the cases that do not involve many technological issues needs to bereconsidered. Meanwhile, Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1679 (written by Osamu
Takura and Hiroaki Niki) states that in the trial proceedings at the JPO, the trial examiners do not always need to rely
on what was revealed in the oral proceedings to make the determination, but can utilize their technical expertiseknowledge to derive the conclusion, so the system may not be suited to oral proceedings in the first place.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

the Code of Civil Procedure are mostly applied mutatis mutandis to the procedures of theexamination and preservation of evidence (the first sentence of Article 151 of the Patent
Act), provisions on the hearing principle are not applied mutatis mutandis. For example,
provisions on admission (Article 179 of the Code of Civil Procedure) are not appliedmutatis mutandis (the second sentence of Article 151 of the Patent Act). Also, provisions
on a judge's capacity to decide on a non-criminal fine, order subpoena, and order thedeposit of a security deposit are not applied mutatis mutandis.
The ex officio principle comprises the principle of examination of evidence ex
officio and the principle of procedure ex officio.
The principle of the examination of evidence ex officio is a system where thetaking of evidence and preservation of evidence can be conducted ex officio without being
requested by the parties (taking of evidence ex officio). The main role of JPO trials is todetermine whether or not there are grounds for refusal or grounds for invalidation.5 Sincesuch determination affects the interests of the general public, it is not appropriate to leave
the procedure solely to the parties concerned. Thus, the JPO may intervene in theprocedure from a public interest viewpoint. In a trial, the JPO may carry out proceedings
on grounds that have not been pleaded by the parties concerned,6 and trial examiners may
examine and preserve evidence at their own discretion (Article 150, paragraphs (1) and(2) of the Patent Act), but in order to prevent taking the parties by surprise, trial examiners
must give the parties an opportunity to present their opinions when carrying out such a
procedure ex officio (paragraph (5) of said Article). In actuality, however, such a
procedure is mostly carried out on a motion by a party. However, the principle of theexamination of evidence ex officio is not limitless, and trial proceedings cannot be
conducted on a point outside the object of claim pleaded by the demandant (Article 153,
paragraph (3) of the Patent Act). The taking of evidence ex officio can be conducted at
the discretion of the chief trial examiner, but it is not obligatory.7[275]
The chief trial examiner may carry out trial proceedings even when the parties, etc.
do not take the procedure or appear before the JPO within a specified period (the principle

5 However, a trial for correction has a lightly different nature.
6 Article 246 of the Code of Civil Procedure provides "The court may not make a judgment on any matters on which
the parties have not claimed."
7 The Tokyo High Court Judgment, May 23, 1967, Torikeshishū, 1967, p. 37 (the Sloping Grain Cleaning Devicecase); the Tokyo High Court Judgment, January 19, 1978, Torikeshishū, 1978, p. 285 (the Sintering Device case); theTokyo High Court Judgment, September 30, 1981, Mutai Saishū, Vol. 13, No. 2, p. 640 (the Pressure Sensitive
Adhesive Tape case). In the following case, the court held that it is not illegal to reject the only means of proof offeredby the party concerned as long as the trial system adopts the Supreme Court Judgment, July 24, 1953, Minshū, Vol.
7, No. 7, p. 840 (the Leather Substitute Article Manufacturing Method case; this case relates to Article 100, paragraph(1) of the Act of 1921, which is practically the same provision as Article 150, paragraph (1) of the current Act).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Inventionof procedure ex officio) (Article 152 of the Patent Act).8(3) Amendment of a written request of a trial (Article 131-2 of the Patent Act)The amendment of a written request for a trial can be divided into a formal
amendment and a substantive amendment. A formal amendment includes the amendmentof the address, name, seal impression, and the like of a party. When there is a specificviolation of a formality (violation of Article 131, paragraph (1) of the Patent Act), thechief trial examiner orders an amendment while designating an adequate time limit(Article 133, paragraph (1) of the Patent Act). The chief trial examiner may also order anamendment when the fees have not been paid or in other specified cases (when the casefalls under any of paragraph (2), items (i) through (iii) of said Article) (paragraph (2) of
said Article). In either case, if the ordered amendment is not made or the amendment
changes the gist of the request, in principle, the chief trial examiner may dismiss thewritten request by a ruling (paragraph (3) of said Article). If any procedure concerning a
trial case other than a request for trial is unlawful and not amendable, the chief trial
examiner may dismiss the procedure by a ruling, after notifying the person who undertook
the procedure of the reasons therefor, and giving him/her an opportunity to submit astatement of explanation, designating an adequate time limit (Article 133-2 of the Patent
Act).
Conventionally, an amendment to change the grounds for the request or to add new
grounds for invalidation and evidence were allowed, so every time an amendment was
made, the past proceedings were wasted, which led to a delay in proceedings. Thus, withthe 1998 revision, it was provided that the amendment of a written request for a trial must
not change the gist of the request (Article 131-2, paragraph (1) of the Paten Act; Article
131, paragraph (1) before the 2003 revision). However, in trials other than a trial forinvalidation, an amendment that changes the gist of the request and the grounds for therequest of the trial is allowed since they have little influence on third parties (the proviso
to Article 131-2, paragraph (1) of the Patent Act), and cases where amendment is
exceptionally allowed were provided as below.
An amendment that changes the gist of the request includes a change or addition to
the provisions of law underlying the grounds for invalidation and an addition or
replacement of evidence that proves the facts that serve as grounds for invalidation. In
practice, the question of whether the addition or change of a demandant or a demandeecorresponds to a change of the gist of the request sometimes presents an issue. Before the

8 There is no major difference in civil lawsuits with regard to this point, since the Code of Civil Procedure also has
the following provisions for cases where the parties do not appear before a court: constructive statements in complaint,
etc. (Article 158 of the Code of Civil Procedure); constructive admission (Article 159, paragraph (3) of the Code ofCivil Procedure); and constructive withdrawal of action (Article 263 of the Code of Civil Procedure).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

1998 revision, there was a Supreme Court judgment that held that it is a change of thegist of the request when one of the joint applicants requests a trial and later adds the otherjoint applicants by amendment.9 In conventional JPO practice, if some of the demandants
or demandees were missing from the request, the office would send a written inquiry
asking for the addition of the missing persons, and would reject the request if thedemandants do not respond to it. However, after this Supreme Court judgment, the JPO
came to reject the request immediately without inviting amendment. Nevertheless, at theTokyo High Court level, decisions have been made which seem to be contrary to theSupreme Court judgment.10 It is questionable how much meaning there is in formallydeeming the failure to describe some of the demandants or demandees as a change to thegist of the request. The reason for imposing severe restrictions on amendment or
correction is to avoid causing unexpected damage to third parties. However, the additionor change of a demandant or demandee often does not have such an adverse effect, sosuch an amendment should be allowed, in principle, in most cases. Studying this in detail,there can be different types of addition or change of names. For example, a notificationof the selection of the representative person has been submitted, but the description in theactual column for the names only says “the representative person” or “the representative
person [name],” or “[name] and [number] others.” In these cases, it could be presumed
that the description is erroneous based on other documents. On the other hand, there are

9 The Supreme Court Judgment, March 24, 1978, Torikeshishū, 1978, p. 153 was a case where, after a joint application
filed by applicants A and B received an examiner's decision of refusal, applicant A independently filed a lawsuit for
rescinding the examiner's decision, and later made an amendment to add applicant B, but the court did not allow theamendment on the basis that it changed the gist of the request. A similar ruling was given in the Tokyo High Court
Judgment, July 27, 1988, Mutai Saishū, Vol. 20, No. 2, p. 346 (the Clock Dial case). However, even after the Supreme
Court judgment, there has been a court judgment stating that although a representative fails to describe some of thejoint applicants in the written request for a trial, the request can be amended if a power of attorney covering trials
has been attached to the request at the time of the filing of the patent application. The same view is indicated in theTokyo High Court Judgment, October 25, 1978, Mutai Saishū, Vol. 10, No. 2, p. 471 (the Taxi Rooftop Indicator
Light case); the Tokyo High Court Judgment, November 20, 1979, Mutai Saishū, Vol. 11, No. 2, p. 608 (theTransmission Device case). In these cases, the power of attorney had covered trials, but the names of some joint
applicants were merely missing from the written request, so it is fairly easy to consider that it was only an error in
the description.
10 The Tokyo High Court Judgment, March 30, 1978, Mutai Saishū, Vol. 10, No. 1, p. 130 (the Photograph Displaying
Tool case). In a case where a trial for invalidation of a utility model was requested by making the former right holder
the demandee by mistake, and where the demandee was later amended to the current right holder, the JPO continued
with the trial examination, and gave a trial decision of invalidation. In a suit against this trial decision, the court
stated as follows: “The system of a trial for invalidation, in consideration of the great influence of an illegitimatelygranted patent or utility model, invalidates the registration of such right by a trial, and nullifies the right retroactively;
therefore, in light of the nature of this system, the purpose of this provision (Article 131 <note by the author>) should
be interpreted to mean that although the demandee in such a trial proceeding disputing over the validity of adisposition should be the administrative authority that gave the disposition (registration), as it is not reasonable toneglect the existence of the right holder who has a direct interest in the result of the trial, the proceeding is to be
carried out by making that person the party concerned. If so, the demandee in a trial for invalidation would merely
be a party for the purpose of formality. Therefore, it is reasonable to consider that the correction of an erroneousdescription of the demandee does not correspond to a change of the gist of the request under paragraph (2) of said
Article, and that this correction remedies the above-mentioned illegitimacy.” This is a case concerning a change ofthe demandee in a trial for invalidation, which is slightly different from a case concerning the addition of joint
applicants, but basically the same idea is considered to apply.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

cases where a trial is requested against a completely irrelevant person. Such a mistake
could result from a misunderstanding or a lack of careful attention, or from a suddenchange of right holder immediately before requesting the trial where there was no time toinvestigate the true right holder. Although it would depend on actual cases, it is basicallyunlikely that the legal stability would be undermined by allowing an amendment.11 Since
the purpose of not allowing an amendment that changes the gist of the request is to preventa delay in proceedings as a result of carrying out the proceedings all over again due to theamendment, whether or not the gist is changed should be determined from the perspectiveof whether or not the proceedings would need to be carried out all over again due to theamendment making a substantial change to the scope of proceedings.
[277]
Not allowing any amendment that would change the gist of the request may
contribute to accelerating the proceedings of the trial in question, but it also means anincrease in the number requests for other invalidation trials and, overall, it did not always
contribute to resolving a single dispute in the short term. In practice, there was also asituation where a trial demandant circumvented the provisions on the prohibition of anamendment that would change the gist by submitting new grounds for invalidation orevidence in the form of a written petition and promoting ex officio proceedings. However,this could risk causing the determination of the trial examiners to be arbitrary and lead tothe dissatisfaction of the opponent. Thus, with the 1998 revision, the provisions werechanged so as to prohibit an amendment that would change the gist in principle, but withthe approval of the chief trial examiner, an amendment may be allowed exceptionally.
Specifically, an amendment that would change the gist came to be allowed only when arequest for correction had been filed in the trial for patent invalidation and such a request
for correction had given rise to a need to amend the written request for the invalidation
trial or when there existed reasonable grounds for not stating the grounds for the request
with regard to the amendment of the request at the time the request for a trial was filed,
and the demandee had agreed to such amendment, where there was clearly no possibility
that the amendment would cause an unreasonable delay in the proceedings (the proviso
to Article 131-2, paragraph (1) and paragraph (2) of said Article of the Patent Act; Article
131, paragraph (1) of the Patent Act before the 2003 revision). In response, it was possible
for the demandee (the patentee) to request a correction of the description, the scope ofclaims, and drawings attached to the application under certain conditions (Article 134-2of the Patent Act). This revision can make the parties satisfied with the procedure, andcan avoid the filing of wasteful invalidation trials and achieve a prompt resolution through11 See Hajime Kaneko and Yoshinobu Someno, Kōgyō Shoyūken Hō, p. 294.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

a single proceeding.
Further, with the 2003 revision, it was provided that, “when a request for a trial forinvalidation is filed, the facts on which the invalidation of the patent is based shall be
specified in concrete terms, and the relationship of each fact that is required to be proved
with the relevant evidence shall be stated” so as to allow the parties to make appropriate
allegations and defense (Article 131, paragraph (2) of the Patent Act). Also, it wasprovided that an unlawful request for a trial, that is not amendable, may be dismissed bya trial decision without giving the demandee an opportunity to submit a written answer(Article 135 of the Patent Act), 12 in order to prevent abusive requests. It wasconventionally handled as a disposition of non-acceptance, but was changed to adisposition of dismissal in order to increase the transparency of the administrative
disposition.
[278]
3.2.4.3. Trial Decisions
A trial decision is equivalent to the judgment in a court action. When a trial decision
is given to order a further examination to be carried out in a trial against the examiner's
decision of refusal (a trial decision to remand), that determination binds the examiner
with regard to that case (Article 160, paragraph (2) of the Patent Act). In reality, however,a case is hardly ever remanded to examination, and the determination on whether or not
to register a patent is made by the trial decision. A final and binding trial decision after
the grant of a patent (a trial decision of invalidation, a trial decision of correction, or atrial decision of invalidation of the registration of extension of the duration) has aretroactive effect (Articles 125 and 128, and Article 125-2, paragraph (4) of the PatentAct).
A trial decision must include the reasons for the decision as well as the conclusion(Article 157, paragraph (2), item (iv) of the Patent Act). The purpose of this is as follows:
to guarantee the fairness of the trial decision by ensuring carefulness and reasonablenessin the trial examiners’ determination and by restraining their arbitrariness; to give the
12 For example, a request filed after the time limit and a request filed by a person who has no standing as a demandantcorresponds to this case. In the Tokyo High Court Judgment, September 21, 1978, Mutai Saishū, Vol. 10, No. 2, p.
447/Hanta, No. 373, p. 163 (the Kyowa Hakko case), which was a case where the demandant only wrote that "thegrounds for the request for the trial will be supplemented later" in the written request, but failed to do so for one year
and seven months after that, the court held that it was a formality violation, but there is a possibility that the deficiency
will lead to an amendment, so an order to amend the grounds for the request should be issued against the demandant
while designating an adequate time limit, and the request should not be regarded as "an unlawful request for a trial,that is not amendable" prescribed in Article 135 of the Patent Act as applied mutatis mutandis pursuant to Article 56,
paragraph (1) of the Trademark Act. However, this court judgment is quite old, and it is questionable whether it isapplicable today.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

parties materials for considering whether or not to file litigation for rescinding the trial
decision; and to clarify the subject matter to be examined by the court when it determines
the appropriateness of the trial decision.13
Before the 2011 revision, it was provided that “no one” may file a request foranother trial on the basis of “the same facts and evidence” after a final and binding
decision has been registered (Article 167 of the Patent Act before the 2011 revision). 14
This measure had the meaning of circumventing any confusion arising from having
multiple decisions given on the validity of a patent right, which is an exclusive right, andavoiding the rehashing of the trial. In order to avoid the rehashing of the trial, the principleof not examining the same matter twice was naturally adopted, but the most notablecharacteristic of that principle for a trial decision of invalidation and a trial decision ofinvalidation of the registration of extension of the duration until 2011 was that thedecision was effective against third parties. However, since a Constitutional problem wasalso pointed out about binding third parties who were not involved in the trial anddepriving them of the right to request a trial, 15 the phrase “no one” was deleted andreplaced with “no party or intervenor” with the 2011 revision, thus dramatically changing
the principle of not examining the same matter twice specific to the Patent Act, which
had continued since the Patent Act of 1909. Before the 2011 revision, the principle of not
examining the same matter twice took effect after the registration of a final and binding
trial decision. This was because a final and binding trial decision had the effect of binding
third parties as well, and the principle was to take effect upon registration, which had thefunction of giving a public notice. However, since the trial decisions were no longer
effective against third parties, the wording was revised to “after the trial decision became
final and binding.” As the parties concerned will naturally know the trial decision, there
was no longer a need to delay the time when the principle takes effect to the time of
13 In the Supreme Court Judgment, March 13, 1984, Hanji, No. 1119, p. 135/Hanta, No. 527, p. 97 (the Non-aqueous
Monoazo Dye Manufacturing Method case), the court rescinded the trial decision based on the grounds that it lacked
a legitimate reason concerning the inventive step.
14 With regard to this issue, see Ayumu Iijima, “Tokkyo Mukō Shinpan Ni Okeru Ichiji Fusairi” (Double Jeopardy inPatent Invalidation Proceedings), Intellectual Property Law and Policy Journal, No. 16 (2007), p. 247; Toshiaki
Makino, “Mukō Shinpan No Kakutei Shinketsu No Dai Sansha Kō No Haishi” (Abolishment of the Effects on Third
Parties of Final and Binding Trial Decisions in Invalidation Trials), Tokkyo Kenkyū (Patent Studies), No. 52 (2011),
p. 17.
15 Eiichi Takigawa, “Ōsutoria Tokkyo Hō Ni Okeru Ichiji Fusairi Kitei No Haishi” (Abolishment of the Prohibitionof Double Jeopardy from the Austrian Patent Act) (Eiichi Takigawa, Tokkyo Soshō Tetsuzuki Ronkō, p. 101, firstpublished in Miyake Masao Kiju Kinen, Tokkyo Sōshō No Shomondai (Various Problems Related to Patent
Disputes)); Yūko Kimijima, “Tokkyo Mukō To Sono Tetsuzuki” (Invalidation of a Patent and Its Procedure) II,
Hōgaku Kenkyū (Study on Law), Vol. 69, No. 3 (1996), p. 60; Toshiaki Makino, “Tokkyo Hō 167 Jō No MondaiTen” (Problems of Article 167 of the Patent Act), (included in Institute of Intellectual Property, Shinpan Seido To
Chiteki Zaisan Soshō No Shōrai Zō Ni Kansuru Chōsa Kenkyū Hōkokusho (Report on the Study on a Future Vision
for Trial System and Intellectual Property Lawsuit), 2002); Tetsuya Ōbuchi, “Tokkyo Shinpan/Soshō Seido No Genjō
To Kadai” (Present State and Problems of Patent Trial and Litigation System), Jurist, No. 1248 (2003), p. 55. The
third parties may intervene in the trial (Article 148 of the Patent Act), and there is also a retrial system for third parties(Article 172 of the Patent Act), but these alone would be insufficient as a procedural guarantee for third parties.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

registration.
[279]
The 2011 revision also limited the scope of the principle of not examining the same
matter twice to the “same facts and evidence” as before the revision. Its meaning had notnecessarily been clarified in theories and court judgments since before the revision. Some
theories suggest that “facts” and “evidence” should not be clearly distinguished, but thatthe two should be read as one.16 On the other hand, some theories suggest that these twoshould be clearly distinguished, and the “facts” in the “same facts” indicate specific facts
within the limit of legal stipulations setting forth the grounds that generate the invalidation
effect, and “evidence” in the “same evidence” which indicates specific evidence that has
been produced in order to prove the reason for invalidation.17 The terminology of “facts”
and “evidence” does not seem appropriate, but it can be considered that “facts” mean facts
that correspond to the reason described in the written request for a trial (Article 131,
paragraph (1), item (iii) of the Patent Act) (Article 123, paragraph (1) of the Patent Act),
which are abstract, and the matters that serve as the concrete foundation of the facts are“evidence.” If this requirement of “the same facts and evidence” were interpreted too
broadly, the scope of prohibition of requesting a trial again (the scope of prohibition of
examining the same matter twice) would become too broad, which would mean thatpatents that should be invalidated would be left as they are. In reverse, if it wereinterpreted too narrowly, it would deviate from the original purpose of adopting theprohibition of examining the same matter twice, resulting in the rehashing of disputes.
The point is where to achieve a balance between the two.
[280]
In a trial, both parties produce evidence to attack and defend a specific reason forinvalidation, and the determination in the trial proceedings is also made on this point ofdispute, so the prohibition of examining the same matter twice specific to the Patent Act

16 Shutsugan/Shinsa/Shinpan/Soshō (Tokkyo Hō Seminā (2)) (Application Filing, Examination, Trials, Lawsuits(Patent Law Seminar (2))), p. 717 (Comment by Masuji Hara).
17 Kazuko Matsuo, “Tokkyo Hō Dai 167 Jō No ‘Dōitsu No Jijitsu Oyobi Dōitsu No Shōko’” (The ‘Same Facts andSame Evidence’ in Article 167 of the Patent Act), Uchida Osamu Koki Kinen, Hanrei Tokkyo Soshō Hō (Case Law
on Patent Litigation), p. 469.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

was adopted regarding matters that have actually been determined in a trial. 18
Specifically, even if the subject of trial proceedings or the reason for invalidation were
the same as in the previous trial, if it was not concretely claimed in the previous trial or
the evidence was not the same, a separate trial may be requested.19 Also, even if the citedprinted publication were the same, if the concrete cited part was different, it could not be
considered as the same evidence.20 There is also the issue of whether or not a new trial
can be requested by adding new evidence to that produced in the previous trial. This issue
must be judged case by case, but a request for a new trial should be allowed only when
the new evidence is found to have a special meaning.21 In this case, it is not proper torender a trial decision of invalidation solely based on the old evidence.22
In ordinary civil litigation, the subjective scope of the effect of a judgment is limited
to the parties (Article 115 of the Code of Civil Procedure) and the objective scope islimited to the subject matter of the suit (Article 114, paragraph (1) of the Code of Civil
Procedure), but the Patent Act before the 2011 revision was characteristic in that it had
broadened the subjective scope of third parties and limited the objective scope to “thesame facts and evidence.” The phrase “no one” was deleted with the 2011 revision as
mentioned earlier, and the prohibition of examining the same matter twice only became
18 In the Supreme Court Judgment, March 10, 1976 (Grand Bench), Minshū, Vol. 30, No. 2, p. 79 (the Knitting
Machine case), the court stated that it is inadmissible to claim a fact concerning the invention as being publicly
known in litigation for rescinding a trial decision, when that fact had not been examined and determined in the
Kokoku trial under the Act of 1921. Although this was not a direct decision rendered on the “same facts and evidence,”
but a part of the obiter dicta, it was a judgment rendered by the Grand Bench, and had a great significance in practice.
Meanwhile, in the Tokyo High Court Judgment, April 23, 1964, Gyōshū, Vol. 15, No. 4, p. 648 (the Synthetic-resinmade Flower case), the court held that it is inadmissible to claim the existence of a new printed publication inlitigation for rescinding a trial decision of invalidation. It stated that a trial decision of invalidation indicates aconclusion to either recognize or reject the request in a trial for invalidation based on the recognition of a specificmatter that has been revealed as a reason for invalidation of a registration, .... and the “same facts and evidence” areconsidered to correspond to the specific fact revealed in this context.” Also see Tadashi Takura, “Mukō Shinpan
Seikyū Wo Shirizokeru Shinketsu Wo Megutte -- Shinketsu Torikeshi Soshō Tono Kanren Ni Oite” (Discussions on
the Trial Decision to Reject the Demand for the Trial for Invalidation -- In Relation to the Suit against the Trial
Examiner’s Decision), Toyosaki Mitsue Tsuitō Ronbun Shū, Mutai Zaisan Hō To Shōji Hō No Sho Mondai (Various
Problems Relating to Intangible Property Law and Business Law), p. 219.
19 The Tokyo High Court Judgment, July 20, 1973, Mutai Saishū, Vol. 5, No. 2, p. 233 (the Thermoplastic Synthetic
Resin Band Forming Method case). Also, in this judgment, the court stated that the same person may re-request atrial if the facts and evidence are not the same as those in the previous trial.
20 The Tokyo High Court Judgment, June 28, 1969, Gyōshū, Vol. 20, No. 5/6, p. 813 (the Oxidized Starch Liquid
Manufacturing Method case).
21 In the Supreme Court Judgment, April 28, 1992, Minshū, Vol. 46, No. 4, p. 245/Hanji, No. 1419, p. 93/Hanta, No.
784, p. 178 (the Barrel Polishing case), the court held that, where a further allegation was made to the effect that aninvention lacks an inventive step by citing an additional invention, if the lack of inventive step is alleged not solely
based on the additional cited invention, and not based on a combination of the additional cited invention and a
specific cited invention that was examined in the previous lawsuit, the second trial decision holding that the invention
involves an inventive step is not illegal.
22 See Osamu Takura, “Mukō Shinpan Seikyū O Shirizokeru Shinketsu O Megutte -- Shinketsu Torikeshi Soshō Tono
Kanren Ni Oite” (Discussions on the Trial Decision to Reject the Demand for the Trial for Invalidation -- In Relation
to the Suit Against the Trial Examiner’s Decision ), Toyosaki Mitsue Tsuitō Ronbun Shū, Mutai Zaisan Hō To Shōji
Hō No Sho Mondai (Various Problems Relating to Intangible Property Law and Business Law), p. 229. There are
two opposing court judgments regarding this issue: the Tokyo High Court Judgment, June 28, 1969, Gyōshū, Vol.
20, No. 5/6, p. 813 (the Oxidized Starch Liquid Manufacturing Method case) and the Tokyo High Court Judgment,
February 28, 1979, Torikeshishū, 1979, p. 79/Tokkyo To Kigyō (Patents and Enterprises) No. 124, p. 30 (the Seam
Forming Device case).

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

effective for “the parties and intervenors” (Article 167 of the Patent Act after the 2011
revision). It had been pointed out that Article 167 of the Patent Act before the 2011
revision, which extended the subjective scope of the effect of the prohibition of examining
the same matter twice to third parties, had the possibility of being unconstitutional, andin order to circumvent such possible unconstitutionality, there was a tendency to narrowlyinterpret “the same facts and evidence,” and construe that a new trial may be requested if
the evidence differed only slightly, regarding that such evidence did not constitute “thesame facts and evidence.” Nevertheless, since Article 167 of the Patent Act was no longer
effective against third parties with the 2011 revision, and the prohibition of examining
the same matter twice became effective only against the parties and intervenors, theinterpretation of that wording will inevitably be affected. In other words, “the same facts
and evidence” had been interpreted narrowly previously because it was effective against
third parties, but with regard to the parties and intervenors, there is no reason to have tonarrowly interpret the scope of these people. With regard to the parties and intervenors,
it is important to prevent the meaningless rekindling of disputes, so the prohibition of
examining the same matter twice under the Patent Act should be interpreted in a similarmanner to the ordinary prohibition in civil litigation in the future. If so, it is not reasonable
to keep the ambiguous wording, “the same facts and evidence.” It would seem more
appropriate to abolish Article 167 of the Patent Act, and derive the conclusion from thegeneral theory of prohibition of examining the same matter twice[281]
3.3. Retrial (Article 171 onward of the Patent Act)
Similarly to civil litigation, a party or intervenor can request a retrial against a final
and binding revocation decision (Article 114 of the Patent Act) or trial decision based on
certain restricted grounds (Article 171, paragraph (1) of the Act), in which case theprovisions of the Code of Civil Procedure are applied mutatis mutandis (paragraph (2) of
said Article). Therefore, the grounds for a retrial correspond to the grounds stipulated in
Article 338, paragraphs (1) and (2) and Article 339 of the Code of Civil Procedure.
However, the grounds for a retrial under the Patent Act also include a case where ademandant as regards a trial, in conspiracy with the demandee, has caused the trial
decision to be rendered for the purpose of harming the right or interest of a third party(fraudulent trial decision) (Article 172, paragraph (1) of the Patent Act). In such a case,the demandant of the retrial is not one of the originally concerned parties, but a third party
whose rights or interests have been harmed, and both the demandant and the demandee§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

in the original trial become the defendants in the retrial (paragraph (2) of said Article).
Until the 2011 revision, a third party was not allowed to request a trial based on “the samefacts and evidence,” so there was significance in conducting a retrial. Today, however, athird party whose rights or interests have been harmed would request a trial forinvalidation or a trial for invalidation of the registration of extension of the duration
instead of a retrial.
A retrial must be requested after the trial decision becomes final and binding, andwithin thirty days from the date on which the demandant becomes aware of the grounds
for the retrial (Article 173, paragraph (1) of the Patent Act). However, if the demandant
was unable to make the request within this time limit due to reasons beyond his/her
control, he/she can make the request within fourteen days (in the case of an overseas
resident, within two months) from the date when the reasons ceased to exist but prior to
six months from the expiration of the said time limit (paragraph (2) of said Article).
[282]
Many provisions on trials are applied mutatis mutandis to a retrial (Article 174 of
the Patent Act). If a request for a retrial has grounds for retrial, the trial examiner
dismisses the request, and if it has grounds for retrial, the trial examiner revokes theoriginal revocation decision or trial decision and renders a new trial decision after
conducting substantive examination. If the demandant of the retrial is dissatisfied withthe trial decision, the demandant files litigation for rescinding the trial decision.
If a patent that had been invalidated in a retrial is restored, the patent is deemed tohave been valid from the start. However, if a person who has worked the invention after
the trial decision of invalidation became final and binding by trusting this decision isregarded as having conducted an illegal act due to the retroactive effect, it would
undermine people's confidence in trial decisions. Thus, the effect of the patent right does
not extend to any products that were produced, imported or acquired (Article 175,
paragraph (1) of the Patent act) or any working of the invention without knowledge(paragraph (2) of said Article) after the trial decision was final and binding but before theregistration of the request for a retrial.
In addition, a statutory non-exclusive license is recognized for a person who has,
without knowledge, been working the invention in Japan or has, without knowledge, been
making preparations therefor during that period (Article 176 of the Patent Act), so such
person can continue to work the invention into the future without removing the facility
used for such purpose. This provision was established for the same purpose and applies
the same requirements as those for the non-exclusive license based on prior use.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

3.4. Advisory Opinion on the Technical Scope of a Patented Invention (Article 71 of
the Patent Act)
The technical scope 1 of a patent right is much more difficult to determine
compared to the scope of a right for a tangible article, which accordingly gives rise to
more disputes. Also, when working a certain technology, the status of both the patentee
and third parties would be unstable if the technical scope of the patent right were unclear.
The issue of technical scope is something that should ultimately be determined in court,
but in some situations it would be beneficial if an impartial advisory opinion could begiven by the competent authority relating to technology in advance, or while the case ispending. The system established to that end is the system of advisory opinion on thetechnical scope of a patented invention (Article 71 of the Patent Act).
[283]
While there was a system of a trial for confirmation of the scope of right2 underthe Act of 1921, its legal positioning was ambiguous, causing conflicting arguments overthe effect of the trial decision, so the system was revised in the current manner in the Actof 1959.
The advisory opinion under the current Act is the expression of an opinion by the
JPO, and it only has the nature of an expert opinion. It is clear from the legislative process

1 In theory, determination on the scope of a patent right is made by first deciding its technical scope and then deciding
on whether or not a product or an act corresponds to an infringement of the right. The advisory opinion system wasestablished in the JPO because the question of technical scope mainly concerns technological issues, which are moresuited to be determined by the JPO. Incidentally, the relation between the scope of protection and the scope of right,
and use of such terminology, is subject to dispute, but we shall not discuss it here (Kenjirō Ōe, “Tokkyo Seikyū No
Han’i To Tokkyo Hatsumei No Hogo Han’i Tono Kakusa” [Difference Between the Scope of Patent Claims and the
Scope of Protection of the Patented Invention], Tokkyo Kanri [Patent Management], Vol. 25, No. 7 [1975], p. 713;
Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 482; Shimao Kosaka, “Chūshōteki Na Tōroku Seikyū No
Han’i No Kisai To Sono Kaishaku” [Abstract Description of the Scope of Registered Claims and Its Interpretation],
Umase Fumio Koki Kinen, Hanrei Tokkyo Shingai Hō (Case Law on Patent Infringements), p. 321; Ikuo Hata,“Tokkyo Shingai Soshō Zakkan” [Various Remarks on Patent Infringement Lawsuits], Tokkyo Kanri [PatentManagement], Vol. 33, No. 4 [1983], p. 409).
2 With regard to the trial for confirmation of the scope of right under the former Act, see Osamu Takura, “Taishō JūNen No Kenri Han’i Kakunin Shinpan No Seido--Shigaisen Sakkinki Jiken O Megutte” (The System of Trials for
Confirmation of the Scope of Rights under the Act of 1921--Study of the Ultraviolet Disinfectant Apparatus Case),
Minji Tokubetsu Hō No Shomondai Dai Nikan (Various Problems of Special Civil Laws, Vol. 2) (Collection ofMemorial Treatises on the 20th Anniversary of the Opening of the Kansai Law & Patent Office (Dai-ichi Hoki, 1985),
p. 259.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

that the advisory opinion does not have legally binding force, 3 and this is also theinterpretation in Supreme Court judgments.4 Therefore, no appeal can be made against
the result of an advisory opinion,5 and the result does not bind the court, which allows adifferent conclusion to be derived in a court judgment. The advisory opinion is made by
the JPO through a careful procedure resembling that of a trial, so it may be treated ashaving more authority in the actual world than a private expert opinion,6 but this is amatter of fact.
Provisions on the advisory opinion procedure had formerly been delegated to a
Cabinet Order under Article 71, paragraph (3), but the Cabinet Order was deleted withthe 1999 revision, and the procedure came to be stipulated in the Patent Act. Although
the advisory opinion differs in character from trials, provisions on trials are appliedmutatis mutandis to a large part of the advisory opinion procedure (Article 71, paragraph(3) of the Patent Act). Such application is expected to ensure the rendering of impartial
advisory opinions. However, since only the necessary parts of the trial procedure havebeen applied mutatis mutandis as they are or by replacing some terms, the provisions arevery difficult to read in actuality.7
3 The council for the law revision consumed much time in examining the effect of the advisory opinion, and after
various discussions and many twists and turns (conflicting theories were observed among the council, the Cabinet
Legislation Bureau, and the court), it was finally decided that is was an advisory opinion having no legally binding
force and, accordingly, no provisions concerning the prohibition of examining the same matter twice and the retrial
were established with respect to the advisory opinion (Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken
Hō) Chikujō Kaisetsu [Dai 19 Han], p. 241; Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 390).
While the term “Kaishaku (interpretation)” was used in the original government draft submitted to the Diet, the term
was revised into “Hantei (advisory opinion)” in the House of Representatives. Both terms are the same in that they do
not have any legally binding force. However, although there was an account by the government in the Diet that theresult of the advisory opinion was subject to petition under Article 177 of the Patent Act (deleted in 1962) and generallitigation, this was denied by a Supreme Court judgment. With regard to an appeal against the result of an advisory
opinion, see Yoshinobu Someno, “Hantei Ni Taisuru Fufuku Mōshitate” (Appeal Against the Result of an Advisory
Opinion), Tokkyo Kanri (Patent Management), Vol. 9, No. 12 (1959), p. 645.
4 The Supreme Court Judgment, April 18, 1968, Minshū, Vol. 22, No. 4, p. 936 (the Nakajima Machine Manufacturingcase). In a subsequent Tokyo High Court Judgment, July 30, 1970, Hanta, No. 253, p. 192 (the Bran/Grain Dryercase), the court held that statements in a copy of a written advisory opinion cannot be adopted. In other words, a copyof a written advisory opinion is legally treated equally to other documentary evidence, and whether or not to adopt it
is decided at the discretion of the court.
5 In the Tokyo District Court Judgment, September 25, 1989, Torikeshishū, 1989, p. 539/Tokkyo To Kigyō (Patents
and Enterprises), No. 252, p. 71, the court stated that an appeal cannot be made based on the Administrative Appeal
Act, because the advisory opinion does not have a binding force and does not correspond to an administrative
disposition.
6 In the Nagoya High Court Kanazawa Branch Judgment, June 14, 1967, Kamin, Vol. 18, No. 5/6, p. 676 (theButylscopolamine Bromide Manufacturing Method case), which was a dispute over whether the fact that an advisory
opinion was made corresponded to a change in circumstances for canceling a provisional disposition, the court statedas follows: “the advisory opinion is made by three trial examiners designated by the JPO Commissioner, so it is atechnical expert determination by a state organ, and at the same time, provisions similar to those related to the JPO
trial are applied to the advisory opinion procedure, so the result of the advisory opinion, although an appeal cannot bemade against it, should not be considered merely as a private expert opinion, but as a public technical determination
under an impartial procedure, which is, to a certain extent, one of authoritative determinations.” This court judgment
recognizes that practically the advisory opinion has a strong effect, but it does not recognize its legal effect as being
any more than an expert opinion.
7 This is not a circumstance specific to this provision, but such application mutatis mutandis and replacement of terms
are too frequently used throughout industrial property laws that they are making it difficult for ordinary people tounderstand the contents. Drafting the provisions in such a way provides a chance for government officials to show
their skills, and such drafting method seems to be an established legislative technique, but they should re-recognize
the importance of making law comprehensible to and widespread among all people.

§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention[284]
An advisory opinion can either be requested to confirm that a product or an act falls
under a certain technical scope (proactive confirmation) or to confirm that it does not fallunder the technical scope (passive confirmation). In an advisory opinion, a determination
is made on whether or not an invention (or its working form) subject to the request falls
under the technical scope of a patented invention. It is not relevant whether or not thedemandant of an advisory opinion is working the invention subject to the request, and it
is also possible to seek an advisory opinion for a hypothetical case example. It is generallyinterpreted that an advisory opinion can be requested even without a demandee. If there
is a demandee (the opponent party), a copy of a written request for an advisory opinion isserved on the demandee, and the demandee can submit a written answer.
An advisory opinion determines only the question of whether or not the subject of
the request falls under a technical scope (Article 71 of the Patent Act). The technical scopeis determined based on the statements in the scope of claims attached to the application,in consideration of the statements in the description and drawings (Article 70 of the Patent
Act). An advisory opinion does not determine legal issues including invalidation, a prioruser’s right, exhaustion, a non-exclusive license for an employee invention, an implicit
non-exclusive license, or the effect of a patent right whose duration has been extended,
but it determines equivalence because it is an issue concerning the technical scope.
Nevertheless, an advisory opinion, which is only an expert opinion, has no legal effect,
so there is little significance in legal theories to clearly demarcate the border between
issues concerning the technical scope and legal issues. Yet, compared to a private expert
opinion, an advisory opinion has a large meaning in practice. If an advisory opinion
determines issues beyond the technical scope of a patented invention to cover also legal
issues, it could give an erroneous impression as if the advisory opinion has determined
the issue of infringement, and could be used by the parties or third parties inappropriately
or abusively, so an advisory opinion should not make legal determination.
While a trial for confirmation of the scope of right under the former Act could only
be requested by an interested party (Article 84, paragraph (3) of the former Act), a person
does not have to be an interested party to request an advisory opinion under the current§3. Oppositions/Trials/Retrials/Advisory Opinions on the Technical Scope of a Patented Invention

Act.8 Unlike a trial, an advisory opinion is the expression of an expert opinion by the
JPO. Therefore, the civil action principle that where there is no interest, there is no causeof action does not apply fundamentally. In addition, if a demandant is required to be aninterested party, extra time and labor will be required to determine whether or not thedemandant is an interested party. Thus, a person requesting an advisory opinion does nothave to be an interested party.
[285]
Incidentally, there is also a question of whether the JPO needs to provide suchservice as a means of resolving private disputes. Although there is a need for advisory
opinions, which are more affordable than court proceedings, the proceedings ofinfringement lawsuits have become more and more expeditious recently, so it seems to
be more proper to solve legal disputes through court proceedings. It would be sufficientfor the JPO to provide advisory opinions when so requested by a court or Customs, etc.
Although it had been possible for the court to commission the JPO Commissioner
to give an expert opinion pursuant to Article 218 of the Code of Civil Procedure, theidentity of the person who should make the determination at the JPO and the procedure
therefor had been unclear. Thus, with the 1999 revision, Article 71-2 was introduced,
providing that where such commission is made, provisions on trials should be appliedmutatis mutandis, and the JPO Commissioner should appoint three trial examiners anddirect them to provide an expert opinion.

8 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō (Jō) [Dai 3 Han], p. 959 (written by Shigetoshi Matsumoto and Yutaka
Koike); Hajime Kaneko and Yoshinobu Someno, Tokkyo/Shōhyō, p. 517, Yoshikazu Tanabe, “Hantei Seido No Un’yō
Ni Tsuite” (Practice of the Advisory Opinion System), Tokkyo Kanri (Patent Management), Vol. 11, No. 8 (1961), p.
477; Nobuo Mon'ya, ed., Chūshaku Tokkyo Hō, p. 201 (written by Shōen Ono) (however, it explains that there remains
a doubt as to whether a request for an advisory opinion can be dismissed or not even when there is absolutely no needto request an advisory opinion). Yoshirō Hashimoto, Tokkyo Hō [Dai 3 Han], p. 228 also mentions that although thedemandant does not usually need to be an interested party, it is questionable whether a person who is not an interested
party can be a demandant. Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 646 states that although anadvisory opinion does not have to be considered to be the same as a trial for invalidation, the demandant should havean interest in complying with the purpose of the system, as long as it is established as a system of the state. Masahiro
Yoshida, “Hantei Seikyūnin No Tekikakusei” (Standing of a Demandant as regards an Advisory Opinion), Patent,Vol. 27, No. 7 (1974), p. 54 also mentions that the demandant must be an interested party.

§4. Litigation for Rescinding a Trial Decision, etc.

[286]

§4. Litigation for Rescinding a Trial Decision, etc.1 (Article 178 onward of the
Patent Act)4.1. General Remarks
Since an administrative organ cannot make a judicial decision in the final instance,
it is imperative under the Constitution to be able to appeal to a court against a disposition
made by the JPO, including a trial decision (Article 32 and the second sentence of Article
76, paragraph (2) of the Constitution). Generally, a person who is dissatisfied with anadministrative disposition can appeal based on the Administrative Case Litigation Act,but for an appeal against an administrative disposition concerning a patent, the provisionsof the Patent Act are applied first, after which the provisions of the Administrative Case
Litigation Act are applied (Article 1 of the Administrative Case Litigation Act), and formatters which are not provided for in said Act, the Code of Civil Procedure is applied(Article 7 of the Administrative Case Litigation Act).
An appeal against a revocation decision (Article 114, paragraph (2)) or a trial
decision, etc. is litigation on lawfulness of an administrative disposition, etc., which
belongs to the category of an action for the judicial review of an administrative disposition(Article 3 of the Administrative Case Litigation Act). The appeal is principally under thejurisdiction of the district court in charge of the location of the administrative authority
which is to be the defendant (Article 12, paragraph (1) of the Administrative Case
Litigation Act). However, special provisions are established in the Patent Act regarding
an appeal against a trial decision and against a ruling to dismiss a written request for a
trial or a retrial, so such appeal should be filed in accordance with those provisions.
Specifically, the Patent Act adopts a system whereby an appeal against such types of JPO
dispositions is not immediately filed with a district court, but reviewed in a JPO trial, andan action against the result of such a review (trial decision) is to be under the exclusive
jurisdiction of the Tokyo High Court (Intellectual Property High Court), omitting the first
instance (Article 178, paragraph (1) of the Patent Act).
Although it has been explained that, compared to an appeal in an ordinary
administrative case, an appeal against such types of JPO dispositions requires hightechnical expertise and it is not appropriate to apply the procedure for an ordinary
administrative case, so it must go through a trial that is specially established for such
purpose, this reason alone cannot explain the need for all of the trials. Indeed, some of
the cases that must undergo trials have weak technical characteristics or strong legal
1 This refers to an action against a trial decision and an action against the dismissal of a written request for a trial or a
retrial (Article 178, paragraph (1) of the Patent Act), but an action against a trial decision is being discussed here in
the main.

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characteristics (this point is discussed later on).
[287]
4.2. Procedures
4.2.1. Jurisdiction and Limitation of Actions (Article 178 of the Patent Act)
An appeal against a revocation decision (Article 114, paragraph (2)) or an appeal
against a ruling to dismiss a written request for an opposition to a granted patent, a written
request for a trial, or a written request for correction is processed under the exclusive
jurisdiction of the Tokyo High Court, omitting the first instance (Article 178, paragraph(1) of the Patent Act). While Article 178 provides that the Tokyo High Court has
exclusive jurisdiction over litigation for rescinding a trial decision, etc., the Intellectual
Property High Court (IP High Court) was established in 2004 as a special branch of theTokyo High Court (the main clause of Article 2 of the Act for Establishment of theIntellectual Property High Court), and the IP High Court came to handle the cases of
litigation for rescinding a trial decision, etc. among the cases handled by the Tokyo High
Court (Article 2, item (ii) of said Act).
Ordinary litigation for rescinding an administrative disposition must be filed within
six months from the date when one becomes aware of the disposition (Article 14,
paragraph (1) of the Administrative Case Litigation Act), but as decisions must be madepromptly regarding patents, litigation for rescinding a trial decision, etc. must be filed
within thirty days from the date on which a certified copy of the trial decision has been
served (Article 178, paragraph (3) of the Patent Act). This time limit is invariable(paragraph (4) of said Article). However, the chief trial examiner may ex officio designate
an additional period extending the invariable time limit for a person in a remote area oran area with transportation difficulties (paragraph (5) of said Article).
4.2.2. Concerned Parties
4.2.2.1. Plaintiff and Defendant (Article 178, paragraph (2) and Article 179 of the Patent
Act)
The plaintiff in litigation for rescinding a trial decision, etc. is limited to a party inthe case, an intervenor, or a person whose application for intervention in the proceedingson an opposition to a granted patent or in a retrial has been refused 1 (Article 178,

1 Since a person whose intervention has been refused by a ruling is eligible to be the plaintiff in litigation for rescindinga trial decision, such person may not file an appeal against the ruling (Article 149, paragraph (5) of the Patent Act).

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paragraph (2) of the Patent Act). In the case of an ordinary administrative case, any person
who has a legal interest in seeking the revocation of an original administrative disposition
can file an action (Article 9 of the Administrative Case Litigation Act). However, as apatent right is effective against the public and restricts the acts of everybody, the numberof interested parties in the broad sense becomes too large, and if the standing to sue isrecognized for all such interested parties, it could cause a delay or confusion in thelitigation. On the other hand, if the standing to sue is recognized only for the parties to atrial, it would be difficult to satisfy the requirement under Article 32 of the Constitutionthat “no person shall be denied the right of access to the courts.” Thus, the provision was
introduced as a compromise measure. 2 Yet, it has been pointed out that a restriction
requiring a person other than a party to a trial to have made an application for interventionin advance in order to be a plaintiff could be in violation of Article 32 of the Constitution.3[288]
The defendant in litigation for rescinding a trial decision is the JPO Commissioner
for an ex-parte case where there is no specific opponent, and is either the demandant or
the demandee of a trial or retrial in an inter-partes case where there is an opponent (Article
179 of the Patent Act).
4.2.2.2. Jointly Owned Right to Obtain a Patent and Jointly Owned Patent Right4
A. Generalities
When a right to obtain a patent or a patent right is jointly owned, the joint owners
must jointly file a request for a trial (Article 132, paragraph (3) of the Patent Act), andwhen a request for a trial is filed against patentees jointly owning a patent right, thedemandees in the said request shall be all the joint owners of the said patent right(paragraph (2) of said Article). However, there are no such stipulations regarding thefiling of litigation for rescinding a trial decision, etc. Thus, there are three divided
interpretations: a theory stating that because the joint owners must uniformly have thesame intention as in the case of a trial, it is a necessary joinder of inherent parties similar
to the case of a request for a trial, and a suit filed by only one of the joint owners would
be dismissed;5 a theory recognizing the standing to sue for one of the joint owners as an
2 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 487.
3 Eiichi Takigawa, Tokkyo Soshō Tetsuzuki Ronkō, p. 1.
4 See Makiko Takabe, “Tokkyo No Kyōyū Wo Meguru Shomondai” (Issues Surrounding Joint Ownership of Patents),
Nakayama Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Essays in Honor of theSeventieth Birthday of Professor Nobuhiro Nakayama: Spreading Wings - Intellectual Property Law in the 21stCentury), p. 214.
5 See Tokkyo Hō Seminā (2) Shutsugan/Shinsa/Shinpan/Soshō, p. 738 (Comment by Masuji Hara). Recently, thistheory of an act of preservation has become more prevalent in theoretical studies. Nobuhiro Nakayama, “Tokkyo O
Ukeru Kenri No Kyōyūsha No Hitori Ni Yoru Shinketsu Torikeshi Soshō No Tekikakusei” (Eligibility of One of the
Joint Owners of the Right to Obtain a Patent to File a Suit against a Trial Decision), Takura Osamu Koki Kinen, Chiteki
Zaisan Wo Meguru Shomondai (Various Problems Surrounding Intellectual Property), p. 549.

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act of preservation; and a theory stating that a suit filed by one of the joint owners islegitimate, because although it is necessary to have a joinder of inherent parties, the filingof a suit by one of the owners has an effect on the interests of all of the joint owners basedon an analogical application of the old provision of Article 62 of the Code of Civil
Procedure (this provision has been moved to Article 40, paragraph (1) in the new Codeof Civil Procedure revised in 1996) by recognizing that the trial and the suit are practicallyin continuation.6 Under the current Act, however, it is difficult to consider a trial andlitigation to be in a successive relationship, so an analogical application of the oldprovision of Article 40, paragraph (1) of the Code of Civil Procedure would not be easy.
Therefore, the possible interpretation of the current Act would be either to dismiss thefiling of a suit that lacks some of the joint owners on the grounds of the necessary joinder
of inherent parties or to treat such a case as legitimate as an act of preservation.
[289]
There are two principal points of issue. The first issue is the need for the joint
owners uniformly to have the same intention with regard to their patent. While the filingof an application (Article 38 of the Patent Act) and a request for a trial (Article 132,
paragraphs (2) and (3) of the Patent Act) must be conducted by all of the joint owners,
there are no such provisions concerning litigation for rescinding a trial decision, etc. Thereis a view that, despite such lack of provisions, the same should apply to litigation, and all
the joint owners should be required to file a lawsuit jointly. The second issue is thepractical problem of actual appropriateness. There is a view that if one of the joint owners
opposes or withdraws from the filing of litigation, the remaining joint owners might lose
their right to obtain a patent or their patent right, which could be too severe for theremaining joint owners and some remedy should be provided.
B. Ex-parte litigation for rescinding a trial decision
There are different types of trial, and they cannot be treated the same. First, we will
study litigation for rescinding a trial decision rendered in a trial against an examiner's
decision of refusal.
Court decisions have held that ex-parte litigation for rescinding a trial decision is a

6 See Naoto Komuro, “Shinpan Tetsuzuki To Shinketsu Torikeshi Soshō Tetsuzuki No Kankei -- Kyōyū No Bāi No
Tōjisha Tekikaku O Chūshin To Shite” (Relation between a Trial Procedure and a Suit Against a Trial Decision -Centering on the Standing of a Party When the Right is Jointly Owned) Ishiguro Junpei and Umase Fumio Kanreki
Kinen, Kōgyō Shoyūken Hō No Shomondai (Various Problems in Industrial Property Law), p. 293. Incidentally, asimilar judgment was also rendered by the Supreme Court in prewar Japan under the former Act (the Supreme Court
Judgment, July 7, 1933, Minshū, Vol. 12, No. 18, p. 1849 [the Request for Invalidation of Utility Model Registrationcase]).

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necessary joinder of inherent parties. 7 However, the core significance of the existenceof a patent right is in its property value, so in that respect it is problematic that the valueof the property owned by the other joint owners would be extinguished when only someof the joint owners refuse to file a lawsuit for rescinding a trial decision. Nevertheless,that also applies to the filing of a patent application or a request for a trial, so if theinterests of the other joint owners are to be considered, it is necessary to wait for an overall
legislative solution that also covers filings and the trial system. When filing a patentapplication or requesting a trial, there is also a need for all of the joint owners to have thesame intention regarding a patent right, and it would not be possible to force other joint
owners to file, so as a legislative approach, a possible solution would be to recognize aclaim for the purchase of the individual shares of the right by the remaining joint owners(a type of a claim for division). Indeed, a patent right, by its nature, cannot be discussed
by solely considering its property aspect. For instance, some scholars do not want tomonopolize their inventions, and prefer not to patent them for the benefit of all of society,8and there is a question of whether the intentions of such inventors can be neglected. There
may also be cases where some joint owners wish to file a patent application, while theothers wish to keep it as know-how. Despite this, however, patent rights would have to
be discussed based mainly on their property value. So, in such a case, there would be noother reasonable way but to settle the inventors' individual problems by a contract before
establishing joint ownership.
[290]
This issue should ultimately be solved by a legislative approach, but as aninterpretation of the current Act, the theory of an act of preservation should be adopted,
although there are some theoretical drawbacks, and it should be considered that litigation
7 The following are cases under the former Act: the Tokyo High Court Judgment, June 17, 1958, Gyōshū, Vol. 9, No.
6, p. 1182 (the Invalidation of Design Registration case); the Supreme Court Judgment, August 31, 1961, Minshū,Vol. 15, No. 7, p. 2040 (the Decision of Refusal of Utility Model Application case); its original instance, the Tokyo
High Court Judgment, April 7, 1960, Gyōshū, Vol. 11, No. 4, p. 1012; the Tokyo High Court Judgment, February 27,
1968, Hanta, No. 221, p. 148 (the Air Pressure Canning Device case); the Supreme Court Judgment, January 18, 1980,
Hanji, No. 956, p. 50 (the Shield Method Segment case); and its original instance, the Tokyo High Court Judgment,
December 1, 1976, Mutai Saishū, Vol. 8, No. 2, p. 454. The Supreme Court Judgment, March 7, 1995, Minshū, Vol.
49, No. 3, p. 944/Hanji, Vol. 1527, p. 145/Hanta, Vol. 876, p. 147 (the Magnetic Therapy Equipment case) was
rendered on a case where joint owners of an invention jointly requested a trial after receiving an examiner’s decisionof refusal but they received a trial decision finding the request to be invalid, and one of the joint owners independently
filed a lawsuit for rescinding the trial decision since another of the joint owners went bankrupt. In the judgment, thecourt reversed the Tokyo High Court Judgment, January 27,1994, Hanji, No. 1502, p. 137 that recognized the standing
to sue, and it dismissed the appeal based on the ground of the necessary joinder of inherent parties. Accordingly, thisissue is considered to have been settled in practice with this Supreme Court judgment. In contrast, in the following
judgments, which were rendered before the abovementioned Supreme Court judgment, the court held that litigation
for rescinding a trial decision that was given in a trial against an examiner's decision of refusal may be filed by one orsome joint applicants: the Tokyo High Court Judgment, April 24, 1975, Mutai Saishū, Vol. 7, No. 1, p. 97 (the Bulky
Knit Fabric case); the Tokyo High Court Judgment, January 27,1994, Hanji, No. 1502, p. 137 (the Magnetic Therapy
Equipment case; this case has been reversed by the Supreme Court judgment in 1995).
8 Wilhelm Conrad Röntgen won a Nobel Prize, but did not pursue economic profit, and purposefully refrained fromacquiring patents. This may have been possible only because Röntgen was a famous university professor. With therecent rise of the idea of the Commons and active development of free software, etc., the situation is becoming
complex.

323§4. Litigation for Rescinding a Trial Decision, etc.

for rescinding a trial decision does not necessarily have to be filed jointly by all the joint
owners. The weak point of the theory of an act of preservation is the need for the joint
owners to have the same intentions with regard to a patent. A patent right is an inseparable
whole, and we must avoid a situation where a patent right is established for one of thejoint owners, but not for the other joint owners. If some of the joint owners file a lawsuit
for rescinding a trial decision, but the others do not, theoretically, a trial decision becomes
final and conclusive for the joint owners who did not file the litigation when the thirtyday time limit for filing a lawsuit arrives. However, the trial decision does not become
final and conclusive for those who have filed a lawsuit, and if a judgment to rescind thetrial decision is rendered by the court, the trial will be resumed, and the trial decision will
be rendered. While a judgment to rescind a trial decision rendered in litigation for
rescinding a trial decision is effective against third parties as well (Article 32, paragraph(1) of the Code of Civil Procedure), it is questionable whether the other joint owners insuch a case would be included in third parties as prescribed in Article 32, paragraph (1)of the Code of Civil Procedure. If a trial decision becomes final and conclusive for thejoint owners who have not filed a lawsuit when the thirty-day time limit for filing a lawsuit
arrives, and if that trial decision were to become effective against the other joint owners
who have filed a lawsuit, the benefit of suit would be lost, and if the trial decision were
not to become effective against them, there would be a contradictory situation where thetrial decision becomes final and binding for some of the joint owners, but not for the otherjoint owners. Therefore, as long as the theory of an act of preservation is adopted, it would
have to be considered that a trial decision does not become final and binding for any of
the joint owners when one of them files litigation against it. 9 Even if the theory of an actof preservation is adopted, from a practical point of view, it would not be disadvantageous
to the other joint owners who did not file a lawsuit even if the trial decision does not
become final and binding for them. Although the legal act of filing a lawsuit has a strong
characteristic of a disposition, the fact that it is litigation does not immediately provide abasis for denying an act of preservation.10[291]
It seems too formal to deny the filing of litigation by one of the joint owners due tothe need for the joint owners uniformly to have the same intention, and to overlook theharm caused to the other joint owners’ interests. An outcome whereby a joint owner's
9 In the Tokyo High Court Judgment, February 8, 1995, Hanji, No. 1558, p. 121 (the Lead Chromate Pigment
Composition case), which was a case relating to the prohibition of examining the same matter twice under Article 167of the Patent Act, the court frankly admitted that “a structure that is compliant, without any contradictions, with all
aspects of the stipulations in the current Patent Act is considered to be difficult,” and stated that the first trial decision
to become final and conclusive did not have the effect of prohibiting the examination of the same matter twice withregard to the other concurrently pending trials. Incidentally, the provisions of Article 167 have been revised by the2011 revision, so a case like this does not occur today.
10 Courts have held that such acts as litigation for seeking registration of a cancellation against a registered right holder(the Supreme Court Judgment, May 10, 1956, Minshū, Vol. 10, No. 5, p. 487) and a request for eviction against an
illegal possessor (the Supreme Court Judgment, April 19, 1918, Minroku, Vol. 24, p. 731) are acts of preservation.

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right will be extinguished if one of the other joint owners goes bankrupt, loses the urge
to take part in litigation, or disappears, or receives the shares of ownership from the otherjoint owners after a trial decision but they cannot be registered in time for the thirty-day
time limit for filing a lawsuit,11 seems to be too biased toward the procedural theory anddisregards the property aspect of patents. A relatively harmless remedial measure for sucha case would be the theory of an act of preservation.12
Whereas the primary ground for denying the standing to sue is the failure to satisfy
the need for the joint owners uniformly to have the same intentions, there would be no
problem as long as it is ensured that the effectiveness of the trial decision, which is anadministrative disposition, is the same for all the joint owners. In litigation for rescindinga trial decision, etc., the court does not reverse the original judgment and render anadministrative disposition for the case. If the claim is dismissed, the trial decision
becomes final and conclusive just as it is, so there is no problem. However, if the claim
is upheld, the trial decision is rescinded and the trial is resumed (Article 181, paragraph(2) of the Patent Act). If it is possible to construe that the trial decision has not become
final and binding for the other joint owners who did not become plaintiffs in the litigation,
it would mean that they have not yet retired from the resumed trial, so they would formallyremain as parties to the trial in such a case. Even if the trial is resumed, and the other joint
owners who have lost the urge to file a lawsuit are included in the resumed trial, they may
retire from the trial in practice, but their names will remain on file and, formally, they
will be deemed to have jointly requested the trial, so the need for the joint owners
uniformly to have the same intention will be satisfied.
[292]
C. Inter-partes litigation for rescinding a trial decision
Next, we will study inter-partes litigation for rescinding a trial decision, mainly atrial decision rendered in a trial for invalidation. Litigation for rescinding a trial decisionof invalidation is an act for avoiding damage to an already established patent. Thus,

11 In the Supreme Court Judgment, August 31, 1961, Minshū, Vol. 15, No. 7, p. 2040 (the Decision of Refusal of
Utility Model Application case), the court held that, even if one of the joint applicants receives the other joint
applicants' rights to obtain registration after filing a lawsuit for rescinding an examiner's decision of refusal on his/herown, if said applicant fails to make the notification of the change of the title to the rights within the time limit forfiling a lawsuit, the request for the litigation is dismissed as being unlawful. In reality, even if a joint owner receives
the other joint owners' shares of ownership within the time limit for filing a lawsuit, it would take a long time for theregistration to be completed, so by the time the registration has been completed, the time limit for filing a lawsuit
may have already passed.
12 Eiichi Takigawa, Tokkyo Soshō Tetsuzuki Ronkō, p. 30; Nobuhiro Nakayama, “Tokkyo O Ukeru Kenri No
Kyōyūsha No Hitori Ni Yoru Shinketsu Torikeshi Soshō No Tekikakusei” (Eligibility of One of the Joint Owners of
the Right to Obtain a Patent to File a lawsuit for Rescinding a Trial Decision), Takura Osamu Koki Kinen, Chiteki
Zaisanken Wo Meguru Shomondai (Various Problems Surrounding Intellectual Property), p. 549; Hisao Shiomi,
Hōgaku Kyōkai Zasshi (Journal of the Jurisprudence Association, the University of Tokyo), Vol. 114, No. 3 (1997),
p. 339; Hisao Shiomi, “Shinketsu Torikeshi Soshō Ni Okeru Soshō Kyōdō No Hitsuyōsei” (Necessity of Joinder of
Actions in Litigation for Rescinding a Trial Decision), Kōgyō Shoyūken Hō Kenkyū (Studies on Law of Industrial
Property Rights), No. 117 (1997), p. 8; Hiroaki Niki, Tokkyo Kanri (Patent Management), Vol. 31, No. 3 (1981), p.
231.

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compared to the above-mentioned litigation for rescinding a trial decision rendered in atrial against an examiner's decision of refusal, it is easier to allow one of the joint owners
to file a lawsuit on his/her own. There have been some court judgments holding that suchcase is also a necessary joinder of inherent parties, but in recent judgments, the court hastreated ex-parte litigation for rescinding a trial decision and inter-partes litigation for
rescinding a trial decision separately, and has held that litigation for rescinding a trial
decision rendered in a trial for invalidation is an act of preservation and not a necessary
joinder of inherent parties.13
In the case of litigation for rescinding a trial decision of invalidation, even if oneof the joint owners were allowed to file a lawsuit, the trial at the JPO will be resumed if
the claim is upheld (if he/she wins the suit) (Article 181, paragraph (2) of the Patent Act),and the rights which were destined to be extinguished will only be extinguished if theclaim is dismissed (if he/she loses the suit) and it will not run contrary to the need for thejoint owners uniformly to have the same intentions.
Unlike ex-parte litigation for rescinding a trial decision, litigation for rescinding a
trial decision of invalidation is filed for a defensive purpose since the patent right would
be extinguished if no step is taken against the trial decision of invalidation, so it would
be easier to allow one of the joint owners to file a lawsuit on his/her own as an act ofpreservation. The Supreme Court considers that a case of acquiring a right and a case of
preventing an established patent right from being extinguished should be treateddifferently. However, in an ex-parte case as well, the right to obtain a patent will be
extinguished unless litigation for rescinding a trial decision is filed, so there seems to be
no rational reason to differentiate the standing to sue between the owner of a registeredpatent right and the owner of a right to obtain a patent.
[293]

13 In the Tokyo High Court Judgment, February 20, 1962, Kōmin, Vol. 15, No. 2, p. 114 (the Shimadzu Corporationcase), which was a case under the former Act where there still existed a system called Kokoku trial, the court heldthat a request for a Kokoku trial filed by X, who is one of the joint demandees of a trial for invalidation, also has aneffect on Y, who is the other joint demandee, as a beneficial act, so a request for a Kokoku trial that has been filed
independently by X cannot be found to be unlawful. On such basis, the court concluded that, when a trial decision ofinvalidation of a patent has been rendered for a jointly owned patent right, a request for a Kokoku trial filed by oneof the joint owners is also effective on the other joint owner. The Supreme Court Judgment, February 22, 2002,
Minshū, Vol. 56, No. 2, p. 348/Hanji, No. 1779, p. 81/Hanta, No. 1089, p. 89 (the ETNIES Trademark case); theSupreme Court Judgment, February 28, 2002, Hanji, No. 1779, p. 87/Hanta, No. 1087, p. 95 (the Mizusawa Udon
Trademark case; this is a case of litigation for rescinding a trial decision of invalidation of a trademark right, but it
the relevant provisions apply mutatis mutandis provisions of the Patent Act, so it can be regarded as a precedent
relating to the Patent Act). Also, in the Supreme Court Judgment, March 25, 2002, Minshū, Vol. 56, No. 3, p.
574/Hanji, No. 1784, p. 124/Hanta, No. 1089, p. 135 (the Pachinko Device case), which is litigation for rescinding
a ruling to rescind a patent based on a post-grant opposition, the court stated that it is possible for one of the joint
owners to file a lawsuit for rescinding a ruling to rescind a patent on his/her own as an act of preservation forpreventing the patent right from being extinguished, and it could be regarded as a precedent for the case of litigation
for rescinding a trial decision of invalidation. In the original instance of these three cases, the court has held that thelitigation is a necessary joinder of inherent parties, since the joint owners must uniformly have the same intention,
as in the case of litigation for rescinding a trial decision rendered in a trial against an examiner's decision of refusal.

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4.2.3. Court Proceedings
Litigation for rescinding a trial decision, etc. is an administrative case, so its
proceedings are carried out in accordance with the procedure stipulated in the
Administrative Case Litigation Act. Litigation is filed with the Tokyo High Court,
omitting the first instance level, but the JPO trial legally differs from the first instance of
litigation. Therefore, litigation and a trial are not in a successive relationship, separate
proceedings are carried out and thus, the parties bear the burden of pleading and proof forthe first instance, and must produce all evidence once again, and they must pay the court
costs separately from the trial costs.
The court can examine evidence by its own authority (Article 24 of the
Administrative Case Litigation Act), but a trial is usually conducted pursuant to the Codeof Civil Procedure (Article 7 of the Administrative Case Litigation Act). There are various
discussions about the application of the principle of admission, but we will leave thatissue to studies in the field of litigation.14
Inter-partes trials (a trial for invalidation and a trial for the invalidation of theregistration of extension of the duration) are disputed in an adversary system between aparty holding a right and a party pleading invalidation of the right. The JPO which madethe disposition can pursue the public interest through trial examiners in the trial phase,but can no longer intervene in a case in the litigation phase, in principle. It has beenpossible for the JPO to intervene in litigation according to Article 32 of the Code of Civil
Procedure, but since the provisions on assisting intervention under the Code of Civil
Procedure will be applied, which makes it difficult to carry out activity to represent public
interests, this system was hardly used. In public law related actions, the interests of a party
could take precedence over the public interest, but because a judgment rescinding a trial
decision binds the JPO, it could have a large impact on society. Therefore, it is desirable

14 Reference materials include: Naoto Komuro, “Shinketsu Torikeshi Soshō Ni Okeru Jihaku To Gisei Jihaku”(Admission of Facts and Fictitious Admission of Facts in Litigation for Rescinding a Trial Decision), Tokkyo Kanri(Patent Management), Vol. 27, No. 8 (1977), p. 809; Naoto Komuro, “Tokkyo Shinketsu Torikeshi Soshō To Jihaku
Hōsoku” (Litigation for Rescinding a Trial Decision on a Patent and the Admission Principle), Meijō Hōgaku (Meijo
Journal on Law), Vol. 36, extra issue (Nagao Hisae Kanreki Kinen [Book Commemorating the Sixtieth Birthday ofProfessor Nagao]) (1986), p. 327; Naoto Komuro, Tokkyo Hanrei Hyakusen (100 Selected Patent-related Court
Decisions) (Second Edition), Case 61; Yoshio Ishikawa, “Jihaku Ni Tsuite” (About Admission of Facts), Nihon
Kōgyō Shoyūken Hō Gakkai Nenpō, No. 6 (1983), p. 148; Rei Kosake, “Tokkyo Kankei Shinketsu Torikeshi Soshō”(Litigation for Rescinding a Trial Decision on a Patent), Shin-Jitsumu Minji Soshō Kōza (New Practical Civil
Litigation Lecture) 10, (Nippon Hyoronsha, 1982), p. 248; Kaoru Kobashi, “Tokkyo Mukō Tetsuzuki Ni Okeru
Tōjisha Shihai” (Dominance of the Parties in the Procedure for Patent Invalidation), The Rokkodai Ronshu (Kobe
University), Vol. 31, No. 4 (1985), p. 189. Incidentally, reference materials regarding burden of pleading and proof
in litigation for rescinding a trial decision include: Yoshisada Matsuno, “Shinketsu Torikeshi Soshō Ni Okeru Shuchō
Risshō Sekinin” (Burden of Pleading and Proof in Litigation for Rescinding a Trial Decision), Miyake Masao Kiju
Kinen, Tokkyo Sōshō No Shomondai (Various Problems Related to Patent Disputes), p. 505; Shigetoshi Matsumoto,“Tokkyo Shinketsu Torikeshi Soshō Ni Okeru Shōmei Sekinin” (Burden of Proof in Litigation for Rescinding a Trial
Decision on a Patent), Hanta, No. 567 (1985), p. 56; Minoru Takeda, Tokkyo Shinketsu Nado Torikeshi Soshō No
Jitsumu (Practical Affairs Concerning Litigation for Rescinding a Trial Decision on a Patent) (Japan Institute ofInvention and Innovation, 1988), p. 43.

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at times for the JPO to state its opinion with regard to the interpretation of the law and its
practices as a representative of the public interest. Thus, with the 2003 revision, it became
possible for a court to seek an opinion from the JPO Commissioner with regard to theapplication of the law, etc. in relation to the case in question, and for the JPO
Commissioner to state such an opinion with the permission of the court (Article 180-2 ofthe Patent Act). The JPO Commissioner's opinion will not bind the court, but could serveas important reference material.
[294]
4.2.4. Court Judgments
In litigation for rescinding a trial decision, a determination is made on whether or
not a trial decision is generally illegal in substance or in procedure. In other words, thesubject of the determination is the illegality of the original administrative disposition, andnot whether or not the patent application in question should be registered. The court
dismisses a claim when it finds the claim to be groundless, and when that judgment
becomes final and binding, the trial decision becomes final and binding, and the case isclosed.
When the court finds that a claim is well-grounded, it gives a judgment to rescind
the trial decision (Article 181, paragraph (1) of the Patent Act). Even if a trial decisionwere illegal, the court cannot reverse it and render a judgment for the case, that is, makea decision to grant a patent or refuse the application. When a judgment to rescind a trial
decision becomes final and binding, the trial decision is deemed never to have been made,and the trial proceedings are resumed at the JPO, with the trial examiners making a further
examination to give another trial decision (paragraph (2) of said Article). In that case, thejudgment to rescind a trial decision binds the administrative authority which has madethe disposition (Article 33, paragraph (1) of the Administrative Case Litigation Act), so
the trial examiners are not allowed to make the same disposition based on the same
reasons, and a trial decision in violation of that binding force will be rescinded in further
litigation for rescinding a trial decision. 15 However, the binding force only applies to thedetermination indicated in the reasons for the judgment, so if substantially new evidence
15 The Tokyo District Court Judgment, September 29, 1980, Mutai Saishū, Vol. 12, No. 2, p. 554 (the Artificial Pearl
Paint Manufacturing Method case; this decision was handed down by the Tokyo District Court, because this case
was a dispute requesting compensation from the State for the damage the plaintiff suffered by reason of an illegal
JPO trial decision); the Tokyo High Court Judgment, December 2, 1986, Mutai Saishū, Vol. 18, No. 3, p. 507 (theOptical Transmission Device case); the Supreme Court Judgment, April 28, 1992, Minshū, Vol. 46, No. 4, p.
245/Hanji, No. 1419, p. 93/Hanta, No. 784, p. 178 (the Barrel Polishing case; the court held that, in litigation for
rescinding a trial decision rendered in a resumed trial, it is not permissible for a party to plead and prove that theinvention could be easily arrived at based on the same cited invention as before). See Osamu Takura, “Kyozetsu
Shinketsu Fufuku Torikeshi Soshō Ni Okeru Kyozetsu Riyū” (Reasons for Refusal in Litigation for Rescinding a
Trial Decision of Refusal), Miyake Masao Kiju Kinen, Tokkyo Sōshō No Shomondai (Various Problems Related toPatent Disputes), p. 545.

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§4. Litigation for Rescinding a Trial Decision, etc.

is produced in the resumed trial, and a claim is made based on this new evidence, it ispossible to have a trial decision of the same disposition.16 Nevertheless, various complex
situations are found in actual cases, so it is often not easy to make a concrete
determination on the scope of the binding force of a judgment to rescind a trial decisionin practice.17[295]
When a person is not satisfied with a judgment made by the Tokyo High Court,
he/she can make a final appeal to the Supreme Court within two weeks from when the
judgment was served. The grounds for the final appeal are the same as those for ordinary
civil litigation (Article 312, paragraph (1) of the Code of Civil Procedure).
4.3. Relationship Between Litigation and Trials (Scope of Proceedings in Litigation
for Rescinding a Trial Decision)1
4.3.1. Nature of Litigation for Rescinding a Trial Decision
It is provided that an action with regard to a matter for which a request for a trial
may be made may be instituted only against a trial decision (Article 178, paragraph (6)of the Patent Act; the principle of requiring a trial before litigation). Such matter firstundergoes a trial, and if litigation is filed against the trial decision, the case is directly
brought before the Tokyo High Court by omitting the first instance (paragraph (1) of said
Article). In legal terms, a trial is an administrative procedure at the JPO, so a trial decision
is an administrative disposition. Therefore, litigation filed against it (litigation for
rescinding a trial decision) is categorized as an action for the judicial review of an
administrative disposition, and according to the principle of administrative law, thesubject matter of the suit is the illegality of the administrative disposition either insubstance or procedure. However, due to the peculiarity of the Patent Act, there areconflicting opinions over the question of whether or not the subject matter of litigation
for rescinding a trial decision should be interpreted in such a broad manner.
The trials can be roughly divided into two types: ex-parte trials and inter-partes
trials. The former, centering on a trial against an examiner’s decision of refusal, does not
adopt an adversary structure, so it has a strong aspect of an administrative disposition.
Accordingly, there would be no major problem in considering litigation against it as an

16 The Tokyo High Court Judgment, April 26, 1989, Mutai Saishū, Vol. 21, No. 1, p. 327 (the Two-Wheel Motorcycle
Fuel Tank Manufacturing Method case).
17 This issue is discussed in detail in Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1722 (written
by Osamu Takura and Hiroaki Niki).
1 Literature discussing this issue includes Tetsuya Ōbuchi, Tokkyo Shinketu Torikeshi Soshō Kihon Kōzōron (Basic
Structure of an Appeal Suit against an Administrative Trial Decision on Patents) (Yuhikaku, 2003).

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§4. Litigation for Rescinding a Trial Decision, etc.

action for the judicial review of an administrative disposition.2 On the other hand, thelatter, centering on a trial for invalidation, takes an adversary structure, so it is moresimilar to the mode of a civil lawsuit. Accordingly, its aspect as an administrative
disposition is vaguer, and it functions more like a preliminary trial before litigation for
rescinding a trial decision. However, a trial for invalidation is a dispute over the illegalityof a disposition by the JPO, and its nature is more like an action for the judicial review ofan administrative disposition since the substantive subject matter of the trial proceedings
is the illegality of the administrative disposition by the JPO. The adversary structure isadopted for convenience, and it can be considered to be a formal inter-partes litigation.3
In any case, the proceedings at the Tokyo High Court are fact-finding proceedings in thefirst instance.
[296]

2 A trial for correction is a trial with no demandee, so it resembles an ex-parte trial. However, strictly speaking, there
is no legal point of dispute, so it is an administrative disposition similar to an examiner’s decision, and not a proceduresimilar to a judicial proceeding. Since a trial for correction is not a dispute over the illegality of a disposition, butrather is itself a primary disposition, there is an opinion that it is not a contentious case. Nevertheless, litigation against
the JPO’s determination to not allow correction is an action for the judicial review of an administrative disposition.
3 Katsumi Takabayashi, Tokkyo Gyōsei Hō (Patent Administrative Law) (Japan Institute of Invention and Innovation,1984), p. 262 explains that such trials are not formal inter-partes litigation, but an action for the judicial review of an
administrative disposition, since there is no legal relationship to be confirmed or formed between the parties by a trial
decision. Apart from the terminology issue of whether or not it is formal inter-partes litigation, the substance of such
litigation for rescinding a trial decision is an action for the judicial review of an administrative disposition.

330§4. Litigation for Rescinding a Trial Decision, etc.

4.3.2. Scope of Proceedings and Judgments of the Supreme Court in Prewar Japan
Under the old Patent Act (Act of 1921), the provisions of the Code of Civil
Procedure regarding an appeal against a decision in the first instance (Koso appeal) wereapplied mutatis mutandis to bringing the case before the Supreme Court (in prewar Japan)(Article 115, paragraph (2) of the former Patent Act). However, under the current Act,
those provisions are not applied mutatis mutandis, and there are no provisions to remand
the case to a trial level.1 Therefore, if a trial decision is rescinded in litigation, the trial
decision is deemed never to have been made, and as a result, the trial is resumed, and thetrial examiners must carry out further proceedings and make a trial decision or a ruling(Article 181, paragraph (2) of the Patent Act). These suggest that a trial and litigation do
not have a relationship of successive instances, and according to the principle ofadministrative law, fact-finding proceedings by the Tokyo High Court, as the court offirst instance, would be free of any restrictions based on the principle of an action for the
judicial review of an administrative disposition.2 In contrast, there was also a view that
restriction should be imposed on fact-finding proceedings, and this issue had been mainly
discussed as an issue on the scope of proceedings in litigation for rescinding a trial
decision, or as a so-called “rehearing dispute.” There were various theories, such as one
allowing the submission of any evidence including new evidence in the suit, similar to an
ordinary action for the judicial review of an administrative disposition, one denying thesubmission of any new evidence that was not produced in the trial, one in between thesetwo, one recognizing the application of the substantial evidence rule, and one suggesting

1 The Anti-Monopoly Act had provided for the remand of a case to the Japan Fair Trade Commission’s hearings by acourt (the hearing system was abolished upon the 2013 revision), but no such provision is stipulated in the Patent Act.
2 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 524 and p. 527 state that in a court’s proceedings
for fact-finding, the parties can produce not only the evidence produced in the trial, but also new evidence based on
the imperative under the Constitution that an administrative organ cannot serve as the court of final instance, but it
also questions whether some restriction might be needed on the production of new evidence. In contrast, Masuji Hara,“Tokkyo Soshō” (Patent Litigation) Minji Soshō Hō Kōza (Civil Litigation Law Lecture) 5 (Yuhikaku, 1956), p. 1503.
explains that since patent litigation makes a trial decision the direct subject matter and is intended for the rescissionof an illegal disposition by the administrative authority expressed therein, the scope of the proceedings is restricted to
the facts indicated in the reasons for the trial decision.

331§4. Litigation for Rescinding a Trial Decision, etc.

that the production of evidence is to be restricted by legal stipulations.3[297]
Conventionally, the Supreme Court had held that new evidence could be produced

3 The theories that consider a trial as something similar to a preliminary trial before litigation include: Hajime Kaneko,“Shinketsu No Shihō Shinsa” (Judicial Examination of a Trial Decision), Iwamatsu Saibankan Kanreki Kinen, Soshō
To Saiban (Lawsuits and Trials), (Yuhikaku, 1956), p. 457 (another reference, though it does not directly discuss theissue of litigation for rescinding a trial decision on a patent, is Ichirō Ogawa, “Shihō Sinsa Ni Kansuru Ichi Mondai -Kaneko Hakase No ‘Shinketsu’ Riron Ni Tsuite” [A Problem Relating to Judicial Examination -- Concerning the ‘Trial
Decision’ Theory of Professor Kaneko], Kaneko Hajime Kanreki Kinen, Saiban Hō No Sho Mondai Ge [Various
Problems in Trial Law, Vol. 2], [Yuhikaku, 1970] p. 529); Hajime Kaneko and Yoshinobu Someno, Kōgyō Shoyūken
Hō, p. 387; Masashi Kaneko, Gyōsei Tetsuzuki/Gyōsei Soshō Hō (Administrative Procedure/Administrative
Contestation Law), (Chikuma Shobo, 1973), p. 181; Naoto Komuro, “Shinpan Tetsuzuki To Shinketsu Torikeshi Soshō
No Kankei -- Kyōyū No Bāi No Tōjisha Tekikaku O Chūshin To Shite” (Relation between a Trial Procedure andLitigation for Rescinding a Trial Decision -- Centering on the Standing of a Party When the Right is Jointly Owned),
Ishiguro Junpei and Umase Fumio Kanreki Kinen, Kōgyō Shoyūken Hō No Shomondai (Various Problems in Industrial
Property Law), p. 293; Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 96; Ichirō Ogawa, Gyōsei Soshō Hō(Administrative Litigation Law) (Yuhikaku, 1966), p. 144. Theories suggesting a recognition that an inter-partes trial
and litigation against a trial decision rendered in that trial are practically in the relationship of a rehearing include Kaoru
Kobashi, “Tokkyo Mukō Tetsuzuki Ni Okeru Tōjisha Shihai” (Dominance of the Parties in Litigation for Rescindinga Trial Decision), The Rokkodai Ronshu (Kobe University), Vol. 31, No. 4 (1985), p. 189. It argues that “a trial forinvalidation and litigation for rescinding a trial decision are not separated as clearly as is indicated by their formalities;
the interpretation of these procedures is a critical issue affecting the essence of the patent invalidation procedure, andit should ultimately be settled by a legislative measure” (p. 215).4 In the Supreme Court Judgment, October 16, 1953,
Minshū, Vol. 4, No. 10, p. 2424 (the Flour Mill case), which is a case under the former Act and a case on a decision ofrefusal under the new Constitution, the court stated that as long as the Tokyo High Court conducts fact-finding
proceedings, it is not illegal for a party to make a new claim in litigation regarding a fact that was not claimed in thetrial or a fact on which the trial decision by the competent authority was not based, and it is not in the least illegal toadopt such a fact as a basis for the court judgment, and recognized unlimited submission of new evidence. In theSupreme Court Judgment, December 20, 1960, Minshū, Vol. 14, No. 14, p. 3103 (the President Lincoln case), which
is a case under the former Trademark Act, the court ruled that litigation for rescinding a trial decision of invalidationof trademark registration is the same as litigation for rescinding an ordinary administrative disposition, so there is no
reason to consider that the reason for rescission should only be errors in the matters produced in the trial that wererecognized and examined in the trial decision, and there is no prohibition on claiming and producing as evidence newmatters that were not produced in the trial. In the Supreme Court Judgment, April 4, 1968, Minshū, Vol. 22, No. 4, p.
816 (the Synthetic Resin Flower case), which is a case under the Utility Model Act, the court stated in the obiter dictathat since a trial for the invalidation of registration judges a dispute over the violation of specific provisions that are set
forth as grounds for invalidation in law, it is possible to consider that there is also a restriction in litigation for rescindingthat trial decision, which forbids the parties to claim grounds for invalidation that are different from the violation of theprovisions in dispute. Thus, the court did not allow the unlimited freedom of claiming evidence in the litigation phase.
Both the Supreme Court judgment in 1960 and that in 1968 seem to have considered litigation for rescinding a trial
decision and a suit against an ordinary administrative disposition not to be completely the same, but have assumed
certain restrictions in the former. Meanwhile, a dissenting opinion by Justice Jiro Matsuda was attached to the Supreme
Court judgment in 1968, in which Justice Matsuda stated that new evidence that had not been produced in the trial
cannot be produced in litigation.

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§4. Litigation for Rescinding a Trial Decision, etc.

in a suit, in principle.4 Subsequently, however, the Tokyo High Court made a judgment
denying submission of new evidence, on the contrary to Supreme Court judgments. Thenat last, in a judgment by the Grand Bench of the Supreme Court,5 the court altered its
precedents and held that “in litigation for rescinding a trial decision, a ground forinvalidation relating to the invention being publicly known that was not examined in the
Kokoku trial procedure cannot be claimed as a reason for the illegality or legality of thetrial decision,” overturning the past Supreme Court judgments and supporting the stanceof the Tokyo High Court. As a result, the issue was settled in practice. In the judgment,
the court also clarified that this principle should not only be applicable to the case of atrial for invalidation, but also to the case of ex-parte trials. It was decided that only the
point disputed in the trial should be the subject matter of the litigation proceedings, andthe point disputed should be specified not by legal provisions, but based on concrete
evidence (e.g. material showing that the invention is publicly known, in an invalidationcase). As a matter of course, court judgments thereafter have complied with this Supreme
4 In the Supreme Court Judgment, October 16, 1953, Minshū, Vol. 4, No. 10, p. 2424 (the Flour Mill case), which isa case under the former Act and a case on a decision of refusal under the new Constitution, the court stated that as longas the Tokyo High Court conducts fact-finding proceedings, it is not illegal for a party to make a new claim in litigation
regarding a fact that was not claimed in the trial or a fact on which the trial decision by the competent authority was
not based, and it is not in the least illegal to adopt such a fact as a basis for the court judgment, and recognized unlimited
submission of new evidence. In the Supreme Court Judgment, December 20, 1960, Minshū, Vol. 14, No. 14, p. 3103
(the President Lincoln case), which is a case under the former Trademark Act, the court ruled that litigation for
rescinding a trial decision of invalidation of trademark registration is the same as litigation for rescinding an ordinary
administrative disposition, so there is no reason to consider that the reason for rescission should only be errors in thematters produced in the trial that were recognized and examined in the trial decision, and there is no prohibition on
claiming and producing as evidence new matters that were not produced in the trial. In the Supreme Court Judgment,
April 4, 1968, Minshū, Vol. 22, No. 4, p. 816 (the Synthetic Resin Flower case), which is a case under the Utility Model
Act, the court stated in the obiter dicta that since a trial for the invalidation of registration judges a dispute over theviolation of specific provisions that are set forth as grounds for invalidation in law, it is possible to consider that there
is also a restriction in litigation for rescinding that trial decision, which forbids the parties to claim grounds forinvalidation that are different from the violation of the provisions in dispute. Thus, the court did not allow the unlimited
freedom of claiming evidence in the litigation phase. Both the Supreme Court judgment in 1960 and that in 1968 seemto have considered litigation for rescinding a trial decision and a suit against an ordinary administrative disposition not
to be completely the same, but have assumed certain restrictions in the former. Meanwhile, a dissenting opinion by
Justice Jiro Matsuda was attached to the Supreme Court judgment in 1968, in which Justice Matsuda stated that new
evidence that had not been produced in the trial cannot be produced in litigation.
5 This is a case on litigation for rescinding a trial decision rendered in a Kokoku trial against a trial decision of theinvalidation of a patent under the former Act: the Supreme Court Judgment, March 10, 1976 (Grand Bench), Minshū,Vol. 30, No. 2, p. 79 (the Knitting Machine case). It was the only judgment rendered by the Grand Bench of theSupreme Court in the field of patent law. See Takashi Honma, “Shinpan To Shinketsu Torikeshi Soshō No Kankei”(Relation Between a Trial and Litigation for Rescinding a Trial Decision), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō,No. 6 (1983), p. 126; Kaoru Kobashi, “Shinketsu Torikeshi Soshō Ni Okeru Shinri Han’i” (Scope of Proceedings in
Litigation for Rescinding a Trial Decision), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 14 (1980), p. 80;
Shigetoshi Matsumoto, “Tokkyo Hatsumei No Shinkisei/Shinposei No Yōken To Shinketsu Torikeshi Soshō Ni Okeru
Sono Shinri Han’i” (Requirements of Novelty and Inventive Step for a Patented Invention and the Scope ofProceedings in Litigation for Rescinding a Trial Decision), Toyosaki Mitsue Tsuitō Ronbun Shū, Mutai Zaisan Hō
To Shōji Hō No Sho Mondai (Various Problems Relating to Intangible Property Law and Business Law), p. 169; Eiichi
Takigawa, Tokkyo Soshō Tetsuzuki Ronkō, pp. 51-/pp. 121-; Minoru Takeda, “Tokkyo Hanrei No Kōsoku Ryoku To
Sono Igi Ni Tsuite” (Binding Force of a Patent-related Court Decision and Its Significance) II, Hatsumei (Invention),Vol. 87, No. 11 (1990), p. 68; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Ge [Dai 3 Han], p. 1679 (written by
Osamu Takura and Hiroaki Niki), Yoshiyuki Mori, “Tokkyo Ni Kansuru Shinketsu Torikeshi Soshō Ni Okeru Aratana
Kōchi Gijutsu Shuchō No Kahi—In’yōrei To Shūchi Gijutsu” (Admissibility of Producing New Publicly Known
Technology in Litigation for Rescinding a Trial Decision on a Patent: Cited Inventions and Well-Known Technology),
Makino Toshiaki Sanju Kinen, Chiteki Zaisanken Hōri To Teigen (Legal Principles of and Recommendations
Concerning Intellectual Property Rights), p, 565.

333§4. Litigation for Rescinding a Trial Decision, etc.

Court Grand Bench decision.6[298]
While the remaining issue is the scope of the application of this decision, the scope
was gradually clarified through a later Supreme Court judgment and other decisions.7
According to those decisions, it was judged admissible to recognize the common
technological knowledge of a person skilled in the art at the time of the filing based onmaterial that had not appeared in the trial procedure for the purpose of clarifying thesignificance of the device (the same applies to an invention) described in the printed
publication that was examined in the trial procedure. In other words, it is not admissible
to produce evidence that is new in substance, but it may be admissible to produce suchnew evidence that would supplement the evidence that has already been produced in thetrial and has been subject to examination. Nevertheless, the determination of whether itis the production of a new fact or production of a publicly known fact for supporting acited invention is often difficult to make. In actual practice, the determination would bemade according to the Supreme Court Grand Bench decision, unless there is law
amendment, by focusing on whether the matter to be proved by the new fact has been
examined in the trial based on allegations and evidence.
[299]
4.3.3. Problems in Limitation on the Scope of Proceedings
Although practical issues have been settled as above, an explanation would be
6 In the Tokyo High Court Judgment, July 31, 1990, Mutai Saishū, Vol. 22, No. 2, p. 457 (the Vane Pump case), thecourt held that when, in litigation for rescinding a trial decision rendered in a trial against an examiner's decision ofrefusal, the JPO comprehends the composition of the invention differently from the trial decision and replaces the wellknown technology cited by the trial decision, it is the same as producing new evidence, which is no different from the
JPO indicating a new reason for refusal, so it is not admissible in litigation for rescinding a trial decision which provides
no opportunity for amendment. In the Tokyo High Court Judgment, December 27, 1990, Mutai Saishū, Vol. 22, No. 3,
p. 879 (the Process for Producing Mesophase Pitch by Using Inert Gas case), the court stated that the determination of
the trial decision was based on the cited invention, and as long as the cited invention is found to provide no suggestion
about resolution of the matter to be solved by the present invention, the cited invention cannot be used as a material for
determining the obviousness of interchange, and therefore it is not permissible to supplement the cited invention by
combining it with a well-known fact and to make a determination based on it. In the Intellectual Property High Court
Judgment, June 29, 2006, Hanta, No. 1229, p. 306 (the Optical Detector of Sheet Paper Identification Device case), thecourt held as follows: at the stage of the trial proceedings, the well-known device was regarded as a “technical featurethat had been well-known even before the filing of the said application” and not considered as a cited invention thatshould be compared with the disputed invention; in addition, the well-known device has never been compared to thedisputed invention; and under these circumstances, the argument made based on change of the primary reference at thephase of lawsuit is not permissible because it would be a gross deviation from the scope of proceedings in litigation for
rescinding the JPO’s trial decision, as held in the judgment of the Grand Bench of the Supreme Court of March 10,
1976, Minshu Vol. 30, No.2, p. 79. In the Intellectual Property High Court Judgment, July 11, 2006, Hanji, No. 2017,p. 141/Hanta, No. 1268, p. 295 (the Fashion Wig case), the court indicated that it is not permissible to replace theprimary reference with supplementary references in litigation for rescinding the JPO’s decision made in patent
opposition proceedings to revoke the plaintiff’s patent.
7 The Supreme Court Judgment, January 24, 1980, Minshū, Vol. 34, No. 1, p. 80 (the Cup Noodle case). In the Tokyo
High Court, March 12, 1985, Mutai Saishū, Vol. 17, No. 1, p. 26 (the Taxi Rooftop Indicator case), the court held thateven material that did not appear in the trial procedure can be newly submitted as long as it is supplementary evidence
for proving matters that are well-known and commonly-used by a person skilled in the art.

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§4. Litigation for Rescinding a Trial Decision, etc.

required as to why the production of evidence is restricted in litigation for rescinding a
trial decision while there is no such restriction in an ordinary action for the judicial review
of an administrative disposition. This point has been explained in various ways bydifferent theories.1
First of all, there is a theory that also tries to apply the substantive evidence rule
stipulated under Articles 80 and 81 of the Anti-Monopoly Act to the Patent Act before
the 2013 revision. 2 However, considering the right of access to courts, which isimperative under the Constitution, the rule that all judicial power belongs to the courts,
and the principle that an administrative organ cannot conduct a trial in the final instance,
it would be even more difficult to recognize the substantive evidence rule in the Patent
Act, which has no express provisions as in the Anti-Monopoly Act. In addition, Article
81 of the Anti-Monopoly Act exceptionally recognized the production of new evidence,but even that would be inadmissible according to the Grand Bench decision, so therestriction could become stricter than that under the Anti-Monopoly Act, which has
express provisions.3 This theory had conventionally been supported by many scholars ofprocedural law, but it is hardly supported today. The issue of the substantive evidence
rule is not directly linked with the issue of the evidence that can be examined in court.
[300]
Secondly, due to the special technological nature of patent-related litigation, there
is a view that places emphasis on the trial decision in the JPO, which specializes intechnology. Indeed, the reason for the establishment of the trial system was to use thetechnological expertise of the JPO, but it is only the reason for the establishment of thesystem, and not a direct reason for imposing restrictions on the scope of proceedings incourt. Furthermore, some of the trials do not require technological expertise. For instance,a trial for invalidation based on the reason of the violation of a treaty or a misappropriatedapplication involves little technological expertise and may, due to its nature, often be
more suited to be judged by a judge rather than a trial examiner. Although many patentright infringement cases involve technological expertise, litigation on these cases can be
filed directly with the court. Also, as it also became possible for the court to determine
1 See Yasuyuki Echi, “Shinketsu Torikeshi Soshō No Shinri Han’i” (Scope of Proceedings in Litigation for Rescindinga Trial Decision), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza I(Lecture on Modern Intellectual Property Law I), p. 165.
2 Hajime Kaneko, “Shinketsu No Shihō Shinsa” (Judicial Examination of a Trial Decision), Iwamatsu Saibankan
Kanreki Kinen, Soshō To Saiban (Lawsuits and Trials), (Yuhikaku, 1956); Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi
I [Dai 2 Han], p. 96.
3 Indeed, according to the substantive evidence rule, any fact-finding supported by substantive evidence binds thecourt (Article 80 of the Anti-Monopoly Act before the 2013 revision), so the fact-finding proceedings by the court are
restricted to that extent. In contrast, according to the Grand Bench decision, a court can examine any evidence that
had been produced in the trial once again in the litigation and give a decision to reverse the original trial decision,
which binds the administrative authority. In this case, a separate trial may be requested for any new evidence that had
not been produced in the trial, and such evidence can be further examined in litigation, so fact-finding proceedings at
the court would not be restricted as in the case of adopting the substantive evidence rule. However, there would be apossibility that the case would go back and forth between the court and the trial.

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§4. Litigation for Rescinding a Trial Decision, etc.

patent validity with the 2004 revision, this theory is not convincing today.
Thirdly, there is a theory that emphasizes the benefit of receiving a determination
in a preliminary trial, 4 although practically this would overlap with the second point
above. This theory posits that the parties concerned are given the benefit of receiving adetermination in a trial at the JPO, which specializes in technology, before receiving acourt determination, due to the technological aspects peculiar to industrial property. It
states that, because currently trials are conducted through a careful procedure similar to a
judicial procedure, there is no problem in omitting the court of first instance. Nevertheless,the receiving of a determination in a preliminary trial may not benefit the parties
concerned in some cases. If it were for the benefit of the parties, there would be no reason
to prohibit the parties from producing evidence for the first time in litigation if the
opposing party abandons the benefit of undergoing a trial. Even if the benefit of receivinga preliminary trial determination were to be recognized, consideration may have to begiven to the benefit of the opposing party in litigation for rescinding a trial decision
rendered in an inter-partes trial, but such a consideration is not required in litigation for
rescinding a trial decision rendered in an ex-parte trial. For instance, even if an applicant
whose claim was dismissed in a trial against an examiner's decision of refusal abandons
his/her benefit of receiving a preliminary trial determination, and produces new evidence
for the first time in the litigation, wishing for an early settlement, there is no practicalreason to deny it, because the opponent is the JPO Commissioner who is a specialized
authority.
[301]
Apart from these theories, there are others that attempt to restrict the scope of factfinding proceedings of the court on the basis of the need to reduce the burden on the court
or of the fact that reasons are already included in the written trial decision.5
Whichever theory is adopted, it would be difficult to rationalize the Grand Benchdecision by one of those theories alone. As far as a trial system has been established, itwould be necessary to make a fairly reasonable division between the functions and theauthority between the trial and court proceedings. On the other hand, however, in order
to introduce a system which is different from an action for the judicial review of an
administrative disposition by an interpretational approach, it is necessary to indicate
sufficient grounds for so doing. This issue is also an issue of how to find a balance
between expeditious dispute resolution and emphasis on the determination by the
4 Eiichi Takigawa, Tokkyo Soshō Tetsuzuki Ronkō p. 136; Sadaharu Tada, “Shinpan To Soshō No Kanreinsei Ni Tsuite
No Ichi Mondai -- Shinketsu Torikeshi Soshō Ni Okeru Shinriken No Han’i O Chūshin To Shite” (Issue Concerning
the Relationship Between a Trial and a Suit -- Centering on the Scope of the Right of Proceedings in Litigation for
Rescinding a Trial Decision), Hara Masuji Hanji Taikan Kinen, Kōgyō Shoyūken No Kihonteki Kadai Jō (Basic Issuesof Industrial Property Rights Vol.1), p. 645. Incidentally, Justice Takigawa is the judge who continued to render High
Court judgments that opposed the Supreme Court judgments and finally drew out the Grand Bench decision.
5 Such academic theories are introduced in detail in Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai
Tokkyo Hō Ge (New Explanatory Notes on the Patent Act Vol. 2), p. 2141 [written by Hirokazu Honda].

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§4. Litigation for Rescinding a Trial Decision, etc.

technology-specializing authority.6
The Grand Bench decision can be read as if it treats all litigation for rescinding trial
decisions uniformly. However, the trials are varied in nature, and even trials of a single
kind (e.g. a trial for invalidation) are not always of the same nature. Although the Patent
Act basically stipulates that all trials and litigation for rescinding trial decisions should be
dealt with under the same provisions, in theory they would need to be studied individually.
The Patent Act has four kinds of trial, but litigation for rescinding decisions
rendered in those trials is discussed uniformly in scholarly discussions.7 However, evenif fact-finding proceedings at court were to be restricted, as held in the Grand Benchdecision, it would not be possible to rationalize this measure based on a single reason for
all of the kinds of litigation for rescinding a trial.
Inter-partes trials are relatively similar to litigation, so it may be possible toconsider them as quasi-judicial procedures. Nevertheless, although all trials forinvalidation are to be conducted through the same procedure, for instance, a trial forinvalidation based on lack of novelty or an inventive step and a trial for invalidation basedon a misappropriated application are different in nature. In the case of a misappropriatedapplication, the main point of dispute is the ownership of a right, so it is fairly similar toan ordinary civil case.8 Accordingly, no reasonable explanation can be given as to thefact that new evidence cannot be produced in litigation. This kind of issue is often more
appropriate to be determined by a judge than a trial examiner, so there is hardly any
practical reason to conduct a time-consuming trial at the JPO in advance. Nevertheless,conducting a trial in advance cannot be avoided, because all cases must first undergo atrial under the current Act. Yet, there is no particularly good reason for restricting the
production of new evidence in court in such cases.
[302]
On the other hand, the need to restrict the fact-finding proceedings in court and torequire a trial procedure is much greater for a trial for invalidation based on a lack ofnovelty or an inventive step. A trial for invalidation is a formal dispute between two
parties, but it is quite different in nature from other formal inter-partes litigation in that a
trial decision rendered therein affects everybody. In ordinary formal inter-partes litigation,
it is possible only to dispute the amount of compensation pertaining to an administrative
disposition instead of disputing the disposition itself. For instance, with regard to the
6 Yasuyuki Echi, “Shinketsu Torikeshi Soshō No Shinri Han’i” (Scope of Proceedings in Litigation for Rescinding a
Trial Decision), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza I(Lecture on Modern Intellectual Property Law I), p. 171.
7 Many theories seem to discuss the issue mainly with litigation for rescinding a trial decision of invalidation in mind,
and only a few of them make clear distinctions based on the nature of each type of trial. Some theories mention that
distinctions should be made between inter-partes and ex-parte trials (e.g. Minoru Iriyama, Hanji, No. 531 (1968), p.
131), but they do not give a detailed explanation.
8 Of course, it does not mean that such case involves no technological expertise. Sometimes highly technologicaldetermination is required when identifying the ownership of an invention. However, such level of technologicaldetermination is also often required in other cases such as those concerning traffic accidents and building disputes.

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§4. Litigation for Rescinding a Trial Decision, etc.

compulsory purchase of land, compensation for the loss is disputed between the landowner/persons having interest in the land and the business operator concerned (Article
133, paragraph (3) of the Compulsory Purchase of Land Act), but the illegality of thecompulsory purchase of the land itself is disputed in an ordinary action for the judicial
review of an administrative disposition. In contrast, a trial for the invalidation of a patentand litigation for rescinding a trial decision rendered therein are particularly peculiar
systems in which the illegality of an administrative disposition of a patent registration isitself disputed between two parties instead of with the administrative authority that madethe disposition. There may be a reason for first conducting thorough trial proceedings at
the JPO which specializes in technology, in order to be extra careful, but the negative sideof consuming extra time to settle the dispute through the going back and forth between
litigation and the trial cannot be overlooked either, so it would be an issue of the balance
between the two.9
Meanwhile, ex-parte trials are closer to an administrative disposition, and farther
from a judicial procedure. Particularly, a trial for correction, which does not have thefunction of re-conducting an examination, is nothing but an administrative disposition.
Even if provisions of the Code of Civil Procedure were applied mutatis mutandis to theprocedure, in essence it does not have the nature of a judicial procedure. An ex-parte trial
is a dispute with the JPO Commissioner, so in that respect there should be no need to giveconsideration to the interest of the defendant (JPO Commissioner) of receiving apreliminary trial determination. This is because, even if new evidence were produced by
the plaintiff (applicant/patentee’s side) in the litigation phase, as long as the JPO
Commissioner is the defendant, the technological issues could be sufficiently dealt within the litigation without undergoing a trial in advance. In addition, there is no doubt thatthe plaintiff is not intending collusive litigation, since the opponent is the JPO
Commissioner. An ex-parte dispute is thus a dispute between the applicant/patentee sideand the JPO side both in formality and in substance, so there should basically be nodifference as to whether the dispute takes place in a JPO trial or in court proceedings.
Considering the time consumed in passing the case back and forth between the trial andlitigation every time new evidence is produced, it would rather be more desirable toprocess the entirety of the case through litigation.
[303]
However, the greatest problem with this idea denying the Supreme Court Grand
9 Yoshiyuki Mori, “Tokkyo Ni Kansuru Shinketsu Torikeshi Soshō Ni Okeru Aratana Kōchi Gijutsu Shuchō No
Kahi—In’yōrei To Shūchi Gijutsu” (Admissibility of Producing New Publicly Known Technology in Litigation for
Rescinding a Trial Decision on a Patent: Cited Inventions and Well-Known Technology), Makino Toshiaki Sanju Kinen,
Chiteki Zaisanken Hōri To Teigen (Legal Principles of and Recommendations Concerning Intellectual Property Rights),
p, 568 states as follows: if new publicly known technology is to be examined in litigation, it would be quite timeconsuming, and if such new technology is produced toward the end of the litigation, the proceedings up to that point
would be wasted; if the JPO determines all reasons for invalidation and reasons for refusal, the shifting of the procedure
to and from the JPO and the court would be reduced, and it would not have so much adverse effects in practice.

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§4. Litigation for Rescinding a Trial Decision, etc.

Bench decision is the handling of an amendment and correction. Under the current
practice, the applicant can basically make no amendment except at the time of filing arequest for a trial against an examiner's decision of refusal (Article 17-2, paragraph (1),item (iv) of the Patent Act) and can make no request for a trial for correction from thetime when a trial for invalidation becomes pending before the JPO until its trial decision
becomes final and binding (Article 126, paragraph (2) of the Patent Act). Thus, theapplicant can no longer make an amendment or correction in the phase of litigation for
rescinding the trial decision. The production of any new evidence by the defendant of
litigation for rescinding a trial decision of refusal or by the plaintiff of litigation for
rescinding a trial decision of invalidation (the person who requested the trial) could beequivalent to an indication of another reason for refusal, and in such a case, the applicant
or patentee would be deprived of a chance to make an amendment or correction. Therefore,
if the JPO Commissioner or the person who requested a trial for invalidation is to beallowed to produce new evidence in the phase of litigation for rescinding a trial decision,some legislative measure should be taken regarding an amendment and correction.
However, this would not be easy since it involves the entire amendment and correction
systems. Unless this point is resolved, it would be difficult to overcome the Supreme
Court Grand Bench decision.
As is clear from the above, a reasonable solution cannot be obtained for this issue
by merely focusing on the scope of fact-finding proceedings in litigation but, ultimately,
one must go back and review the way a trial should be conducted. The need to take sucha great step naturally means that a legislative solution will be required. This issue should
be discussed someday as an issue of revision of the trial system.
4.3.4. Technical Determination Ability of Courts
Compared to the time taken to reach a Supreme Court Grand Bench decision (1976),
the technical determination ability of courts has improved dramatically today. In terms of
the system, the Tokyo District Court and the Osaka District Court have jurisdiction overpatent infringement cases (Article 6 of the Code of Civil Procedure), 1 and they aremaking technical determinations. Furthermore, with the 2004 revision, it also became
possible for the courts to determine patent invalidity (Article 104-3 of the Patent Act).
The systems of judicial research officials and technical advisors have also been expanded.
In actuality, the courts have examined the technical issue of the presence or absence ofgrounds for invalidation in many infringement lawsuits. Allowing invalidation defenses
is based on an assumption that ordinary courts also have the ability to examine technical
1 Until the 2003 revision, an action for a patent infringement case could be filed with any district court nationwide,similar to ordinary civil litigation.

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§4. Litigation for Rescinding a Trial Decision, etc.

issues. The Tokyo High Court (IP High Court), which has the exclusive jurisdiction overlitigation for rescinding trial decisions, has been determining technical issues from thepast, so today we can no longer say that courts lack the ability to examine technicalmatters and that they need to have the cases examined beforehand through trials. Also,
the 2011 revision provided that, after a judgment on an infringement case becomes final
and binding, the parties cannot assert that a ruling to revoke the patent in response to an
objection, such as a trial decision of invalidation, has become final and binding in a retrial(and cannot request a retrial as a result) (Article 104-4 of the Patent Act). Therefore, aparty could suffer a disadvantage unless he/she makes the utmost effort with regard to thepatent validity in infringement litigation. This fact premises that the courts can also makea technical determination on patent validity. Although it is extremely difficult to overturnthe Supreme Court Grand Bench decision, it is possible to make a narrow interpretationof the scope of application of the Grand Bench decision, and now the next step should betaken to seek a new legislative measure.

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§5. Dispute for Rescinding a Disposition by the Commissioner of the JPO, etc.

[304]

§5. Dispute for Rescinding a Disposition by the Commissioner of the JPO, etc.
In general terms, a person can appeal against a disposition by an administrative
authority to the authority that has made the disposition, as provided for in the
Administrative Appeal Act unless otherwise stipulated in another law (Article 1, paragraph(2) of the Administrative Appeal Act). However, the Patent Act before the 2014 revision
provided that litigation for rescinding any of the following dispositions could only be filed
after a ruling or an arbitration decision had been made concerning an objection or a request
for review that was filed against the disposition: disallowance of an extension of a time
limit (Article 5 of the Patent Act); dismissal of an application, etc. (Article 18 of the Patent
Act); award (Articles 83 and 92 of the Patent Act); rescission of an award (Article 90 of the
Patent Act); dismissal of a request for a certificate, etc. (Article 186 of the Patent Act);decision for deeming an international application to be a patent application (Article 184-20
of the Patent Act); and dismissal of a request for registration (Article 38 of the Patent
Registration Order) (Article 184-2 of the Patent Act before the 2014 revision). Therefore,
a person appealed first to the JPO Commissioner, and if still dissatisfied, filed litigation
with the Tokyo High Court. Any litigation directly filed without undergoing this process
was dismissed as being illegitimate.
[305]
The appeal system was drastically reformed by the revision of the Administrative
Appeal Act and related Acts in 2014 (which came into effect on April 1, 2016). As a result,the principle of reconsideration before appeal became considerably restricted from theviewpoint of increasing fairness, improving the ease of use, and enhancing/expanding
remedies for the people. It became possible for a person who is dissatisfied with a generaladministrative disposition (in the case of the Patent Act, the abovementioned dispositions
such as a disposition of dismissal of an application) to choose whether to file an appeal or
to immediately file litigation. Article 184-2 (Reconsideration Before Appeal) of the Patent
Act, which had restricted a person from making such choice was deleted (Article 227 of
the Act on Arrangement of Relevant Acts Incidental to Enforcement of the Administrative
Appeal Act [Act No. 69 of 2014]). The revision has enabled a person who is dissatisfied
with a disposition to choose between two routes: file an appeal or file litigation. Meanwhile,
litigation cannot be filed against such disposition as an examiner's decision of refusal
without undergoing a JPO trial first, as under the conventional practice.
As exceptions to the principle of reconsideration before appeal, a review cannot berequested under the Administrative Appeal Act with regard to an examiner’s decision, a341

§5. Dispute for Rescinding a Disposition by the Commissioner of the JPO, etc.

revocation decision, a trial decision, a decision to dismiss a written request for a trial or a
retrial, or other dispositions for which the Patent Act provides that no appeal may be made,or failure to make any of these dispositions (Article 195-4 of the Patent Act). An objection
against a ruling to dismiss an amendment or an examiner's decision is processed within atrial against an examiner's decision of refusal, and an objection against a trial decision anda ruling to dismiss a written request for a trial or a retrial can be processed by filing a lawsuitwith the Tokyo High Court (IP High Court) (Article 178, paragraph (1) of the Patent Act).
Therefore, even if a review cannot be requested based on the Administrative Appeal Act,the interests of the person receiving the disposition are not harmed in practice. Other
dispositions against which no appeal may be made include a ruling on a motion requesting
an exclusion or recusation or failure to make such ruling (Article 143, paragraph (3) of the
Patent Act) and a ruling on an application for intervention or failure to make such ruling(Article 149, paragraph (5) of the Patent Act). It is because there are practical ways
available to appeal against these dispositions and find remedies for them.
Incidentally, since an advisory opinion (Article 71 of the Patent Act) is the expressionof an expert opinion by the JPO, and not an administrative disposition, no appeal can bemade under the Administrative Appeal Act and no litigation for rescinding such advisory
opinion can be filed.

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§6. Nature of a Patent Right[306]§6. Nature of a Patent Right
6.1. Comparison with a Right of Ownership
The Patent Act provides for the features of a real right, that is, a right to demand
abatement of a nuisance and a right to demand prevention of a nuisance (Article 100), andbecause of these rights, scholars regard a patent right as having the nature of a real right.
No such provision existed under the former Act, but it was considered that those two rights
existed because the patent right has the nature of a real right. In any case, it is generally
considered that the patent right has the nature of a real right. This is not wrong, but thepatent right only borrows the legal structure of a right of ownership. In fact, the subject
matter of a patent right, which is an invention (technical idea = information), is different innature from the subject matter of a right of ownership, which is an object. Also, patent law
and ownership law exist for different reasons.
A thing refers to a corporeal object (Article 85 of the Civil Code), and a right ofownership is the absolute and dominating title to a thing (Article 206 of the Civil Code).
As the subject matter of a right of ownership is a corporeal thing, the typical means ofrestoring the status quo in the case of the infringement of a right of ownership is to demand
the recovery of the thing (make a demand for the return of the thing), and the harmonious
state of a right of ownership is basically restored by recovering the actual thing which theowner was deprived of. In contrast, the idea of possession with the same meaning as thepossession of a corporeal object does not apply to information, which is the subject matterof a patent right,1 so a right to demand recovery is not stipulated with regard to a patentright. In the case of a thing (corporeal object), for which exclusiveness (or the competitive
nature) of consumption is recognized, basically only one person can possess the thing,2 andthe possessor needs the right to demand the recovery thereof in order to restore his/her
control over it.
On the other hand, information is not exclusive, and a third party can work a patented
invention, anytime, anywhere, not subject to any quantitative limit, without depriving the
1 There is a view that the working of an invention or the use of a trademark constitutes possession, which is not appropriate.
If the concept of possession is recognized, this could provide a basis for various effects, such as possessory action,
presumption of rights, acquisition of fruits, reimbursement of expenses, and acquisitive prescription. It is inappropriate
to recognize these effects only on account of the working of an invention or the use of a trademark. Information property
is characterized by its aspect of being able to be used by multiple people at the same time. Therefore, it cannot be
deemed to be possessed merely by the fact of its being worked or used. However, this is only a matter of words, so it
should cause no problem if the word “possession” is used with sufficient awareness that such effects do not arise. The
same applies to the word “ownership.”
2 In the legal sense, there are exceptions to this conception, such as co-ownership and indirect possession; however, thisis not discussed in any detail here because it is not the essential issue in making comparison with information property.

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§6. Nature of a Patent Rightpatentee of his/her possession. Moreover, unauthorized working or use of an invention bya third party does not interfere with the working or use of the invention by the right holder.3
Although the Patent Act, as a legal technique, adopts the legal structure of a real right, thesubstance of a patent right is not the absolute and dominating title to a thing, but the title tothe exclusive use of an invention, which is information (Article 68, Article 2, paragraph(3)), in other words, the title to prohibit others from working or using the patented invention.
Accordingly, the right holder can restore the harmonious state of his/her monopoly bystopping the unauthorized working.
[307]
The provisions on possession under the Civil Code shall “apply mutatis mutandis tocases where a person exercises his/her property rights with an intention to do so on his/herown behalf” (Article 205 of the Civil Code). This means that the provisions on possession
apply mutatis mutandis to rights to property other than things, and in this respect,possession under Article 205 of the Civil Code is referred to as quasi-possession. There isalmost no objection to the argument that the provision on quasi-possession is applicable tointellectual property rights, and many theories advocate that quasi-possession has a greatsignificance when it concerns intellectual property rights in particular.4 However, civil law
scholars do not give their opinions about what it is that constitutes possession of intellectual
property rights. More specifically, they do not explain what kind of act is regarded as the“exercise of property rights,” which gives rise to quasi-possession. If they consider that theworking of an invention is equivalent to the exercise of a property right, their view isinconsistent with the Patent Act currently in effect that require registration as the requisite

3 It is another argument that unauthorized working or use by a third party could undermine the right holder’s economic
interests.
4 Sakae Wagatsuma, Bukken Hō (Real Right Law) (Iwanami Shoten, 1592), p. 354, Hiroshi Suekawa, Bukken Hō (RealRight Law) (Nippon-Hyoron-sha, 1988), p. 274, Junichi Funabashi, Bukken Hō (Real Right Law) (Yuhikaku, 1960), p.
334, Sakae Wagatsuma, Toru Ariizumi, and Takeshi Kawai, Minpō I Sōsoku, Bukken Hō [3 han] (Civil Code I General
Provisions, Real Right Law [3rd ed.]) (Keiso Shobo, 2008), p. 346, Rokuya Suzuki, Bukken Hō Kōgi [5 teiban] (Lecture
on Real Right [5th revised ed.]) (Sobunsha, 2007), p. 110, Takeshi Kawai, Bukken Hō (Real Right Law) (NipponHyoron-sha, 1985), p. 184. Fujio Oho, Bukken Hō Jō (Real Right Law, 1st volume) (Yuhikaku, 1966), argues that in
actual terms, quasi-possession becomes a problem only in connection with servitude, which is right to the point.. In
Germany, there are no such provisions on quasi-possession that are applicable to property rights in general; the quasipossession is provided for only with regard to land and personal servitude (BGB 1029, 1090). Sakae Wagatsuma andToru Ikuyo, Minpō Annai 4 Bukken Hō Ge (Guide to the Civil Code 4 Real Right Law, 2nd volume) (Keiso Shobo,2006), p. 228, state that quasi-possession can be established for a patent right and a copyright as well, while noting that“as these rights have distinctive features, there are many problems as to the extent to which the Civil Code is applicableto them, not to mention that it would not be so easy to recognize the applicability mutatis mutandis of the provisions in
the chapter on possession of the Civil Code.” In the first place, it is not clear why Article 205 of the Civil Code exists
at all, and in practice, the scope of the application of this clause is extremely limited. See Yoshiyuki Tamura, “Mutai
Zaisanken to Junsenyū” (Intangible Property Rights and Quasi-possession), Yamahana Masao, Igarashi Kiyoshi, Shigeo
Yabu Koki Kinen Minpōgaku to Hikakuhōgaku No Shosō II (a book commemorating the sixtieth birthday of Masao
Yamahana, Kiyoshi Igarashi, and Shigeo Yabu, Aspects of Civil Law Study and Comparative Law Study II)(Shinzansha, 1997).

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§6. Nature of a Patent Rightfor the existence and assignment of rights. 5 As opposed to a thing, in the case of an
invention that can be worked by more than one person concurrently, if a person without
title works or uses such invention with the intention of doing so on his/her own behalf, suchworking alone should not be recognized as the basis for justifying acquisition byprescription, etc. In practical terms, what matters is who is it that is recorded as the rightholder in the patent registry, so it is unimaginable that any person other than the registeredright holder would seek an injunction based on quasi-possession. On the other hand, if theentry of one person’s name in the patent registry is thought to constitute quasi-possession,
this would be contrary to the purport of the provisions on possession, i.e. to protect thefactual state of possession. Then, except for the two conceptions mentioned above, what
could be recognized as the basis for quasi-possession? Unless this point is clearly explained,
it is meaningless to advocate that the provision on quasi-possession is applicable tointellectual property rights.
[308]
Furthermore, there is a crucial difference between the nature of a right of ownershipand a patent right, in terms of how they come into being, continue to exist, and are
extinguished, as well as the substance and scope of the rights. While a right of ownershipis originally acquired by appropriation, specification, combination, or acquisition byprescription (Articles 239 to 246 of the Civil Code), a patent right arises only by anadministrative disposition by the JPO. Because of this, the Patent Act needs to have various
provisions having the nature of administrative law for setting up the administrative organthat handles this process (the JPO) and establishing various procedures. These proceduralprovisions are one of the pillars of patent law, and they have the nature of administrative
law as well. What is more, unlike the right of ownership of a thing, the exclusive right toan invention, which is a technical idea, has a substantial impact as it restricts acts of a third
party.
A right of ownership and a patent right also differ from each other in that a right ofownership has no time limit and stays in effect permanently until the thing owned is lost,
whereas a patent right has a time limit. Since a right of ownership is a dominating right tocontrol a concrete thing, other people can produce and sell the same type of thing, inprinciple, particularly if it is a movable property. Therefore, basically, there is no problem
with a right of ownership for a specific thing staying in effect permanently. On the other
5 In the category of intellectual property rights, the copyright system adopts the non-formality principle, under which a
copyright comes into being upon the creation of a work, and registration is not a requirement for the existence of a
copyright and it is only a requirement for perfection with regard to the transfer of a copyright. When explaining quasipossession of intellectual property rights, most scholars take up copyrights as an example, and few discuss patent rights
or other industrial property rights. See: Junichi Funabashi, Bukken Hō (Real Right Law) (Yuhikaku, 1960), p. 334,
Takeyoshi Kawashima, Minpō I Sōron Bukken (Civil Code I, General Provisions, Real Right) (Yuhikaku, 1960), p. 122.
In this subsection, only patent rights are discussed.

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§6. Nature of a Patent Right

hand, as a patent right is an exclusive right to production, sales, and the like, it is a rightthat can itself stop the working of an identical technology by others. Accordingly, thepermanent existence of a patent right could make it possible to permanently prohibit othersfrom inventing improvements based on the patented invention, and would impede thedevelopment of technology and run contrary to the interest of society as a whole. For
instance, it is apparent that recognition of an exclusive right to an obsolete and universal
technology, such as a nail or a screw bolt, is harmful. Also, all inventions are made basedon the achievements of their predecessors, so recognition of permanent effectiveness for apatent right would also give a permanent exclusive right to the achievements of thepredecessors of a person who happened to make the invention, which is unfair. It issufficient to allow an exclusive right to the inventor for a period that is enough to recover
the research and development expenses and acquire reasonable profits. Because of this, thepatent law of every country around the world stipulates a certain time limit without
exception.
[309]
These differences can be considered to derive from the difference in the reason forexistence between a right of ownership and a patent right.
First, unlike ownership law, patent law has an extremely strong characteristic as anindustrial policy aimed at preventing unfair competition and contributing to thedevelopment of industry. In other words, the subject matter, the scope of protection, andthe duration of the patent right are decided from the policy perspective of what kind ofsystem is the most desirable for technological development. Taking a look at the protectedsubject matter, while a right of ownership protects any corporeal things, there is an
exceptive provision on the protected subject matter regarding a patent right (Article 32 of
the Patent Act). What to exclude depends on the industrial situation at the time, and it isdecided on a policy-based determination. For example, if the patent on a chemical
substance itself is recognized when the technological level in the chemical industry is still
low, the state’s chemical industry could be taken over by efficient foreign companies, so it
will be more beneficial for domestic industry only to recognize process patents, which havea smaller effect. However, if a chemical substance patent is not recognized when thetechnology has developed to a certain level, the chemical industry will devote itself only toinventing improvements, and will lose the incentive to make pioneering inventions byinvesting in basic research, which will have a negative effect on the technologicaldevelopment of the country. Therefore, the timing for the introduction of the chemical
substance patent system would be decided by closely watching the status of the industry.
Due to such a policy-based reason, the chemical substance patent was introduced in346

§6. Nature of a Patent Right

Germany in 1968, in Japan in 1975, and in South Korea in 1987. The Japanese chemicalindustry, especially the pharmaceutical industry, started to put more effort into basic
research after the introduction of the chemical substance patent system. Such an industrial
policy characteristic is not found in a right of ownership.
In the case of a particular thing, the scope of a right is clearly defined and there ishardly any dispute over the existence of a right.6 As for a patent right, the existence itself
of a right is evident from its registration, 7 but the scope of such right is not always
unequivocally clear. When handling a particular thing, one person can easily perceive thescope of a right by his/her five senses, whereas it is a laborious task to clarify the scope of
information property. In the case of a patent right, if the scope of an infringement is limited
to the literal scope of a patent claim, it would, to some extent, be easy to demarcate thescope of protection; however, in that case, it would be easy to bypass the patent right andthe reason for the existence of a patent right would be reduced. To avoid this, it is necessary
to create a certain margin around the scope of protection, the size of which differs among
the respective domains of intellectual property law. Thus, the scope of protection of a patentright is destined always to be a seed of discord. The size of the margin is not determined
fundamentally but sometimes decided on policy-based reasons. It also differs from country
to country or from age to age.
[310]
A patent right has the aspect of a personal right (right of credit). Specifically, aninventor has the right to have his/her name described as the inventor in the filing documents,
the certificate of patent, and the patent registry (Article 36, paragraph (1), item (ii) of the
Patent Act; Article 4ter of the Paris Convention). The personal right aspect of a patent right
has a far smaller effect than that of a copyright, but compared to a right of ownership, it
could be counted as one of the special features of a patent right.
As the above suggests, a patent right has a strong characteristic as an industrial policy,
unlike a right of ownership. Also, a patent right does not take the structure of a real rightfrom necessity—it is the product of the times in the 19th century when the patent system
took on an industrially important meaning—, but it adopts the concept of a real right merely
for convenience, so various types of systems can be supposed in theory.8 For instance, a
6 Disputes may arise as to whether or not the thing is bona vacantia or with regard to the boundary of real property;
however, these disputes relate to the ownership of the right in question, taking the existence of the right for granted.
7 As for some types of intellectual property for which registration is not required, such as copyrights or property protectedunder unfair competition law, the existence itself of the right or property is often unclear. With regard to copyrights inparticular, disputes often arise as to whether or not the subject matter in dispute is eligible for protection by a copyright.
Recently, as a result of the development of computers and databases, many items have come to pose the question of
unclearness in terms of whether or not the subject in dispute is protected by copyright.
8 See Ryūta Hirashima, “Tokkyoken Ni Motozuku Sashidome Seikyūken No Gōriteki Konkyo To Genkai”(Reasonable Grounds and Limits of an Injunction Based on a Patent Right), Ryū Takabayashi, Ryōichi Mimura, andToshiko Takenaka ed., Gendai Chiteki Zainsan Hō Kōza (Lecture on Modern Intellectual Property Law), p. 133.

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§6. Nature of a Patent Rightpatent right on which an injunction could not be demanded but only compensation fordamages, would not be irrational at all, and it would only be a problem of appropriatenessor effectiveness of the patent. Such a system is not preposterous. The right of rental, which
is a performer’s neighboring right under the Copyright Act, can be used as the basis forseeking an injunction for a period specified by Cabinet Order (12 months), but only as thebasis for claiming remuneration during the 49 years following that period (Article 95-3,
paragraphs (1) through (3) of the Copyright Act). The only question would be whether or
not it is appropriate from a policy perspective. Recently, there have been many scholars
who assert a legislative approach, insisting that the right to seek an injunction should be
restricted when the patent right is too strong and also inappropriate. In this manner, a patentright has a nature whereby its requirements and effect are decided by policy-based
determinations. Because of this strong industrial policy aspect, a patent is often discussed
in connection with international trade and is taken up as an important negotiation item in
the WTO and other arenas.
[311]

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§6. Nature of a Patent Right

6.2. Joint Ownership (Article 73 of the Patent Act)1
The joint ownership of a patent right arises through joint invention, the assignmentof one person’s share of the patent right, or inheritance by multiple persons. There aredifferent provisions for the joint ownership of patent rights from those for the coownership of corporeal things. The difference between a patent right and a right ofownership largely derives from the fundamental difference in their respective subject
matters, an invention and a corporeal thing, and that is a basic issue in the study ofintellectual property, including patent rights. In the case of a corporeal thing in coownership, when one person is using that thing, other people cannot use it, so a system
whereby one of the co-owners can use that thing without the consent of the other coowners would be unrealistic, and a provision for making adjustments between the coowners is required (Article 249 of the Civil code). In the case of the joint ownership of apatent right, however, the working of the invention by one joint owner does not obstruct
the working of it by the other joint owners (non-exclusiveness of consumption). 2
Therefore, various systems have been developed for the joint ownership of patent rightsfrom a legal policy perspective, and different systems are adopted by different countries.
Also, the system design of patent law may vary substantially since it is an extremely
artificial system. Theoretically, there would be the same number of solutions as there arematrixes with regard to whether or not one of the joint owners can freely work theinvention, whether or not one of the joint owners can freely license out or assign his/hershare of ownership, and whether or not such joint owner needs to share the profits gained
therefrom with the other joint owners in each of those cases.
The provision on co-ownership under the Civil Code is also applied mutatis
mutandis to property rights other than a right of ownership, unless otherwise provided forby law or ordinance (Article 264 of the Civil Code). Therefore, for the joint ownership ofa patent right, the provisions on joint ownership under the Patent Act are applied first,
and when there is no applicable provision under the Patent Act, the Civil Code is applied.
Special provisions that are different from those for a right of ownership are established
for the joint ownership of a patent right as mentioned below.
First, each of the joint owners of a patent right can, except as otherwise prescribedby contract, work the patented invention subject to there being no quantitative limitation,
1 This section is largely owed to Toshiya Kaneko, “Chiteki Zaisanken No Jun-Kyōyō (Tokkyoken Wo Chūshin Ni)”
(Quasi-Co-Ownership of Intellectual Property), Gakkai Nenpō, No. 34 (2010), p. 1.
2 With regard to this point, see Nobuhiro Nakayama, “Jyōhō No Ryūtsū To Chosakuken” (Information Distribution
and Copyright), Honma Takashi Kanreki Kinen, Chiteki Zaisanken No Gendaiteki Kadai (Essays in Honor of the
Sixtieth Birthday of Professor Takashi Honma: Modern Issues of Intellectual Property Rights), p. 210; Nobuhiro
Nakayama, “Zaisanteki Jōhō Ni Okeru Hogo Seido No Genjō To Shōrai” (Current Status and Future of Systems forProtecting Property-like Information), Iwanami Kōza: Gendai No Hō Dai 10 Kan Jōhō To Hō (Iwanami Lecture:
Modern Law, Vol. 10, Information and Law), (1997). p. 267.

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irrespective of his/her own share of the right (Article 73, paragraph (2) of the Patent Act).
This is very different from the fact that the co-owners of a right of ownership can use thesubject matter to make profits according to their respective shares of ownership.3 Since
the subject matter of a patent right is an exclusive right to information, which is intangible
information, quantitative limitation cannot be conceptualized regarding its use, so it isdifficult to use the subject matter of a patent right according to one person’s share and, atthe same time, in legal terms, the working of the invention by one of the joint owners
does not obstruct the working by another of the joint owners. Although there is noquantitative limitation under law, as long as the market is limited, the working of an
invention by one of the joint owners could affect the economic interests of the other joint
owners, so the system design would differ depending on how such economic
disadvantage suffered by the other joint owners is taken into account.
[312]
Information, by its nature, can be used in a superimposing manner and to infinity
in its physical meaning, but in reality, there is a limit to the market for information.
Therefore, the joint owners of a patent right basically compete with one another for
gaining a larger market share, and in this respect, they are considered to be in economic
rivalry.4 The stronger the power of one of the joint owners, the more the other joint
owners will lose their markets and be affected economically. As a matter of course, thejoint owners may be in a cooperative relationship such as with family members or
association members in some specific cases, but that is not necessarily the relationshiprequired for the joint ownership of a patent right. Probably because joint owners arebasically rivals instead of allies, restrictions were set on the assignment or other treatmentof the right that they jointly own.
It is construed that one person’s share of a co-owned ownership can be freely
assigned, although there are no express provisions for so doing. However, none of thejoint owners of a patent right can either assign their shares or establish a right of pledge
on them without the consent of all the other joint owners (Article 73, paragraph (1) of the
Patent Act). Since each of the co-owners of a right of ownership can use and receive profit
3 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [19 han] (Clause-by-Clause
Commentary on Industrial Property Law [19th ed.]), p. 246, explains that Article 73, paragraph (2) has been set out
for caution’s sake, so as to avoid misunderstanding due to the influence of the provision of paragraph (1) of said
Article (transfer and establishment of a pledge require the consent of the other joint owners). However, it isparticularly pointed in that Article 73 paragraph (2) provides that each joint owner of a patent right may work theentire patented invention, irrespective of his/her share, separately from the provision of the Civil Code (Article 249)
that each co-owner may use the entire property in co-ownership in proportion to his/her share. In this respect, Article
73, paragraph (2) has not been established merely for confirmation purposes.
4 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [19 han] (Clause-by-Clause
Commentary on Industrial Property Law [19th ed.]), p. 246, states that joint owners should have a relationship ofmutual trust, and Koe Toyosaki, Kōgyō Shoyūken Hō [Shinpan, Zōho] (Industrial Property Law [new enlarged ed.]),p. 264, also states that trust among joint owners is necessary. From a legal perspective, however, the joint owners
are in a competitive relationship, in principle, and they are considered to have a relationship of trust when they arein a special relationship under a contract, etc.

350§6. Nature of a Patent Rightfrom the subject matter according to his/her own share (Article 249 of the Civil Code),the value of the share is basically not affected legally by whoever the other co-owners are,so there is little need to restrict the assignment of the share.5 However, the joint ownerof a patent right can freely work the invention irrespective of his/her share of the right, so
he/she gains economic influence from the financial power and the management power ofthe other joint owners. In other words, the other joint owners can be his/her rivals, so theidentity of the other joint owners would be important. The practical economic value of
one person’s share could vary considerably depending on the other joint owners. If freeassignment of a person’s share of a patent right is allowed, there can be a case where asmall company, which you thought was your partner in jointly owning the patent right,
assigns its share in the right to a large company, and then this large company becomesthe new joint owner and confronts you as a gigantic competitor. To avoid such a situation,
the system under the current Act enables a joint owner to block third parties from entering
into joint ownership without him/her being involved in such entry. Each joint owner of apatent right may work the patented invention without the consent of the other joint owners
but may not freely assign his/her share. The theoretical explanation for this is that, while
it is possible to agree on the conditions for the working of the invention and the likeamong the joint owners by an advance contract, if a free assignment is recognized, it will
be difficult for the assignee, etc. to conclude an advance contract with the other joint
owners ex post facto, so prohibiting the assignment as a default status would provide an
incentive for concluding an advance contract.
[313]
However, it should be noted that this kind of system is not necessarily common
worldwide. For instance, U.S. case law allows each joint owner to dispose of and license
his/her share independently. Nevertheless, this rule on joint ownership is a default rule;the situation in the U.S. and the situation in Japan might seem to be very different, but inthe end, matters relating to the right can be dealt with by agreement.6
This does not apply to general succession; the share of a jointly owned patent canbe succeeded to by operation of the law, without the consent of the other joint owners.
Some problems may arise in such a case as where the other joint owner was an SME
which was later taken over by a large company, but the only reasonable interpretation
would be that the share of a jointly owned patent is succeeded to by operation of law. It
would be preferable to set up, in advance, a clause for the case where the share is
5 In practice, there is a great difference as to whether the other co-owner is a member of an organized crime group or
an ordinary good citizen, but they can be considered as being one and the same from a legal perspective.
6 For the joint ownership system of each country, see “Sekai Shuyōkoku Ni Okeru Tokkyo Ken No Kyōyū Ni Tsuite(Joint Ownership of Patent Rights in the World’s Major Countries),” Tokkyo Kanri (Patent Management), Vol. 34,
No. 8 (1984), p. 1039; Toshiya Kaneko, “Kyōyū Tokkyokensha Ni Yoru Jiko Jisshi: Doitsu No Giron Kara No Shisa”(Working of an Invention by a Joint Patentee: Implications Following Discussions in Germany), Chiteki Zaisan HōSeisaku Gaku Kenkyū (Intellectual Property Law and Policy Journal), No. 21 (2008), p. 239.

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§6. Nature of a Patent Right

transferred (a change of control clause). As a legislative approach, the inconvenience may
be eliminated if provisions are established to have the joint owner who works theinvention share his/her profits with the other joint owners.
The joint owner of a patent right cannot grant an exclusive license or non-exclusive
license without the consent of the other joint owners (Article 73, paragraph (3) of the
Patent Act). This applies to the case of granting a provisional exclusive license (Article
34-2, paragraph (8) of the Patent Act) or granting a provisional non-exclusive license(Article 34-3, paragraph (12) of the Patent Act) while the patent application is pending.
These restrictions were established because if a third party can come to work the invention
without the knowledge of the other joint owners, it would harm their interests, similarly
to the case of restricting assignment. If one of the joint owners grants a license
independently, it could cause the other joint owners similar economic damage as in thecase of assignment. In short, the significance of this measure is in eliminating the meansfor persons other than the joint owners to work the invention without the consent of all
the other joint owners.
[314]
The question here is the meaning of working by a joint owner. No problem occurs
if a joint owner works the invention by himself/herself, but it is uncertain whether
working by a subcontractor corresponds to the working by the joint owner. If the working
by a subcontractor is regarded as an act under a license, the act of subcontracting would
be a patent infringement without the consent of the other joint owners. This is an
important issue because subcontracting plays a significant role in Japan. Basically, if thesituation is such that the subcontractor follows the instructions of the joint owner, delivers
all of its products to the joint owner, and attaches the trademark, etc. of the joint owner,
the subcontractor can be regarded as operating subordinately to the joint owner, so the352§6. Nature of a Patent Rightworking of the invention can be considered as a working by the joint owner.7
There is no special provision under the Patent Act with regard to a demand forpartition, but due to the nature of a patent right being an exclusive right for working an
invention, it would often be difficult to partition the actual right. In theory, it may bepossible to divide the right based on the applicable geographical area,8 divide it according
to the mode of the working the invention, or divide it by claim,9 but that is not so realistic.
However, a share of the joint ownership of a patent right is a property right, and it is not
something that should be subject to a collective restriction, so it is extremely unreasonable
if the joint owners could not break away from the relationship of joint ownership.
Therefore, the prevalent theory allows a demand for the partition of the right either bydividing the money acquired by selling the right or by having one of the joint owners
acquire the right by paying the other owners the price for their respective shares. This is
not considered to cause any particular inconvenience. Each joint owner of a patent right
may freely work the patented invention irrespective of his/her share of the right. Thatbeing said, however, if there is a gap between the joint owners in terms of the production
7 The Akita District Court Judgment, February 7, 1972, Mutai Saishū, Vol. 4, No. 1, p. 19 (the Horseshoe case). This
was a dispute over whether or not an act of manufacturing by the subcontractor of one of the joint owners of a utility
model without the consent of the other joint owners required a license, in a case where the joint owner had createdthe die, provided technical assistance, given instructions on the materials, quality, and the performance of the
manufacturing machine, had the entirety of the products delivered to itself, conducted a thorough inspection of the
products, and decided the production volume and the unit price of the product, but the production facility was ownedby the subcontractor. The court held that since the joint owner and the subcontractor were in a product supply contract
relationship including an aspect of a subcontract agreement, the subcontractor should be considered to be working
the invention as its own business, so the working of the invention without the consent of the other joint owners
infringed the utility model right of the other joint owners. In the Sendai High Court Akita Branch decision on
December 19, 1973, Hanji, No. 753, p. 28, which was the appeal of the above district court judgment, the court
denied the infringement, judging that the subcontractor had manufactured the product as a part of the organizationof the joint owner, and the joint owner had worked the invention on its own account and under its control andmanagement. (The final appeal of this case was dismissed; Supreme Court Judgment, December 24, 1974, PatentNews, p. 4096.) References include Tatsuji Kishimoto, “Kyōyūsha No Kikan To Shite No Shitauke No Jisshi Ni Tsuite(Working by a Subcontractor as a Part of the Organization of a Joint Owner),” Kigyō Hō Kenkyū (Study on Business
Act), No. 222 (1973), p. 30; Tatsuji Kishimoto, “Kyōyūsha No Kikan To Shite No Jisshi Ni Tsuite (Working by a
Subcontractor as a Part of the Organization of a Joint Owner) (Re-examined),” Kigyō Hō Kenkyū, No. 235 (1974),
p. 20; Naoto Komuro, “Kyōyūken-sha No Jisshi Kōi Ni Tsuite—Jitsuyō Shinan Ken Shingai Sasidome Seikyū Jiken
Hanrei Yori (Working by Joint Inventors—Based on the Court Decisions in Cases Seeking an Injunction against autility Model Infringement),” Tokkyo Kanri (Patent Management), Vol. 25, No. 12 (1975), p. 1261; Ichiro Nakayama,“Kyōyū Ni Kakaru Tokkyoken No Jisshi Kyodaku Ni Taisuru Ta No Kyōyūsha No Dōi Ni Tsuite” (Consent of the
Other Joint Owners for the Licensing of a Jointly Owned Patent Right), AIPPI Vol. 47, No. 2 (2002), p. 10.
Considering the situation of subcontractors in Japan, the decision by the High Court seems to be more appropriate.
Similar court judgments include the Supreme Court (in prewar Japan) decision on December 22, 1938, Minshū Vol.
17, p. 2700 (the Patterned Knitwear case); and the Tokyo District Court Judgment, February 20, 2008, Hanji No.
2009, p. 121 (Telephone Card Reader Case, in which, as a precondition for one of the joint owners to claim
compensation for an employee invention, whether or not the subcontractor’s act constitutes the working by the otherjoint owner was disputed.) In relation to a design right, the Supreme Court held that any act performed by the person
who manufactures and sells the article that carries the design in question, only in response to the licensee’s orders
and exclusively on behalf of the licensee, falls within the scope of the exercise of the right by the licensee (Supreme
Court Judgment, October 17, 1969, Minshū Vol. 23, No. 10, p. 1777, Hanji No. 577, p. 74, Hanta No. 241, p. 81(Globe-shaped Transistor Radio Design Case).
8 It is not possible to divide a patent right itself by geographical area, such as a patent right for eastern Japan and thatfor western Japan, but the approach would be, for example, where one person acquires a patent right and grants its
exclusive license for western Japan to the other joint owners free of charge and unconditionally.
9 The patent right itself cannot be divided, but it would be possible to create an effect equivalent to having practicallydivided a patent right by an agreement between the parties.

353

§6. Nature of a Patent Rightcapacity or financial resources, as in the case between the company and the university,
inequality could arise as a practical problem. It is desirable that this problem is dealt withby agreement beforehand, but if there is no such agreement, the party who wishes to makeup for his/her disadvantage can demand the partition of the right as the last resort.
However, the proviso of Article 256, paragraph (1) of the Civil Code is applicableconcerning a special agreement on prohibition of partition, so it is possible to conclude
an agreement prohibiting partition for five years,10 and registration can be made to thiseffect (Article 33, paragraph (2) of the Patent Registration Order). The fact that it ispossible to register a special agreement prohibiting partition can be viewed as a groundfor arguing that partition itself is not prohibited in general.
[315]
The point that should be noted is that the provisions on joint ownership are default
rules, which apply where there is no agreement between the parties. As the joint
ownership, in reality, can take various forms, it is difficult to regulate all of those formsof relationship by law, and it is inappropriate to uniformly regulate the relationship ofjoint ownership by way of mandatory statutes. As long as it is difficult to establish
provisions that assume all kinds of joint ownership relationships, inconveniences would
inevitably occur regardless of whatever kind of joint ownership system were adopted. For
example, in the case of a joint ownership between an individual that cannot work theinvention in practice and a large company that can work the invention on a massive scale,the Patent Act has no provisions on the sharing of the profits gained by the large company
in such a case, but it would be possible to take care of such profit share through an advance
contract. It could be construed that by stipulating the default situation under Article 73,
the Patent Act encourages the parties to make an agreement in advance if they do not findthat situation to be desirable. In recent years, there have been strong calls for revision of
Article 73 from those who hold patent rights but do not by themselves work the patented
invention (e.g. universities); however, considering that this clause provides for a default
rule, such revision is almost meaningless, and it is inappropriate to revise it into a
mandatory statute. Even if it is provided by law that a joint owner may assign his/hershare or grant a license without the consent of the other joint owners or that a joint ownermust share the profits gained through his/her working of the invention with the other joint
owners, such provision can be freely changed by agreement, and the substance of the10

However, the period can be extended by another five years by renewing the registration. If so, it will be possible toconclude a special agreement on the prohibition of partition for ten years, but the life of a patent right often does notlast for ten years in practice, so the partition of such a patent right would not be possible in practice as a result.

354

§6. Nature of a Patent Rightagreement is to be determined depending on the balance of power between the parties.11
Due to the above, it would be desirable to conclude and advance a contract between the
joint owners insofar as possible. In addition, because a joint owner may demand partitionof a jointly owned patent right, it may be possible to hold negotiations on specific mattersby using partition as a bargaining chip.
[316]
The next issue is whether or not each of the joint owners can independently claim
compensation for damages or the return of an unjust enrichment, or demand the abatementof a nuisance.
There should be no problem if a claim for compensation for damages and a claim
for the return of unjust enrichment can be independently made by each of the joint owners
regarding his/her own share. 12 Each of the joint owners is able to claim an amountaccording to his/her own share, in principle, but there are also many problems regarding
determination of the amount. However, at least, when a person receives a claim fordamages under Article 102, paragraph (3) of the Patent Act, the person paying thedamages only needs to pay the proportion of the damages corresponding to the claimant’s

11 Universities often own patent rights jointly with the companies that provide them with funds. In such cases, theuniversities engage in creating inventions but they hardly ever work the inventions themselves. Under the existing
law, universities are in a disadvantageous position in that they cannot even license the patented inventions and makea profit without the consent of their partner companies (the other joint owners), whereas the companies can freely
work and make a profit from the inventions. In order to rectify such situation, universities demand that Article 73 of
the Patent Act be revised so that a university can claim a share of profit from other joint owners. However, it isnatural for the company, which provides funds for the university, to attempt to make an agreement that could override
the default rule that is disadvantageous to the company, and the outcome would be the same as the current situation.
If the university intends to make an agreement that is advantageous to it, there is no choice for the university but totry to improve its own bargaining power; it is, in the end, not the issue of the provision on joint ownership but theissue of the level of the university’s power.
12 It is clear that a right to claim compensation for damages is a money claim, which is a divisible claim that does nothave to be uniformly exercised by all of the joint owners together, and damages can be claimed by each of the joint
owners regarding his/her own share alone (the Tokyo District Court, December 22, 1969, Mutai Saishū, Vol. 1, p.
396 (the Foldable Table Legs case); the Osaka District Court Judgment, November 25, 1987, Mutai Saishū, Vol.
19, No. 3, p. 434 (the Parquet-Patterned Building Material case)). The Copyright Act provides that each of the joint
owners can demand compensation for damages in accordance with his/her own share (Article 117, paragraph (1)of the Copyright Act). This provision under the Copyright Act merely confirms what is only a matter of course.
Regardless of whether the infringed matter is a corporeal thing, an invention or a copyrightable work, the right todemand compensation for damages that arise after the infringement is a money claim having the same nature inboth cases.

355

§6. Nature of a Patent Rightregistered share of the right.13 When the share is unknown, with no registration having
been made, each of the joint owners is presumed to have an equal share (Article 250 of
the Civil Code), so unless otherwise provided for, the claimee merely needs to pay anequally divided amount.
[317]
While an act of preservation can be conducted independently by each co-owner, atypical act of preservation hardly exists in the case of a patent right, unlike in the case ofa corporeal thing (e.g. the case of repairing the leak in the roof of a house). Such a casewould only occur where, for example, a joint owner fails to pay patent fees, and the otherjoint owner pays those patent fees in order to maintain the patent right, but because it isexpressly provided that an interested person may pay a patent fee even against the will of
the person that is to pay the patent fee and claim reimbursement of the expenses (Article
110 of the Patent Act), it would cause no problem. It may be possible to regard a request

13 There should be relatively little resistance to the point that the claimant can demand compensation for the proportionof damages corresponding to his/her share when the amount of damages is considered to be an amount equivalent
to a license fee (when Article 102, paragraph (3) of the Patent Act is applied). However, there is a problem when
(1) the amount calculated by multiplying the quantity of the articles assigned by the infringer by the rate of profit
supposed to be gained by the right holder (paragraph (1) of said Article), or (2) the amount of profits gained by the
infringer (paragraph (2) of said Article), is considered to be the amount of the damages. For instance, when a joint
owner working the invention on a large scale holds a one-percent share, and the other joint owner is working theinvention on a very small scale in spite of holding a ninety-nine-percent share (e.g. when a large company hasreceived a one-percent share of an invention from a small company, and is working it), there would be a question
when distributing the damages according to the share. While this is considered to assume a case where the joint
owners are working the invention in the same way, how will the amount of damages be calculated if one joint owneris working the invention but the other is not (e.g., in the case of a company and a university)? A possible approach
would be to pay in proportion to the quantity of the assigned products in the case of a claim for damages under
Article 102, paragraph (1), and in proportion to the amount of profits in the case of a claim for damages underparagraph (2) of that Article. However, there is a possibility that one of the joint owners might claim damages underparagraph (1) and another joint owner might claim damages under paragraph (2). In addition, the joint owners may
not be working the invention in the same way, as one joint owner may be producing the products while anotherjoint owner is selling the products. In any case, this is a difficult problem, which has not been clarified in theory or
settled in practice, so it shall not be discussed in detail here. See Masaharu Miyawaki, “Kyōyū Ni Kakaru
Tokkyoken Ga Shingai Sareta Baai No Songaigaku No Santei: Chizai Kōhan Hei 22・4・28 Heisei 21 (Ne) 10028
Wo Keiki Toshite” (Calculation of Damages in the Case of Infringement of a Jointly Owned Patent Right: Promptedby Rendering of the Intellectual Property High Court Judgment, April 28, 2010, 2009 (Ne) No. 10028), AIPPI, Vol.
56, No. 11 (2011), p. 724; Toshiya Kaneko, “Chiteki Zaisanken No Kyōyū To Songai Baishōgaku No Santei” (Joint
Ownership of Intellectual Property Rights and Calculation of Damages), Doshisha University Intellectual Property
Law Research Group ed., Chiteki Zaisan Hō No Chōsen (Challenges of Intellectual Property Law), p. 308. The
Osaka District Court Judgment, November 25, 1987, Mutai Saishū, Vol. 19, No. 3, p. 434 (the Parquet-Patterned
Building Material case), pursuant to Article 102, paragraph (1) (currently paragraph (2)), presumed the amount of
profits gained by the infringer to be the damages and the proportion of the damages corresponding to the joint
owner’s (claimant’s) share of the right as the amount of damages suffered by that joint owner. Meanwhile, in theTokyo District Court Judgment, December 22, 1969, Mutai Saishū, Vol. 1, p. 396 (the Foldable Table Legs case),
which was a case where products manufactured by one of the joint owners (the plaintiff) had been sold by the otherjoint owners, the court recognized that the profits of each joint owner are almost the same, so without recognizing
the shares of joint ownership, it stated that the presumption under Article 29, paragraph (2) of the Utility Model
Act (the same as Article 102, paragraph (2) of the Patent Act, and Article 29, paragraph (3) of the current Utility
Model Act) is that the damages are proportionate to the amount of profits made by the respective joint owners. In
the Intellectual Property High Court Judgment, April 28, 2010, court website (the Steel Column Plumbing
Correction Equipment case), the court held that because joint owners can work the entire patented invention
irrespective of their share of ownership, the amount of damages due as a result of an act of infringing the patentright should be calculated not in proportion to the share of ownership, but in proportion to the extent of working
the invention (this was a peculiar case where the right to claim damages was assigned by another joint owner to theappellant).

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§6. Nature of a Patent Rightfor a trial as an act of preservation, but it would not present a problem because there is anexpress provision that a request for a trial requires a necessary joinder of inherent parties
and can only be made by all of the joint owners together (Article 132, paragraph (3) ofthe Patent Act). There is an issue of whether one of the joint owners can independently
file a suit against a trial decision as an act of preservation, but this issue has been discussed
earlier (see “4.2.2. Litigation to Seek Rescission of Trial Decision; Procedure; Parties
Concerned”).
Another issue is a demand for the abatement of a nuisance. Since each of the joint
owners is entitled to the entirety of the jointly owned subject matter, it should beinterpreted that each of them respectively has the right to demand the abatement of a
nuisance based on the right for their respective shares as an act of preservation.14 Eachjoint owner may independently file a suit to seek the abatement of a nuisance, but the
judgment rendered is effective in relation to the litigant alone and it does not affect theother joint owners’ rights to demand the abatement of a nuisance. This means that, even
if one of the joint owners independently files a suit and loses the case, the other joint
owners would still be able to file separate suits. The party who is sued by one of the joint
owners can avoid being further sued by the other joint owners by giving a notice of thesuit to them (Article 53, paragraph (1) of the Code of Civil Procedure), in which casethose other joint owners, if they do not intervene in the suit, shall be deemed to haveintervened in the suit at the time when they were able to intervene (paragraph (4) of said
Article) and shall be bound by the judgment rendered in the suit (paragraph (1) of said
Article).
[318]
Some theories take the view that the nature of the joint ownership of a patent rightas set out above is not co-ownership under the Civil Code, but joint ownership under the
Civil Code, or something similar,15 but these theories are incorrect. Such theories are
merely founded on the superficial phenomenon that assignment, establishment of a pledge,
and license are restricted with regard to joint ownership of a patent right, and they
overlook the essence of the patent right. Although there is no direct stipulation on joint
ownership under the Civil Code, joint ownership is one mode of common ownershipwhere assignment, partition and so forth are subject to collective restriction due to theexistence of a joint purpose, such as a partnership asset or inherited property. Joint
14 It can be considered similar to the demand for abatement of a nuisance based on a right of ownership. Junichi
Funabashi, Buken Hō (Real Right Act) (Yuhikaku, 1960), p. 381; Sakae Wagatsuma, Toru Ariizumi, Shintei Bukken
Hō (Newly Revised Real Right Act) (Minpō Kōgi (Civil Code Lecture) II) (Iwanami Shoten, 1983), p. 327.
15 Kazuo Morioka, Kōgyō Shoyūken Hō Gaisetsu [4 han] (Outline of Industrial Property Law [4th ed.]), p. 50 (statingthat it is co-ownership having an aspect of joint ownership under the Civil Code); Shiro Mitsuishi, Tokkyo HōGaisetsu [Shinpan] (Outline of Patent Act [new ed.]), p. 349. Meanwhile, Sueaki Oda, Yoshio Ishikawa, Zōtei ShinTokkyo Hō Chūkai (Revised and Enlarged Edition of Commentary on New Patent Act), p. 304 states that it is quite
close to joint ownership under the Civil Code, but that aspect mainly derives from the peculiarity of intangible
property.

357

§6. Nature of a Patent Rightownership under the Civil Code is a pre-modern mode of common ownership subject tostrong collective restriction, though there is a concept of individual shares of the subject
matter. Therefore, if joint ownership of a patent right were considered to be joint
ownership under the Civil Code, there would be inconveniences such as not being able topartition the right, so the right would no longer comprise adequate economic goods.
Under the current Act, joint ownership of a patent right is restricted in terms of assignment
or license. However, that is not a collective restriction based on a joint purpose among
the joint owners, but, rather, such a restriction has been established for a policy purpose
due to the peculiarity of intellectual property, and what is more, it is imposed by thedefault rule. Co-ownership of a right of ownership is also naturally restricted when thesubject matter is a corporeal thing because of the nature of the subject matter, so joint
ownership of a patent right should also be naturally subject to the restriction derived fromthe nature of the subject matter. The content of the restriction differs between the joint
ownership of a patent and the co-ownership of a right of ownership only because of thedifference in the subject matter. The restriction on an assignment, establishment of apledge, or license derives from the peculiarity of the subject matter, and the fact that thetrial requires a necessary joinder of inherent parties is based on the necessity of having
uniform intentions for a patent right, and not due to an aspect of joint ownership under
the Civil Code. Also, while the current Japanese Act has such provisions concerning
restrictions on assignment, etc., it is also quite possible to establish a law such as that in
the U.S. law under which a joint owner can transfer or license out the invention
independently. In the first place, a patent right can be co-owned without a joint purposeor a trustful human relationship. The joint owners do often establish a joint purpose, butthat is not a requirement for the establishment of the joint ownership of a patent right.
Some theories try to explain the peculiarity of the joint ownership of a patent right as aconsequence of it being joint ownership under the Civil Code, but that is not sufficient to
explain the peculiarity of the joint ownership of a patent. As is clear from the above, it isunnecessary and harmful to explain that the joint ownership of a patent right has the nature358

§6. Nature of a Patent Rightof joint ownership under the Civil Code.16[319]

16 The court stated that although joint ownership of a patent right is subject to restrictions similar to those on joint
ownership under the Civil Code, the nature of the joint ownership of a patent is not that of joint ownership under
the Civil Code, but is that of co-ownership under the Civil Code, in the Tokyo High Court Judgment, April 24,
1975, Mutai Saishū, Vol. 7, No. 1, p. 97 (the Bulky Knit Fabric case). (This is a case where the court held that asuit against a trial decision can be brought independently by one of the joint owners.) Similarly, the court statedthat the nature of joint ownership of a patent right is that of co-ownership under the Civil Code, in the Tokyo High
Court Judgment, January 27, 1994, Hanji, No. 1502, p. 137. (This is also a case where the court recognized one of
the joint owners as having the standing to file a suit against a trial decision. This point has been rejected in theSupreme Court Judgment, March 7, 1995, Minshū Vol. 49, No. 3, p. 944, Hanji No. 1527, p. 145, Hanta No. 876,
p. 147, denying the standing to sue of only one of the joint owners, but the Supreme Court Judgment did not referto the nature of a patent right.) Incidentally, the argument over the joint ownership of a patent and the joint
ownership under the Civil Code is only intended for theoretically comprehending the patent right. In settling an
actual problem (e.g. settling the problem of whether or not one of the joint owners can file a suit against a trial
decision), the conclusion should not be derived from the theories over the joint ownership of a patent/joint
ownership under the Civil Code, but should be determined based on various factors. (For details, see Nobuhiro
Nakayama, “Tokkyo Wōkeru Kenri No Kyōyūsha No Hitori Ni Yoru Shinketsu Torikeshi Soshō No Tekikakusei(Eligibility of One of the Joint Owners of the Right to Obtain a Patent to File a Suit against a Trial Decision),”Takura Osamu Koki Kinen, Chiteki Zaisan Wo Meguru Sho Mondai (Essays in Honor of the Seventieth Birthdayof Professor Osamu Takura: Various Problems Surrounding Intellectual Property) (a book commemorating theseventieth birthday of Professor Osamu Takura), p. 551.)

359

§7. Effects of a Patent Right[320]§7. Effects of a Patent Right
7.1. Active Effect and Passive Effect
A patent right has an active effect and a passive effect. The former refers to the effectwhereby the patentee can exclusively work the invention, and its extent is called the scopeof effect. Meanwhile, the latter refers to the effect whereby the patentee can abate theworking of the invention by others, and its extent is called the scope of protection. The
scope of effect and the scope of protection differ in the case of a trademark right and adesign right, so the distinction between the two has an important meaning, but, under the
Patent Act, they are basically the same, so the distinction is not considered to be important.1
Issues related to the scope of protection are mostly issues of the passive effects discussed
in infringement cases, so they shall be described later in the part about infringements.
Looking at laws comparatively, the effect of a patent right is stipulated to have apassive effect under patent laws in most countries. The current Japanese law formally
stipulates as if a patent right has an active effect, stating that the patentee shall “have theexclusive right to work the patented invention as a business” (Article 68 of the Patent Act).
On the other hand, the Japanese Patent Bylaws of 1888 had stipulated that the effect of apatent right should be a right of prohibition (Article 1, paragraph (2)). The current Patent
Act stipulates it as the exclusive right to work the patented invention as a business, but theessence of a patent right and other intellectual property rights by their nature exist as rights
of exclusion. There has long been a dispute over whether a patent right is a right ofmonopoly or a right of exclusion, but this dispute does not seem to be so useful. The subject
matter of a patent right is technical information, and considering the nature of information,
it should be enough to deem that the essence of a patent right is basically a right of exclusion.
If it is a right of monopoly, it would also have an effect of exclusion, and if it is a right of
exclusion, it tends to be a right of monopoly at the same time. This issue often seems to be
1 The term “technical scope” is used in Article 70 of the current Patent Act, but its meaning is not clearly defined. The
technical scope is considered to refer to the technical idea materialized by the description of the patent claims, but it isalso often interpreted to be the same as the scope of a right. However, the technical scope and the scope of a right differ
when there is a prior user’s right. It is also sometimes regarded as being the same as the scope of protection, but therelation between the two is not quite clear. Under the Patent Act, an indirect infringement (an act deemed to be an
infringement; Article 101 of the Patent Act) refers to the infringement of the part of the technology outside the scope ofthe technical idea materialized by the claims so, at least in that sense, the technical scope and the scope of protection do
not coincide with each other. Incidentally, the Patent Act stipulates as an exception that where the duration of a patentright is extended, such patent right shall not be effective against any act other than the working of the patented invention
for the product which was the subject of the disposition which constituted the reason for the registration of extension(Article 68-2 of the Patent Act), so the technical scope described in the claims and the scope of protection are different
in that case.

§7. Effects of a Patent Right

discussed in relation to double patents, etc., but the conclusion should be determined foreach point of issue rather than drawing an inescapable conclusion from the various
theories.2[321]

2 With regard to this issue, see Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 1009 (writtenby Masabumi Suzuki).

§7. Effects of a Patent Right

7.2. Working of the Invention as a Business7.2.1. “As a Business” (Article 68 of the Patent Act)The scope of the effect of a patent right is restricted to the “working of the invention
as a business” (Article 68 of the Patent Act). Such restriction had not been establishedunder the old Act, so according to the letter of law, a patent right shall also be effective
against personal and home working of the invention.1 However, a revision was made in
the current Act. The purpose of the Patent Act is “to contribute to the development ofindustry” (Article 1 of the Patent Act). Therefore, according to this purpose, it is thought
to be necessary and sufficient only to regulate the working as a business.
While there are various theories concerning the interpretation of “as a business,”2
judging from the purpose of the Patent Act, which is to contribute to industrial
development, this requirement should be considered merely to exclude personal and homeworking of the invention, and this view may be generally accepted.3 As long as a patented
invention is worked as part of an economic activity, such working can be considered tocorrespond to the working as a business even if it was not directly intended for gaining
profits, and even the working of an invention in public works, medical services and law
practices that are not profit-making businesses can also be regarded as the working as abusiness. However, the issue of whether or not an act corresponds to the working as abusiness has hardly ever been disputed in a court case, so it is considered to be arequirement of low importance in practice.

1 The restriction of “working as a business” had been established in the old Utility Model Act and the old Design Act,but for some reason, it had not been included in the old Patent Act. A patent right is an exclusive right to use atechnical idea, and it is an extremely powerful right in that it imposes restraints on others’ acts. Accordingly, thescope of the effect should not be expanded without cause, and it is sufficient to recognize the exclusive right to bewithin the scope necessary for the purpose of the law. Because of this, the restriction of “working as a business” wasestablished under the current Act. Under the old Patent Act as well, there seem to be no court cases in which thatpoint was disputed in actuality.
2 The majority theory is to interpret that the “working as a business” refers to working other than the personal andhome working of the invention (Koe Toyosaki, Kōgyō Shoyūken Hō [Shinpan, Zōho] (Industrial Property Law [newenlarged ed.]), p. 208, etc.). Some of the other theories define it as working whereby an invention “can be repeatedly
and continuously used in industrial management” (Nobuo Monya, Chiteki Zaisanken Hō Gairon [2 han] (Intellectual
Property Act [3rd ed.]), p. 113); “working with the purpose of directly or indirectly meeting the demand orconvenience of many and unspecified persons” (Sueaki Oda, Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Chūkai(Revised and Enlarged Edition of Commentary on New Patent Act), p. 272); “working where the working of thepatented invention is the purpose of business” (Hajime Kaneko, Yoshinobu Someno, Tokkyo Shōhō (Patents andTrademarks), p. 102); or “an economic activity conducted with a continuous intention” (Bunzo Takino, Kōgyō
Shoyūken Hō (Industrial Property Act), p. 60). First of all, an invention could be worked only once in the case ofcivil engineering work, or the product could be imported only once for a business purpose. It is unreasonable toconsider that an act conducted as a business activity does not constitute a patent infringement, as long as it is only
worked once, and the requirements of repetition and continuity are not necessary. Secondly, because there arebusiness activities that only target a small number of specific users, the requirement of working for many andunspecified persons is not necessary either. Thirdly, since the working of an invention by a company for the welfareof the employees or for goods to be distributed to the shareholders or customers must also be considered to be an
infringement, the requirement that the working of the patented invention is the purpose of a business is also
unreasonable.
3 Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p. 1018 (written by Masabumi Suzuki)
states that this is intended to exclude acts that are carried out for a non-economic purpose in a private domain.

§7. Effects of a Patent Right[322]
At least until recently, the working of an invention required a certain amount ofexpertise, experience, funds and other resources, and it was hardly imaginable that theworking of a patented invention conducted not as a business (e.g. making a product as ahobby) could infringe the patentee’s interest, so working other than the working as abusiness was not called into question. However, in recent years, as an increasing numberof software-related inventions have been created, it has become more popular for people
to produce (or, more accurately, reproduce in most cases) or use patented inventions
within their homes or for their personal use. This trend is making it more difficult todistinguish between the working as a business and personal working, and now thesituation has reached a level where, if such home or personal working is left unaddressed,
it would affect the patentees’ economic benefits. For instance, inventions relating tocomputer software have come to be patented, and according to this tendency, there may
be cases where an individual engages in transmitting a patented computer program byusing a computer network, or an individual appears as one of the parties using (working)an invention relating to a computer network (e.g. an online payment system). If such typeof working takes place, often difficulties might arise in determining whether or not thisworking is conducted as a business. In the field of patent law, a movement toward
reconsidering the requirement of “working as a business” has not yet been seen. However,as the advancement of digital technology has made it extremely easy for nonprofessional
individuals to reproduce digitized materials, there is a controversy in the copyright fieldover the necessity to revise the provisions on reproduction for private use (Article 30 of
the Copyright Act). This suggests that in the field of patent law as well, it will become anincreasingly important issue to consider where we can find a balance point between theinterest to be enjoyed by the patentee (and technological development) and the harmful
effect resulting from restricting the acts of others. With regard to infringers in the casewhere multiple people are involved in the infringement, see “8.2.1.(3) Infringement inwhich multiple people are involved.”[323]
7.2.2. Working (Article 2, paragraph (3) of the Patent Act)
7.2.2.1. Significance of Defining “Working”
An ownership is a title to the use, profits, and disposition of a (corporeal) thing(Article 206 of the Civil Code). The Civil Code does not have provisions defining the useof a thing (corporeal thing), because a thing must always be possessed in order to be used,§7. Effects of a Patent Rightand the mode of use does not go beyond the bounds of common sense.1
Unlike ownership, a patent right has an effect of prohibiting others from committing
certain acts, and hence the scope of its effect needs to be clearly defined by law.2 A patentright is a historically new, artificially created right. Its subject matter is an invention, which
is an intangible technical idea and is described by text in the form of a claim. Because ofthis, it is unclear what kinds of acts constitute an infringement of a patent right. The scopeof the working of the invention, which corresponds to use in the case of a corporeal thing,cannot be demarcated by the concept of possession, and the mode of working is not always
singular. For instance, it is uncertain whether or not an act of distributing a catalog in whicha product that infringes a patent right is published, in order to sell such infringing product,
constitutes an infringement, until some legislation is enacted. Unless this point is made clear,
third parties would not be able to distinguish between legal and illegal acts of working.
Therefore, the Patent Act specifies the concept of working and the scope of the effect of theright for each category of invention (Article 2, paragraph (3) of the Patent Act).
Patent rights are a system designed to encourage the creation of inventions by
allowing inventors to monopolize their inventions on condition that they disclose theinventions and thereby to make profit from such monopolization, which can be incentives
for them. Since a patent right restricts acts of others, the scope of working of a patented
invention should be limited to the extent necessary for securing such incentives.
Accordingly, the concept of working should be based on an act that meets the constituent
elements of the patent claim, and the effect of a patent right should extend to a productmade by way of such act (assignment or use of the product), and should also extend to otherincidental acts that could virtually jeopardize the patentee’s interest. The scope of incidental
acts in this meaning tends to expand over time.
[324]
7.2.2.2. Working of the Invention of a Product (Article 2, paragraph (3), item (i) of the
1 The Supreme Court Judgment, January 20, 1984, Minshū Vol. 38, No. 1, p. 1, Hanji No. 1107, p. 127, Hanta No.519,
p. 129 (a case regarding the official announcement written by a famous Chinese calligrapher in the Tang era, Yan
Zhenqing), is a rare case where the point in dispute was the concept of using and receiving profit from a thing owned in
the context of an ownership. The court stated that the ownership of a work of art only exists as the exclusive power ofcontrol over the work as a tangible thing, and it does not function as the power to directly and exclusively control thework of art itself as an intangible thing; therefore, even if someone uses the work as an intangible thing without infringing
the exclusive power of control that is vested in the person who owns the work as a tangible thing, such use cannot be
regarded as infringing the ownership of the work (in this case, the owner of the original work of art (calligraphy museum)sued the defendant for its act as copyright infringement, alleging that the defendant published the photographic plate of
Yan Zhenqing’s calligraphic work which was made and acquired from the plate’s owner before the museum had
acquired the work).
2 For the necessity to study the concept of working, see Hisayoshi Yokoyama, “‘Jisshi’no Gainen no Kentō wo Tōshite
Miru ‘Jōto no Mōshide’ Gainen no Igi” (Meaning of the Concept of “Offering for Assignment” Viewed through the
Study of the Concept of “Working”), Makino Toshiaki Sanju Kinen: Chiteki Zaisanken Hōri To Teigen (In Honor ofProfessor Makino Toshiaki’s Eightieth Birthday: Legal Principles of and Recommendations Concerning Intellectual
Property Rights), p, 178.

364

§7. Effects of a Patent Right

Patent Act)In the case of the invention of a product (including a computer program, etc.),
working is defined as acts of producing, using, assigning, etc. (assigning and leasing and,in the case where the product is a computer program, etc., including providing through anelectric telecommunication line3), exporting or importing, or offering for assignment, etc.
(including displaying for the purpose of assignment or leasing) of the product (Article 2,paragraph (3), item (i)). The former Patent Act also had a definition of the term “working.”
Through the 2002 revision, the previous definition was revised by inserting theparenthesized phrase stating that the term “product” includes a computer program, etc. A“computer program, etc.” is construed to include something equivalent to a computer
program, such as a data structure wherein the speed of data processing increases with theuse of a computer. In the process of system designing, it was an alternatively possible
approach to specify computer programs as a new category of invention. However, due tothe fact that such a category as “computer programs” was not found elsewhere in the world,
and in consideration of the continuity of the administrative operations at the JPO, the optionof including computer programs in the scope of “product” was finally chosen. With thisrevision, the act of providing a computer program through a network came to be regarded
as an act of direct infringement, without needing to discuss the possibility of constituting
an indirect infringement. At the time of this legal revision, whether or not to include genesequences and protein configuration into the scope of product was also discussed. However,it was thought that these subject matters were scientific discoveries which required aconsiderable amount of funds and research effort, and although they seemingly had some
economic value, granting a patent right—a powerful right to exclusive use—, at least at thattime, would rather adversely affect academic research or industrial development. Based on
this recognition, the option of including those subject matters into the scope of product was
not adopted, and only a computer program, etc. was introduced into the scope of product.
“Producing” refers to the act of making the product, and covers not only the
production of industrial products, but also assembly, construction, forming, and plantcultivation. The combining of parts also corresponds to producing. Also, the modification

3 This includes both wired and wireless telecommunication lines. Japan Patent Office, ed., Kōgyō Shoyūken Hō (Sangyō
Zaisanken Hō) Chikujō Kaisetsu [19 han] (Clause-by-Clause Commentary on Industrial Property Law [19th ed.]), p.
15, states as follows: telecommunication refers to the transmission of two-way communications; although it does notinclude broadcasting, the 2002 revision clearly stipulates that the act of providing the product via the interactive network
is included in the scope of the working; the transmission of a computer program via the broadcasting network is
considered to fall within the concept of “assignment or lease” under the old Act prior to the 2002 revision and it is also
included in the scope of the working under the current Act. This conclusion presented by the JPO may be valid but it isunnatural to consider that the broadcasting constitutes “assignment or lease,” which should have been corrected at thetime of the 2002 revision.

365§7. Effects of a Patent Right(repairing) or remodeling of an important part is also regarded as producing.4 This point
will be discussed in detail in “8.2.6. Exhaustion of Rights.”[325]“Using” refers to using the product relating to the patented invention by a method of
attaining the purpose of the invention.5 This is because, from the standpoint of the purposeof the Patent Act, which is industrial development, there is no reason to consider that use
in a mode that is unrelated to the purpose of the invention is illegal. In addition, the use ofa product produced by using the product relating to the patented invention does notcorrespond to the working of the invention.
The Patent Act provides that “assigning and leasing” includes provision through anelectric telecommunication line (Article 2, paragraph (3), item (i)). Assigning the patented
product free of charge constitutes infringement if it is conducted as a business. A typicalexample of an assignment is a transfer of ownership, but assignment includes any othercases that can be regarded as being substantially equivalent. For example, even an act thatis legally recognized as a contract for work can be an assignment if the product ismanufactured and delivered for value.6 Through the 2002 revision, the provisions on theconcept of “working” were amended to include a computer program, etc. in the scope of
product (Article 2, paragraph (3), item (i)). A “computer program, etc.” is defined as “a setof instructions given to an electronic computer which are combined in order to produce a
specific result” 7 (Article 2, paragraph (4)). However, a computer program itself is anintangible thing, and unlike a “thing” as set forth in Article 85 of the Civil Code (whichrefers to a tangible thing), this provision is intended only for the purpose of specifying the
4 An act of producing is a concept that includes, in addition to the act of producing (manufacturing) in the ordinary sense,such acts as the assembly and mounting of parts (the Tokyo District Court Judgment, February 25, 1981, Mutai Saishū,Vol. 13, No. 1, p. 139 (the Single-Lens Reflex Camera case)), the repair of a material portion of an object (the Osaka
District Court Judgment, April 24, 1989, Mutai Saishū, Vol. 21, No. 1, p. 279 (the Sand Producing Machine Hammer
case)), and the modification or replacement of components, which results in the production of a new patented productthat is not identical to the original patented product (the Supreme Court Judgment, November 8, 2007, Minshu Vol. 61,
No. 8, p. 2989/Hanji No. 1990, p. 3/Hanta No. 1258, p. 62 (the Ink Cartridge case)). Also, the act of installing a software
application for creating documents on a computer constitutes an act of production (The Intellectual Property High Court
Judgment, September 30, 2005, Hanji No. 1904, p. 47, Hanta No. 1188, p. 191 (Ichitaro Case)). As a rare example, in
the Tokyo District Court Judgment, May 15, 2002, Hanji, No. 1794, p. 125/Hanta, No. 1108, p. 275 (the Ceramic Bladecase), the court held that it is possible there to be a case where a person has been supplied with a target product (witha thickness of 0.525–0.313 mm) which does not satisfy the constituent feature, “the surface coating of the ceramicmaterial is constituted with a layer of which the overall thickness is up to 0.25 mm,” of the patented invention, but
without any change to the material being made, the ceramic material became thinner by abrasion through use, and the
product formally comes to fall within the scope of claims; but since this results from an act of using the product according
to the ordinary purpose of use, such purchaser’s act cannot be regarded as an act of producing a product under social
conventions.
5 In the Osaka District Court Judgment, July 20, 2006, Hanji No. 1968, p. 164 (Platform Truck Stopper Case), the court
stated that the act of merely conducting an inspection, repair, or replacement of parts of the device relating to the patented
invention does not constitute an act of using.
6 The following is a case relating to a design right: the Tokyo District Court Judgment, August 31, 1965, Hanta No. 185,
p. 213 (the Revolving Book-Displaying Instrument case).
7 This definition is almost the same as the definition under Article 2, paragraph (1), item (x) of the Copyright Act, withthe exception that while the Patent Act protects technical ideas, the Copyright Act protects expressions and therefore
defines a computer program as an “expression.”366

§7. Effects of a Patent Right

scope of working of an invention that could constitute infringement. When one person has
assigned a tangible thing to another, there is nothing left in the hand of the assignor, whereas,
if one person has provided a computer program to another via an electric
telecommunication line, the assignor still retains the same computer program. A question
was raised about applying the concept of assignment when understanding such act.
Nevertheless, there was a strong necessity to prohibit this kind of act and, to this end, it has
been provided that in the case of a computer program, etc., provision via an electric
telecommunication line shall be included in the scope of assignment (or in other words,
deemed to be assignment) (Article 2, paragraph (3), item (i)). “Leasing” means to lend, andsimilar to the case of assignment, it does not matter whether the product is lent for value or
free of charge. However, many of the cases where a product is lent free of charge areconsidered not to be leasing as conducted as a business, e.g. where individuals lend andborrow the product. In such a case, the act does not constitute an infringement. In the future,a scheme wherein a computer program is stored on a cloud computer and users acquire theprogram outcome alone by operating the cloud computer via the Internet will be morecommon. There may be arguments over whether an act engaging in such a scheme should
be regarded as assignment, etc., leasing, or use. In conclusion, that act may be categorized
as one of these modes of working the invention.
[326]
Importing and exporting are also included in the concept of working. While
importing has naturally been considered to fall within this concept, exporting wasadditionally included in this concept under the 2006 Revision (Article 2, paragraph (3), item(i)). As for “exporting,” it was thought, before this revision, that since production orassignment in most cases took place within Japan before exporting, it was not such so
serious a problem even if the exporting itself could not be stopped, and that it would beenough for exporting to be regulated under the law of the country of destination (where therecipient of the goods is located), so there was no need to regulate this issue under Japanese
patent law.8 At the same time, however, there were also problems in that even when apatent-infringing product was detected in the process of export, nothing could be done tostop the export unless there was proof of domestic assignment, etc., and an attempt wasmade first to import a foreign infringing product into a bonded area in Japan and then reexport it while indicating Japan as the exporting country. As products that infringe
intellectual property rights have come to be distributed across national borders, a

8 In the following case, which took place before the 2006 revision, the court held that when no agreement on exporting
had been made upon granting a non-exclusive license for a patent right, the patentee cannot stop the licensee’s act ofexporting: the Tokyo District Court Judgment, May 18, 1963, Kamin Vol. 14, No. 5, p. 979 (the Laundry Method
Utilizing Swelling Pressure case).

367

§7. Effects of a Patent Right

momentum toward suppressing such infringement on an international scale increased,9 andaccordingly, upon the 2006 revision, exporting was additionally stipulated as a type ofworking (Article 2, paragraph (3), item (i)). With regard to border measures against export,
a procedure similar to that relating to import is provided by law (Customs Act, Articles 692, et seq.). For more details about border measures, see “8.2.2. Border Measures (CustomsAct)).” It should be noted that the act of exporting is itself an act conducted within the
territory of Japan, so it can be regulated by the law of Japan, independently from patentlaws of foreign countries, and such regulation does not conflict with the territoriality
principle.
[327]
Offering for assignment, etc.10 (including displaying for the purpose of assignment,etc.) is to externally express one’s intention or desire to assign a product, and it includes
acts conducted to this end, such as displaying a product, distributing catalogs and pamphlets
of a product, and soliciting consumers to buy a product, or creating a website to display a
product on it, while preparing an inquiry form concerning the sale of the product.11 The
provision that was in force before the 1994 Revision only covered such “display,” but since“offering for sale” was stipulated as part of the exclusive right in Article 28 of the WTO’s
TRIPS Agreement, a provision concerning “offering” was introduced in the Patent Act ofJapan. The concept of “offering” introduced upon the revision is broader than the conceptof “display” used since before the revision and can be considered to include “display,” butit was clearly defined in brackets to make sure. If “offering for assignment, etc.” isconducted by a person who engages in manufacturing and sale, such person would often
fall within the scope of “person who is likely to infringe” (Article 100, paragraph (1)). Since
this act could be the subject of an injunction even in the past, it was rarely taken up as a
topic of discussion. In the future, however, “offering for assignment, etc.” will be more
likely to be challenged as an infringement in such cases as where it is conducted by a person
other than the manufacturer/seller or conducted beyond national borders.12

9 The Anti-Counterfeiting Trading Agreement (ATCA), which Japan advocated in 2005 at the G8 Summit in Gleneagles,
was signed in 2011. ATCA obligates the suspension of the export of counterfeit and pirated goods. Japan ratified thisAgreement, whereas the EU signed it but the European Parliament voted overwhelmingly against the ratification. As of
2015, the Agreement has not yet taken effect.
10 See Hisayoshi Yokoyama, “‘Jisshi’no Gainen no Kentō wo Tōshite Miru ‘Jōto no Mōshide’ Gainen no Igi” (Meaningof the Concept of “Offering for Assignment” Viewed through the Study of the Concept of “Working”), Makino Toshiaki
Sanju Kinen: Chiteki Zaisanken Hōri To Teigen (In Honor of Professor Makino Toshiaki’s Eightieth Birthday: Legal
Principles of and Recommendations Concerning Intellectual Property Rights), p, 191.
11 In the Intellectual Property High Court Judgment, September 15, 2010, Hanta No. 1340, p. 265 (the DVD Multi-drivecase), which discussed international jurisdiction as the main issue, the court held that opening a website constitutes
offering for sale.
12 See Tsukasa Matsumoto, “‘Jōto Tō no Mōshide’ to Zokuchi Shugi no Gensoku” (“Offering for Assignment, etc.” andTerritorial Principle), Makino Toshiaki Sanju Kinen: Chiteki Zaisanken Hōri To Teigen (In Honor of Professor Makino
Toshiaki’s Eightieth Birthday: Legal Principles of and Recommendations Concerning Intellectual Property Rights), p,
161.

368

§7. Effects of a Patent Right

In the past, the act of possessing an infringing product did not itself constituteinfringement. The right holder could seek an injunction when he/she found that a person
was in possession of an infringing product, and that the product was likely to infringe
his/her rights (Article 100, paragraph (1)). However, as it was not easy to prove thelikelihood of such infringement in some cases, the right holder, in reality, had difficulties
in directly checking the infringer’s act of possession. To solve this problem, the 2006
revision stipulated that an act of possessing an infringing product for the purpose of
assigning, etc. or exporting it shall be deemed to constitute infringement (Article 101, item(iii)). Where infringing products were put into the distribution process, the right holder
would often have to stop the sale of those products one by one, which was practicallydifficult in many cases. For this reason, by deeming that an act of “possession” constitutes
infringement under the Patent Act as in the case under the Trademark Act and thereby
broadening the concept of working, it is now also possible to prevent the spread ofinfringing products at Customs. This also applies to exporting; the act of possessing an
infringing product for the purpose of exporting it, which takes place before the product is
put into the export process, is now also deemed to constitute infringement.
[328]“Importing” refers to the act of carrying goods from overseas into Japan. The term
“import” is used in various laws, and its concept should be drawn from the legislative
purposes of the respective laws. From the perspective of levying tariffs at Customs, carrying
goods from bonded areas into other areas of Japan is construed as importing, whereas in
the case of dealing with illegal drugs, etc., landing goods from ships or airplanes isconstrued as such. Under the Import Trade Control Order, when goods pass across theJapanese coastline, they are deemed to have been imported. With regard to products that
infringe intellectual property rights, carrying infringing products into bonded areas, not tomention carrying such products as someone’s personal belongings, sending them by mail,or smuggling them into Japan, should be construed as corresponding to an act of importing
and therefore as constituting an infringement (Article 109-2, paragraph (2) of the Customs
Act).13 If those goods for which Japan is not the designated country of destination are
13

Kosaku Yoshifuji and Kenichi Kumagai, Tokkyohō Gaisetsu [13 han] (Outline of the Patent Act [13th ed.]), p. 434,
commented that goods in the bonded warehouse should not be regarded as imported goods, but stated that “an act of
producing a patented product at the factory in the bonded area, using imported parts or materials, should be construed
as domestic production.” With regard to goods infringing trademark rights or violating the Unfair Competition
Prevention Act, a dominant view considers landing as importing. In the previous edition of this book (Kōgyō Shoyūken
Hō Jō (Industrial Property Law Vol. 1)), the author stated that, “Goods that are in a bonded area are regarded as not
being imported yet,” which was an erroneous view. There are various types of bonded areas, such as designated bonded
areas, bonded warehouses, bonded factories, bonded exhibition sites, and comprehensive bonded areas (Article 29 of
the Customs Act). Among those, bonded factories are establishments designated by the Director-General of Customs asplaces where private businesses may perform processing, manufacturing or other operations using overseas goods before
going through the customs procedure for import declaration (Article 56 of the Customs Act). In view of these points,
carrying of goods into bonded areas should be considered to be included in the scope of the import under the Patent Act.

369

§7. Effects of a Patent Rightlanded into the bonded warehouse temporarily for the purpose of rehandling, or if those
goods which are placed in the bonded area, designating Japan as the country of destination,
go through processing, remodeling, sorting, etc., such movement of goods should beconstrued as corresponding to importing even before the infringing goods pass throughCustoms. This view also has an implication of preventing the risk that such goods could bereshipped overseas in the guise of goods exported from Japan.
On the other hand, when a ship loaded with goods that infringe an intellectual
property right merely passes through the territorial seas of Japan, such movement of goods
does not correspond to importing.14 Landing goods into the bonded warehouse only for the
purpose of sifting or rehandling and then sending them overseas also does not seem to have
any illegal nature. If Japan aims to make its ports international hub ports and make themmore competitive on a global scale, it is necessary to encourage such activities as accepting
a large amount of goods brought by foreign ships and then putting them into a large ship tosend them overseas. If landing goods only for the purpose of sifting/rehandling is prohibitedas constituting infringement of a patent right, this could pose an impediment to Japanese
ports becoming international hub ports. Allowing such movement of goods would not leadto a situation where infringing goods come to market in Japan, and therefore would notcause any substantial damage to Japanese patentees.
[329]
With regard to exporting and importing, the Customs Act provides for bordermeasures that are different from those taken in ordinary civil actions. For details, see “8.2.2.
Border Measures.”
The greatest issue regarding importing is parallel imports. This issue shall be
described in detail in 8.2.6. Exhaustion of Rights.
7.2.2.3. Working of an Invention of a Process (Article 2, paragraph (3), item (ii) of the
Patent Act)
With regard to the invention of a process, the acts of using the process are stipulated
as the working of the invention (Article 2, paragraph (3), item (ii) of the Patent Act).
Similarly to the case of the invention of a product, such use of the process for attaining theoriginal purpose of the invention of the process corresponds to working. Since the inventionof a process does not involve products, troublesome problems do not occur so often.
However, in relation to the case of inspecting the quality or standards of a product by using
14

In the Basic Directive on the Customs Act, Chapter 6 Customs Clearance, Section 7 Articles Infringing Intellectual
Property Rights (Export ), 69.11-8 (Handling of Transit Goods), it is stated that “it should be noted that transit goods
are not subject to an application for suspension of import.”370

§7. Effects of a Patent Rightthe invention of a process, a question arises as to whether or not a process patent shall beeffective against such a product inspected by using the patented process. In the field ofpharmaceutical products in particular, if it is impossible to physically inspect thepharmaceutical product without using the patented process, or if the patented process isdesignated by laws and regulations, it is impossible to complete the manufacture of thepharmaceutical product or obtain approval for the product from the Ministry of Health,Labour and Welfare without using the patented process. In such cases, whether or not thepatent right granted for the inspection method shall be effective against the pharmaceuticalproduct becomes an issue. On this point, even when an inspection of the pharmaceuticalproduct cannot be conducted without using the patented inspection method, what is
infringed is the patent for the method, so it is inappropriate to consider that the patent for
the inspection method shall be effective against the inspected pharmaceutical product.
Otherwise, a person who has only invented an inspection method would virtually be entitledto the effect of the patent as if he/she has invented the inspected pharmaceutical product.15
If a person wants a patent that is effective against the pharmaceutical product, he/she should
obtain a patent on the pharmaceutical product; or otherwise, that person should not be
granted a de facto right to monopoly that is effective against the pharmaceutical product as
well.
[330]
7.2.2.4. Working of the Invention of a Process of Producing a Product (Article 2,paragraph (3), item (iii) of the Patent Act)The invention of a process of producing a product has the nature of both an inventionof a product and an invention of a process. Its working not only includes the acts of using
15 In the Osaka High Court Judgment, November 18, 1997, Chiteki Saishū Vol. 29, No. 4, p. 1066 (Physiologically Active
Substance Measurement Method Case), the court found that, since the patented method in question is necessarily
incorporated into the manufacturing process of the pharmaceutical product and used in the relationship neither too
close nor too remote from other manufacturing operations, there is a relationship in which the “use of the method”
equals the “production of the product,” and based on this finding, the court concluded that as in the case of an “inventionof a process for producing a product,” the patent in dispute has an effect which enables the patentee to seek an injunction
against infringement, as a measure necessary for preventing infringement, in respect of the sale of the products
manufactured by using the patented method as well. On the other hand, in the judgment on the final appeal of the samecase (the Supreme Court Judgment, July 16, 1999, Minshū Vol. 53, No. 6, p. 957, Hanji No. 1686, p. 104, Hanta No.
1010, p. 245), the court determined that the destruction of the pharmaceutical product in dispute and the withdrawal of
the application for registration in the National Health Insurance Drug Price List go beyond the bounds of measures thatshould be taken to realize the right to seek an injunction, and neither of them constitutes “measures necessary for theprevention of infringement” as set forth in Article 100, paragraph (2) of the Patent Act. It is basically enough to use
the patented method only once in order to conduct the inspection, so even if the method is used without authorization,
it is meaningless for the right holder to try to suspend use after the method has been used. In addition, such unauthorized
use just for one time may only cause minor damage. In consideration of these points, it is inappropriate to consider thatthe patent for the invention of the inspection method should be allowed to be effective in relation to not only the method
but also the inspected pharmaceutical product because such treatment would have too great an impact on other aspects,
though the right holder would be dissatisfied with this.

371

§7. Effects of a Patent Rightthe process, but also the acts of using, assigning, etc., importing, or offering for assigning,
etc. of the product produced by the process (Article 2, paragraph (3), item (iii) of the Patent
Act). The product produced by the process includes a computer program, etc. (because item(i) which defines the term “product” contains the phrase “including a computer program,etc.; the same shall apply hereinafter.”) Accordingly, a computer program created by apatented automatic programming process is included in the scope of “product” as referred
to in item (iii), and using that program would constitute infringement.
In this case, there is the issue of whether use of the product is limited to use of thedirect product produced by the claimed process or whether it covers use of the final product(secondary/tertiary product, etc.). This issue mostly becomes a problem in the case of achemical substance. In the case of machines, etc., the direct product is often used as the
final product just as it is, so it is often clear that the patent for the process of producing thedirect product is effective against the final product. It should be considered that the patentshall also be effective against the final product in the case of a chemical substance, in
principle, but delicate problems could arise in some specific cases. When a patent right has
been granted to the process of producing an intermediate product, there are cases where theintermediate product is produced first and then it is reprocessed into the final product, andcases where the intermediate product is presumed to be produced within a series ofchemical reactions. While use of the intermediate product itself is clear in the former case,
it is difficult to tell in the latter case16.

16 For detailed discussions, see Kosaku Yoshifuji, Tokkyo Hō Gaisetsu [13 han] (Outline of Patent Act [13th ed.]), p.
438.

372

§7. Effects of a Patent Right[331]
7.3. Restriction on Effects of a Patent Right
A patent right, which is a right to a monopoly for working the patented invention asa business, has powerful effects that can stop others from working the invention, unlike theeffects of ownership. Therefore, unless considerable restrictions are imposed on its effects,
it could have a negative rather than a positive influence on industrial development.
Accordingly, the Patent Act imposes various restrictions on the effects of a patent right.
These restrictions are based on industrial policy reasons, public interest reasons, or the
principle of equity.
7.3.1. Restrictions Pertaining to the Limits of the Scope of Right
These restrictions limit the effects of a patent right with regard to specific products
or acts, irrespective of who conducts the acts. In that sense, they are considered to indicate
the limits of the scope of right.
7.3.1.1. Working for the Purposes of Experiment or Research (Article 69, paragraph (1)of the Patent Act)1
The purpose of the Patent Act is industrial development, and as the means to attainthis purpose it grants a right to a monopoly in return for the inventor's act of making theinvention public. The purpose of having the invention published is to raise the technologicallevel of society in general, but it would not make a great contribution to that end if third
parties could only browse the description. It is necessary to permit additional experiments
by third parties for the purpose of learning the content of the patented invention. Suchadditional experiments may also give rise to inventions of improvements or otherinventions, and they contribute to enriching technology. To put it more strongly, one of the
1 Keiko Someno, “Shiken/Kenkyū Ni Okeru Tokkyo Hatsumei No Jisshi” (Exploitation of Patented Invention forExperimentation and Research) (I)(II), AIPPI Journal, Vol. 33, No. 3, p. 2/No. 4, p. 2 (1988) is particularly outstanding
as a study on this issue. It mentions investigation of the patentability, investigation of the functions, and experiment forthe purposes of improvement/development as legal acts of working the invention. Other studies include: Hiroaki Niki,“Iyakuhin No Tokkyoken Sonzoku Kikan Chū Ni Okonawareta Kōhatsu Iyakuhin Ni Tsuite No Seizō Shōnin Shinsei
Kōi To Tokkyoken Shingai” (Approval Application of Follow-up Drugs under Pharmaceutical Law before theExpiration of Pharmaceutical Patent, and the Patent Infringements under Patent Law) (1)(2)(3), Patent, Vol. 50, No. 11(1997), p. 17/Vol. 51, No. 1 (1998), p. 49/Vol. 51, No. 2 (1998), p. 15; Yukio Shimizu and Yoshiyuki Tsujita, “Tokkyo
Hō 69 Jō 1 Kō Ni Okeru ‘Shiken Matawa Kenkyū’ No Rironteki Konkyo To Chosakuken Hō (Theoretical ground of‘Experiment or Research’ in Article 69, paragraph (1) of the Patent Act and the Copyright Act), Takura Osamu Koki
Kinen, “Chiteki Zaisan Wo Meguru Sho Mondai” (Various Problems Surrounding Intellectual Property), p. 141. Studies
focusing on the U.S. system include: Ryōko Iseki, “Shiken/Kenkyū Toshite No Tokkyo Hatsumei No Jisshi -Gasshūkoku No Bāi (Working of a Patented Invention as Experiment/Research -- in the Case of the United States),”Dōshisha Hōgaku (The Doshisha Law Review), Vol. 44, No. 5, p. 43.

373

§7. Effects of a Patent Right

greatest objectives of the Patent Act is to promote inventions of improvements. Japan
should make efforts to advance basic research and obtain pioneering patents. However, it
should not be forgotten that products meeting the needs of society are often developed
through the existence of many improvement patents surrounding a basic patent. Therefore,
the Patent Act needs to have a function whereby it also promotes many inventions ofimprovements and peripheral inventions besides basic inventions. The important thing isthat basic and applied technologies are developed in a balanced manner. Such basic
recognition would be helpful for interpreting many aspects of the Patent Act, including theinterpretation of the scope of right based on the doctrine of equivalents. Indeed, the patentee
could find himself/herself at an economic disadvantage where he/she is unable to sell the
product well due to the development and sales of better products that resulted frominventions of improvements. However, in many cases, an invention of improvement would
be an invention dependent on the original patent, in which case the original patentee would
have some control over the invention and could gain profits by cross licensing. It is also
important to promote inventions of improvements for industrial development, so althoughsome economic loss may practically be incurred on the patentee's part, such level ofdisadvantage for the patentee cannot be avoided for technological development.
[332]
Accordingly, the Patent Act stipulates that a patent right shall not be effective against
the working of the patented invention for experimental or research purposes (Article 69,
paragraph (1) of the Patent Act). However, even where the invention is worked under thename of experiment or research, if it is worked in a manner unrelated to the developmentof the technology, the patent right will be effective against such act. For instance, the effectsof the patent are considered to extend to an act of working the invention under the name ofexperiment or research, for conducting market research by selling products on a trial basis.
Such act of working an invention is not intended for technological progress, but only forprofit. Therefore, such experiment would not contribute to industrial development as
intended by the Patent Act.
Article 69, paragraph (1) of the Patent Act permits working only for experimental or
research purposes, and does not go so far as to permit the sale of a product that is createdas a result of the experiment or research. Because, if a product resulting from the experimentor research conducted by working a patented invention is placed on the market, it would
cause the patentee to incur direct damages.
Working an invention for experimental or research purposes becomes an issue mostfrequently with regard to patent rights on pharmaceuticals and agricultural chemicals, andmany lawsuits have been filed in connection with this issue. A pharmaceutical or374§7. Effects of a Patent Rightagricultural chemical cannot be manufactured or sold without the permission or approval(disposition) of the Ministry of Health, Labour and Welfare or the Ministry of Agriculture,
Forestry and Fisheries, and an enormous amount of experimental data must be submitted
in order to receive that disposition. The preparation of such data requires a considerable
amount of time. In order for a third party to start selling a product protected by a patentimmediately after the expiration of the duration of the patent, such party must conduct
experiments and acquire a governmental disposition before the expiration of the durationof the patent. In such a case, there will be a question of whether working an invention insuch a way (the act of manufacturing a pharmaceutical, which is a patented product, andusing it in clinical experiments, etc.) can be regarded as working an invention forexperimental or research purposes. Many lower court judgments held that an act of working
an invention for such a purpose was only the preparation for acquiring profits by working
the same invention as the patented invention immediately after the expiration of theduration of the patent, and not for making new inventions of improvements through such
experiments, and construed that working the invention in such a way did not correspond to
working it as intended by Article 69, paragraph (1) of the Patent Act.2 At the same time,
there were lower court judgments that held that such working corresponded to working forexperimental or research purposes. Ultimately, a Supreme Court judgment3 was rendered,holding that such working corresponded to working for experimental or research purposes
and was legal, and this issue was tentatively settled in practice. However, in this judgement,
the Supreme Court put a certain brake on such experiment and research, stating that “if athird party works a patented invention beyond the bounds of experiment necessary for

2 The court judgment which triggered such an interpretation was the Tokyo District Court Judgment, July 10, 1987, Mutai
Saishū, Vol. 19, No. 2, p. 231 (the Herbicide case), and there are other court judgments that have indicated the same
opinion. In this judgment, the court held that Article 69 was legislated since experiment and research are fundamentally
aimed at advancing technology to the next level, and extending the effects of patents to such experiment and research
impedes technological progress, and stated that the tests on efficacy, etc. which are necessary for filing an application
for the registration of an agricultural chemical under Article 2 of the Agricultural Chemicals Control Act are not intended
for technological progress, but are solely intended for sales of herbicides, so they are not regarded as the experiment andresearch mentioned under the Patent Act. This Herbicide case was disputed in a number of countries other than Japan,
and varied court judgments have been rendered in different countries.
3 In the Supreme Court Judgment, April 16, 1999, Minshū, Vol. 53, No. 4, p. 627/Hanji, No. 1675, p. 37/Hanta, No. 1002,
p. 83 (the Antiplasmin Agent case), the court held that an act of producing a chemical substance or a drug which falls
within the technical scope of a patented invention during the duration of the patent and of carrying out the necessary
experiments for obtaining data to be attached to a written application for manufacture approval by using the produced
chemical substance or drug in order to apply for the approval to manufacture prescribed in Article 14 of thePharmaceutical Affairs Act (referred to as the “Act on Securing Quality, Efficacy and Safety of Products Including
Pharmaceuticals and Medical Devices” from 2014) for the purpose of manufacturing and selling a generic drug after the
expiration of the patent duration corresponds to the "the working of the patented invention for experimental or research
purposes" referred to in Article 69, paragraph (1) of the Patent Act. As the reason for the judgment, the court mentioned
that, one of the fundamentals of the patent system is to make the invention available for free use by anybody after the
expiration of the patent duration and thereby extensively benefit society in general, but since it is necessary to conduct
prescribed experiments over a certain period in advance in order to gain approval for manufacturing a drug, if such
experiments were regarded as not being subject to Article 69, paragraph (1) of the Patent Act, third parties would not beable to use the invention freely for a considerable period after the expiration of the patent term, and it would have thesame result as extending the patent duration for a considerable period.

375§7. Effects of a Patent Right

applying for approval of drug manufacturing and produces a generic drug which is to be
sold after the expiration of the duration of the patent right or produces or uses the chemical
substance contained in the patented invention as an ingredient of a generic drug, such act
constitutes infringement of the patent and therefore is impermissible.”[333]
This Supreme Court judgment was controversial. Basically, the determination should
be made based on the purport of Article 69, but the Supreme Court held that the act
corresponded to an experiment made on the basis that, if the act is determined as not being
an experiment, third parties would not be able to immediately work the invention after the
expiration of the duration of the patent right on the patented pharmaceutical, and in practicethat would be equivalent to extending the duration of the patent right. The Supreme Court
made such judgment by brandishing the fundamental principle of the Patent Act. From apractical viewpoint, however, even though the duration of patent rights on pharmaceuticals
and agricultural chemicals can be extended by five years, the duration of the patent is still
often shortened in practice due to a delay in government dispositions on manufacturing andsales, and in extreme cases, approval for manufacturing or sale is given after the expirationof the duration of the patent right, and that is being considered as unavoidable.
[334]
If the Supreme Court judgment is considered to be right, there is little meaning in
discussing the matter further. Even if Article 69 were construed to have been establishedmainly for promoting inventions of improvements, the determination on this matter isdifficult in some cases. In light of the legislative purpose of Article 69, it would bereasonable to conclude that an experiment solely for the purpose of sales does notcorrespond to the experiment under Article 69; that is that the effects of the patent do extend
to such an experiment. Therefore, if the experiment of a pharmaceutical product in question
were merely a bioequivalence test, it would not give rise to any new improvements, and it
should not be regarded as an experiment under Article 69. However, in actual experiments
for clinical research, there can be cases where some improvements are made.4 For example,
there can be an experiment for the clinical research of a pharmaceutical relating to a basic
patent, which is intended for improving the form, method, or amount of a dosage. In theend, this issue needs to be determined based on whether or not the working of the invention
4 Osamu Kusama, Chizai Kanri (Intellectual Property Management), Vol. 47, No. 2 (1997), p. 209. Also, in the original
instance of the above-mentioned Supreme Court judgment, the Osaka High Court Judgment, May 13, 1998, Chiteki
Saishū, Vol. 30, No. 2, p. 271, the court stated that the various tests conducted for filing an application for approval for
manufacturing generic drugs may not immediately bring about new improvements or progress concerning
pharmaceutical technology, since they do not constitute technological research that directly links to new inventions or
dependent inventions, but through the extensive technical and fundamental reviews concerning drug manufacturing,
including pharmaceutical standards and drug formulation technology, and the accumulation of the review results, various
findings and knowledge that could serve as the basis for future progress in pharmaceutical technology can be gained,
and in that regard, such tests are broadly considered to contribute to the progress of science and technology.

376

§7. Effects of a Patent Right

was intended for making a new creation, by comprehensively judging the value of the patentand the value, significance, etc. of the invention of an improvement. Ultimately, there
would have to be a determination on whether the working the invention could bring about
technological progress but, specifically, there would have to be a determination on whether
the experiment was aimed at improving the basic patented invention or whether it was
related to another invention unassociated with the improvement of the basic patented
invention.5 When a patent has already been granted for an invention of an improvement ofa basic patented invention, an experiment for making that improvement could, in effect, be
presumed to be an act of working an invention for the purpose of making a new creation.
There are also many cases where the parties dispute over whether an injunction for acertain period and compensation for damage can be demanded after the expiration of theduration of the patent (an assertion that, because clinical experiments during the durationof the patent are illegal, the act of working the invention during a certain period after the
expiration of the duration of the patent would also be illegal). Even if this type ofexperiment were not the experiment under Article 69, but were the illegal working of theinvention, the duration of the patent would have expired by the time oral arguments had
been concluded. Therefore, an injunction would not be awarded. On the other hand,damages may be awarded if the working of a patented invention before the expiration of
the duration of the patent right is found to be for experiment or research purposes, or may
not be awarded if it is not found as such.
[335]
Incidentally, Article 69, paragraph (1) of the Patent Act does not have an express
provision to limit the experiments only to those for the purpose of technologicaldevelopment. Based on the purpose of the system, follow-up experiments for trying out
whether the patent actually has the effect stated in the description and experiments in thecase of filing a trial for invalidation or patent infringement litigation should also be
considered to be legal.
7.3.1.2. Means of Transportation Merely Passing Through Japan (Article 69, paragraph(2), item (i) of the Patent Act)The effects of a patent right do not extend to vessels or aircraft merely passing
through Japan, or machines, apparatus, equipment or other products used therefor, even if

5 See Naoto Shimizu, "Iryōhin No Rinshō Shiken To Tokkyo Hō 69 Jō 1 kō Ni Kitei Sareru 'Shiken Matawa Kenkyū'
Tono Kankei" (Relation Between a Clinical Experiment of a Pharmaceutical Product and 'Experiment or Research'
Stipulated in Article 69, Paragraph (1) of the Patent Act), Chizai Kanri (Intellectual Property Management), Vol. 46, No.
1 (1996), p. 23.

377

§7. Effects of a Patent Rightthe invention was worked in Japan in such a manner as to infringe the patent right. A meansof transportation merely passing through Japan causes only slight damage to the patentee
for it leaves Japan in a short time, even if the working infringed the patent right, and thisprovision was established because the stoppage of working the invention in such a casecould cause an extremely serious obstruction to the international transportation system.
This is the national legislation of the provisions of Article 5ter of the Paris
Convention. The Paris Convention also provides for land vehicles, but they are not includedin the provision under the Japanese Patent Act. It is considered to be based on theassumption that no land vehicles will come into Japan from overseas simply for the purposeof passing through, as Japan is surrounded by sea. If a land vehicle (e.g. automobile or bus)that could infringe a patent right did pass through Japan having arrived on a ferry, theprovision of the Paris Convention would apply directly and the movement of a land vehicle
in this manner would not be considered as infringement (Article 26 of the Patent Act).
With regard to international aviation, Article 27 of the Convention on International
Civil Aviation provides that a seizure, etc. by reason of a patent right, etc. is not allowed.
7.3.1.3. Products Existing in Japan Prior to the Filing of the Patent Application (Article
69, paragraph (2), item (ii) of the Patent Act)
A patent right is not effective against products which existed in Japan prior to thefiling of the patent application. This is a provision with a similar purpose as the provisionon the prior user’s right in Article 79 of the Patent Act. However, while the prior user’s
right takes the form of a non-exclusive license, this provision protects products that had
actually existed at the time of the filing by excluding them from the scope of effects of thepatent right. Therefore, if the product is destroyed this provision is no longer applicable,
and if the same product were made again, it would constitute a patent infringement.
[336]
Although there is no provision on products manufactured by using products that had
existed in Japan prior to the filing, it should be construed that a patent right is not effective
against such products either.6 For instance, when a patent has been granted on a particularweaving machine, the patent right is not effective against fabric made by using anotheridentical weaving machine that had existed prior to the filing. Otherwise, Article 69,
paragraph (2), item (ii) of the Patent Act would lose its practical meaning.
7.3.1.4. Acts of Mixing Two or More Medicines (Article 69, paragraph (3) of the Patent
6

Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 287.

378

§7. Effects of a Patent RightAct)
With the 1975 revision, patents were also granted for medicines, which had not been
subject to patents. However, if the effects of patents on medicines that are made by mixing
multiple medicines and their mixing methods extend to acts of mixing two or more
medicines based on a prescription from doctors or dentists, it may cause confusion in the
medical world. Therefore, both the act of mixing two or more medicines and the medicines
so prepared were excluded from the effects of a patent right upon the 1975 revision.
Recently, however, this provision has been applied less frequently because medical
practitioners are more likely to use manufactured medicine rather than preparing medicine
by themselves.
The medicines under discussion here are restricted to those used for human diseases.
According to Article 2, paragraph (1) of the Act on Securing Quality, Efficacy and Safetyof Products Including Pharmaceuticals and Medical Devices (referred to as the“Pharmaceutical Affairs Act” until the 2014 revision), medicines include those used foranimals, but since the Patent Act defines a medicine to be a product used for the diagnosis,
etc. of human diseases, medicines in this context do not include those for animals.
7.3.1.5. Restriction on the Effects of a Patent Right Restored by a Retrial (Articles 175
and 176 of the Patent Act)
A trial decision of invalidation has a retroactive effect, so the patent would be deemed
to have never existed, and anybody would be able to work the invention, in principle.7 If
the patent right is recovered in a retrial, the patent right would be deemed to have been valid
from the start retroactively. Then, the working of the invention by a third party between
when the trial decision of invalidation became final and binding and before the registrationof the demand for a retrial would be illegal. In that case, people would not be able to trusta trial decision of invalidation. Thus, a certain restriction is imposed on the effects of a
restored patent right in order to protect those who trusted a trial decision. Specifically, it isstipulated that a patent right on a product invention shall not be effective against any productimported into or produced or acquired in Japan without knowledge, after the trial decision
invalidating the patent became final and binding but before the registration of the request
for a retrial (Article 175, paragraph (1) of the Patent Act). In addition, the patent right shallnot be effective against the following acts: the working of an invention without knowledge

7 For example, there are some cases like a double patent where an identical prior patent remains extant after a later patentbecomes invalidated. In such a case, third parties cannot work the invention even if one of the patents is invalidated.

379

§7. Effects of a Patent Right(Article 175, paragraph (2), item (i) of the Patent Act); in the case of a product invention,
the act of producing, assigning, etc., importing or offering for assignment, etc. any productto be used for producing said product without knowledge (item (ii) of said paragraph); inthe case of a product invention, the act of possessing said product for the purpose of
assigning, etc. or exporting it without knowledge (item (iii) of said paragraph); in the caseof a process patent, the act of producing, assigning, etc., importing or offering for
assignment, etc. any product to be used for the use of said process without knowledge (item(iv) of said paragraph); and in the case of an invention of a process of producing a product,
the act of possessing the product produced by said process for the purpose of assigning, etc.
or exporting it without knowledge (item (v) of said paragraph).
[337]
The same applies when a patent, of which the registration of an extension of its
duration had been invalidated, is restored through a retrial, when the establishment of apatent right with respect to a patent application refused by a trial decision has beenregistered through a retrial, and when the establishment of an extension of the duration ofa patent right with respect to an application for the registration of an extension of theduration of a patent right refused by a trial decision has been registered through a retrial(Article 176 of the Patent Act).
7.3.2. Restrictions Pertaining to Relationship with Others
The patent right is also restricted in relation to other persons. These restrictions are
not limits deriving from the patent right itself, but restrictions for the purpose of adjusting
the interests of third parties.
7.3.2.1. Restrictions Pertaining to Dependency on or Conflict with Another Person’s
Invention
While a patent right is stipulated as a title to working the patented invention as abusiness monopolistically (Article 68 of the Patent Act), the working of the invention issometimes restricted in relation to another person’s rights. Specifically, if one person’s
patented invention utilizes another person’s prior patented invention, registered utility
model, or registered design (including a similar design), the patentee (including an
exclusive licensee and a non-exclusive licensee) cannot work his/her own patented
invention (the first part of Article 72 of the Patent Act). The patentee cannot work his/her
own invention either if the invention conflicts with another person’s prior design right or380

§7. Effects of a Patent Right

trademark right1 (the second part of Article 72 of the Patent Act). When a patent should beinvalidated due to the existence of another person’s prior patented invention or registeredutility model, a trial for invalidation may be requested or invalidity may be invoked as
grounds for defense, and there is no need to make a particular stipulation to the effect thatthe invention cannot be worked. Therefore, such a stipulation has only been established fora dependent invention. In comparison, when a patent right conflicts with a prior design rightor trademark right, the patent right is not invalidated immediately, but there is a risk that
two conflicting rights will remain extant, so a stipulation has been established whereby thepatented invention cannot be worked in such a case (the second part of Article 72 of the
Patent Act).
[338]
The provisions of the first half of Article 72 of the Patent Act concern the issue ofpatent infringement from the prior inventor’s point of view (it constitutes an infringement
if the invention in question depends on a prior invention), and the issue of a requirement
for a compulsory license (Article 92 of the Patent Act) on the part of the later inventor. In
practice, a request for a compulsory license is rarely made, and the constitution of an
infringement only depends on whether or not the allegedly-infringing technology falls
within the technical scope of the patented invention, so in infringement litigation, there isno need to discuss the question of whether or not such technology depends on the patented
invention. The conclusion would be the same whether the infringer is a later patentee or aperson who has not filed any patent application so, in that sense, the dependency of theinvention under Article 72 of the Patent Act does not present an issue in an infringementcase. The issue is whether or not the invention in question falls within the technical scopeof the prior patented invention. Recognition of an infringement involves complicated anddifficult problems in the case of a dependent invention, but in theory, whether or not aninvention is dependent is not directly linked to the constitution of an infringement.2
Now we shall review the dependency of an invention.3
The first question is in what kinds of cases is an invention considered to be dependent
on a prior invention. There are various court judgments and theories regarding this question
but, roughly speaking, the opinions conflict between those that recognize the dependency
only when the later invention utilizes the prior invention and those that also recognize the
1 A trademark right was newly added since three-dimensional trademarks were recognized with the 1996 revision of theTrademark Act.
2 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han], p. 458; Fumio Umase, “Riyō Hatsumei No Gainen” (Concept of a
Dependent Invention), Kōgyō Shoyūken Hō Kenkyū (Studies on Law of Industrial Property Rights), Vol. 13, No. 4 (1967),
p. 11.
3 With regard to the modern significance of the dependent invention system, see Yoshinobu Someno, Riyō Hatsumei Ron(Discussions on Dependent Inventions) (1) – (5), Jurist, No. 263, p. 32/No. 267, p. 28/No. 268, p. 36/No. 269, p. 59/No.
270, p. 30 (1963).

381

§7. Effects of a Patent Rightdependency when the prior invention is unavoidably worked when working the later
invention. Many of the court judgments set forth that a dependent invention refers to a casewhere the later invention comprises all of the content of the prior patented invention andutilizes it as is (the so-called direct utilization theory) or a case where the later invention
includes the entirety of the prior invention. 4 There are also theories that consider adependent invention to be an invention in which the main part of the matter requisite for its
composition comprises the whole or the main part of the matter requisite for thecomposition of the prior patented invention (similarly to the requirement for theconventional additional patent).5 Meanwhile, there are theories stating that a dependent
invention includes cases where the later invention cannot be worked without utilizing theprior invention. 6 Considering that the dependency of a patent is also an issue that is
discussed as a requirement for a compulsory license, the appropriate theory would be toconsider that dependent patents include inventions that cannot be worked without utilizing
a prior invention.7 It should be construed that a case where an invention cannot be worked
without utilizing a prior invention occurs not only when the prior invention must be
technically utilized, but also when the working constitutes a deemed infringement (Article
101 of the Patent Act).8 For example, supposing that the prior invention is a use invention
that uses a chemical substance called DDT as an insecticide and DDT has no other use thanas an insecticide, and the later invention is an invention on the method for manufacturing
DDT, the later invention does not directly utilize the prior invention, but if DDT is
manufactured based on the later invention, it would constitute an indirect infringement of
the prior patent. The later invention should be regarded as a dependent invention in such acase, too. Nevertheless, the actual determination must be made by examining the individual
cases in detail. In particular, many cases in the chemical field are extremely complicated

4 The Osaka District Court Judgment, September 11, 1958, Hanji, No. 162, p. 23 (the Chlorpromazine case); the Osaka
District Court Judgment, May 4, 1961, Kamin, Vol. 12, No. 5, p. 937 (the Expanded Polystyrene case); the Yamaguchi
District Court Judgment, April 30, 1964, Hanji, No. 391, p. 32/Hanta, No. 161, p. 153 (the Polypropylene case); theOsaka District Court Judgment, December 26, 1964, Kamin, Vol. 15, No. 12, p. 3121 (the Polypropylene case); theOsaka District Court Judgment, October 24, 1967, Hanji, No. 521, p. 24/Hanta, No. 214, p. 107 (the Polyester case);
the Kyoto District Court Judgment, March 27, 1968, Hanji, No. 521, p. 38/Hanta, No. 218, p. 153 (the Polyester case);
the Kyoto District Court Judgment, May 7, 1971, Mutai Saishū, Vol. 3, No. 1, p. 197 (the Binding Block Toy case).
5 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 289; Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan],p. 257. However, Mitsuishi’s theory also states that when two patented inventions are directly technically dependent oneach other (e.g. a prior patented invention of a product and an invention of the process of manufacturing that product),they are dependent inventions.
6 For instance, when the prior invention is an invention of a product, and the later invention is its manufacturing method,
the later invention does not utilize the idea adopted in the prior invention, and it cannot be worked without infringing theprior patent. Thus, these theories suggest that dependency should be recognized in such a case, too. Kōsaku Yoshifuji,
Tokkyo Hō Gaisetsu [Dai 13 Han], p. 448; Kazuhiko Takeda, “Tokkyoken No Honshitsu To Riyō Kankei” (Essence ofa Patent Right and Dependency of Patents), Tokkyo Kanri (Patent Management), Vol. 14, No. 8 (1964), p. 528.
7 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han], p. 92 calls this theory a theory of unavoidable infringement, whichis reasonable.
8 See Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (New Explanatory Notes on the Patent
Act Vol. 1), p. 1155 [written by Atsushi Kawada].

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§7. Effects of a Patent Rightand difficult to determine.9[339]
Furthermore, different conditions apply in cases of double patenting and a selection
invention. Unlike in the case of a dependent invention, no restriction is specially stipulatedon the effects of a double patent, because in principle, double patenting only results froman erroneous examination.10 However, since double patenting actually takes place, someform of interpretation is also required for them. Theories conflict between those suggestingthat the later patentee must gain the consent of the prior patentee when working theinvention,11 and those suggesting that the later patentee can work the invention without
such consent.12 There is an express provision to the effect that the later patentee cannot
work his/her invention freely if the later invention has been made by adding something toanother person’s prior invention (when it is a dependent invention) (Article 72 of the Patent
Act). In light of this, it would be unconvincing if the later invention could be worked freely
when it has not added anything and is identical to the prior invention, so the later patentee
should not be allowed to work the invention in such a case either. However, although thelater patent would be invalidated in such case, the later patentee without knowledge who is
working or preparing to work the invention can obtain a non-exclusive license (a license
due to use prior to a request for an invalidation trial) by paying a reasonable consideration
therefor (Article 80 of the Patent Act). It is inequitable that the patentee of a dependent
invention who has added something to a prior invention cannot obtain any license, while
the patentee of a later invention that is identical to the prior invention without any additional
inventive element involved therein would be granted a non-exclusive license under Article
9 For detailed and specific analyses on this point, see Yoshinobu Someno, Riyō Hatsumei Ron (Discussions on Dependent
Inventions) (3)(4), Jurist, No. 268 (1963), p. 36/No. 269, p. 59; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han],
p. 456.
10 An exception to this is the case of a patent under the agreement between the Japanese government and the United States
government which facilitates the exchange of technical knowledge and patent rights for defense purposes (the so-called
1956 Agreement; Treaty No. 12 of 1956). For discussion on this point, see “2.2.1. Procedures for Obtaining a Patent;
Laying Open of the Application; Reasons for and Significance of Introducing the System of Laying Open the
Application.”
11 Although the theoretical structure differs depending on the scholar, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō
Jō [Dai 3 Han], p. 866 [written by Nobuhiro Nakayama]; Eiji Saegusa, “Riyō Hatsumei O Meguru Mondaiten”(Various Problems Surrounding Dependent Inventions), Tokkyo Kanri (Patent Management), Vol. 28, No. 9 (1978), p.
1058; Osamu Takura “Kōgyō Shoyūken Ni Motozuku ‘Sashidome’ O Megutte” (Discussions on an ‘Injunction’ Basedon Industrial Property), Hanta, No. 210 (1967), p. 30; Kazuhiko Takeda, “Iwayuru Kenri Kōshi Setsu Ni Tsuite” (TheSo-called Right Enforcement Theory), Tokkyo Kanri (Patent Management), Vol. 11, No. 3 (1961), p. 12. The Tokyo
High Court Judgment, February 24, 1959, Hanji, No. 181, p. 6 (the Carlton case); the Tokyo District Court, September
27, 1972, Hanta, No. 288, p. 277 (the Propyl Carbamate case).
12 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 291 (this theory is founded on the provision under
Article 80, paragraph (1), item (i) of the Patent Act stipulating that the original patentee obtains a non-exclusive license
when one of two or more patents have been granted for the same invention); Shirō Mitsuishi, Tokkyo Hō Shōsetsu[Shinpan], p. 259; Hajime Kaneko and Yoshinobu Someno, Kōgyō Shoyūken Hō, p. 196; Tatsuki Shibuya, Chiteki
Zaisan Hō Kōgi I [Dai 2 Han], p. 215 (while stating that it is prevalent to deny infringement in such a case, it statesthat there are many opposite views as well). The Osaka District Court Judgment, September 11, 1958, Hanji, No. 162,
p. 23 (the Chlorpromazine case); the Yamaguchi District Court Judgment, April 30, 1964, Hanji, No. 391, p. 32/Hanta,
No. 161, p. 153 (the Polypropylene case); the Kyoto District Court Judgment, May 7, 1971, Mutai Saishū, Vol. 3, No.
1, p. 197 (the Binding Block Toy case).

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§7. Effects of a Patent Right

80 of the Patent Act when his/her patent is later invalidated. In the latter case, a nonexclusive license under Article 80 of the Patent Act is granted in consideration of the factthat the patentee worked the patented invention while relying on the JPO’s decision. In
addition, while it may be possible for the patentee of the dependent invention to negotiatewith the patentee of the prior invention, the patentee of the later invention in the case of
double patenting may not have such a chance. It goes without saying that the patentee ofthe prior invention can never be held liable by the patentee of the later invention for an
infringement.13[340]
Next, we shall review the case of selection inventions. A selection invention is aninvention which, in the case where an existing invention expressed in a generic concept, isexpressed in a more specific concept covered by that generic concept, and a constituent
element of which has a prominent effect although it is not specifically described in thedescription of the prior invention. It depends on one’s concept of a selection invention, butsince there are various types of selection inventions, it should ultimately be considered thatthe question of dependency differs in individual cases. While many selection inventions arelikely to be recognized as dependent inventions, not all of them are dependent. With regard
to selection inventions, see “1.3.1.4.D.4) Selection invention.”[341]
7.3.2.2. Restriction by a License
If another person has a legal license, the effects of a patent right are restricted to that
extent. Apart from a license granted with the intent of the parties concerned, there arestatutory licenses and compulsory licenses.
A license granted with the intent of the parties concerned is the most typical type of
license, and it is only natural that the scope of the right to a monopoly is reduced to that
extent as it has been granted with the intent of the patentee, etc. Thus, such license need not
be regarded as a special restriction on the patent right.
A statutory license is a license that arises by operation of law by meeting certain
requirements, and a compulsory license is a license that a person who satisfies legal
requirements obtains by making a request to a person having the authority to arbitrate (theJPO Commissioner or the Minister of Economy, Trade and Industry). Both licenses can be

13 In the Tokyo District Court Judgment, March 12, 1979, Mutai Saishū, Vol. 11, No. 1, p. 134 (the Working Glovescase), which was a case between a design right and a utility model right, the court rejected a claim seeking an injunction
by a design right owner against a person who was working the device with the consent of the prior utility model owner.
The same applies in a case between patentees.

384§7. Effects of a Patent Rightconsidered to be restrictions on the effects of a patent right, because they arise irrespectiveof the intent of the patentee. These licenses are non-exclusive licenses under the Patent Act,and their details will be discussed in “9.4.4. Compulsory License” and “9.4.5. Statutory
License.”385

§7. Effects of a Patent Right[342]
7.4. True Right Holder's Right to Seek Transfer of a Patent Right (Article 74 of the
Patent Act)
7.4.1. Problem of Misappropriated Applications and the 2011 Revision
7.4.1.1. Circumstances before the 2011 Revision
Although the Japanese Patent Act adopts the inventor principle, unlike the system inGermany, it did not have a system to award the true right holder a right to seek the transfer
of a patent right (a right to seek the return of a patent right) against the patentee of themisappropriated patent. Under the old Act (Act of 1921), it was provided that if anapplication filed by a person other than the successor in title to a right to obtain a patent or
filed by a person who has misappropriated another’s invention is refused, an application
later filed by the legitimate right holder within a certain time limit shall be deemed to havebeen filed as of the date of filing of the misappropriated application, etc. (Article 10). The
same rule applied in the case where a JPO decision to invalidate the misappropriated patentbecame final and binding (Article 11). Although these provisions did not directly prescribe
the right to seek the return of a patent right, they were at least designed to protect the person
whose invention was misappropriated (the true right holder) to the extent to seeking such
return. For example, even if a third party filed an application after the filing by themisappropriator and before the filing by the true right holder, the true right holder was
supposed to be given relief. These provisions concerning misappropriation were abolishedwhen the current Act was enacted, causing confusion as to how misappropriatedapplications should be handled. Even so, if a person who does not have a right to obtain apatent files a patent application without authorization of the true right holder, there is apossibility that such filing would be considered as a tort. More specifically, illegality ofsuch filing would be determined while comprehensively taking into consideration various
circumstances such as how the third party has acquired the knowledge of the invention andfiled the application. The filing of a misappropriated application may be found to be a tort
in general terms, but in reality, it is not easy for the true right holder to prove the causal
relationship between the misappropriation and the damage he/she suffered from it, or theamount of damage sustained thereby.
The true right holder may request a trial for invalidation on the basis that the patentin question had been granted for a misappropriated application, and to invalidate that patent(Article 123, paragraph (1), item (vi) of the Patent Act). However, if the patent were386

§7. Effects of a Patent Rightinvalidated, the invention would be available to be worked not only by the right holder but
by everybody, including the person who once misappropriated the patent, which is not afavorable outcome for the right holder.1 Meanwhile, a patent right is formally regarded asa right similar to a real right, which is generated by an administrative disposition, and it
was considered to be theoretically difficult to recognize a right to seek the return of a patentright in the absence of legal basis. As long as the inventor principle is adopted, it may betheoretically appropriate to recognize the right to seek the return of a patent right. However,in addition to problems related to administrative laws, there were other aspects that needed
to be considered, namely, the existence of a subsequent acquirer of the patent, or various
rights established in relation to the patent, such as a license or a security right. There werelimits to dealing with all of these ex post facto merely by interpretation. Accordingly, court
judgments and academic theories were swayed in the face of such a situation. Although
there is a Supreme Court judgment which upheld a claim for returning a patent right in a
special case,2 there was a strong view that it was difficult to have the patent right returnedin general.
[343]
The purpose of the Patent Act is to “contribute to the development of industry”(Article 1), and to achieve this purpose, the patent system is designed to encourage
inventors to disclose their inventions, rather than granting them a right to monopoly without
conditions. In other words, the Patent Act adopts a system that grants patents only to those
who have not only created inventions but further put efforts and costs into obtaining the
JPO’s decision to grant patents by filing applications, undergoing examination and having
their patents rights registered.
In contrast, allowing the true inventor to seek the transfer of a patent right means thatthe true inventor can become the patentee without filing an application him/herself which
requires costs and ingenuity, only because of a chance event in which a third party has filed
a misappropriated application. Therefore, in the past, the general view was negative aboutallowing the true inventor to seek the transfer of a patent right based on his/her right toobtain a patent. In addition, even though the conclusion that the true inventor should beallowed to seek the transfer of a patent right may be acceptable, there were many
complicated problems concerning how to treat holders of various rights established on themisappropriated patent right (e.g. subsequent acquirer, licensee), despite the existence ofthe relevant provisions of the current Patent Act. It was more difficult to recognize the right

1 In practice, the parties sometimes deal with the matter between themselves while avoiding a trial for invalidation andmaintaining the patent, by such method as having the patent jointly owned by both parties or establishing a license.
2 The Supreme Court Judgment, June 12, 2001, Minshū, Vol. 55, No. 4, p. 793/Hanji, No. 1753, p. 119/Hanta, No. 1066,
p. 217 (the Garbage Disposer case). The details of this case are explained below.

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to seek the transfer of a patent right only based on legal interpretation.
In the past, there were no provisions that allowed the true inventor to seek the transfer
of a patent right or a right to obtain a patent against the misappropriator. However, there
was also a problem with not giving any relief at all to the true inventor. Under suchcircumstances, courts and scholars, and even the JPO, considered that the true right holder
should be allowed to seek the change of the name of the applicant regarding themisappropriated application and become the applicant by furnishing the JPO with adeclaratory judgment3 acknowledging his/her status as the inventor of the misappropriatedinvention while the application is pending.
Although many court decisions did not recognize the true right holder’s right to seek
the transfer of a patent right, the Supreme Court ruled4 that the true right holder may beallowed to seek the transfer of a registered patent right under special circumstances. The
case in which the Supreme Court made this ruling was a complicated case: the applicant ofa misappropriated application submitted a notification of change of the name of theapplicant with a forged deed of assignment, and registered the transfer of a share in the right3
4

It is considered that a declaratory judgment can be replaced with a record of judicial settlement or a record of conciliation.
The Supreme Court Judgment, June 12, 2001, Minshū, Vol. 55, No. 4, p. 793/Hanji, No. 1753, p. 119/Hanta, No. 1066,
p. 217 (the Garbage Disposer case), held that allowing the registration of the transfer of the plaintiff’s share in the patentright is the easiest and most direct way to solve the dispute. The court rendered this judgment on the following reasons:(i) while the plaintiff lost his/her right to obtain a patent, the defendant obtained a patent right without legal cause; (ii)the right to obtain a patent in this case and the registered patent were in continuity with each other, only in a modified
form; (iii) even if the plaintiff were to file another application, the application will be refused; (iv) the damages cannot
be fully recovered by merely claiming damages based on a tort; (v) the plaintiff had filed an action seeking a declaratory
judgment prior to the patent registration; and (vi) patentability requirements such as novelty and inventive step were notdisputed in this case and the only point at issue was the ownership of the right. Incidentally, in the first instance judgment,
the Naha District Court Judgment, April 9, 1997, Minshū, Vol. 55, No. 4, p. 822, the court upheld the plaintiff's claim,
holding that, premising that the patent is valid, a dispute on the ownership of the patent should be determined primarily
by the court, in accordance with the principle. In the second instance judgment, the Fukuoka High Court Judgment, July
31, 1997, Minshū, Vol. 55, No. 4, p. 833, the court dismissed the appeal on the following grounds: even where a patenthas been registered for a misappropriated application, it must be treated as a valid patent until the patent is determined
as invalid by a person with authority; allowing the transfer of a patent right from the person who misappropriated thepatent to the person whose patent was misappropriated would lead to the same consequence as invalidating the patent
granted to the person who has no right to obtain a patent, while having the establishment of a new patent right registered
for the true right holder, both without going through the patent invalidation procedure at the JPO; hence such measure
is contrary to the purpose and institution of the patent dispute procedure. The Supreme Court quashed the judgment insecond instance and rendered its own judgment in which it allowed the registration of the transfer of a patent right understrict restrictions. Following this, a question was raised with regard to the range within which this highest court judgment
would be applicable. The Tokyo District Court Judgment, July 17, 2002, Hanji, No. 1799, p. 155/Hanta, No. 1107, p.
283 (the Brassiere for Breast Cancer case) was rendered on the applicable range of the Supreme Court judgment above.
The district court held that the Patent Act does not recognize the inventor's right to seek a procedure to register thetransfer of a patent right from an applicant of a misappropriated application by operation of law, and mentioned thefollowing differences between its judgment and the Supreme Court judgment in 2001: (i) in the Supreme Court case, theappellant of final appeal had filed a patent application himself/herself, but the appellant in this case had not filed an
application, and recognizing such right would mean providing a remedy beyond the framework of the system of the
Patent Act; (ii) while the only point in dispute in the Supreme Court case was the ownership of the right, the point at
issue in this case was the identity of the true inventor; and (iii) although there was no remedial method available in theSupreme Court case, the appellant had an opportunity to obtain a patent if he/she had filed an application after learning
about the misappropriated application. In the Tokyo District Court Judgment, July 26, 2007 (court’s website; the Powder
Transfer Apparatus case), which is related to a utility model, the court held that the holding in the Supreme Court
judgment dated June 12, 2001, was not applicable to the registration of the transfer under the circumstances where oneof the joint owners of the invention filed an application independently and the other joint owner sought the transfer of
its share in the utility model right.

388

§7. Effects of a Patent Rightto obtain a patent to him/herself. In this case, the true right holder had filed a suit to seek ajudgment to declare his/her ownership of the right to obtain a patent, and if a declaratory
judgment in favor of the true right holder had become final and binding before the patent
was registered, the true right holder could have changed the name of the applicant based on
the declaratory judgment. However, what actually happened was that the patent was
registered while the suit was pending before the court. Accordingly, the true right holder
amended the initial claim and requested that the transfer of the patent right to him/herself
be registered, in response to which the Supreme Court ordered the registration of thetransfer. In this respect, a judgment permitting the registration of the transfer of a patentright may be interpreted as if the Supreme Court acknowledged ownership by succession.
However, since protection of a third party was not an issue of the case, the Supreme Courtof course said nothing about this point. Even with this Supreme Court judgment, it was still
unclear in what cases the true right holder would be allowed to seek the transfer of a patentright, and it was also a problem that the right to seek the transfer of a patent right was notrecognized in general terms. In this situation, momentum toward revising the Patent Act
increased.
[344]
7.4.1.2. The 2011 RevisionThis problem was resolved to some extent through the establishment of a special
provision on the transfer of a patent right (a right to seek the return of a patent right) which
can be sought by the true right holder against the owner of a misappropriated patent (Article
74 of the Patent Act) upon the 2011 revision of the Act.5 Specifically, it was provided that
if a patent right is registered based on a patent application filed by a person who does nothave a right to obtain a patent, the true right holder may request that person to transfer themisappropriated patent right to him/her, and that, when the right to obtain a patent was
jointly owned, but the applicant did not file the application jointly with the other joint
owners, the other joint owners may demand that the patentee transfer their shares in thepatent right to them6 (Article 74, paragraph (1) of the Patent Act). In the future, along withthe expected increase in the number of joint research projects between companies or
between a company and a university, such cases of violation of the provisions concerninga joint application will take place more frequently.
[345]
5 The special provision is applicable to applications filed on and after the effective date of the revising Act (April 1, 2012).
6 It is provided that “The claim for the transfer of a patent right shall be made for the share that the claimant believes tohold in the right to obtain a patent” (Patent Act Enforcement Ordinance, Article 40-2).

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§7. Effects of a Patent Right

The transfer of a patent right is effective retroactively (Article 74, paragraph (2) ofthe Patent Act; the issue of third party protection in such a case is discussed later). A newcertificate of patent is not issued in the case of the ordinary transfer of a patent right, but inthe case of a transfer under Article 74, a certificate of patent is issued because it is an
original acquisition (Article 28, paragraph (1)).
Along with this revision, the scope of persons who are eligible to request aninvalidation trial by reason of misappropriation of an application or violation of theprovisions concerning a joint application has been limited to a person who has the right toobtain a patent (the part in parentheses in Article 123, paragraph (2)). It was also provided
that any person may submit allegation and evidence to claim the invalidity of the patent as
defense in infringement litigation (Article 104-3, paragraph (3)). A patent right is
extinguished retroactively when a JPO decision invalidating the patent becomes final andbinding, whereas, even if the court upholds the claim of invalidity, such judicial ruling,which is effective only between the parties, does not cancel the registration and therefore it
is not prejudicial to the right of the true right holder. It should be noted, however, that after
the patent right is transferred to the true right holder, the defect in the patent right has
already been corrected and can no longer be asserted as the grounds for invalidation, nor
can invalidity be claimed as defense (the part in parentheses in Article 123, paragraph (1),item (ii) and the part in parentheses in item (vi) of the same paragraph). Meanwhile, under
the revised Patent Act, a misappropriated application is given the status of prior application;
after a patent right is transferred to the true right holder, the application which was once
misappropriated and now belongs to the true right holder is given the status of priorapplication (as a result of the deletion of the former Article 39, paragraph (6)).
While Article 74, paragraph (1) of the Patent Act provides for the case where a joint
application should be filed and the case of misappropriation in the narrow sense (i.e. thecase where a patent is granted based on a patent application filed by a person who does nothave the right to obtain a patent) separately, an application filed without the consent of theother joint owners of the right to obtain a patent can also be regarded as a misappropriatedapplication in a broad sense. Since the basic legal effect does not change between these twocases, they are collectively treated as misappropriated applications here, unless otherwise
indicated. It should be noted, however, that there is a difference between these cases in that,in the case where the right to obtain a patent is jointly owned, the true right holder may seek
the transfer of a share in the patent right, instead of the patent right as a whole (Article 74,
paragraph (3) of the Patent Act). It is difficult to determine a person’s share in a patent right,
but this is not a problem under Article 74; it is a problem that cannot be avoided in the caseof a joint invention. In this connection, since “each co-owner's share shall be presumed to390

§7. Effects of a Patent Rightbe equal” (Article 250 of the Civil Code), joint inventors have an equal share unlessotherwise proved.
[346]
Because the transfer of a patent right under Article 74, paragraph (1) of the Patent
Act has a retroactive effect, rights attached to the patent right as of the time of the transfer
would be extinguished unless specially provided (Article 74, paragraph (3)). Therefore,
provisions were established to provide relief in such case. Specifically, a person who, at thetime of the transfer of a patent right, owned the patent right or an exclusive license or nonexclusive license on said patent right and had been doing or preparing for business working
the invention without knowledge of the misappropriation, etc. shall have a non-exclusive
license on the patent right, only to the extent of that invention and the purpose of suchbusiness worked or prepared, and the patentee after the registration of the transfer of thepatent right (the true right holder) shall have the right to receive a reasonable considerationfrom such non-exclusive licensee (Article 79-2). For details, see “9.4.5.6. Non-exclusive
License Granted Due to Working of an Invention Prior to Registration of Transfer of a
Patent Right (Article 79-2 of the Patent Act).”
As the Patent Act adopts the inventor principle, it seems as if the inventor and thesuccessor in title are recognized as having a right to seek the transfer of the patent right by
operation of law. However, the true right holder becomes the patentee without filing apatent application, which requires money, time, and ingenuity, only because a third party
happened to file a misappropriated application. The theoretical basis for such a
circumstance would also pose a question. It is a question of whether to consider that if thetrue right holder has not filed a patent application, he/she should be prepared for a deserved
risk, or, on the contrary, that the true right holder cannot necessarily be blamed for nothaving filed a patent application since there must be some reason therefor. The answer tothis question may have an influence on the interpretation of the scope of application of therevised Patent Act.
In actual litigation to seek the transfer of a patent right, difficult problems remain
with regard to the production of evidence, etc.7 Unlike in the case of the return of a product,
it would be difficult to prove the identity of the misappropriated invention as opposed tothe actual established patent right. In the case of a product, the stolen product and the
product of which the return is sought are usually the same, with some modifications madethrough processing (Article 246 of the Civil Code) at the most. In the case of a patent,

7

Yoichiro Komatsu, “Bōnin Shutsugan to Jitsumujō no Jakkan no Kadai” (Misappropriated Applications and Some
Practical Issues), Makino Toshiaki Sanju Kinen: Chiteki Zaisanken Hōri To Teigen (In Honor of Professor Makino
Toshiaki’s Eightieth Birthday: Legal Principles of and Recommendations Concerning Intellectual Property Rights), p,
488.

391

§7. Effects of a Patent Right

however, following the completion of the invention, a patent attorney, etc. drafts patentclaims and a description, publishes the application for a fee, requests an examination, makes
amendments in the course of actions with the JPO, and in some cases, corrects theapplication even after the patent registration, gradually making the patent right moresophisticated. The choice of whether or not to file an application depends on the applicant,and the filing is not the same for everybody, but the degree of skill used in filing anapplication could greatly affect the value of the patent right. It may be relatively easy torecognize such an identity when an employee has filed an application for an employee's
invention under his/her own name in spite of the fact that the right to obtain a patent belongs
to the employer, or when one of the joint inventors has filed an application byhimself/herself, but the determination would present a difficulty in the case of
misappropriated applications in general.
[347]
When an action to seek the registration of the transfer of a patent right is filed, anannouncement of registration is made (Article 3, item (ii) of the Patent Registration Order),which serves as warning to a third party. When the transfer is registered, the person who
has obtained the registration (the true right holder) may claim compensation (Article 65,
paragraph (1)) against the person who has worked the patented invention before theregistration of the patent right (Article 74, paragraph (2)). As a result of the introduction of
new Article 74, the true right holder can now choose between seeking the transfer of thepatent right and requesting a trial for invalidation, gaining access to another offensive toolthat can be used against the patentee of a misappropriated patent. In reality, the true rightholder would be more likely to choose to seek the transfer of the patent right.
It is provided that the transfer of a patent right may be sought against the “patentee,”
not the “misappropriator.” If a patent right or the right to obtain a patent has been transferredfrom the misappropriator to a third party, the true right holder may claim the transfer of thepatent right against the party who holds the patent right at the time of making the claim.

392§8. Infringement

7.4.2. Problems with the Right to Seek the Transfer of a Patent Right
7.4.2.1. Transfer Sought for Each Claim
When the applicant of a misappropriated application has carried out some inventive
act and added the results of that act when filing the misappropriated application, a difficult
problem would arise. If the invention of the true right holder and the invention of theapplicant of the misappropriated application correspond to each other perfectly claim byclaim, it seems theoretically not impossible to allow the true right holder to seek the transfer
of a patent right for each claim, as long as the requirement of unity of invention is met.
However, in the JPO’s practice, a patent right may not be transferred for each claim, andthe transfer must be sought for a patent right as a whole. The transfer of a “share” in a patentright is provided for in Article 33 of the Patent Registration Order, but this Order provides
for nothing about the “claim-by-claim transfer.” Thus, there is no method for registering
the transfer of a patent right for each claim. In terms of literal interpretation, Article 185(Special provisions for patent or patent right covering two or more claims) provides thatwith regard to a patent and patent right referred to in the provisions prescribed therein, “thepatent shall be deemed to have been granted, or the patent right shall be deemed to exist,
for each claim.” However, since Article 74 is not mentioned, Article 185 can be interpreted
as not allowing the transfer of a patent right for each claim.1 As long as a patent right may
not be transferred for each claim, the patent right is subject to co-ownership by the true
right holder and the patentee of the misappropriated patent. Even if, for example, theinvention of claim 1 is created by the true right holder and the invention of claim 2 is createdby the patentee of the misappropriated patent, the patent right as a whole is to be jointly
owned by them, and the true right holder is entitled to seek the transfer of his/her share in
the patent right against the patentee of the misappropriated patent, in proportion to his/her
contribution to the invention. As they jointly hold the patent right as a whole, each of them
may work the patented invention as a whole (Article 73, paragraph (2)), and may not assign
or create a pledge on his/her share without the consent of the other (paragraph (1) of thesame Article). In consequence, each can work the portion of the invention that he/she did
not create, but cannot assign or otherwise dispose of his/her share for the portion of theinvention that he/she created. This problem of the divisional transfer of a patent right for
1

Minoru Takeda, “Bōnin Shutsugan Tō ni taisuru Shin no Kenrisha no Kyūsai Sochi” (Remedial Measures for True Right
Holders against Misappropriated Applications, etc.), L&T (Law & Technology) No. 54 (2012), p. 48, states as follows:“The most part of the provisions (of Article 185) were drafted in consideration of the convenience in the procedures at
the JPO; “There is no need to interpret Article 185 as meaning that the claim-by-claim transfer of a patent right would
be permitted only in the cases under the provisions prescribed therein, for the purpose of ensuring reasonable andappropriate interpretation and practice under the patent system.” However, the JPO currently does not allow the transfer
of a patent right for each claim in its practice, and it would need to change the computer software if it is to allow suchtransfer. If a court decision allowing the claim-by-claim transfer becomes final and binding, the JPO would have no
choice but to reconstruct its computer system.

§8. Infringement

each claim has not been raised abruptly upon the enactment of Article 74. It had alreadybeen discussed in the course of introducing the revised multiple claiming system, but ended
up with no legislative measure being taken. It was not addressed at the time of the 2011
Revision, either, and no new provision was introduced in the Patent Registration Order withregard to the transfer of a patent right for each claim. This problem is not just about whether
the transfer of a patent right may be sought for each claim, but it represents a bigger problem,
i.e. whether the divisional transfer of a patent right for each claim should be generally
allowed. Unless this problem is settled, the problem concerning the transfer of a patent rightfor each claim under Article 74 is never settled. Conversely, this means that the problem
under Article 74 can be settled if a solution is found with regard to that general problem.
[348]
There may also be a case where the invention of the true inventor is combined withan invention of the applicant of the misappropriated application in a single patent claim. In
such a case, it is inevitable for the patent right as a whole to be jointly owned by them, andthe true right holder may seek the transfer of his/her share.
7.4.2.2. Invalidity, Rescission and Cancellation of a Contract for Assignment of a
Right to Obtain a Patent
The term “misappropriation” may remind people of a case of industrial espionage,
but in reality, misappropriation often takes place as a result of a contract for assignment of
the right to obtain a patent being invalidated, rescinded or cancelled for some reasons. Since
the invalidity, rescission or cancellation of the assignment contract has a retroactive effect,
the assignment contract is extinguished retroactively, and the patentee would turn out tohave had no right to obtain a patent at the time of filing the application. Article 123,
paragraph (1), item (vi) of the Patent Act provides for a case where the patent has been
granted on a “patent application filed by a person who has not had the right to obtain apatent.” In this case, Article 74 would be applicable to such patent applicant in the matterof form.
The Civil Code has provisions concerning protection of a party without knowledge(Article 94, paragraph (2) in the case of fictitious manifestation of intention; Article 96,
paragraph (3) in the case of fraud and duress; and Article 545, paragraph (1) in the case ofcancellation), and Article 79-2 of the Patent Act also provides for protection of a party
without knowledge. Hence, the relationship between these provisions raises an issue;
whether or not it is appropriate to treat the case of invalidity, rescission or cancellation of acontract in the same manner as treating the case of industrial espionage which is settled by§8. Infringement

applying Article 79-2 of the Patent Act.
[349]
In general terms, the Patent Act is a kind of special law in relation to the Civil Code.
With regard to an issue of co-ownership, for example, the provisions of the Patent Act
prevail, and the provisions of the Civil Code apply only if the Patent Act has no applicableprovisions (Article 264 of the Civil Code). However, it is possible to consider that Article79-2 of the Patent Act only provides that a third party without knowledge shall have a nonexclusive license, and that this provision does not supersede the provisions of the Civil
Code concerning protection of a third party. Since neither of these views is decisively
superior to the other, what decision the court would make in actual cases is unpredictable.
If the provisions of the Civil Code prevail, since the Civil Code does not provide forprotection of a third party without knowledge of invalidity of a contract due to a mistake(Article 95; there is a widely accepted view that such third party should be protected), theprovisions of Article 79-2 of the Patent Act would be applied to a subsequent acquirer of apatent right and a licensee based on a patent right if they have no knowledge, and theywould be granted a non-exclusive license to that extent. On the other hand, a party who hasa pledge on a patent right and a party who has attached a patent right would not be eligible
for protection, and their claim would be settled ex post facto as a claim for damages orunjust enrichment against the patentee of the misappropriated patent.
Invalidity due to fictitious manifestation of intention and rescission due to fraud or
duress have a retroactive effect (Article 121 of the Civil Code) but may not be asserted
against a third party without knowledge (Article 94, paragraph (2), and Article 96,
paragraph (3) of the Civil Code). If the provisions of the Civil Code prevail over theprovisions of Article 79-2 of the Patent Act, the subsequent acquirer, pledgee or licensee
without knowledge whose rights are based on a patent right would remain to be the patentee,
pledgee or licensee even when the true right holder has sought the transfer of the patentright. If the true right holder sustains damage due to the existence of a third party (e.g. athird party who has acquired a patent right from the patentee of the misappropriated patent
without knowing the misappropriation), the case would be settled as a dispute for damages
or unjust enrichment between the misappropriator and the true patentee (Article 545,
paragraph (3) of the Civil Code).
In the event of cancellation of a contract (Article 540, et seq. of the Civil Code), thecancelled contract is considered to lapse retroactively, and each party shall assume an
obligation to restore the other party’s original state (Article 545, paragraph (1) of the Civil
Code). However, since this shall not prejudice the rights of a third party (the proviso to thesaid paragraph), the true right holder who has cancelled the contract may not be able to seek§8. Infringement

the transfer of the patent right in some cases. A typical example is that a contract which has
been validly formed is later cancelled due to a default on the part of the successor in title.
It would be more appropriate to consider such case as an issue of the restoration of the otherparty's original position under Article 545 (Effect of Cancellation) of the Civil Code, rather
than applying Articles 74 and 79-2 of the Patent Act.2
7.4.2.3. Legal Relationships of Parties Concerned before Registration of Transfer3
Article 79-2 of the Patent Act is a provision to adjust the relationships of the parties
concerned after the registration of the transfer of a patent right. There was no provision in
the Patent Act concerning the legal relationships before the registration of the transfer, andthe 2011 Revision did not introduce any measure to deal with a patent right based on amisappropriated patent after it is registered and before its transfer is registered. With regard
to the transfer of a patent right yet to be registered, courts and scholars had tried to find areasonable solution to address it during the procedure while an application is pending.4 In
conclusion, making notification of the change of the name of the applicant based on adeclaratory judgment has been recognized as a means that has the same effect as seeking
the transfer in practical terms. Thus, the conventional method established by judicial
precedents is considered to still be effective after the 2011 Revision.5
Article 79-2 of the Patent Act only prescribes that a non-exclusive license shall be
granted to a person who is working or preparing to work an invention “at the time of the
2 Minoru Takeda, "Bōnin Shutsugan Tō Ni Taisuru Shin No Kenrisha No Kyūsai Sochi" (Remedial Measures for True
Right Holders against Misappropriated Applications, etc.), L&T (Law & Technology), No. 54 (2012), p. 49, argues thatthe provisions of the Civil Code should apply with regard to cancellation of a contract. In the previous edition (2ndedition) of this book, the author stated that the provisions of the Civil Code should apply only in the case of cancellation,
but now the author considers that it may be appropriate to apply the provisions of the Civil Code in preference to Article79-2 of the Patent Act, although neither of them is decisively superior to the other.
3 See Masashi Takeo, “Tokkyo Hō 79 Jō no 2 no Igi ni kansuru Ichi Kōsatsu” (A Study on the Significance of Article 792 of the Patent Act), Nakayama Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Essaysin Honor of the Seventieth Birthday of Professor Nobuhiro Nakayama: Spreading Wings - Intellectual Property Law inthe 21st Century), p. 355.
4 For details, see Tokkyo Hō [Shohan] (Patent Act [1st ed.]), p. 163, and Nobuhiro Nakayama and Naoki Koizumi, ed.,Shin Chūkai Tokkyo Hō Jō (New Explanatory Notes on the Patent Act Vol. 1), p. 420 [written by Kazuhiko Yoshida
and Kiyoshi Iida]. For essays discussing this issue, see Kazuhiko Takeda, “Tokkyo wo Ukeru Kenri no Henkan Seikyū
ni tsuite” (Claim for the Return of the Right to Obtain a Patent), Patent Vo;. 34, No. 7 (1981), p. 2; Ryo Matsuda, “Bōnin
Shutsugan to Shin no Kenrisha Hogo” (Misappropriated Applications and Protection of True Right Holders), Chiteki
Zaisan Hō Seisaku Gaku Kenkyū (Intellectual Property Law and Policy Journal), No. 3 (2004), p. 195; Ryu Takabayashi,“Bōnin Shutsugan to Shin no Kenrisha no Kyūsai” (Misappropriated Applications and Relief for True Right Holders,”
Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka eds., Gendai Chiteki Zaisan Hō Kōza I (Lecture on Modern
Intellectual Property Law I), p. 61.
5 In the Tokyo District Court Judgment, April 16, 1981, Hanta No. 395, p. 155 (the Grain Processing Method case), andthe Tokyo District Court Judgment, May 29, 1987, Hanji No. 1240, p. 130 (the Stopper case), the court held that if anagreement has been reached on the transfer of a patent right from the misappropriator to the true right holder, the true
right holder is entitled, as the effect of such agreement, to notify the JPO of the change of the name of the applicant. In
the Tokyo District Court Judgment, October 30, 1985, Hanta No. 576, p. 88 (the Plastic Element Manufacturing Methodcase), the court declared that the plaintiff has the right to obtain the patent, given the circumstances where the plaintiff
asked his friend to file the patent application on his behalf, but the friend filled in his own name as the inventor andapplicant.

§8. Infringement

registration of transfer of the patent right.” Article 79-2 provides for the condition underwhich a non-exclusive license is generated, but does not clearly specify when a nonexclusive license is generated. It is therefore not impossible to interpret this provision as
meaning that a non-exclusive license would be granted if only the person is working or
preparing to work the invention at the time of the registration of the transfer of the patentright, even with regard to his/her working of the invention before the registration of thetransfer. From the perspective of balance of interest as well, a question would arise as tothe conclusion that if only the person is working or preparing to work the invention without
knowledge at the time of the registration of the transfer of the patent right, the person would
be allowed to continue to work the invention after the registration of the transfer, but theworking of the invention before the registration of the transfer would be retroactively illegal
due to lack of authorization. A person who has been working or preparing to work theinvention before the registration of the transfer has been doing that while relying on theregistration of the patent right held by the misappropriator. It may not be appropriate to use
the time of the registration of the transfer as the base point in time when determining
illegality. It would rather be appropriate to apply Article 79-2 directly or analogically andconsider that a non-exclusive license would be generated on the grounds that the person
had been working or preparing to work the invention, even before the registration of thetransfer of a patent right, if the person has been doing that without knowledge. 6
Furthermore, a question also remains as to the conclusion that if a person who worked theinvention before the registration of the transfer of a patent right has ceased to do that by thetime of the registration, Article 79-2 does not apply because the person is not working or
preparing to work the invention at the time of the registration, whereas his/her working
before that point in time would be judged to be illegal retroactively.
[351]
Supposing that Article 79-2 is not applicable to the working of the invention before
the registration of the transfer of a patent right, the product manufactured before theregistration might be considered to have been manufactured illegally, and a person who haspurchased and used that product might also be considered to have worked the invention

6

Yasuto Komada, “Tokkyoken no Torimodoshi to Zen’i no Daisansha no Hogo” (Return of the Patent Right andProtection of Third Party without Knowledge), Doshisha University Intellectual Property Law Study Group, ed.,Chitekizaisan Hō no Chōsen (Challenge of Intellectual Property Law), p. 149, states that “it should be construed that thetrue right holder may assert as defense the fact that he/she was in the position to acquire the patent in the future.”§8. Infringement

illegally.7 However, in the case where the person who was registered as the legitimate
patentee at the time of manufacturing of a product later ceases to be the patentee
retroactively, the claim of exhaustion of the patent right should be accepted from theperspective of security in business, because the product was manufactured by the person
who was the legitimate right holder at the time of manufacturing. The same applies to the
product manufactured and sold by a licensee in the case where the licensing agreement islater invalidated, rescinded or cancelled.
Supposing that Article 79-2 is applicable to the working of the invention before theregistration of the transfer of a patent right, the working before the registration would beconsidered to be legal, and the person who worked the invention would be liable to pay
reasonable consideration to the true right holder for the period of working. If there is alicensee based on a misappropriated patent right, the patentee holding that patent rightwould have to return the royalties he/she has received to the licensee as unjust enrichment.
In this connection, there is no uniform method of calculating the amount of royalties; theinitial fee may be high with a low rate of royalties for the actual working, only the initial
fee may be required, or no fee may be required, depending on the case. In particular, thecalculation of the amount of royalties would be difficult in the case of cross licensing, andwould be more complicated in the case of comprehensive cross licensing. This is an issue
to be settled between the patentee of the misappropriated patent and the licensee.
There are two views concerning how to deal with the case where the licensee of amisappropriated patent has already paid royalties to the patentee: one view is that the true
right holder is eligible to claim reasonable consideration against the licensee because he/she
has been the right holder from the beginning; and the other view is that the licensee is nolonger liable to pay royalties because payment by a party who has infringed another’s rightwithout knowledge and negligence constitutes payment to a holder of quasi-possession ofa claim (Article 478 of the Civil Code). According to the former view, the case would besettled as a dispute for unjust enrichment between the licensee and the patentee of themisappropriated patent. According to the latter view, the case would be settled as a disputefor unjust enrichment between the true right holder and the patentee of the misappropriatedpatent. In short, this issue ultimately comes down to the question of who should take therisk of lack of financial resources.

7

In the Tokyo District Court Judgment, July 11, 2012, Hanji No. 2175, p. 98/Hanta No. 1388, p.334 (the case on DVDsof South Korean Stars), which was related to copyright infringement, the court held as follows: if the sales agreement
between the copyright holder and the exclusive distributor had been cancelled due to a default, the first sale of the productcannot be deemed to have been legal, and hence the subsequent sale by the party who had purchased the product fromthe exclusive distributor would constitute copyright infringement, without needing to discuss exhaustion of the copyright.
The conclusion reached by the court may be derived from the retroactive effect of the cancellation, but its holding isquestionable in light of the exhaustion theory that is intended to ensure smooth distribution of products.

§8. Infringement[352]
7.4.2.4. Period for Seeking the Transfer of a Patent Right
There is no limit to the period during which the true right holder can seek the transfer
of a patent right. However, Germany limits such period from the viewpoint of ensuring safe
transactions (Section 8 of the German Patent Act limits such period to within two years
from the granting of the patent, except when the patentee of the misappropriated patent has
knowledge of misappropriation). In Japan, since there is no limit to the period for requestinga trial for invalidation, it is likely that no limit was imposed on the period for seeking thereturn of the patent in order to achieve a balance therewith. However, when a JPO decision
invalidating the patent becomes final and binding, the outcome is merely that anybody
would be able to work the invention since the right will be extinguished retroactively, andhence there is no need to adjust interests of parties concerned after that. In contrast, in thecase of seeking the transfer of a patent right, the patent right is deemed to have belonged tothe true right holder and functioned as a right to a monopoly from the start. Since therelationship of rights established on the misappropriated patent right will instantly fall apartwhen the patent right is transferred, the intricate relationships with these rights need to be
dealt with after the transfer. In that sense, from the perspective of ensuring legal stability,
it seems to be necessary to introduce a limit to the period through legislation.
7.4.2.5. Whether It Is Appropriate to Recognize Retroactive Effect of Transfer of a
Patent Right
The revised Patent Act recognizes a retroactive effect of the transfer of a patent right,
but there are doubts about whether this is truly appropriate. All of those various problems
discussed above are derived from recognizing such retroactive effect. Although somepeople might consider that recognizing a retroactive effect of the transfer of a patent rightis a natural consequence of the inventor principle, the author considers that this should be
discussed as an issue concerning legislative policy, rather than as a theoretical issue.
If a retroactive effect is not recognized, the working of the invention until the timeof the registration of the transfer of a patent right would be totally legal, and a certain scopeof interested parties would be granted a non-exclusive license after the registration of thetransfer in accordance with Article 79-2 of the Patent Act. In that case, since the patenteeof the misappropriated patent would be deemed to have received profit that he/she should
not have received, the treatment of such profit would be settled as a dispute for damages orunjust enrichment between the true right holder and the patentee of the misappropriated§8. Infringement

patent,8 and the true right holder would have to take the risk of lack of financial resourceson the part of the patentee of the misappropriated patent. Thus, if a retroactive effect is notrecognized, the problem that remains after the transfer is to be settled between the true rightholder and the patentee of the misappropriated patent, without affecting any third party.
This would make the system simpler.
[353]
7.4.2.6. Other Problems
Various practical problems remain unsolved with regard to Articles 74 and 79-2 ofthe Patent Act. For example, although it is possible to transfer a patent right on the basis ofa contract concluded between the true right holder and the patentee of the misappropriatedpatent, this is a ordinary type of transfer and may not be asserted against a third party. The
transfer under Article 74 is effected based on a declaratory judgment in principle. Then,
can a record of settlement resulting from an ordinary or speedy trial procedure replace adeclaratory judgment? A declaratory judgement would turn out to be meaningless if thepatentee of the misappropriated patent assigns or abandons the patent right while a suit toseek the transfer of the patent right is pending. In that case, is it possible for the true rightholder to seek a provisional disposition prohibiting the disposal of property in order to avoid
the change of the other party to litigation?9 Although this may be outside the scope of the2011 Revision, a question also arises as to whether it is possible to seek such a provisional
disposition based on the right to obtain a patent before a patent is granted in order to havethe applicant of the misappropriated application remain to be the litigant10. If this is possible,
there are questions concerning procedural matters, such as how to publicly announce suchprohibition and who should bear the burden of proof.
7.4.3. Transfer of Right during the Pendency of a Patent Application
The 2011 Revision did not provide that the transfer of a patent right may be sought
before the registration of the patent right, and thus there seems to be no change to theconventional handling of such case. The reason why the transfer of a patent right yet to beregistered was not included in the 2011 Revision may be because judicial precedents had
8

As there may be cases where the misappropriated patent right has been transferred to another, who should take theultimate responsibility would be decided on a case-by-case basis.
9 Makiko Takabe, “Bōnin ni yoru Iten Tōroku no Jitsumu” (Practice of Registration of Transfer by Reason ofMisappropriation), L&T (Law & Technology) No. 55 (2012), p. 6.
10 Makiko Takabe, “Bōnin ni yoru Iten Tōroku no Jitsumu” (Practice of Registration of Transfer by Reason ofMisappropriation), L&T (Law & Technology) No. 55 (2012), p. 8, states that a provisional disposition may not be issued
in such case.

§8. Infringement

established the rule for handling this case and the lawmakers did not find the necessity oflegislation.
The assignment of a right to obtain a patent during the pendency of a patentapplication shall become effective upon notification to the JPO Commissioner (Article 34,
paragraph (4) of the Patent Act). A person who makes notification of his/her succession to
the right must submit a document proving the succession in title, such as a contract for
assignment (Article 5, paragraph (1) of the Patent Act Enforcement Ordinance). On thisoccasion, the successor is not required to seek cooperation of the original right holder, andtherefore is not able to request the original right holder to take the procedure to change thename of the applicant. However, in practice, if the true right holder has filed a suit against
the applicant of the misappropriated application to seek a declaratory judgment that he/she
has a right to file a patent application, and submits the judgment to the JPO Commissioner,
the JPO regards it as a document proving the succession to the right and accepts thenotification (Formality Examination Manual, 45.25 Handling of Notification of Change ofName of Applicant Accompanied by Declaratory Judgment), and thus the true right holder
can change the name of the applicant to his/her name while the application is pending.11 In
the case of a misappropriated application, the issue of the change of the name of theapplicant would have never arisen because the right to obtain a patent has belonged to thetrue right holder from the beginning. However, for the sake of convenience, the true rightholder had been virtually allowed to seek the transfer of the right by employing this method,
as if a declaratory judgment could serve as an alternative to a contract for assignment.
[354]
The 2008 Revision introduced a provisional exclusive license and a provisional nonexclusive license as new systems regarding the right to obtain a patent. Even if the name of
the applicant is changed after either of these provisional licenses is established, such change
is an ordinary type of transfer and the true right holder would not become the applicant
retroactively and the provisional license would remain in effect. Any damage sustained by
the true right holder from this outcome should be settled between the true right holder andthe applicant of the misappropriated application. On the other hand, if the true right holder
seeks the transfer of a registered patent right, the transfer would be effective retroactively,
and the dispute would be settled by applying Article 79-2 even after the provisional license
becomes a formal license. The 2011 Revision provides for only the case of the transfer after
the registration of a patent right, but the true right holder would need to seek the return of
the right from the applicant of the misappropriated application while the application is

11

The Tokyo District Court Judgment, June 5, 1963, Kamin Vol. 14, No. 6, p. 1074/Hanta No. 146, p.146 (the VolumetricPowder Feeder case), which is related to a utility model right, and other cases.

§8. Infringement

pending. The conventional solution based on judicial precedents handles this case as thecase of assignment of the right to obtain a patent. Issues such as the retroactive effect of thetransfer and protection of a third party cannot be solved by judicial precedents. Legislative
solution to these issues will be required in the future.

§8. Infringement[355]§8. Infringement
8.1. General Remarks
A patent right has the effect of exclusion (passive effect), which prevents others fromworking the invention without proper authority and enables the patentee to demandcompensation for damages against an infringer. In addition, criminal penalties are
stipulated regarding a patent infringement. Although an exclusive right to use technicalinformation is recognized for a patent right, that is only under the current Act, and it is not
irrational to contemplate a principle that a patent right recognizes no right of exclusion but
only the right to demand compensation. It is solely a matter of legislative policy. Under thecurrent Act, it is considered that the effectiveness of a patent right is not secured without
the right to seek an injunction, but if, as in the case of the United States, the treble orpunitive damages systems, etc. were introduced to add a punitive function to compensation
for damage, the significance of the right to seek an injunction would be reduced accordingly.
In other words, patent law is an artificially built legal system, which can be designed more
freely as compared to such laws as the civil code.
In recent years, there has been a remarkable progress in technology that has not been
seen previously, as exemplified by biotechnology, and in some technical fields, we now see
the advent of such a patent by which the patentee can seize the upstream technology andtake control of all of the downstream technologies (e.g., research tool patents). In otherwords, if the upstream technology were seized, downstream technologies that are likely to
be invented in the future would also be seized in effect, and this could undermine the
incentive for inventing downstream technologies, and run counter to the purpose of the
Patent Act. A question has been raised as to whether this kind of patent rights can reallycontribute to the development of industry, or would they rather impede development.
Furthermore, the restriction of the use of some types of technology would cause great
confusion in society at large, such as the stoppage of electricity, a bank’s financial system,or the railways. Although these problems can be solved by granting non-exclusive licenses
by way of awards (Article 93), it is still possible to reconsider them as issues relating to theeffects of a patent right. In the future, the debate over the substance and effects of a patentright is expected to become more active.1 Compared to the right to claim damages, the1

See "Shingai Soshō Tō Ni Okeru Tokkyo No Anteisei Ni Shisuru Tokkyo Seido/Un'ei Ni Kansuru Chōsa Kenkyū
Hōkokusho" (Establishment and Operation of a Patent System Conducive to Patent Stability in Infringement Lawsuits)(FY2013 JPO-commissioned research study report on the issues related to the industrial property rights system, 2014,
Institute of Intellectual Property).

§8. Infringement

right to seek an injunction in particular could have a larger impact on society or could cause
the infringer's disadvantage to be inappropriately larger than the right holder's advantage.
Also, patent trolls have become a major issue in recent years. Thus, the exercise of the rightto seek an injunction based on a patent right is expected to generate considerable debate.2
This issue would need to be discussed not merely within the framework of patent law, but
within the framework of private law in general.3[356]
Incidentally, infringement only refers here to cases where a third party having no title
works the patented invention, and does not include cases that practically obstruct theworking of the exercise of the patent. Therefore, such acts as stopping the working by force,
stopping a loan by putting pressure on the financial institution or stopping the supply of the
raw materials so as to make it impossible practically to work the invention can constitutethe forcible obstruction of business (Article 234 of the Penal Code) or torts, but they are
not recognized as acts of infringing patents.4
The first instance of actions relating to patent rights is under the exclusive jurisdictionof the Tokyo District Court if the actions are filed in East Japan (the areas under thejurisdiction of the Tokyo High Court, the Nagoya High Court, the Sendai High Court, or
the Sapporo High Court) and under the exclusive jurisdiction of the Osaka District Court if
they are filed in West Japan (the areas under the jurisdiction of the Osaka High Court, theHiroshima High Court, the Fukuoka High Court, or the Takamatsu High Court) (Article 6,paragraph (1), items (i) and (ii) of the Code of Civil Procedure). The third instance of suchactions is under the exclusive jurisdiction of the Tokyo High Court (paragraph (3) of said
Article), and handled by the Intellectual Property High Court, which is a special branch of
the Tokyo High Court (Article 2 of the Act for Establishment of the Intellectual Property
High Court).
Since the system of a trial for confirmation of the scope of a right existed before the2 Ryūta Hirashima, "Sashidome Seikyū No Seigen: Rironteki Kanousei Ni Tsuite No Kōsatsu" (Restrictions on the Rightto Seek an Infringement: Discussion on Theoretical Possibilities) Gakkai Nenpō, No. 33 (2009), p. 53; Ryūta Hirashima,"Tokkyoken Ni Motozuku Sashidome Seikyūken No Gōriteki Konkyo To Genkai" (Resonable Grounds and Limits ofa Right to Seek an Injunction Based on a Patent Right), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed.,Gendai Chiteki Zaisan Hō Kōza I (Lecture on Modern Intellectual Property Law I), p. 133; Ryūta Hirashima,"Tokkyoken Ni Motozuku Sashidome Seikyūken Ni Okeru 'Naizaiteki Genkai'" ("Intrinsic Limits" of a Right to Seek
an Injunction Based on a Patent Right), Patent, Vol. 66, No. 5 (Separate Volume No. 10) (2013), p. 1; Masabumi Suzuki,"Tokkyoken Shingai Ni Taisuru Minji Kyūsai Ni Kansuru Oboegaki: Sashidome Sochi Seigen No Kanousei Wo
Megutte" (Memorandum on Civil Remedies Against Patent Infringement: Possibilities of Restricting Injunction
Measures), Patent, Vol. 66, No. 5 (Separate Volume No. 10) (2013), p. 43.
3 Yasuyuki Echi, "Minpōgaku Ni Okeru Sashidome Seikyūken Riron To Chiteki Zaisan Hō Ni Okeru Sashidome
Seikyūken" (Theory of the Right to Seek an Injunction under Civil Law and Right to Seek an Injunction underIntellectual Property Law) Patent, Vol. 66, No. 5 (Separate Volume No. 10) (2013), p. 12.
4 The following is a copyright-related case: the Yokohama District Court Judgment, October 29, 1985, Hanji, No. 1176,
p. 126, Hanta, No. 609, p. 98 (the Case of a Bird with a Flower in Its Beak). In this case, the court held that the act of
obstructing the production of a movie (a cinematographic work) by force is not a copyright infringement, and statedthat an act in the manner of harming the use of the copyright holder’s work itself does not constitute an act of
infringement. This reasoning also applies to a case of patent infringement.

§8. Infringement

Act of 1959, patent infringement had rarely been disputed in civil actions at that time. Most
such suits have taken place under the current Act. In addition, many of the infringement
suits that occurred in the period between 1955 and 1964 were cases seeking provisional
dispositions, but now infringement is mostly claimed in principal actions.

§8. Infringement[357]
8.2. Civil Remedies
8.2.1. Right to Seek an Injunction (Article 100 of the Patent Act)
(1) Significance of the right to seek an injunction
There were no provisions on the right to seek an injunction under the former Act (Actof 1921), but the right had been recognized in court judgments and academic theories fromthe viewpoint that a patent right was a right having an aspect of a real right. The current
Act has provisions setting out this interpretation, and makes it clear that, in addition to
demanding the stopping of any infringement, it is possible to demand the disposal of
products constituting an act of infringement, the removal of facilities used for an act of
infringement, or other measures necessary for the prevention of infringement (Article 100,
paragraph (2) of the Patent Act). A demand for such disposal or removal, which is not ademand for an injunction but a demand for a feasance, cannot be made independently; it
can only be made together with a demand for an injunction.1 Therefore, if infringement
has occurred in the past, but it is not likely to occur in the future, a demand for an injunction
cannot be made, so a measure necessary for the prevention of infringement cannot be
demanded under Article 100, paragraph (2) of the Patent Act either.
Instead of being a law in extension of the tort law, the Patent Act has been legislated
as a law that grants a right, and it recognizes the right to seek an injunction as one of theeffects of that right. This is considered to be a right to demand which is similar to a real
right, with which a demand can be made merely based on the objective existence of an actof infringing a right without having to satisfy subjective requirements such as intention or
negligence. Article 100 of the Patent Act is similar to Article 198 (Actions for Maintenanceof Possession) of the Civil Code also, in respect of the structure of the provision, and it does
not impose subjective requirements for the constitution of an infringement. In addition, an
injunction can also be requested against one’s original invention which is not an imitation,
as long as it falls within the scope of a patent right (this is called a suspensive effect).
Therefore, the Patent Act is not a law prohibiting imitation in the strict sense. On the other
hand, the Copyright Act is a law prohibiting imitation, so one cannot demand an injunction
against one’s original work.
1 In the Tokyo District Court Judgment, September 29, 1993, Torikeshishū, 1994, p. 635 (the Tiekapto case), the court
held that the right to demand disposal and the right to demand removal can only be exercised together with the exerciseof the right to demand the stoppage or prevention of an infringement and cannot be exercised independently; so after
the expiration of the duration of the patent right, disposal, etc. cannot be demanded for products which constituted an
act of infringement before the expiration of the duration of the patent right as an act necessary for preventing an
infringement. Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 291.

406

§8. Infringement

Since a patent right is a title under which one can acquire exclusive profits from theexclusive use of certain technical information, the primary issue in countering an
infringement would be to recover the exclusivity, that is, the exercise of the right to demand
an injunction. In contrast, while the right to claim compensation for damage is generally
considered to be a system for compensating for actual damage, if punitive compensation
were to be recognized, as is the case in the United States, compensation for damage could
also have a deterrent effect.
[358]
An injunction can be demanded when an infringement has actually occurred or is
likely to occur (Article 100, paragraph (1) of the Patent Act). Even if the defendant does
not produce or sell the products in question, an injunction may be demanded if the court
finds that there is a likelihood of infringement.2(2) Persons having the right to seek an injunction and the subject of an injunction
The patentee and an exclusive licensee have the right to seek an injunction, but anon-exclusive licensee is not considered to have that right. This point will be discussed in
the part about non-exclusive licenses. The grant of an exclusive license restricts the workingof the invention by the patentee to an extent (Article 77, paragraph (2) of the Patent Act),but it should be construed that the license does not obstruct the patentee from exercising
the right to seek an injunction.3 Although there are some opposing views, we should apply
the same idea whereby the right to demand the abatement of a nuisance based on ownershipis recognized even after the grant of a limited real right. In practical terms as well, if aperson working an invention without the authorization of the patentee is left as is, it would
affect the patentee's royalty income, and as result of such a person's products being sold on
the market, the value of the patent right could fall after the expiration of the term of the
exclusive license.
By making a demand for the disposal of products constituting an act of infringement,
2 In the Tokyo District Court Judgment, July 10, 1987, Mutai Saishū, Vol. 19, No. 2, p. 231 (the Herbicide case), thecourt held that the entrustment of trial experiments of another person’s patented agricultural chemical and the application
for its registration as an agricultural chemical are acts of preparation for selling, using, or assigning the products by aperson who is not the patentee, so a demand for an injunction against these acts is an act necessary for preventing afuture infringement.
3 The Yamaguchi District Court Judgment, February 28, 1963, Kamin, Vol. 14, No. 2, p. 331/Hanta, No. 142, p. 184 (theSynthetic Float case); the Tokyo District Court Judgment, March 18, 1964, Hanji, No. 377, p. 63/Hanta, No. 160, p.
133 (the Trousers Waist Lining case). In the Tokyo District Court Judgment, February 6, 2003, Hanji, No. 1870, p. 107(the Method of Searching for Ligand Molecule case), which is a judgment holding contrary to the former two judgments,
the court held that, where an exclusive license is established for a patent right, only the exclusive licensee can exercise
the right to seek an injunction with regard to the licensed scope of the patent, and the patentee cannot exercise the rightto seek an injunction. However, in its appellate instance, the Tokyo High Court Judgment, February 27, 2004, Hanji,
No. 1870, p. 84, the court held that the patentee who has granted an exclusive license also has the right to seek an
injunction. The same judgment was given in the final instance, the Supreme Court Judgment, June 17, 2005, Minshū,Vol. 59, No. 5, p. 1074/Hanji, No. 1900, p. 139/Hanta, No. 1183, p. 208, and the interpretation became fixed in practice.
For details, see Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (New Explanatory Notes on
the Patent Act Vol. 1), p. 1020 [written by Masabumi Suzuki].

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§8. Infringement

one can seek the disposal of products that are necessarily involved in the act of
infringement—in the case of the invention of a product or the invention of a process of
producing products, the products produced by working the invention. By making a demand
for the removal of the facilities used for an act of infringement, one can demand the removalof products that were used to facilitate the act of infringement—in the case of the inventionof a product or the invention of a process of producing products, products used for the
purpose of working the invention, such as dies, catalysts, or equipment, and in the case of
the invention of a process, products used when working the invention. Meanwhile, delivery
cannot be demanded in lieu of such disposal or removal.4 Whereas the right to seek adisposal is a right specially recognized under the Patent Act, delivery cannot be allowed
unless there are special provisions permitting such delivery. If delivery were to be permitted,
there would also be a need to stipulate provisions on the cost and method of retention after
delivery, the risk of loss in the case of having caused damage to the products or facilities,
the obligation to reship the products and facilities after the lapse of the patent right, andother matters. The fact that such provisions are not stipulated in the Patent Act suggests that
the Act is not intended to allow such a complicated process.
[359]
In addition, one can demand measures necessary for preventing an infringement(Article 100, paragraph (2) of the Patent Act). There are conflicting views as to what kindof measures are regarded as necessary measures, between an objective theory insisting thatthey should be determined objectively and a subjective theory emphasizing that they should
be determined based on the subjective intention of the person who carries out the measures.
It is not possible to standardize these views, so the question of whether or not certain
measures are “necessary measures” should be determined by comprehensively consideringboth the objective nature of the measures and the subjective intention of the person who
carries out the measures. If the scope of the measures necessary for the prevention of an
infringement is too broad, it would improperly broaden the effectiveness of the patent right,
and if the scope is too narrow, it would undermine such effectiveness. Specifically, theeffectiveness of a patent right should be sufficiently secured and the “necessary measures”
should be limited to what are truly necessary, by taking into account the contents of the
4 Minoru Takeda, Chiteki Zaisanken Shingai Yōron (Tokkyo/Ishō/Shōhyō Hen) [Dai 5 Han], p. 392; Etsuhiro Nozaki,“Tokkyoken Shingai no Teishi Oyobi Yobō Seikyū (Demand for Stoppage or Prevention of a Patent Infringement),”
Makono/Kōgyō Shoyūken Soshō Hō (Industrial Property Litigation Act) (Saiban Jitsumu Taikei (Outline of Court
Practices) 9), p. 61 (this states that there is no room to recognize a demand by which one would be allowed to freely use
or consume the articles or the facilities after their delivery); Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3Han], p. 947 [written by Shigetoshi Matsumoto, Katsuhiko Mise]. While no theories recognize the free use or disposalof the articles or the facilities by the patentee after delivery, the following theory supports the right to demand delivery:
Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 465. It states that as long as the destruction of a product isrecognized, delivery of possession should also be justifiably recognized. The same opinion is expressed in Sueaki Oda
and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 354.

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§8. Infringement

patented invention, the mode of the act of infringement, and the specific details of the
injunction, among other matters.5(3) Infringement in which multiple people are involved
The principle of the Patent Act is to treat an act that meets all of the constituent
elements of the claims as infringement, and exceptions to this principle are indirect
infringement (Article 101) and the doctrine of equivalents. While the Patent Act basicallyassumes an infringement whereby a single person works all of the constituent elements ofthe claims of the patented invention, it has provisions on indirect infringement for an
infringement whereby multiple people are involved (see “8.3. Indirect Infringement(Deemed Infringement)”) and has a finite list of acts that constitute an indirect infringement(Article 101 of the Patent Act). Therefore, a person who induces or aids the commission of
an infringement will not be an infringer, in principle, since such act does not constitute anindirect infringement.6 When multiple people are involved in committing an infringement,
the act is generally not regarded as an infringement, and particularly a person who produces
and sells general-purpose products is not regarded as an infringer. In fact, however, due tothe development of the Internet environment, there are often cases where multiple people
are involved in working an invention in a way that does not constitute an indirect
infringement, such as the case of an electronic payment system, e-commerce, or cloudcomputing, and such cases sometimes include individuals who do not work the invention
as a business. In particular, if any part of the working of the invention takes place outside
Japan, the problem becomes more complicated. This type of dispute is expected to increasein the future.
[360]
In the case of the invention of a product, even if the individual parts constituting theclaims are produced by different people, the person who finally assembles those parts andproduces a product that satisfies all of the constituent elements is usually the direct infringer,
and the producers of the parts will not be infringers, in principle, unless their acts constitute
5 In the Supreme Court Judgment, July 16, 1999, Minshū, Vol. 53, No. 6, p. 957/Hanji, No. 1686, p. 104/Hanta, No.
1010, p. 245 (the Physiologically Active Substance Measurement Method case), the court held that, "necessary
measures" should be those that can ensure the effectiveness of the exercise of the right to seek an injunction and thosethat are within the scope necessary for putting the right to seek an injunction into practice, and concluded that thepatentee cannot seek, based on a patent right relating to the invention of a process, the disposal of drugs of which thequality standards have been tested by using the said process and withdrawing an application for listing the drugs on thenational health insurance drug price standard.
6 In the Tokyo District Court Judgment, August 17, 2004, Hanji, No. 1873, p. 153/Hanta, No. 1172, p. 302 (the Iron
Manhole Cover Replacement Method case), the court stated that a person who is infringing or is likely to infringe apatent right as referred to in Article 100 means a person who independently performs or is likely to perform the workingof the patented invention or any of the acts prescribed in Article 101, and does not include a person who induces or aids
such working or acts, and held that, even if, as a result of preparing and distributing pamphlets disclosing a patented
process, a third person works the process and infringes the patent right by looking at the pamphlet, the patentee cannot
demand an injunction as long as the third person's act does not constitute any of the acts prescribed as an indirect
infringement.

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§8. Infringement

an indirect infringement. Nevertheless, recently there has been an increase in inventions
relating to a system that is constructed on a network, and claim descriptions of suchinventions often assume the working of the inventions by multiple people. In particular,
where a patented system (product) is to be used (worked) by multiple people, there are oftencases where people such as the system administrator, the service provider, and system users
independently work the respective parts of the claims and, as a result, all constituent
elements are worked. Since each person is only using a part of the claims, and they often
do not have a joint intention of committing an infringement, there is a question of who willbe the infringer. Although it depends on the claim description, the person who constructed
the system will likely be an infringer if the person has engaged in an act of production(working of the invention), but the main question here is who is committing an act of
infringement through the use of the system. While the recommended claim description is
to have no human acts involved, such a style of description would be difficult to apply or
would lead to an inaccurate and awkward claim description for certain types of invention.
In such a case, the issue will be whether or not the system operator can be identified as aperson working the invention.7[361]
In the case of an invention of a process or an invention of a process for producing a
product, the same problem occurs when the process involves multiple steps, and multiple
people work those steps separately, and although all steps are completed as a result, no
person has worked the overall claims. In such a case, it would be questionable to conclude
that nobody is an infringer in spite of the fact that the products constituting an infringement
have been produced or a process constituting an infringement has been worked as a result,and it may be reasonable to find infringement in some cases; but the problem would be its
theoretical structure. First, if the individual people involved in the working of the invention
have jointly taken part in an infringement, all of these people could be deemed to havejointly committed the act of infringement (joint direct infringement).8 A typical case is
7 Hiroki Saitō, “Nettowāku Riyō Tokkyo No Jisshi Kōi To Shingai No Shutai -- Kakō Renzu Kyōkyū Shisutemu Jiken
To JAddress Sābisu Jiken O Chūshin To Shite” (Infringing Actions and Infringers of Patents Related to Computer
Networks: Eyeglass Lens Order System Case, JAddress Service Case, and Beyond), Chizai Kanri (Intellectual Property
Management), Vol. 61, No. 1 (2011), p. 8 insists that the concept of "use" should be broadly interpreted to "include an
act of providing a service to make a product relating to the patented invention available in a way that achieves the
purpose of use."
8 In the Osaka District Court Judgment, May 4, 1961, Kamin, Vol. 12, No. 5, p. 937 (the Expanded Polystyrene case),
the court stated in obiter dicta that "when an act of working a part of another person's patented process, in combination
with another person's act of working a part of the invention, results in working said patented process as a whole, suchas when a person works all the steps involved in the invention by having another person undertake one or more of thesteps, and additionally works the other steps by himself/herself, or when multiple people jointly work all of the steps
involved by sharing the steps between them, the former case is no different from the outsourcer working all of the steps
involved and the latter case is no different from multiple people jointly working all of the steps, so both cases constitutean act of patent infringement." The court further pointed out that "a mere act of supplying raw materials or intermediate
substances with a prediction that the act may result in working another person's patent or an act of recommending theuse of such substances for working another person's patented process" will not constitute a patent infringement.

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§8. Infringement

where people jointly conducting a business each undertake different steps of work, and as
a result, products constituting an infringement are produced or a process constituting an
infringement is worked. In such case, each person would be responsible for not only the act
the person has committed, but for the entire infringement as an infringer, so the individual
people would need to have the joint intention of committing an act of infringement jointly,
and if they have committed the acts separately without such joint intention, their acts should
be construed as not constituting a joint act of direct infringement.9 However, some scholars
hold opposite views regarding this point. It is considered that the subjective intentions of
the people committing the acts do not need to be taken into account in determining whether
or not an act of infringement was committed, that is, whether their acts constitute an
infringement, but such people's joint intention should be taken into account in determining
who should be held liable for the act. Introducing a subjective requirement in thedetermination of infringement is not completely free of theoretical problems.10 However,
if a joint direct infringement is found solely based on the objective requirement, the scopeof infringement will be too broad, and some kind of limitation would be required. Article
101, items (ii) and (v) of the Patent Act, which are provisions on indirect infringement, set
forth the subjective requirement of "knowing that ... the said product is used for the workingof the invention." Thus, it would not be irrational to impose a subjective requirement when
determining the scope of joint direct infringers.
[362]
Meanwhile, if a person uses another person who works a part of the claimed
invention, as a mere organ or tool, and commits an act of infringement as a result, the actsof the person serving as the organ or tool are evaluated as being committed by the user (theperson who uses said person as the organ or tool), and the user could be regarded as a direct

9 Naoki Mizutani, “Fukusūsha Ga Tokkyo Shingai Ni Jijitsujō Kan’yo Shite Iru Baai No Shingai Shutai No Nintei”(Determination of Infringers in the Case Where Multiple People Are Practically Involved in Patent Infringement),
Makino Toshiaki Sanju Kinen, Chiteki Zaisanken Hōri To Teigen (Doctrines of and Recommendations ConcerningIntellectual Property Rights), p. 121; Makiko Takabe, “Fukusū Shutai No Kan’yo To Tokkyoken Shingai” (Involvementof Multiple People and Patent Infringement), Toshiaki Makino, Toshiaki Iimura, Makiko Takabe, Yōichirō Komatsu,
and Tomoki Ihara eds., Chiteki Zaisanken Soshō Jitsumu Taikei I (Outline of Intellectual Property Lawsuit Practices I),
p. 416.
10 Hideo Ozaki, “Konpyūta Puroguramu To Tokkyo Shingai Soshō No Sho Mondai” (Various Problems in Computer
Program and Patent Infringement Litigation), Toshisuke Kiyonaga and Ryūichi Shitara, Gendai Saiban Hō Taikei 26
Chiteki Zaisanken, p. 230; Ryūta Hirashima, “Fukusū Shutai Ga Kaizai Suru Tokkyoken Shingai Hōri Wo Meguru
Aratana Hōkōsei Ni Tsuite Oboegakiteki Kentō” (Note on Analysis of New Directions for the Doctrine of Patent
Infringement Involving Multiple Infringers), Makino Toshiaki Sanju Kinen, Chiteki Zaisanken Hōri To Teigen(Doctrines of and Recommendations Concerning Intellectual Property Rights), p. 153.

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infringer.11 A person who has used another person as an organ or tool is regarded as having
conducted the acts carried out by said other person not only under the Patent Act, but also
in many other legal domains, including the indirect principal in crime under the Penal Code.
The question is what specific situation is required for applying the tool theory. It is possible
to have cases where a person uses another person as a tool based on their personal
relationship, 12 and cases where a person takes advantage of the act of another person
conducted in good faith.13[363]
Where an act does not constitute a joint direct infringement and is not found to be an
act carried out as a tool, could such an act constitute an infringement in some cases?14 Also,with regard to a patent on a process, a court has found a service provider to be an infringer.15
Considering the development of Internet business, an infringement may be more frequently
committed through the use of a patented invention rather than through its future production.
At the same time, the style of such claim description whereby its constituent elements are
met through a combination of acts carried out by multiple independent people is expected
to become more common. Since the Patent Act has provisions on an indirect infringement
for an infringement committed by multiple people, and those provisions has a finite list of

11 In the Sendai High Court Akita Branch Judgment, December 19, 1973, Hanji, No. 753, p. 28 (the Horseshoe case), thecourt held that, where a subcontractor of one of the joint owners of a patent right has worked the patented invention
without the permission of the other joint owner, the subcontractor engaged in the manufacturing as an organ of thejoint owners, and the court denied such act to be an infringement on the basis that the act has been carried out under
the control and management of the joint owners on the joint owners' own account (the final appeal against this judgment
was dismissed; the Supreme Court Judgment, December 24, 1974, Tokkyo Nyūsu (Patent News), p. 4096). In addition,in the Tokyo District Court Judgment, September 20, 2001, Hanji, No. 1764, No. 112/Hanta, No. 1094, No. 245 (theMethod of Creating Images Electrodeposited on Clock Faces case), which was a case where six out of the seven steps
involved in the invention of a process were carried out by the defendant, but the single remaining step was taken by
the dial face manufacturer who purchased the product from the defendant by way of peeling off the release paper atthe back of the product and adhering the product to a dial face or another object, the court found infringement, holdingthat the defendant used the dial face manufacturer as a tool and that the defendant could be deemed to have beenworking all of the processes constituting all of the constituent elements of the invention. For details, see "8.3. Indirect
Infringement (Deemed Infringement) (Article 101 of the Patent Act)."
12 In the Supreme Court Judgment, October 17, 1969, Minshū, Vol. 23, No. 10, p. 1777/Hanji, No. 577, p. 74/Hanta, No.
241, p. 81 (the Globe-shaped Transistor Radio Design case), which is a case concerning prior use, the court held thatthe working of an invention required for a prior user's right to be effective "includes a case where the prior user places
orders with another person who has a business facility to manufacture products relating to the design in question only
for the prior user, and sells the products after receiving the delivery thereof from such person."
13 In a criminal case, if a person uses a mail carrier to deliver an explosive, the person who mailed the explosive isconstrued to be the offender, and the mail carrier was merely used as a tool.
14 The Copyright Act does not have provisions on an indirect infringement, but the Supreme Court has found the manager
of a karaoke restaurant who is not an actual performer to be an infringer based on a theory called the karaoke doctrine,and mainly based on two benchmarks (management/control status and business interests).
15 In the Intellectual Property High Court Judgment, March 24, 2010, Hanta, No. 1358, p. 184 (the JAddress case), whichis related to the invention of a process for accessing an information page, comprising a phase of providing the client's
descriptor (an act of the user operating the client’s PC), a phase of processing on a directory server and presenting theidentified page to the client (an act of administering and managing the server), the court found that the person working
such invention is the person implementing the "process of providing access," and found the service provider to be an
infringer. In this case, the court stated that the patented invention related to a process for providing access to a server,
not a process for accessing a server, which means that the patent cannot be infringed unless a client accesses the server,and held that the person who works the invention is construed to be the person who provides access to the server as
the interpretation of the patent claim.

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§8. Infringement

infringing acts so as to demarcate the limits of infringements, we should not broaden theinterpretation of those provisions too easily. Yet in reality, there have been increasing cases
where an infringer should be construed in a normative manner and a person who is engaged
in some kind of control/management should be regarded as an infringer. 16 Maybe theprovisions on an indirect infringement should be reviewed to cover Internet-related patentrights as well, but when interpreting the current Act, the question would be how far theinterpretation of the concept of control/management can be broadened in determining theinfringer.17[364]
The above are conceptual categories, and it is difficult to clearly delineate the border
between them in reality. For example, it is hard to clearly distinguish if a person is acting
as an organ/tool or is engaged in control/management. In any case, a patent infringement isestablished when a single person works all of the constituent elements described in thescope of claims of the patent, in principle, and one must be careful in broadening theinterpretation.
So far, we have discussed the issue of the infringer, that is, the issue of who is the
person against whom an infringement can be demanded. Compensation for damage will be
an issue of joint tort by inducement or accessoryship under the tort theory of the Civil Code,so in some cases compensation for damage may be claimed against a person who has only
worked a part of a patent claim. Also, penal provisions are sometimes applied to a person
who has only worked a part of a patent claim, based on the complicity theory of the Penal
16 In the Tokyo District Court Judgment, December 14, 2007, court website (the Supply System for Eyeglass Lens case),
the court stated that, "with regard to whether the constituent elements are met, it is sufficient to determine, based on apremise that two or more people are involved, whether the people who are intended to be those to carry out the acts
have performed the respective acts described in the scope of the patent claims, or whether they possess or own therespective parts of the system, and the fact that one or some of the people who actually carried out the acts were not
the agents of the manufacturer in performance is not relevant with regard to the issue of whether the constituent
elements are met." On such a basis, the court held that "the question of the person against whom an injunction ordamages can be demanded, that is, the person who is working the invention (Article 2, paragraph (3) of the Patent Act)should be decided by determining the person who is controlling and managing the system in question, which differsfrom the issue of whether the constituent elements are met."
17 See Naoki Mizutani, “Bizinesu Hōhō Tokkyo No Kōshi Ni Tomonai Aratani Shōjite Kuru Mondai” (Problems Arisingout of Enforcing Business Method Patents), Jurist, No. 1189 (2000), p. 40; Naoki Mizutani, “Fukusūsha Ga Tokkyo
Shingai Ni Jijitsujō Kan’yo Shite Iru Baai No Shingai Shutai No Nintei” (Determination of Infringers in the Case
Where Multiple People Are Practically Involved in Patent Infringement), Makino Toshiaki Sanju Kinen, Chiteki
Zaisanken Hōri To Teigen (Doctrines of and Recommendations Concerning Intellectual Property Rights), p. 104; andKei Iida and Naoki Okumura, “Intānetto Nanbā Jiken” (The Internet Number Case), Nakamura & Partners ed., Chiteki
Zaisan Soshō No Genzai (Intellectual Property Litigation Today), p. 225. Nobuyasu Ogata, “Fukusū Shutai Ni Yoru
Shingai (Jisshi No Gainen) Ni Tsuite” (Infringement by Multiple Infringers [Concept of Working an Invention]), Jurist,
No. 1227 (2002), p. 59 states that, with regard to a patent on a process, the concept of use should basically be
determined objectively, but if appropriate protection cannot be extended by such a method, it may be allowable tobroaden the scope of the protection exceptionally, while giving consideration to the subjective aspects and personal
relationships, specifically listing the following: (i) the accused person should be aware of the probability that the steps
comprising the constituent elements should be taken in order to attain the intended function and effect of the invention,and there should be a willingness to take those steps; (ii) the accused person has a personal relationship with anotherperson whereby the accused person follows the other person's inventive steps comprising the constituent elements inorder to attain the intended function and effect of the invention; and (iii) an injunction should be effective for
eliminating the infringing situation.

413

§8. Infringement

Code. Therefore, the issue of the infringer boils down to the question of whether or not torecognize the right to seek an injunction, which is a problem specific to the Patent Act.
8.2.2. Border Measures (Customs Act)1
The conventional intellectual property legislations had adopted the principle ofregulating imports and not regulating exports. It had been considered sufficient to deal withmatters concerning exports based on the law of the destination country (the country inwhich the place where the products are to be delivered or the person who is to receive thegoods exists). However, as products infringing intellectual property rights have come to be
traded around the world, a need arose to restrict such cross-border distribution of infringing
products at the export phase. As a result, export was added to the types of acts of working
an invention under the Patent Act, and substantively based on such provisions, products
infringing patent rights are specified as export-prohibited goods under the Customs Act.2
As the working of an invention under the Patent Act includes importing andexporting (Article 2, paragraph (3)), an injunction can be requested against the import orexport of infringing products in infringement litigation. In reality, however, it is physicallydifficult or too time-consuming to deal with such importing or exporting through litigation,and it is often difficult to seize such products once they are imported and spread within
Japan. Also, once products are exported, they can no longer be stopped. Therefore, a bordermeasure to stop the products from coming in or going out at customs is necessary. While
such border measure is an obligation under the TRIPS Agreement, the Patent Act only
provides that importing and exporting are regarded as the working of an invention (Article
2, paragraph (3) of the Patent Act), and all matters concerning suspension at the customs
are provided under the Customs Act. It must be noted, however, that the Customs Act does
not specify the importing or exporting of patent infringing products as an illegal act, but
specifies products that are illegal under the Patent Act as import- or export-prohibited goods
and stipulates various provisions for suspending their import or export. For example, theAct on the Circuit Layout of a Semiconductor Integrated Circuit (Semiconductor Integrated
Circuit Act) does not prohibit the export of infringing products, so the Customs Act does
not specify such articles for export as export-prohibited goods. In short, in order to treat
products as import- or export-prohibited goods under the Customs Act, they need to be

1 See CIPIC (Customs Intellectual Property Information Center), Shin Chiteki Zaisanken Shingai Buppin No Mizugiwa
Torishimari Seido No Kaisetu (New Explanation of the Border Control System for Intellectual Property Right Infringing
Products) (Japan Tariff Association, 2003).
2 Article 16 of the Anti-Counterfeiting Trade Agreement (ACTA) (which is already signed and ratified by Japan, butwhich has yet to become effective) provides “Each Party shall adopt or maintain procedures with respect to import andexport shipments under which...,” regulating not only import but also export.

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§8. Infringement

specified as being illegal under a substantive law such as the Patent Act.
[365]
Many of the import- and export-prohibited goods under the Customs Act are thosewhich are regulated for the protection of the public interest from a perspective whereby
such goods are unadulterated social evils, such as narcotic drugs, guns, and forgedbanknotes. In contrast, patent infringing goods are not types of articles whose import isessentially impermissible, and there is no problem in importing those goods if the patentee
gives his/her consent. Even if certain articles were infringing goods when they were
imported or exported, if the right holder and the importer or exporter subsequently reach asettlement and conclude a license, such articles would become legal retroactively. In otherwords, whether or not the import or export of an article should be allowed can be freely
decided by the patentee. Therefore, there is a need for a procedure which differs from thatfor treating goods that are unadulterated social evils. Making dispositions on such matter at
the customs had been difficult in some ways because, conventionally, there had been noprocedural provisions concerning dispositions by the Directors-General of Custom-Houses
regarding goods infringing intellectual property rights, so in actuality such dispositions had
been made only after the right holder had offered relevant information.3
The history of border measures for goods infringing intellectual property dates far
back to when “goods that violate imperial law concerning patents, utility models,trademarks and copyrights” were listed along with opium and books that contravened
public order and morality as import-prohibited goods in the customs tariff schedule attachedto the former Customs Tariff Act enacted in 1897 (and became effective in 1899). Later,
with the 1954 revision of the Customs Tariff Act of 1910, “goods that infringe patent rights,
utility model rights, design rights, trademark rights, and copyrights” were listed in Article
21 of the Act. In addition, provisions on confiscation, disposal, and reshipment of importprohibited goods were introduced, and goods that infringed neighboring rights were added
to import-prohibited goods on the 1970 revision. In 1986, officials in charge of illegal
products, etc. were introduced at the customs as a measure to enhance the framework for
examining goods infringing intellectual property rights. After that, provisions on bordermeasures were established in Article 51 onward of Part III, Section 4: Special Requirements
Related to Border Measures of the TRIPS Agreement (Agreement on Trade-Related
Aspects of Intellectual Property Rights; effective since 1995) of the WTO (the Marrakesh
Agreement) concluded in 1994. In response, Japan revised Article 21 of the Customs Tariff

3 The specific procedures had been decided by the Basic Directive on the Customs Act (June 5, 1992, Zōkan, No. 519,
Regulation of Goods Infringing Intellectual Property), but this directive was abolished upon the 1994 revision of the
Customs Act, and a new directive was issued (December 28, 1994, Zōkan, No. 1192). The directive was further amended
before the present directive was issued.

415§8. Infringement

Act in 1994 (it came into effect on January 1, 1995), and established the procedure for
identifying whether or not suspect goods are infringing goods and the system of application
for import suspension. In addition, the Customs Tariff Act Enforcement Order was revised(addition of provisions from Articles 61-3 through 61-9; Cabinet Order No. 414), the Rules
on Deposit Money for Compensation for Damage Pertaining to Application for Import
Suspension (Ordinance of the Ministry of Justice and Ministry of Finance No. 5)) were
established, and a directive was revised. As a result, provisions on the infringement
identification procedure were stipulated, the right to apply for import suspension wasrecognized for trademark right holders, copyright holders, and holder of neighboring rights,
and a system was introduced to deposit money for compensating any damage that may becaused to the importer (Article 21-3 of the Customs Tariff Act).4 Later, the right to file anapplication for import suspension was also recognized for patentees, utility model rightowners, and design right owners, and the system for seeking the opinion of the JPO wasintroduced with the 2003 revision. In 2006, all of the provisions on border measures that
had been stipulated under the Customs Tariff Act were moved to the Customs Act. In linewith this, an expert advisor system5 was established to hear the opinions of experts in thesystem of application for import suspension and the infringement identification procedure.
At the same time, in preparation for Japan's accession to the Anti-Counterfeiting Trade
Agreement (ACTA), which was advocated by Japan, the Patent Act was also revised toinclude exporting in acts of infringement, and with the 2006 revision, patent infringing
articles were also added to export-prohibiting goods under the Customs Act (Article 69-2,
paragraph (1), item (iii) of the Customs Act).6[366]
Article 69-2, paragraph (1), item (iii) of the Customs Act lists patent infringing goods
as export-prohibited goods, and Article 69-11, paragraph (1), item (ix) of the Customs Act
lists patent infringing goods as import-prohibited goods. The Directors-General of Custom4 Since the importer faces the risk of suffering damage from not being able to import the goods until the procedures arecompleted, the Directors-General of Custom-Houses can order applicants to make a deposit of a reasonable amount ofmoney in order to provide security for such damage (Article 21-3 of the Customs Tariff Act at the time; Article 53 of
the TRIPS Agreement). Such a system where the applicant provides security for the respondent in response to an
administrative disposition made by an administrative agency, which is the Director-General of a Custom-House in thiscase, is a completely new type of system, which was legislated as an obligation under the TRIPS Agreement.
5 The Director-General of the Custom-House commissions the task to a person with knowledge and experience ofintellectual property rights, such as a lawyer, patent attorney, or scholar, who has no interest in the case concerned(Article 69-14 of the Customs Act).
6 With regard to details on the revisions and their background, see Kazuhisa Saitō, “Zeikan Ni Okeru Chiteki Zaisan
Shingai Buppin No Mizugiwa Torishimari” (Border Control of Intellectual Property Infringing Goods at the Customs),
CIPIC Journal No. 171 (2006), p. 43; Institute of Intellectual Property, Chiteki Zaisan Shingai Buppin No Mizugiwa
Torishimari Seido No Kaisetsu (Explanation on the Border Regulation Measures for Goods that Infringe Intellectual
Property) (CIPIC (Customs Intellectual Property Information Center), 2009), p. 9; Makoto Saitō, “Mizugiwa Kisei Ni
Yoru Kenri No Shikkō -- Gyōsei Hō No Shiten Kara” (Enforcement of Right by Border Regulation -- From the
Perspective of Administrative Law), Chosakuken Hō Kenkyū (Annual of the Copyright Law Association of Japan), No.
22 (1995), p. 9.

416

§8. Infringement

Houses can order the confiscation, disposal, or reshipment (which is naturally inapplicable
to export) of such infringing goods (Article 69-2, paragraph (2) and Article 69-11,
paragraph (2) of the Customs Act).7 Meanwhile, a person who exports infringing goods ispunished by imprisonment with work for a term not exceeding ten years or a fine notexceeding ten million yen or a combination thereof (Article 108-4, paragraph (2) of the
Customs Act), and a person who imports such goods is punished by imprisonment withwork for a term not exceeding ten years or a fine not exceeding seven million yen or a
combination thereof (Article 109-2, paragraph (2) of the Customs Act).
[367]
In order to suspend the clearance of patent infringing goods at Customs, the questionof whether or not the goods infringe a patent right needs to be determined, and theorganization that makes this determination differs by country. In some countries, the courts
make such a determination (European countries, etc.), or a third-party organization makes
such a determination (the International Trade Commission of the United States, the Korea
Trade Commission of South Korea, etc.), but Japan has a system whereby the DirectorsGeneral of Custom-Houses make the determination and suspend importing or exporting as
an administrative disposition.
If suspect intellectual property infringing goods are found at the customs and thegoods are not subject to offense investigation (Article 119 onward of the Customs Act;
investigation on whether or not goods are subject to the penal provisions of the Customs
Act 8 ), investigation is commenced to identify whether the goods infringe intellectual
property. Import or export may be suspended at the customs either ex officio by the
Director-General of a Custom-House or by application filed by a party. The infringement
identification procedure may also be commenced ex officio when a customs official
discovers intellectual property infringing goods in the process of import inspection. The
procedure based on application filed by a party is discussed below.
The procedure is divided into the procedure of application for import suspension,
which the patentee files with the Director-General of a Custom-House to identify whether
or not the goods in question are patent infringing goods, and the identification procedure9that is conducted after the Director-General accepts the application (the two procedures are
sometimes collectively referred to as the “identification procedure”).
7 The details of the procedures are specified in Chapter 6 Customs Clearance, Section 7 Intellectual Property Infringing
Goods (Export) and Section 8 Intellectual Property Infringing Goods (Import) of the Basic Directive on the Customs
Act.
8 Investigation is conducted for cases of violation that fall under the penal provisions of the Customs Act (offense cases)by a method similar to criminal investigation, and prosecution is instituted after the Director-General of a CustomHouse makes an accusation.
9 The procedure is stipulated in the provisions as “a procedure for identifying whether or not said goods fall under any of
the categories of goods set forth in these items” (Article 69-12, paragraph (1)).

417§8. Infringement

In the case of import, the patentee may submit to the Director-General of a CustomHouse necessary evidence for making a prima facie showing of the fact of infringement10
by goods which the patentee finds to be infringing his/her patent right and, if the goods areto be imported, file an application with the Director-General to conduct an identification
procedure for those goods (Article 69-13, paragraph (1) of the Customs Act). The subjectof application is the import goods, so the application may be filed even if the infringer(importer) has not been identified. When this application is filed, examination is conducted
to determine whether or not to accept the application, and a decision of acceptance, nonacceptance, or pending11 is made12 (paragraphs (2) and (3) of said Article).
[368]
Under that process, the Director-General of the Custom-House may seek the opinionof an expert advisor (Articles 69-14) if an interested party submits a written opinion, if there
is a dispute (litigation, etc.) or a dispute is found likely to occur between the applicant andan interested party over the presence or absence of infringement, if it is difficult todetermine whether or not a prima facie showing of the fact of infringement has been madein the examination of an application for import suspension, or if it is found appropriate tohear the opinion of an expert advisor with regard to an application for import suspension,etc. 13 The matters on which an expert advisor’s opinion may be sought include thetechnical scope of a patented invention, as well as grounds for preventing the establishmentof infringement (such as parallel import, exhaustion of the right, prior use, experiment or

10 Here, the fact of infringement includes not only cases where the infringing goods have already been imported into
Japan, but also cases where such goods are likely to be imported into Japan. For example, it includes a case where thegoods have been exhibited at an overseas trade fair and are likely to be imported, or a case where the goods are soldon an Internet shop and are likely to be imported.
11 Sometimes the decision on acceptance is pended until the court issues a judgment.
12 If a party is dissatisfied with the disposition by the Director-General of a Custom-House, the party may raise an
objection against the Director-General (Article 89, paragraph (1) of the Customs Act), and further request the Ministerof Finance to conduct an administrative review, in which case the Minister must consult with a council (Article 91 of
the Customs Act). If the party is dissatisfied with the determination by the Minister of Finance, the party may fileadministrative litigation for rescission of that determination.
13 The detailed procedure is described in a notice issued by the Custom and Tariff Bureau, Zaikan No. 657 (July 1, 2014)“Chiteki Zaisan Shingai Buppin No Torishimari Ni Kansuru Senmon Iin Seido No Un’yō Tō Ni Tsuite”(Implementation of the Export Advisor System Concerning Regulation of Intellectual Property Infringing Goods, etc.).

418

§8. Infringement

research, invalidity of the right, 14 abuse of the right, etc.). When suspect goods are
considered to be included in the goods that are to be imported following the approval of an
application for import suspension, an infringement identification procedure is commenced(Article 69-12, paragraph (1) of the Customs Act), and determination is made as to whether
or not the goods subject to the procedure are patent infringing goods. The Director-Generalof the Custom-House must notify the patentee and the importer of the fact that an
identification procedure will be conducted, the fact that they may submit evidence and state
their opinions on whether or not the goods are patent infringing goods, and other mattersspecified by Cabinet Order (said paragraph).15 The Director-General of the Custom-House
may not order confiscation, disposal, or reshipment of goods unless the Director-General
has completed this identification procedure (paragraph (4) of said Article).
[369]
With the 2007 revision, a system was introduced to allow the patentee to follow a
simplified procedure when the importer does not intend to dispute an infringement (theproviso to Article 62-16, paragraph (1) and paragraphs (4) and (5) of said Article of the
Customs Act Enforcement Order). However, Article 62-16, paragraph (3), item (vii) of the
Customs Act Enforcement Order (the identification procedure for goods that must not be
imported) provides “excluding an application relating to a patentee, utility model rightowner, or a design right owner,” so the simplified procedure is not applied to patent
infringing goods.16
When the infringement identification procedure begins, the Director-General of the

14 In the Kobe District Court Judgment, January 19, 2006, court website (the Stone Lantern case), an importer whose
import of stone lanterns was suspended due to patent infringement demanded the Director-General of a Custom-House(more precisely, the head of the Rokko Island Sub-Branch Customs of the Kobe Customs to whom the authority had
been delegated) to rescind the disposition on the basis that the patent in question lacked an inventive step, which was
grounds for patent invalidation. Article 104-3 of the Patent Act provides that the right may not be exercised “inlitigation concerning the infringement of a patent right,” and the issue was whether invalidity of a patent right can beasserted against a disposition at the customs. The court held that denial of the assertion of invalidation would giveexcessive protection to the patentee while giving an inappropriate disadvantage to the person declaring the import ofgoods, which runs against the principle of equity, and that there is no need or rationality for the Director-General of a
Custom-House to make a disposition on identification of infringement even in such a case where the patentee’s exerciseof the patent right would be restricted in infringement litigation. The court took a careful step whereby, instead of
directly applying Article 104-3, it referred to said Article and interpreted that the “patent right” set forth in Article 6911, paragraph (1), item (ix) of the Customs Act “indicates a patent right which does not have grounds for invalidation.”
Following this judgment, invalidity of the right was added to the matters on which an expert advisor’s opinion may besought. Section 1(2), Chapter 1 Treatment of the Hearing of the Opinion of an Expert Advisor with Regard to an
Application for Import Suspension of Zaikan No. 657 (July 1, 2014) “Chiteki Zaisan Shingai Buppin No Torishimari
Ni Kansuru Senmon Iin Seido No Un’yō Tō Ni Tsuite” (Implementation of the Export Advisor System Concerning
Regulation of Intellectual Property Infringing Goods, etc.) states “it should be noted that the customs does notdetermine the invalidity of a right,” but this merely states the natural fact that a disposition by the customs is noteffective against the public, unlike a trial decision of invalidation.
15 For details, see Izumi Hayashi, “Chiteki Zaisan Shingai Buppin No Zeikan Deno Torishimari (Mizugiwa Sochi)”(Regulation of Intellectual Property Infringement Goods at Customs [Border Measures]), Jurist, No. 1405 (2010), p.
126.
16 Chapter 6 Customs Clearance, Section 7 Intellectual Property Infringing Goods (Export), 69-1-1-2(2) Simplified
Procedure of the Basic Directive on the Customs Act excludes applications concerning patents, utility models, anddesigns from the simplified procedure.

419

§8. Infringement

Custom-House must give both parties an opportunity to inspect (check the external
appearance of) the cargo (Article 69-13, paragraph (4) of the Customs Act). The patentee
may request the Director-General of the Custom-House for his/her approval to examine(check the internal structure, etc. of) a sample of the suspect goods, in which case the
Director-General must notify the importer (Article 69-16, paragraph (1) of the Customs
Act). The Director-General of the Custom-House may, in the identification procedure, hear
the opinion of the JPO Commissioner (Article 69-17, paragraph (1) of the Customs Act),and if necessary,17 seek the opinion of an expert advisor with regard to matters outside thetechnical scope of the right (Article 69-19 of the Customs Act). As for matters within thetechnical scope of the right, the Director-General hears the opinion of the JPO
Commissioner (Article 69-17, paragraph (1) of the Customs Act).
During the infringement identification procedure, the goods are held at a bonded
warehouse. In order to secure compensation for any damage incurred by the importer due
to not being able to import the goods in question until the identification procedure iscompleted, the Director-General of the Custom-House may order the applicant to deposit
security to a reasonable amount (Article 69-15, paragraph (1) of the Customs Act).18 In
principle, if an infringement is not identified within ten days (20 days if extended), theimporter may file a request for the discontinuance of the identification procedure byproviding security to cover any damage caused by the import (Article 69-20 of the Customs
Act; Article 53, paragraph (2) of the TRIPS Agreement). If, finally, the goods are found to
be non-infringing, the goods pass through customs, and if they are found to be infringing,unless they are voluntarily dealt with by the importer, they are confiscated or disposed of,or the importer is ordered to reship them (Article 69-11, paragraph (2) of the Customs Act).
If a party is dissatisfied with the identification results, he/she may dispute the results basedon the Administrative Appeal Act and the Administrative Case Litigation Act. The speedof the procedure for border measures is greater than that of litigation, so the parties
concerned need to make their responses accordingly.
In the case of an export, a procedure similar to that for an import is basically followed
although there are slight differences in some steps such as the sample examination by theright holder (Articles 69-2 through 69-10 of the Customs Act), but due to the nature ofexport, the goods are not reshipped as a matter of course.
[370]

17 The Director-General hears the opinion of an expert adviser when it is difficult to determine whether the goods inquestion are infringing goods due to issues that had not been raised in the procedure of application for importsuspension, or the like.
18 However, deposit of security seems to have never been ordered to date (as of 2015).

420§8. Infringement

The above procedures are followed when tangible goods are to pass through customs
and be brought into Japan; but intangible goods, such as computer programs and music
which are not stored on a physical medium, are often transmitted into Japan via the Internet
without going through customs. Goods that are most strongly affected by suchcharacteristic digital technology are copyrighted works and programs. Since such goods do
not pass through customs, they cannot be made subject to border measures, so if they areused in Japan, such use will be regulated.
For the concept of import and export that are regarded as the working of an invention,
see “7.2.2.2. Working of the Invention of a Product.”8.2.3. Right to Claim Compensation for Damage1
8.2.3.1. Introduction
The Patent Act has a presumptive provision on the amount of damages with regard
to patent infringement, but it does not provide for the basis for claiming compensation fordamage. Therefore, the damages are claimed based on the tort provisions under Article 709
of the Civil Code. A possible legislative measure would be to establish a provision for
claiming damages under the Patent Act. However, as it is hardly likely for a patent
infringement to be an act other than a tort in actual cases, the result would be the same
either with or without such a provision under the Patent Act, and it will only be a matter ofa legislative technicality.2
In order to claim compensation for damage caused by an act of tort, the plaintiff mustbear the burden of proof regarding the intent or negligence of the infringer (hereinafter
including the case of a suspected infringer), the causal relation between the act of
infringement and damage, and the amount of damages, in principle. Nevertheless, in the
1 With regard to this issue, see: Industrial Property Council, “Songai Baishō Nado Shō Iinkai Hōkokusho -- Chiteki Zaisan
Ken No Tsuyoi Hogo” (Report of Subcommittee on Compensation for Damages, Industrial Property Council -Powerful Protection of Intellectual Property Right), (1997); Japan Patent Office, “21 Seiki No Chiteki Zaisan Ken O
Kangaeru Kondankai Hōkokusho -- Korekara Wa Nihonn Mo Chiteki Sōzō Jidai” (Report by the Commission onIntellectual Property Rights in the Twenty-first Century -- Toward the Era of Intellectual Creation), (1997); Institute ofIntellectual Property, “Chiteki Zaisan Ken Shingai Ni Kakaru Minji Teki Kyūsai No Tekiseika Ni Kansuru Chōsa
Kenkyū Hōkokusho” (Research and Study on Rectification of Civil Remedies concerning Intellectual Property
Infringement), (1997); Institute of Intellectual Property, “Chiteki Zaisan Ken Shingai Ni Taisuru Songai
Baishō/Bassoku No Arikata Ni Kansuru Chōsa Kenkyū Hōkokusho” (Report on Research and Study of the Ideal
Compensation for Damages and Penalties concerning Intellectual Property Infringement), (1998); Institute ofIntellectual Property, “Sankyō Zaisanken Funsō Wo Meguru Genjō Ni Kansuru Chōsa Kenkyū Hōkokusho” (Study on
Current Conditions Regarding Industrial Property Disputes) (2006); Institute of Intellectual Property, “Nichi Bei Kan
Ni Okeru Tokkyoken No Kōshi Ni Kansuru Shomondai Ni Tsuite No Chōsa Kenkyū Hōkokusho” (Problems Related
to Patent Enforcement in Japan, the United States and South Korea) (FY2007 JPO-commissioned research study reporton issues related to the industrial property rights system; 2008).
2 Article 4 of the Unfair Competition Prevention Act provides for the obligation to compensate for damage and Article 5of the Act provides for a presumption of the amount of damages that is similar to Article 102 of the Patent Act. However,the conclusion is unlikely to differ even without such provision as Article 4 of the Unfair Competition Prevention Act.

421

§8. Infringementcase of the infringement of a patent or other intellectual property, there is a considerable
difficulty in proving all of these matters due to the character of intellectual property as
information, so the Patent Act has provisions for presuming negligence and provisions forpresuming and deeming that a certain amount should be the amount of damages (Articles
103 and 102 of the Patent Act).
[371]
Since there had been criticism that the amount of damages recognized by the courts
was too small, Article 102 of the Patent Act was revised in 1998 and 1999 to make provingof the amount of damages easier than before.
8.2.3.2. Presumption of Negligence (Article 103 of the Patent Act)The subject matter of a patent right—an invention—is technical information, which
is difficult to manage physically and whose existence is difficult to search due to its nature
as information property. Therefore, it is generally difficult to prove the intent or negligenceof the infringer. While even originally developed technology, which is not an imitation, canconstitute a patent infringement, if the infringer asserts a defense of non-negligence against
a claim for damages, often the patentee cannot rebut the defense. Accordingly, the Patent
Act adopts the publication system, and provides that negligence shall be presumed (Article
103 of the Patent Act). Although there was no presumptive provision on negligence in the
Act of 1921, negligence was often presumed by court judgments, and such presumption
was also supported by academic theories. Therefore, the provisions only stipulated
conventional practice, and there was hardly any change following the introduction of suchprovisions.
All registered patents are published,3 and the current Act presumes the infringer toknow the contents of patent rights because public notification of patent rights is provided,transferring the burden of proof to the infringer. The party concerned is an entity operating
business since only working an invention as a business constitutes an infringement, thus it
had been considered that no major trouble would occur by presuming the negligence of theinfringer, that is, by imposing on the infringer an obligation to research the registration. In

3 There was a secret patent system under the former Act, and unpublished patents existed, but no such patents exist under
the current Act. However, most countries worldwide have a secret patent system.

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§8. Infringement

reality, a defense of non-negligence has hardly ever been successful.4[372]
The effects of a patent right extend not only to the production but also to the use andassignment, etc. of the invention (Article 2, paragraph (3) of the Patent Act). Therefore, notonly an act by a producer, but also an act of using or selling the product as a businessconstitutes a patent infringement. However, in actuality, it is often not reasonable toobligate all users to conduct patent searches. For instance, a taxi company uses automobiles
as a business, and as the operation of automobiles that infringe patents constitutes aninfringement, practically it would be difficult to obligate such taxi company to search patentrights concerning automobiles.5 Also, if retailers sell infringing goods, such acts constitutean infringement, but retailers cannot be expected to conduct patent right searches in a
majority of cases. In addition, mechanical devices involve numerous patents, and it isalmost impossible for users to search those patents. Although it depends on the case, it
seems reasonable to overturn the presumption of negligence with regard to compensation
for damage in some such cases, but such attempt has failed in an overwhelming majority
of court cases.6 Even if the presumption of negligence is overturned, negligence after awarning, or at least after the service of a complaint, will be found, so compensation fordamage after that will be recognized.
As for the presumed details of the negligence, it is clear that negligence is presumed
with regard to not knowing of the existence of the patent right. Next, negligence ispresumed with respect to not knowing that the act fell within the scope of the right of thepatent. Otherwise, the proof of negligence would be extremely difficult unless aninfringement is committed in completely the same mode as the scope of patent claims, andthe patent right would have no practical meaning. There is a view that negligence should
not be found when the infringer has sought the opinion of an expert, such as a lawyer or apatent attorney, with regard to infringement/non-infringement, but negligence is hardly
4 Under the Design Act, the registration date and the gazette publication date sometimes differ, and a design right is not
publicly notified during the period from registration until publication in the gazette, so there is a question of whether
the provisions on presumption of negligence are applicable to use of the design during this period. The following arecases under the Design Act where the court found no negligence: the Osaka District Court Judgment, March 29, 1972,
Mutai Saishū, Vol. 4, No. 1, p. 137 (the Road Safety Fence case); the Osaka District Court Judgment, November 28,
1973, Hanta, No. 308, p. 278 (the Duster Handle case); the Osaka High Court Judgment, May 27, 1994, Chiteki Saishū,Vol. 26, No. 2, p. 447 (the Clamp Design case). In the following case, which was a rather complicated case, the court,
while recognizing that presumption could be rebutted under special circumstances as a generality, held that thepresumptive provision was applicable even before the design was published in the Design Gazette: the Nagoya District
Court Judgment, December 17, 1979, Mutai Saishū, Vol. 11, No. 2, p. 632 (the Screw Machine case). It should beconstrued that, under the Design Act, negligence is not presumed until the design gazette is published, also from theviewpoint of achieving balance with the secret design system (the proviso to Article 40 of the Design Act).
5 Automobiles and computers are often used a business, but it is impossible for their users to search an enormous numberof patent rights.
6 In the Tokyo District Court Judgment, October 31, 1984, Hanta, No. 543, p. 200 (the Successive Noodle Boiling Methodcase), the court upheld a claim for damages, holding that, even if a company running a restaurant were merely using amachine purchased from another company, that does not reduce the generally expected obligation to search for thepresence or absence of the patent rights involved.

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ever denied in such a case in actuality.7 In actual litigation, the presumption of negligenceis hardly ever overturned, so the presence or absence of negligence is rarely disputed. In
light of such circumstances, Article 103 of the Patent Act, which is legally a presumptive
provision, is applied in a manner closer to a deeming provision due to the difficulty indestroying the presumption. However, it is problematic to apply the presumptive provisioneven to cases where the performance of the search obligation is practically impossible, andoverturning of the presumption of negligence should be admitted depending on thespecifics of the case.
[373]
Incidentally, the degree of negligence is not presumed under Article 103 of the Patent
Act, so a person who asserts that the act has been conducted “without gross negligence” asprovided under Article 102, paragraph (4) of the Patent Act bears the burden of proof.8
8.2.3.3. Calculation of the Amount of Damages (Article 102 of the Patent Act)9(1) Generality
The Patent Act has special provisions concerning amounts of damages (Article 102of the Patent Act). Although the plaintiff bears the burden of proof regarding the amountof damages according to the principle of tort law, it is often difficult to prove the amountof damages resulting from a patent infringement. Since the subject matter of a patent rightis intangible information, which has a characteristic that an infringement can be committed
concurrently by multiple infringers in multiple places. Therefore, it is more difficult toprove the amount of damage caused by an act of infringement compared to a case
7 In the Osaka District Court Judgment, October 30, 1984, Hanta, No. 543, p. 263 (the Handle for a Handbag case), thecourt found negligence even where the infringer had obtained a patent attorney's opinion that the act in question was
not an infringement. In the Tokyo District Court Judgment, April 25, 2002, court website (the Equipment for Separating
and Removing Foreign Substances from Raw Seaweed case), the court held that the sole fact that the infringer has
sought the opinion of his/her patent attorney or lawyer with regard to non-infringement of the patent right is insufficientfor overturning the presumption of negligence.
8 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 1133 [written by Reiko Aoyagi].
9 Essays on this issue include the following: Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan]; andYoshiyuki Tamura, Kinōteki Chiteki Zaisanken No Riron (Chiteki Zaisan Kenkyūjo Sōsho 1 (Theory of Functional
Intellectual Property Law (Institute of Intellectual Property Series 1)) (Shinzansha, 1996), p. 205 onward (the contentsof this essay are summarized in the following essay: Yoshiyuki Tamura, “Tokkyoken Shingai Ni Taisuru Songai Baishō”[Compensation for Damages concerning a Patent Infringement], Shihō [Private Law] [Japan Association of Private Act],
No. 54 [1992], p. 269). Yōichi Maeda, “Minpō Ni Okeru Songairon No Genjō To Tokkyo Hō 102 Jō l Kō / Shōhyō Hō
38 Jō l Kō” (Current Status of Damage Theories under the Civil Code and Article 102, Paragraph (1) of the Patent Act/ Article 38, Paragraph (1) of the Trademark Act), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To Songai Baishō(Intellectual Property Infringement and Compensation for Damage), p. 1. Related court judgments are overviewed inHarumi Kojō, “Tokkyo/Jitsuyō Shinan Shingai Soshō Ni Okeru Songai Baishō No Santei” (Assessment of the Amountof Damages in Patent/Utility Model Infringement Litigation) 1-6, Hatsumei (Invention), Vol. 86, No. 1 (1989), p. 16
onward. Other references include the following: Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 972[written by Reiko Aoyagi]; Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (NewExplanatory Notes on the Patent Act Vol. 1), p. 1510 [written by Kei Iida]; Kaoru Kamata, “Chiteki Zaisan Soshō Ni
Okeru Songai Baishō Hōri” (Principle of Compensation for Damage in Intellectual Property Litigation), Tokkyo Kenkyū(Patent Studies), No. 17 (1994), p. 4.

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concerning tangible property. Since damage caused by a patent infringement is not damage
to the patent right itself, but is a “lost profit” with a special characteristic whereby damage
becomes apparent through a market, which involves uncertainties, the causal relation
between an act of infringement and damage is often unclear. In extreme cases, the sale ofinfringing goods could activate the market of the patented product, and could lead to profits
for the right holder as well. Accordingly, if the amount of damages is assessed solely basedon the general principles under tort law, there is a high risk that it would not be possible toprove the causal relation and the amount of damages. As this could encourage
infringements, there was a need to design a system that enables a plaintiff to claim areasonable amount of damages from the infringer. Thus, the Patent Act has special
provisions concerning the presumption, etc. of a reasonable amount of damages (Article
102 of the Patent Act).
[374]
Because an act of patent infringement is a tort, it is possible to claim damages inaccordance with the provisions of Article 709 of the Civil Code, without using thepresumptive provisions under Article 102 of the Patent Act.10 In such a case, damages can
be claimed for any damage that has a reasonable causal relation with the act of infringement.
However, since a patent is intangible information, the information itself is unlikely to bedamaged through its unauthorized use by another person,11 and the actual damage would
mainly be lost profit, that is, profit that could have been gained if the act of infringement
had not been committed. Theoretically, damages can also be claimed for damage caused
by a loss of credibility of the patent right, but such a claim has been upheld in only very
few cases in actuality.
Under the general principle of tort law (Article 709 of the Civil Code), compensation
can be claimed for damage pertaining to any reduced sales caused by an act of infringement.
In addition, if the selling price had to be lowered due to the act of infringement,

10 With regard to a claim for damages under Article 709 of the Civil Code, see Yoshiyuki Tamura, Chiteki Zaisanken To
Songai Baishō [Shinpan], p. 2; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 981 [written by Reiko
Aoyagi].
11 It may be possible to cancel another person’s patent registration by using false documents, but this is not an issue ofpatent infringement.

425

§8. Infringementcompensation can be claimed for the resulting damage. 12 Compensation can also be
claimed for damage pertaining to any reduction in royalty income caused by the act of
infringement. Besides these, compensation can be claimed for attorney’s fees andinfringement investigation fees in some cases. In reality, however, unlike an act of
infringement of the ownership on a corporeal thing, which is the typical mode of
infringement of a property right, it is often difficult to prove the causal relation between an
act of patent infringement and the damage suffered therefrom due to the involvement offactors like economic conditions and consumer preferences, besides the determination of
the infringer’s technical capability, capital, advertising ability, experience, efforts, and thepresence of alternative products. In other words, it is usually quite difficult to prove that the
reduced sales of the right holder, the lowered price, or the reduced royalty income was only
attributable to the act of patent infringement.
[375]
Special provisions on the calculation of the amount of damages have been establishedunder the Patent Act due to the peculiar nature of patent infringements. While there aresome grounds for reducing the amount of damages, roughly speaking, Article 102,
paragraph (1) of the Patent Act (introduced upon the 1998 revision) sets out that the amountof damages is estimated to be the sum of money obtained by multiplying the quantity of
the assigned infringing articles by the profit per unit quantity that could have been gainedby the patentee, paragraph (2) of said Article presumes the profits gained by the infringer
through the act of infringement are the amounts of damages, and paragraph (3) of said
Article deems an amount equivalent to the amount of money that the patentee would havebeen entitled to receive for the working of the patented invention to be the damages. This
does not mean that a right to claim damages exists for each of these paragraphs, but a single
right to claim damages based on an act of tort exists as the subject matter of litigation andthe respective paragraphs of Article 102 explain its calculation methods.
Since these presumptive provisions did not exist under the former Act (Act of 1921),

12 In the Okayama District Court Judgment, May 29, 1985, Hanta, No. 567, p. 329 (the Punch Hanger case), the court
stated that compensation can be claimed for lost profits resulting from not being able to maintain the selling price,which could have been maintained were it not for the infringement, as a case of passive damages. After the court
recognized the profit gained by the infringer as the amount of damages suffered pursuant to Article 102, paragraph (1)of the Patent Act (before the 1998 revision; current paragraph (2)), it added the damages caused by the discount inprices, and recognized their total amount as the amount of damages to be awarded. In the Tokyo High Court Judgment,
December 17, 1991, Chiteki Saishū, Vol. 23, No. 3, p. 808 (the Woodgrain Decorative Paper case), the court held an
act of selling a product that completely imitated the pattern of another person’s woodgrain decorative paper that wasin no way the defendant’s work in a competitive area at a low price to be an act of tort, and recognized the amount ofdamages to be the difference between the discounted price and the original price. Although this court judgment is not
an intellectual property infringement case, the recognition of the amount of damages in the case where an identicalproduct was sold by way of an act of tort also can be analogized to the case of a patent infringement, so it serves as agood reference. However, it should be noted that this is a tort case, so the amount of damages was found by considering
all the circumstances including the selling method apart from the issue of the infringer directly imitating anotherperson’s work.

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§8. Infringement

there had been various theories regarding the amount of damages. Accordingly, uponlegislating the current Act (Act of 1959), the present provisions were added for the purposeof reducing the burden of proof within the framework of the damage compensation system
for an act of tort.13 The report released by the revision council at the time of enactment of
the Act of 1959 had set out that a claim can be made for the return of the profits gained by
the infringement or for compensation for the damage actually suffered by the
infringement.14 However, this was later revised to the framework under the current Act
because of the criticism that, if the infringer had to return the entire amount of the profits
when the profits were higher than the amount of damages suffered by the patentee, theprotection would be excessive for the patentee and too severe for the infringer, while itwould also go against the general principle of the Act on Compensation for Damages. In
other words, the legislators had the intention of abolishing the idea of returning the profitsand processing the issue within the framework of tort law.15(2) Article 102, paragraph (1) of the Patent Act
Upon the 1998 revision, paragraph (1) was newly added to Article 102 of the Patent
Act, and the conventional paragraphs were moved down accordingly. New paragraph (1)provides that, if the infringer assigned16 articles that led to the act of infringement, theamount of damage sustained by the right holder may be considered to be the amount of
profit per unit of articles which would have been sold by the right holder if there had beenno such act of infringement, multiplied by the quantity of articles assigned by the infringer,
the maximum of which shall be the amount attainable by the right holder in light of his/hercapability to work such articles. However, the paragraph provides that if any circumstances
exist under which the patentee or the exclusive licensee would have been unable to sell theassigned quantity, the amount calculated as the number of articles not able to be sold due
to such circumstances shall be deducted. In other words, the main clause of paragraph (1)provides that the amount of damages is to be within the capability of the right holder, and

13 For the detailed process of legislation of the current Act, see Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō[Shinpan], p. 48.
14 Kōgyō Shoyūken Seido Kaisei Shingikai Tōshin Setsumeisho (Explanation on the Report of the Council on Revisionof Industrial Property Systems), p. 105; Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō
Kaisetsu [Dai 19 Han], p. 301.
15 In contrast, Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 237 indicates a possibility that the return of the
profits could be recognized under the name of compensation for damage, because no consideration is being given towhether the right holder could have actually gained such an amount of profits in the absence of the infringement.
16 "Assign" here is only a typical example, and it should be construed to include leases, etc. (Kaoru Kamata, “Tokkyoken
Shingai To Songai Baishō” [Infringement of Patent Right and Compensation for Damages], CIPIC Journal, Vol. 79[1988], p. 1; Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han], p. 347). However, assignment is unlikely to be
carried out as a mode of working an invention relating to a simple process, so paragraph (1) will not apply, andparagraphs (2) onward will apply in such a case.

427§8. Infringement

the proviso provides that such amount is to be reduced by taking into account othercircumstances (such as the existence of competing goods). While the right holder has theburden of proof with regard to the main clause of paragraph (1), the infringer has the burdenof proof with regard to the “circumstances ... under which the patentee or the exclusive
licensee would have been unable to sell” set forth in the proviso. Conventionally, the causal
relation of such circumstances had been considered to be difficult to prove, but the law
revision facilitated proof by stipulating such circumstances as grounds for reducing theamount of damages. In applying paragraph (1), whether or not the articles were assigned
for value or for free is irrelevant. This is because, even if they were assigned for free, they
still deprive the right holder of the opportunity to sell once they are placed on the market.17
In reality, there may be a circumstance where users use the articles if they get them for free
but not if they have to buy them. In such case, the infringer would have the burden of proof
to establish that circumstance as grounds for reducing the amount of damages.
[376]
The term “presume” which had been used in former paragraph (1) (current paragraph(2)) was avoided, because presumptive provisions often resulted in all-or-nothing types ofsolution since presumption could no longer be applied once facts to rebut the presumption(such as that the right holder had not worked the invention) had been proved.18 On thecontrary, new paragraph (1) assumes the profit per unit of articles which the right holder
would have been unable to sell if there had been no act of infringement, multiplied by theassigned quantity, to be the damage sustained by the right holder to the extent that it does
not exceed the right holder's capability to work such articles, and deducts the amountcalculated as the number of articles that would not have been sold by the right holder. Also,
under former paragraph (1) which had calculated the amount of damages based on the profit
gained by the infringer, the amount of damages tended to be underestimated when theinfringer's profit was small or when the right holder's product was expensive but the
infringer's product was poor-quality and cheap. However, under new paragraph (1), whichcalculates the amount based on the profit which the right holder would have been able togain, the right holder is able to claim damages even when the infringer has not gained any
profit, and the amount of damages awarded is expected to grow higher than that underformer paragraph (1).
Damages under Article 102, paragraph (1) of the Patent Act shall be set at an amountof which the maximum shall be the amount attainable by the right holder in light of his/her

17 The Intellectual Property High Court Judgment, January 24, 2012, court website (the Solid Golf Ball case).
18 Under the provisions of presumption of damage, occurrence of damage could not be presumed if the right holder had
not worked the invention, so the presumption would be rebutted, and the right holder would need to produce evidence
from scratch.

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§8. Infringement

capability to work the articles in question. This is because any amount beyond his/hercapability is a portion for which the right holder would not have been able to work thearticles, and as such, no lost profit is considered to exist for such portion. This paragraph isapplied to such cases as where the right holder is a small company while the infringer is alarge company, and their manufacturing capabilities differ tremendously. If the rightholder's capability to work the invention is strictly interpreted, the amount of profit
achieved by fully operating the existing factories, etc. would be the upper limit of thedamages, but then the significance of introducing new paragraph (1) would be diminished.
Actually, if products sell well, the right holder can often increase production by expanding
capital investment or hiring part-time workers through such measures as obtaining a loan
from a bank, etc. 19 So the capability to work the invention should be determined byincluding the right holder's potential capability, taking into consideration such varied
circumstances.20[377]
The phrase “articles which would have been sold by the patentee or the exclusive
licensee if there had been no such act of infringement” refers to the right holder's productsthat can be substituted for the infringing goods in the market. The substitutability is asufficient requirement. For example, even articles with different quality, design, or sales
channels can be regarded as articles which would have been sold, as long as they are

19 Case-by-case determination would be required in such a case as expanding a factory by obtaining a new loan. The
capability to work the invention would likely be denied for a product that is manufactured for one season, but thecapability would likely be recognized for a product that is manufactured over a long term.
20 In the Tokyo District Court Judgment, July 17, 1999, court website (the Recording Sheet case), the court held that,considering that the right holder is sometimes forced to refrain from making a capital investment for the manufactureand sale of his/her products as a result of a large quantity of infringing goods going on the market, if the strict
interpretation of the right holder's capability to work the invention would result in a lack of appropriate relief for theright holder, it would go against the purpose of the Patent Act revision to introduce new paragraph (1) for expanding
the protection of the right holder’s rights. The court further stated that an infringer's act of selling infringing goods onthe market not only directly reduces the sales of the right holder's product by competing with such product during thesales period in relation to traders and consumers, but also reduces the sales of the right holder's product even after thesales period of the infringing goods as a result of the infringing goods being stored as inventory by traders orcontinuously used by consumers. The court concluded that the capability to work the invention as prescribed in Article
102 of the Patent Act cannot be construed as referring to the specific manufacturing capability and selling capability
during the period strictly matching the time of the sales of the infringing goods, and if the patentee has the potential
capability to manufacture and sell a certain amount of products during the duration of the patent right by such means
as receiving a loan from a financial institution and making a capital investment, the patentee should be regarded ashaving the capability to work the invention, in principle. In the Tokyo District Court Judgment, March 19, 2002, Hanji,
No. 1803, p. 99/Hanta, No. 1119, p. 244 (the Slot Machine case), the court stated that the capability to work theinvention cannot be construed as referring to the specific manufacturing capability and selling capability during theperiod strictly matching the time when the infringing goods were sold, and if the patentee has the potential capability
to manufacture and sell a certain amount of products during the duration of the patent right by such means as receivinga loan from a financial institution and making a capital investment, it is reasonable to construe that the patentee has
the capability to work the invention, in principle.

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substitutable for the infringing goods.21[378]
When a product worked by an infringer does not conflict with a patented invention
which the right holder owns and works, but conflicts with another patented invention
owned but not worked by the patentee, and when the product worked by the patentee andthat worked by the infringer are in competition with each other, there is a question ofwhether paragraph (l) or paragraph (3) will be applied since the right holder is not working
the infringed patented invention. This becomes an issue when, for example, the right holder
owns substance patents for Drug A and Drug B, which have slightly different chemical
structural formulae, but have the same effects and are competitors in the market, and theright holder works the invention of Drug A but does not work the invention of Drug B.
Damages claimable for a patent infringement assume the profit which would have been
gained if there had been no act of infringement (lost profit), similar to the case of an
ordinary act of tort; so if the infringer's product B and the plaintiff's patented product A are
competing with each other and there is a circumstance whereby it can be assumed that theright holder's patented product would have been sold if the infringer's product had not been
manufactured and sold, a reasonable causal relation should be found between the act of theinfringer and the damage, and the application of paragraph (1) should be allowed.22 Since

21 Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p. 312; Yoshiyuki Tamura, “Songai Baishō Ni
Kansuru Tokkyo Hō No Kaisei Ni Tsuite” (Revision of the Patent Act, etc. with Regard to Compensation for Damage),
Chizai Kanri (Intellectual Property Management), Vol. 49, No. 3 (1999), p. 331. In the Osaka District Court Judgment,
April 19, 2007, Hanji, No. 1983, p. 126 (the Goggles case), while the patentee's product had competed with the
infringing product in the market and demand for the product would have been increased if the infringing product had
not been on sale, the court held that the patentee's product was competitive with the infringing product in the market
even if there were differences in design and added functions. The same view is indicated in the Intellectual Property
High Court Judgment, January 24, 2012, court website (the Solid Golf Ball case). An opposite view is indicated in
Ryōichi Mimura, “Chiteki Zaisanken Shingai Soshō Ni Okeru Songai No Santei Ni Tsuite” (Calculation of Damage
in Intellectual Property Infringement Litigation), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To Songai Baishō(Intellectual Property Infringement and Compensation for Damage), p. 270.
22 Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han], p. 348; Kazuhiko Yoshida, “Songai Baishō” (Compensation for
Damage), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza II (Lecture
on Modern Intellectual Property Law II), p. 163; Hideo Ozaki, “Tokkyo Hō 102 Jō 1 Kō No Shoronten” (Issues
Concerning Article 102, Paragraph (1) of the Patent Act), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To Songai
Baishō (Intellectual Property Infringement and Compensation for Damages), p. 20. In the Tokyo High Court Judgment,
June 15, 1999, Hanji, No. 1697, p. 96 (the Sumithermal case; a case concerning Article 102, paragraph (2) of the Patent
Act), the court held that there is a reasonable causal relation between the act of infringement and the loss of an
opportunity to sell a competitive product in which the patented invention is not used, and awarded damages in an
amount equivalent to the profit. In the Tokyo District Court Judgment, October 8, 2009, court website (the Orally
Administered Absorbent case), the court stated that paragraph (2) is applicable if there is any profit which would havebeen gained by the right holder if there had been no act of infringement (while this is a case concerning paragraph (2),the same is considered to apply to paragraph (1)). In the Intellectual Property High Court Judgment, January 24, 2012,
court website (the Solid Golf Ball case), the court stated as follows: given that the main clause of Article 102, paragraph(1) of the Patent Act does not literally require the right holder’s products to be those in which the patent has been
worked, it is sufficient for the right holder’s products to be substitutable for competing products which would havebeen sold by the right holder if there had been no act of infringement, and they do not need to be products in which theright holder’s patent has been worked. The same view is indicated in the Tokyo District Court Judgment, January 30,
2014, court website (the Automatic Telephone Number Data Creating Device case).

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paragraph (1) indicates a method for the calculation of damages, there should be no problem
in applying the paragraph if there is a situation where the right holder's product would havebeen sold in the absence of the infringement. This issue, which is also applicable toparagraph (2) (paragraph (1) before the revision), had been argued since before the 1998
revision.
If there is a circumstance such as that a portion of the demand for the infringer's
product is not oriented toward the right holder, that portion serves as the grounds for
reduction of the amount of damages under the proviso to paragraph (1). Also, when using
the same patent, if the products in question are not competing at all in the market, such aswhere the right holder's product is television and the infringer's product is radar, paragraph(1) will not apply, and the application of paragraph (3) will be considered.
[379]
The prevalent theory is to construe that the amount of the right holder’s profit basedon which the amount of damages under paragraph (1) should be calculated is the rightholder's marginal profit,23 that is, the amount obtained by deducting variable expenses
from the right holder's sales, and that, in principle, the deduction of such expenses asinvestment in development and general administration should not be permitted.24 For the
23 Marginal profit is an accounting term, which is an amount obtained by deducting variable expenses from sales andwhich incorporates profit and fixed costs, but in law, the term often seems to be used in a more relaxed manner than astrict accounting concept. Here, it should be considered as a question of how much extra cost would have arisen if theright holder were to additionally manufacture the same quantity of products as those sold by the infringer.
24 Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p. 235; Harumi Kojō, “Tokkyo/Jitsuyō Shinan
Shingai Soshō Ni Okeru Songai Baishō No Santei” (Assessment of the Amount of Damages in Patent/Utility Model
Infringement Litigation) 2, Hatsumei (Invention), Vol. 86, No. 2 (1989), p. 45; Reiko Aoyagi, “Tokkyo Hō 102 Jō 1
Kō (Songai Baishō No Suitei) Ni Tsuite (Discussions on Article 102, Paragraph (1) of the Patent Act [Presumption ofCompensation for Damage]),” NBL Additional Volume, No. 33 (1996), p. 13, Shigeki Chaen, “Tokkyoken Shingai
Ni Yoru Songai Baishō” (Patent Infringement Damages), Jurist, No. 1162 (1999), p. 51. In the Tokyo District Court
Judgment, October 30, 1995, Hanji, No. 1560, p. 24/Hanta, No. 908, p. 69 (the Control Program case; a copyrightcase), the court stated that, presumptive provisions are found to premise a social fact supporting the presumption of
the probability that as long as the infringer has gained some profit by using a copyrighted work, the copyright owner
can obtain the same profit by using the copyright work in the same manner. On such basis, the court mentioned thatthe meaning of the profit obtained by the infringer, which is a fact premised upon presumption, should not be boundby the financial and accounting concept of profit, but should be determined based on its relationship with the presumed
fact. The court held that, to the extent of the number of units that can be manufactured and sold without new capital
investment or the additional employment or training of workers, the plaintiff's lost profit should be considered to be
the marginal profit obtained by deducting only the variable expenses for manufacturing and sales from the amount ofsales. In the Tokyo District Court Judgment, February 21, 1997, Hanji, No. 1617, p. 120 (the Plastic Infant Toy case;a case relating to the Unfair Competition Prevention Act), the court held that, if the plaintiff is already manufacturing
and selling the product in actuality after investing in development and other areas, to the extent of the number of units
that can be manufactured and sold without investment in new development or the additional employment of workers,
the plaintiff's lost profit should be considered to be the sales profit obtained by deducting only the variable expenses
for sales, such as purchase costs, from the amount of sales of the plaintiff, and the number of units of the defendant's
product sold is found to be within the extent of the number of units that the plaintiff could have manufactured and sold,so it is reasonable to consider that the profit obtained by the person who has committed an act of unfair competition,
which is a fact premised upon presumption, is the amount obtained by deducting only the variable expenses such aspurchase costs from the amount of sales of the defendant's product, and not deducting the development costs, personnel
costs, general administration costs or manufacturing management costs relating to the defendant's product. The sameview was indicated in the Tokyo District Court Judgment, October 7, 1998, Hanji, No. 1657, p. 122/Hanta, No. 987,
p. 255 (the System for Loading Device case); the Tokyo District Court Judgment, February 8, 2001, Hanji, No. 1773,
p. 130/Hanta, No. 1092, p. 266 (the Toy With Automatic Bullet Supplying Mechanism case); the Osaka District Court
Judgment, April 19, 2007, Hanji, No. 1983, p. 126 (the Goggles case).

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§8. Infringement

right holder, the development costs and personnel expenses are often sunk costs which havealready been invested, so the issue should not be the average profit calculated by deducting
all of such expenses from the sales amount, but the profit calculated by premising suchinvestments and deducting from the gross profit the additional costs that would be required
when manufacturing the same quantity of products as the quantity of infringing products
sold. 25 In reality, however, what kind of additional costs would be required for the
additional manufacturing differs case by case, so a flexible interpretation is necessary.26
For example, in the case of a product for which the personnel expenses, advertising costs,
and general administration expenses are linked with its sales, such expenses would also be
deducted, in principle. In addition, if there is a situation where there is a large quantity of
infringing goods, and it was impossible to manufacture the same quantity of products unlessthe manufacturing equipment was beefed up, such capital investment may be deducted.
[380]
If part of the patent rights involved in the right holder's product has been infringed,
the damages should be determined according to its contribution rate.27 In particular, whenan extremely large number of patent rights are involved in a single product, such as in thecase of an electronic device or automobile, it is quite problematic to determine that the
profit from the product has been lost due to the infringement of a single patent right. The
contribution rate is not merely the percentage of the price which is accounted for by thecomponent, but to what extent the infringed portion contributes to stimulating thepurchasers' demand for the product should also be a factor to be determined. However,since the calculation of such contribution rate is extremely difficult, or almost impossible,
there may be cases where the damages would be ultimately determined based on Article105-3 (Determination of Reasonable Damages) of the Patent Act.

25 For example, damages to be paid when a passenger has ridden a train without paying a 100 yen train fare should not
be the railway company's profit incorporating the railway track construction costs and personnel expenses (e.g., 10 yen
per passenger), but should be 100 yen (it is a separate issue that a large penalty charge is sometimes imposed under
the conditions of carriage). This is because, the railway company does not hire workers or construct railway tracks
each time in order to transport the passenger who has failed to pay the fare, but would have earned a profit of 100 yen
if the company had transported that passenger under the regular fare.
26 Although it is a case prior to the 1998 revision, in the Tokyo District Court Judgment, October 12, 1998, Chiteki Saishū,Vol. 30, No. 4, p. 709/Hanji, No. 1653, p. 54/Hanta, No. 986, p. 144 (the Cimetidine case), the court held that among
the direct expenses (the bulk powder fee, the drug formulation and packaging costs, the patent license fee, and theshipping and sales management costs) and general administration expenses, an amount equivalent to expenses that
increase or decrease in proportion to the amount of sales of the plaintiff's drug product should be deducted from thedamages.
27 The Intellectual Property High Court Judgment, January 24, 2012, court website (the Solid Golf Ball case). In contrast,
Hideo Ozaki, “Tokkyo Hō 102 Jō 1 Kō No Shoronten” (Issues Concerning Article 102, Paragraph (1) of the Patent
Act), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To Songai Baishō (Intellectual Property Infringement andCompensation for Damages), p. 26 states that, irrespective of the contribution rate, if one unit of the right holder’s
product is sold the right holder gains the profit per unity quantity, and the contribution rate does not affect the profits
gained by the right holder, so it is reasonable to evaluate the contribution rate as one of the “circumstances ... underwhich the right holder would have been unable to sell” set forth in the proviso. However, it feels uncomfortable toconstrue the contribution rate as a circumstance for being unable to sell.

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§8. Infringement

Paragraph (1) provides that if any circumstances exist under which the right holder
would have been unable to sell the assigned quantity of articles, the amount calculated as
the number of articles not able to be sold due to such circumstances shall be deducted. By
proving the existence of such circumstances, the infringer can reduce the amount equivalent
to the proportion which has been proved to exist from the amount obtained by multiplying
the infringer's assigned quantity by the amount of profit per unit of articles which would
have been sold by the right holder. Such circumstances are generally considered to include
the presence of alternative products, the infringer's brand power, selling capabilities, andcompany size, and the fact that the infringing goods are more affordable and/or have abetter performance than the right holder's product. Due to this measure, the amount ofdamages is expected to be reasonable, since an all-or-nothing type of solution (such as that
under paragraph (1)) can be avoided, and damages can be determined proportionately.
However, to what extent such circumstances should be taken into consideration is a difficult
issue.
[381]
The presence of a patent right tends to be only one of the many factors leading to goodsales of a product, so if the provisions are loosely interpreted and the grounds for reducing
the amount of damages are broadly construed, the amount of damages awarded would be
reduced and the legislative purpose of the provisions would be lost. 28 However, if theprovisions are too strictly interpreted, the right holder would gain an unreasonably large
profit.29 Here again, there is a fundamental question of what is meant by damage caused
by a patent infringement. If the purpose of paragraph (1) is construed within the frameworkof current tort law to mean compensation for actual damage, circumstances such as theextremely low price of infringing goods, the infringer's large investment in advertising costs,
28 As a case in which the provisions were loosely interpreted, in the Osaka District Court Judgment, April 19, 2007,
Hanji, No. 1983, p. 126 (the Goggles case), the court held that, as a result of considering various circumstances, itwould be reasonable to determine that the quantity of products, after deducting the quantity of the plaintiff's products
which he/she was unable to sell, is 1 percent of the assigned quantity of the infringing products. The quantity was also
determined to be 1 percent in the Intellectual Property High Court Judgment, September 25, 2006, court website (theChair-type Air Massage Machine case).
29 As a case in which the provisions were strictly interpreted, in the Tokyo District Court Judgment, March 19, 2002,
Hanji, No. 1803, p. 99/Hanta, No. 1119, p. 233 (the Slot Machine case), the court held that we cannot interpret theseprovisions as being those established under a fiction that infringing goods have a complementary relationship with theright holder's products on the market, based on the nature of the patent right as an exclusive monopolistic right, butthat we can have an interpretation whereby, when regarding the damage caused by sales of infringing goods as a lossof the patentee's market opportunity, such factors as the infringer's sales efforts and the presence of alternative goods
or competitive goods other than the infringing goods on the market correspond to the circumstances under which theright holder would have been unable to sell the assigned quantity as referred to in the proviso to Article 102, paragraph(1). Additionally, in the Tokyo District Court Judgment, April 25, 2002, court website (the Equipment for Separating
and Removing Foreign Substances from Raw Seaweed case), the court held that such factors as the infringer's sales
efforts and the presence of alternative goods or competitive goods other than the infringing goods on the market cannot
be interpreted as corresponding to the circumstances under which the right holder would have been unable to sell theassigned quantity as referred to in the proviso to Article 102, paragraph (1).

433§8. Infringement

the attractive characteristics of the infringing goods that are unrelated to the patent inquestion, the presence of other competitive products on the market, and the infringer's
strong brand power would be taken into consideration as important factors.30 On the other
hand, if the purpose of paragraph (1) is construed in a more normative manner, so as also
to include a general preventive meaning, the above factors would hardly be taken into
consideration, and only special circumstances such as the infringing goods being highly
seasonable products would be taken into account.31[382]
While former paragraph (1) (current paragraph (2)) had presumed that the infringer's
profit constituted the damages, current paragraph (1) basically provides that the amount of
profit per unit of articles which would have been sold by the right holder, multiplied by the
infringer's assigned quantity, can be considered to be the amount of damages, although
there is a possibility of reducing the amount, so as to determine the amount of damages
based on the profits of the right holder’s side. With the introduction of new paragraph (1),most problems associated with the difficulty of proving the loss of profit caused by adecrease in the right holder's sales in proportion to the quantity sold by the infringer havebeen resolved. Nevertheless, in addition to the requirement that the maximum damages
shall be the amount attainable by the right holder in light of his/her capability to work theinvention, the proviso to the paragraph stipulates that if any circumstances exist underwhich the right holder would have been unable to sell the assigned quantity, the amount ofdamages should be reduced accordingly. In general, it is not considered that paragraph (1)alters the principle of tort law. Since the profit rate is often a trade secret, the latermentioned protective order may be required in some cases.

30 In the Osaka District Court Judgment, December 12, 2000, court website (the Multiple-Layer Tire case), the court
found that the right holder would not have been able to sell 70 percent of the quantity of the infringer's sales due tosuch factors as the price of the right holder's product being 7 to 50 times higher than that of the infringing goods. In
addition, in the Intellectual Property High Court Judgment, September 25, 2006, court website (the Chair-type Air
Massage Machine case), the circumstances under which the right holder would have been unable to sell his/her
products are not restricted to circumstances specific to products that could have been sold by the patentee, etc., but canalso include the presence of competitive goods and alternative goods on the market, the infringer's sales efforts, brandpower and sales capabilities, other characteristics (design, function, etc.) of the infringing goods that would havemotivated consumer purchases, and the price of the infringing goods. Meanwhile, in the Osaka District Court Judgment,
April 19, 2007, Hanji, No. 1983, p. 126 (the Goggles case), the court held that it is reasonable to construe that suchcircumstances as the price of the infringing goods, the sales routes of the infringing goods, the presence of competitive
products, and the contribution rate of the patent in question to the assigned quantity of the infringing goods can betaken into consideration as the circumstances under which the right holder would have been unable to sell his/hergoods, and, on the basis that the main clause of Article 102, paragraph (1) provides for a legal fiction to consider theamount calculated by the above method to be the amount of damages, a claim asserting that the circumstances underwhich the right holder would have been unable to sell as prescribed in the proviso to that paragraph should beinterpreted restrictively cannot be upheld.
31 Ryōichi Mimura, “Songai Baishō (1) – Tokkyo Hō 102 Jō 1 Kō” (Compensation for Damages (1) – Article 102 (1) of
the Patent Act), Toshiaki Makino and Toshiaki Iimura eds., Shin Saiban Jitsumu Taikei 4 Chiteki Zaisan Kankei Soshō
Hō, p. 296. Ryōichi Mimura, “Chiteki Zaisanken Shingai Soshō Ni Okeru Songai No Santei Ni Tsuite” (Calculationof Damage in Intellectual Property Infringement Litigation), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To
Songai Baishō (Intellectual Property Infringement and Compensation for Damage), p. 269.

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§8. Infringement

Although there is a measure for reducing the amount of damages in certain cases,
paragraph (l) is established on a legal fiction that the patentee's patented product and theinfringing goods are in a complementary relationship in the market. In other words, it
premises that only the right holder is allowed to sell articles that use the right holder’s
technology because the right holder is entitled to monopolistically work the technology,
and the right holder's sales would fall in proportion to the sales of the infringing goods. It
establishes a fiction that the amount of damages would be the amount of profit per unit ofarticles which would have been sold by the right holder if there had been no act of
infringement, multiplied by the assigned quantity, and deducts any amount that needs to be
deducted. Nevertheless, a monopoly of technology and a monopoly of the market often do
not coincide, and in reality, competitive technology tends to exist. Thus, it is rare for thepatented product to be able to command a completely monopolistic status in the market
based on the patent right.32 The patent right is usually only one of the factors based on
which the patented product commands a superior position in the market. The outcome
would also differ depending on factors other than the patent right, such as the right holder'scapital strength, brand power, selling capabilities, and sales efforts. In other words, newparagraph (1) was established in spite of a lack of an empirical rule that the right holder’s
product would lose sales in proportion to the infringing goods sold. One reason for thiswould be the realistic issue that it is difficult to prove the amount of damage suffered by apatent infringement, and another reason may be to not merely compensate for loss of profit,
but also take a step forward into the domain of disgorgement of profits or normative
damages, although it may deviate from the legislators' intention to construe Article 102
within the framework of tort law. If so, while paragraph (1) provides buffers, namely, “themaximum damages shall be the amount attainable by the right holder in light of his/hercapability to work the invention” and “if any circumstances exist under which the rightholder would have been unable to sell the assigned quantity, the amount calculated as thenumber of articles not able to be sold due to such circumstances shall be deducted,” andmaintains the appearance of not exceeding the framework of tort law, we should also be
cautious about allowing a decrease in the amount of damages when interpreting thesebuffers.
[383]
When the damages claimed are determined to have exceeded the right holder'scapability to work the invention, Article 102, paragraph (1) will not be applied to suchexcess portion, but the amount equivalent to a license fee under paragraph (3) of said Article
32 Hideo Ozaki, “Tokkyo Hō 102 Jō 1 Kō No Shoronten” (Issues Concerning Article 102, Paragraph (1) of the Patent
Act), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To Songai Baishō (Intellectual Property Infringement andCompensation for Damages), p. 18.

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§8. Infringement

should be claimable, in principle.33 However, there are many court decisions and academic

33 For example, when an infringer has manufactured 100 articles, but the right holder has a capability of manufacturing
70, damages may be claimed under paragraph (1) with regard to the 70 articles, and damages may be claimed underparagraph (3) with regard to the remaining 30. See Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo
Hō Ge (New Explanatory Notes on the Patent Act Vol. 2), p. 1604 [written by Kei Iida]. Yoshiyuki Tamura, “Songai
Baishō Ni Kansuru Tokkyo Hō No Kaisei Ni Tsuite” (Revision of the Patent Act, etc. with Regard to Compensation
for Damage), Chizai Kanri (Intellectual Property Management), Vol. 49, No. 3 (1999), p. 239; Nobuhiro Nakayama,ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 1012 [written by Reiko Aoyagi]; Yoshiyuki Tamura, “Isshitsu Rieki No
Suitei Fukumetsu Go No Sōtō Jisshiryōgaku Baishō No Kahi” (Permissibility of Awarding an Amount of Reasonable
License Fee After the Presumption of Lost Profit Has Been Overturned), Intellectual Property Law and Policy Journal,
No. 31 (2010), p. 1; Ryōichi Mimura, “Chiteki Zaisanken Shingai Soshō Ni Okeru Songai No Santei Ni Tsuite”(Calculation of Damage in Intellectual Property Infringement Litigation), Ryū Takabayashi ed., Chiteki Zaisanken
Shingai To Songai Baishō (Intellectual Property Infringement and Compensation for Damage), p. 284; Toshiya
Kaneko, “Tokkyo Hō 102 Jō 1 Kō Tadashigaki Ni Sōtō Suru Sūryō He No 3 Kō Tekiyō No Kahi (Isushiki Massājiki
Jiken)” (Applicability of Paragraph (3) to the Quantity Corresponding to the Proviso of Article 102, Paragraph (1) of
the Patent Act [the Chair-type Air Massage Machine Case]), Tokkyo Hanrei Hyakusen (100 Selected Patent-related
Court Decisions) [4th ed.] Case 84 (2012); Yasuyuki Echi, “Tokkyo Hō 101 Jō 1 Kō Tadashigaki Ni Yoru Suitei
Hukumetsu Go No 3 Kō No Tekiyō No Kahi” (Applicability of Paragraph (3) After the Presumption Under the Proviso
to Article 101, Paragraph (1) of the Patent Act Has Been Overturned), Chizai Kanri, vol. 62, No. 10 (2012), p. 1477;
Yasuyuki Echi, “Tokkyo Hō 102 Jō 1 Kō Tadashigaki Ni Yoru Kōjo Sūryōbun He No 3 K Kō No Tekiyō” (Applicationof Paragraph (3) to the Quantity to Be Reduced Under the Proviso to Article 102, Paragraph (1) of the Patent Act),
L&T, No. 60 (2013), p. 55; Akimitsu Arai, “Songai Baishō (2)” (Compensation for Damage [2]), Toshiaki Makino,
Toshiaki Iimura, Makiko Takabe, Yōichirō Komatsu, and Tomoki Ihara eds., Chiteki Zaisan Soshō Jitsumu Taikei II(Outline of Intellectual Property Litigation Practice II), p. 24; Toshiya Kaneko, “Tokkyoken Shigai Ni Yoru Shingai
No Futatsu No Omota Toraekata - Uriage Genshō Ni Yoru Isshitsu Rieki To Jisshiryō Sōtōgaku No Kankei” (Two
Major Concepts of Damage Caused by Patent Right Infringement: Relationship Between the Lost Profit Resulting
From a Decrease in Sales And the Amount Equivalent to a License Fee), Nakayama Nobuhiro Koki Kinen Ronbunshū,Habataki - 21 Seiki No Chiteki Zaisan Hō (Essays in Honor of the Seventieth Birthday of Professor Nobuhiro
Nakayama: Spreading Wings - Intellectual Property Law in the 21st Century), p. 440. In the Tokyo High Court
Judgment, June 15, 1999, Hanji, No. 1697, p. 96 (the Sumithermal case), the court stated that, because there is room
to claim damages based on paragraph (3) if a claim for damages under paragraph (1) was completely denied, there isalso room to claim damages under paragraph (3) for a part of a claim for damages filed under paragraph (1) if said partof the claim was denied (the court found that 40 percent of the quantity of products sold by the infringer could not havebeen sold by the right holder due to the existence of competitors, and allowed application of paragraph (3) to that
portion). In the Osaka High Court Judgment, April 10, 2002, court website (the Multiple-Layer Tire case), the court
stated that damages cannot be claimed under Article 102, paragraph (1) of the Patent Act for 70% of the quantity
because there were circumstances under which the right holder would have been unable to sell his/her products, but it
is construed that the reasonable amount of compensation under Article 102, paragraph (3) of said Act can be claimed
for that portion, because they are also products produced by working the invention without a license. In the Osaka
District Court Judgment, February 10, 2005, Hanji, No. 1909, p. 78 (the Sample Preparation Tray case), which is a
special case concerning utility model right infringement, the court applied paragraph (1) to the products which thedefendant sold for value, and applied paragraph (3) to half of the quantity of the products which the defendant assigned
for free, holding that the demand for receiving the products would usually be considerably larger when the products
are assigned for free, in comparison to when they are sold for value.34 Makiko Takabe, Jitsumu Shōsetsu Tokkyo
Kankei Soshō [2 Han] (Detailed Explanation of Practice of Patent-Related Litigation [2nd Ed.]), p. 248; Kazuhiko
Yoshida, “Songai Baishō” (Compensation for Damage), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka
eds., Gendai Chiteki Zaisan Hō Kōza II (Lecture on Modern Intellectual Property Law II), p. 182; Hideo Ozaki,“Tokkyo Hō 102 Jō 1 Kō No Shoronten” (Issues Concerning Article 102, Paragraph (1) of the Patent Act), Ryū
Takabayashi ed., Chiteki Zaisanken Shingai To Songai Baishō (Intellectual Property Infringement and Compensation
for Damages), p.24. In the Intellectual Property High Court Judgment, September 25, 2006, court website (the Chairtype Air Massage Machine case), the court stated that, if it is construed that the amount equivalent to a license fee canbe claimed even for the portion which the patentee could not have sold, it will be allowing the patentee to receive
compensation for damage exceeding the scope of lost profits which he/she could fundamentally claim as damages
against the act of infringement. The same view has been indicated in the Osaka District Court Judgment, April 19,
2007, Hanji, No. 1983, p. 126 (the Goggles case) and the Intellectual Property High Court Judgment, December 22,
2011, Hanji, No. 2152, p. 69 (the Heavy Metal Immobilization Agent case). In the Intellectual Property High Court
Judgment, January 24, 2012, court website (the Solid Golf Ball case), the court denied application of paragraph (3),stating that, if it is construed that the amount equivalent to a license fee can be claimed even for the portion which thepatentee could not have sold, it will be allowing the patentee to receive compensation for damage exceeding the scopeof lost profits which he/she could fundamentally claim as damages against the act of infringement. Recent IntellectualHigh Court judgments are tended toward the theory to deny application of paragraph (3), and it is considered that thetheory to deny the application is more predominant in practice.

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theories that oppose this idea.34 In short, it is a question of whether or not Article 102,
paragraphs (1) and (2) can be regarded to cover all damages that need to be evaluated. The
concept of damage in patent right infringement cannot be regarded the same as that in
infringement of a thing (corporeal object). Unlike a thing, a patent right is a right ofprohibition, and cancellation of the right of prohibition (i.e. a license) can theoretically be
granted for an unlimited number of products, irrespective of the right holder's capability towork the invention. As a result, there is no upper limit to the total amount of license fees.
The damage under paragraph (1) supposes the damage of not being able to sell the rightholder’s own products, that is, the ordinary lost profit, which is damage within the rightholder's capability to work the invention. In contrast, the damage under paragraph (3) is theamount equivalent to a license fee, which can be infinitely large irrespective of the rightholder's capability to work the invention. An opposite view asserts that the amount ofdamage calculated under paragraph (1) covers all lost profit, and if the damages underparagraph (3) are awarded, it would be the awarding of damages in an overlapped mannerin an amount exceeding the lost profit. While it has been regarded that compensation fordamage caused by patent right infringement is the compensation for damage under Article
709 of the Civil Code, and that Article 102 of the Patent Act is merely a provision for
calculating the amount of damage, there is a need to study the substance of lost profits
caused by infringement of information property. Unlike in the case where a person’s househas been used by another person without permission, a patentee may unexpectedly receive
an enormous amount of damages when another person infringes his/her patent right. In
other words, the amount of compensation for patent right infringement has a fundamental
nature of being decided by the circumstances of the infringer rather than those of the rightholder. From such a viewpoint, paragraphs (1) and (3) should not to be a choice of one or
the other; damages under paragraph (1) should be awarded for the scope of products which
the right holder could manufacture, and the compensation of an amount equivalent to a
34 Makiko Takabe, Jitsumu Shōsetsu Tokkyo Kankei Soshō [2 Han] (Detailed Explanation of Practice of Patent-Related
Litigation [2nd Ed.]), p. 248; Kazuhiko Yoshida, “Songai Baishō” (Compensation for Damage), Ryū Takabayashi,
Ryōichi Mimura, and Toshiko Takenaka eds., Gendai Chiteki Zaisan Hō Kōza II (Lecture on Modern Intellectual
Property Law II), p. 182; Hideo Ozaki, “Tokkyo Hō 102 Jō 1 Kō No Shoronten” (Issues Concerning Article 102,
Paragraph (1) of the Patent Act), Ryū Takabayashi ed., Chiteki Zaisanken Shingai To Songai Baishō (Intellectual
Property Infringement and Compensation for Damages), p.24. In the Intellectual Property High Court Judgment,
September 25, 2006, court website (the Chair-type Air Massage Machine case), the court stated that, if it is construed
that the amount equivalent to a license fee can be claimed even for the portion which the patentee could not have sold,it will be allowing the patentee to receive compensation for damage exceeding the scope of lost profits which he/she
could fundamentally claim as damages against the act of infringement. The same view has been indicated in the Osaka
District Court Judgment, April 19, 2007, Hanji, No. 1983, p. 126 (the Goggles case) and the Intellectual Property High
Court Judgment, December 22, 2011, Hanji, No. 2152, p. 69 (the Heavy Metal Immobilization Agent case). In theIntellectual Property High Court Judgment, January 24, 2012, court website (the Solid Golf Ball case), the court denied
application of paragraph (3), stating that, if it is construed that the amount equivalent to a license fee can be claimed
even for the portion which the patentee could not have sold, it will be allowing the patentee to receive compensation
for damage exceeding the scope of lost profits which he/she could fundamentally claim as damages against the act of
infringement. Recent Intellectual High Court judgments are tended toward the theory to deny application of paragraph(3), and it is considered that the theory to deny the application is more predominant in practice.

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license fee under paragraph (3) should be awarded for the portion exceeding that scope, inother words, the portion corresponding to the proviso to paragraph (1) (the portion forwhich the right holder does not have the capability to work the invention) should be treatedin a similar manner as having granted a license. With regard to the potential market of thepatent right, the lost profit in the ordinary sense becomes an issue for the portion within thepatentee’s capability to work the invention, but it should be construed that the right holder
can also claim an amount equivalent to the license fee for the portion exceeding thatcapability because it was possible to grant a license for such exceeding portion as well. Thiscan be considered to be the same as a business practice where a right holder often works
the invention within his/her capability to do so, but licenses out the portion in excess. It waspossible to license out the right even for the portion for which the right holder had nocapability to sell products. Therefore, if the right holder’s manufacturing ability is low,
application of paragraph (1) should be allowed within the scope of the manufacturing
ability, and the application of paragraph (3) should be allowed for the remainder (in thecase of the proviso to paragraph (1)), deeming that it could have been licensed out. Thisissue leads to the question of what kind of idea the damage caused by patent right
infringement is, and also concerns the peculiarity of information property (see “(5) Limitsof tort law” and “(6) Peculiarity of an infringement of information goods”).
[384]
Paragraph (1) only provides for the damage caused by a decrease in sales, and such
expenses as attorney's fees could be claimed separately under Article 709 of the Civil Code.
[385](3) Article 102, paragraph (2) of the Patent Act35
Article 102, paragraph (2) (former paragraph (1)) presumes the infringer's profit tobe the amount of damage suffered by the right holder, and if the amount is higher than thedamage actually suffered by the right holder, that amount will be reduced. This paragraphis used when it is easier for the right holder to prove the infringer's profit rather than theamount of damage he/she sustained or when the right holder does not wish to disclose
his/her profit rate. Particularly after the establishment of Article 105 (Production ofDocuments, etc.) and Article 105-2 (Expert Opinion for Calculation of Damages). The
general view is that this paragraph has been basically stipulated as an issue concerning
proof, within the framework of tort law.
According to conventional court judgments and the majority of theories, Article 102,

35 See Ryū Takabayashi, “Tokkyo Hō 102 Jō 2 Kō No Saiteigi” (Re-defining Article 102, Paragraph (2) of the Patent
Act), Nakayama Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Essays in Honor of theSeventieth Birthday of Professor Nobuhiro Nakayama: Spreading Wings - Intellectual Property Law in the 21stCentury), p. 456.

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paragraph (2) is a provision for presuming damages, so it applies to presumption of thelost profit resulting from a decrease of sales, but it does not apply to presumption of theoccurrence of an infringement (facts serving as a premise for the presumption).
Accordingly, the plaintiff has been believed to bear the burden of proof and pleading withregard to the occurrence of an infringement, which is a requirement for application of
Article 709 of the Civil Code.36 Due to the difficulty of proving the amount of damage
caused by patent right infringement, paragraph (2) was established to facilitate such proof.
Since occurrence of some damage also needs to be proved in the case of an ordinary tort,
the provision is considered to have been introduced based on the idea that the same applies
in the case of patent right infringement. Specifically, when the right holder does not work
the invention himself/herself, the idea of the occurrence of passive damages does not stand,so the presumption in Article 102, paragraph (2) has been considered to be inapplicable.37
However, paragraph (2) is only a presumptive provision, and it does not deem the profits
of the infringer to be the damages, so such strict interpretation does not seem to be necessary.

36 In the Tokyo District Court Judgment, June 26, 1972, Hanta, No. 282, p. 267 (the Electric Stand Design case), thecourt denied application of the presumptive provision and held that only an amount equivalent to the license fee canbe claimed, stating that the amount claimed by the plaintiff was not found to be entirely attributable to the defendant’s
act of tort, because it could not be asserted that the defendant was the only person selling goods of a design similar tothe design in question. According to the view held in this judgment, the right holder has to plead and prove various
circumstances supporting the fact that he/she would have gained profits equivalent to those gained by the infringer in
the absence of the infringement, not only including the fact that the subject matter of the right had not been worked byother third parties but also that the right holder had a sufficient manufacturing capacity or a sufficient distribution
system. This would practically undermine the significance of having established the presumptive provision. Since thepresumptive provision under paragraph (2) is considered to have been established due to the extreme difficulty to provethese matters, many court judgments have not imposed such strict requirements.
37 The first judgment that indicated such view was the Tokyo District Court Judgment, September 22, 1962, Hanta, No.
136, p. 116 (the Double-Barreled Toy Gun case; a utility model case). Subsequent judgments include the Tokyo
District Court Judgment, March 27, 1978, Mutai Saishū, Vol. 10, No. 1, p. 102 (the Morimitsu case; it is a trademarkcase, so it cannot be directly applied to a patent right, but it would serve as a reference); the Nagoya District Court
Judgment, April 25, 1980, Hanji, No. 992, p. 93 (the Flower Crest case; a trademark case where, out of three trademarks,paragraph (2) [before the 1998 revision; currently paragraph (3)] was applied to one that was not in use but was a stock
trademark, and was also applied to the other two for lack of proof of the actual damage suffered; in its appellate instance,
the Nagoya High Court Judgment, July 17, 1981, Hanji, No. 1022, p. 69, the court allowed application of paragraph(1) [before the 1998 revision] regarding the two trademarks that were in use); the Osaka District Court Judgment, June
17, 1980, Mutai Saishū, Vol. 12, No. 1, p. 242 (the Nameplate case); the Osaka High Court Judgment, February 19,
1981, Mutai Saishū, Vol. 13, No. 1, p. 71 (the Building Materials case; a trademark case); the Osaka District Court
Judgment, December 20, 1984, Mutai Saishū, Vol. 16, No. 3, p. 832 (the Plover case; a trademark case); the Tokyo
High Court Judgment, June 15, 1999, Hanji, No. 1697, p. 96 (the Sumithermal case). In the Tokyo District Court
Judgment, March 10, 2015, Hanji, No. 1918, p. 67 (the Tunnel Cross-Section Marking Method case), the court applied
paragraph (2) to one of the joint owners of the patent right who was working the invention, and applied paragraph (3)to the other joint owner who was not working the invention. Shōzō Yoshihara, “Tokkyoken Shingai Ni Yoru Songai
Baishō Seikyū Soshō No Yōken Jijitsu” (Fact Requirements in a Damage Suit concerning Patent Infringement),
Ishiguro Junpei Tsuitō Kinen, p. 186; Yutaka Tsutsui, “Songai (1) -- Suitei Kitei No Tekiyō Yōken” (Damages (1) -Requirements for Application of the Provision of Presumption), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō
Shoyūken Soshōhō, p. 323; Ryūichi Shitara, “Songai (2) -- Shingai Kōi Ni Yori Uketa Rieki” (Damages (2) -- Profits
Gained through Infringement), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshōhō, p. 330;
Toshisuke Kiyonaga, “Songai (4) -- Fukusū No Shingaisha” (Damages (4) -- Multiple Infringers), Toshiaki Makino,ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshōhō, p. 350; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai3 Han], p. 1017 [written by Reiko Aoyagi]. Influential views that oppose these majority views were indicated in
Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p. 24, and Kaoru Kamata, “Chiteki Zaisan Soshō
Ni Okeru Songai Baishō Hōri” (Principle of Compensation for Damages in Intellectual Property Litigation), Tokkyo
Kenkyū (Patent Studies), No. 17 (1994), p. 4.

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§8. Infringement

Many court judgments had applied the presumptive provision under paragraph (2)(paragraph (1) before the 1998 revision) on the basis that as long as the right holder engaged
in the same type of act of working the invention even to the slightest extent, some kind ofdamage would be predicted to be caused by the act of infringement, in principle. 38
Nevertheless, all-or-nothing types of conclusions tended to be derived whereby, if the rightholder has not worked the invention at all, the presumptive provision under paragraph (2)would not be applied, and if he/she has worked the invention even to a slight extent, thepresumption under paragraph (2) would apply. If the right holder has not worked theinvention, damages would be claimed in an amount equivalent to a license fee underparagraph (3), and many court judgments have applied paragraph (3) and have only
recognized an amount equivalent to the license fee.
[386]
In contrast, the Intellectual Property High Court Grand Panel Judgment (the Waste
Storage Device case) 39 in 2013 has drawn attention as an opposite judgment. In thisjudgment, the court indicated a new determination that "the application of Article 102,
paragraph (2) of the Patent Act does not require the patentee to have worked the patented
invention when there are any circumstances suggesting that the patentee could gain profits
if no patent infringement had been made by the infringer." The court stated that "various
circumstances, such as the difference between the patentee and the infringer in terms of themanner of business, shall be taken into consideration as circumstances that call for a
reduction in the presumed damage amount," and held that the damage amount would not
be reduced in this case because the defendant has not presented any specific allegation or
proof concerning the amount of profit, etc. gained by the plaintiff's sales agent in Japan.
Since this judgment has been rendered by the Grand Panel of the Intellectual Property High

38 For specific cases, see Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p. 9.
39 In the Intellectual Property High Court Grand Panel Judgment, February 1, 2013, Hanji No. 2179, p. 36/Hanta, No.
1388, p. 77 (the Waste Storage Device case; appeal dismissed/appeal unaccepted), the right holder (plaintiff) locatedoverseas was importing and selling products through a sole agent, and the infringer (defendant) was selling products
imported from China, but the plaintiff right holder itself had not manufactured and sold products in Japan. The court
stated that "taking into account that Article 102, paragraph (2) of the Patent Act was provided for the purpose of
reducing the difficulty in proving the damage amount and that the effect thereof is merely presumptive, there are no
reasonable grounds for making the requirement for the application of said paragraph particularly strict," and held thatparagraph (2) could be applied even when the right holder has not worked the invention. See Yoshiyuki Tamura"Shingai Ni Yoru Rieki Wo Suitei Suru Tokkyo Hō 102 Jō 2 Kō No Tekiyō No Yōken To Suitei No Fukumetsu No
Kahi" (Requirements for Application of Article 102, Paragraph (2) of the Patent Act Which Presumes Profits Gained
Through Infringement And the Possibility of Overturning the Presumption) Chizai Kanri (Intellectual Property
Management), Vol. 63, No. 7 (2013), p. 2107; Nobuhide Ōtomo, "Tokkyo Hō 102 Jō 2 Kō No Tekiyō Yōken—Gomi
Chozōki Jiken Chizai Kōsai Daigōgi Hanketsu" (Requirements for Application of Article 102, Paragraph (2) of the
Patent Act: the Intellectual Property High Court Grand Panel Judgment on the Waste Storage Device Case), Tokkyo
Kenkyū (Patent Studies), No. 56 (2013). Incidentally, the Tokyo District Court Judgment, December 26, 2011, court
website, which is the prior instance of this case, applied paragraph (3) by holding that the case lacks the premises for
applying the presumption under paragraph (2) in accordance with past court judgments.

440§8. Infringement

Court, it is expected to have an extremely large influence on future practice. 40 The
conventional theory asserting that the "damage sustained as a result of the infringement" inparagraph (2) only refers to damage sustained by a right holder who had worked theinvention by himself/herself has no grounds stipulated in the provisions. It would be morenatural to construe that the existence of some kind of damage would suffice. In this case,however, the court did not uphold the application of paragraph (2) unconditionally, but it
required "circumstances suggesting that the patentee could gain profits if there had been noact of infringement" which are not necessarily limited to the working of the invention by
the right holder himself/herself. While this was a case concerning a sole agent, the treatmentin the case where the right holder has no such close relationship but is merely licensing out
his/her right41 or in the case where the right holder is a university or the like which cannot
work the invention by itself would be a future issue.
[387]
As discussed in the abovementioned Intellectual Property High Court Grand Panel
Judgment, paragraph (2) is a presumptive provision, so if there is any problem, it would be
sufficient to resolve the problem by overturning the presumption. For example, in the casewhere an act of infringement has been committed, but the mode of working the invention
does not compete with that of the right holder in the market, the presumption would likely
be overturned. There is a possibility that the above judgment would have a great influence
not only on the case of calculating the amount of damages caused by infringement, but also
on companies' future intellectual property strategies. For example, there is a business model
whereby a business group has a management company collectively manage the group's
patents and other intellectual property rights by using trusts, and has the company licenseout the rights to the group companies in order to manage the group's intellectual property
strategies uniformly and strategically. Such business model had a disadvantage of not being
able to use Article 102, paragraph (2), but in the future, such model may see progress.
[388]
Next, there is an argument over whether the profit under paragraph (2) refers to theinfringer’s net profit or gross profit. In the past, the majority of the theories seemed toconsider such profit to be net profit based on the reason that paragraph (2) provides for a

40 The same view was subsequently indicated in the Tokyo District Court Judgment, January 30, 2014, court website (theAutomatic Telephone Number Data Creating Device case; a case in which the right holder was manufacturing andusing not the patented products in question, but products that compete with those of the infringer), and its appellate
instance, the Intellectual Property High Court, September 11, 2014, court website.
41 Toshiaki Makino and Naoya Isoda, "Songai Baishō" (Compensation for Damage), Toshiaki Makino, Toshiaki Iimura,
Makiko Takabe, Yōichirō Komatsu, and Tomoki Ihara eds., Chiteki Zaisan Soshō Jitsumu Taikei II (Outline ofIntellectual Property Litigation Practices), p. 45 states that the application of paragraph (2) may be allowed in suchcases as where there are provisions on running royalties based on sales, because "it establishes a relationship underwhich the right holder's profits would be lost by the act of infringement."441

§8. Infringement

system for compensating damages actually suffered. 42 Therefore, not only variable
expenses but also general administration expenses, etc. were deducted from gross profit,
leading to lowering of the damages awarded, while application of paragraph (2) was often
denied for lack of proof of the amount of profit due to the plaintiff’s not being able to prove
net profit, and the significance of having established the presumptive provision was often
lost.43 Thus, recently, the profit under paragraph (2) came to be regarded as the infringer’s
marginal profit,44 and the marginal profit theory became prevalent. It is a theory to consider
that, to the extent that the infringer can manufacture the infringing goods without making
new capital investment or hiring new workers, the infringer's general administration
expenses should not be deducted, in other words, only the costs that newly came to berequired with regard to manufacture of goods constituting the infringing goods should be

42 See Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 1024 (written by Reiko Aoyagi), and the theories
and the court judgments cited therein. In the Tokyo District Court Judgment, April 27, 1988, Mutai Saishū, Vol. 20,
No. 1, p. 209 (the Louis Vuitton case; a trademark case), the court mentioned that the amount of profit is not the amountof gross profit obtained by subtracting the purchase cost from the sales amount of the product, but an amount obtainedby subtracting all costs required for the sales, including the purchase cost, advertising cost, personnel expenses, andrents for stores and exhibition sites, from the sales amount of the product, and denied application of paragraph (1)(which is paragraph (2) under the current Act) due to lack of proof for net profit. The same view was indicated in the
Okayama District Court Judgment, May 29, 1985, Hanta, No. 567, p. 329 (the Punch Hanger case). In the Tokyo
District Court Judgment, February 9, 1990, Hanji, No. 1347, p. 111/Hanta, No. 725, p. 213 (the Lead Chromate
Pigment Composition case), the court stated that general administration expenses, non-operating profit and loss, andextraordinary profit and loss are not unrelated to the act of manufacture and sales of infringing goods, and ruled thatthe profit gained by the infringer is the net profit obtained by deducting these expenses. In contrast, in the Osaka
District Court Judgment, June 28, 1985, Mutai Saishū, Vol. 17, No. 2, p. 311 (the Etiquette Brush case; a trademarkcase), the court ordered compensation in an amount equivalent to the amount of gross profit, stating that as long as theplaintiff has given certain proof with regard to the gross profit, the burden is on the defendant to prove any factors for
reducing this amount. The court mentioned, as the ground for the order, that because the plaintiff often cannot proveanything more than the gross profit in response to an order to produce documents, imposition of an additional burden
on the plaintiff to also prove the net profit would produce a result contrary to the purpose of having established thepresumptive provision, which is to facilitate proof. Actually, not many theories strictly adopt the net profit theory or
the gross profit theory, and most theories are considered to be based on either one of these theories, with some suitable
modifications added thereto.
43 Ikuo Hata, “‘Handa Zuke Yō Yōzai’ No Gijutu Teki Han’i No Kaishaku Oyobi Ikko No Seihin No Ichibubun DakeGa Tokkyoken O Shingai Suru Kōsei Ni Natteiru Bāi No Songai Gaku” (Interpretation of the Technical Scope of“Soldering Solvent” and Amount of Damages in the Case Where Only One Part of a Product Infringes Patent Right),
Umase Fumio Koki Kinen, Hanrei Tokkyo Shingai Hō (Case Law on Patent Infringements), p. 745.
44 Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 5 Han] (Patent Law from the Ground Up [5th ed.]), p. 276 calls this idea
the theory of marginal profit on the infringer's side. In the Tokyo District Court Judgment, February 8, 2001, Hanji,
No. 1773, p. 130/Hanta, No. 1092, p. 266 (the Toy With Automatic Bullet Supplying Mechanism case), the court heldthat the amount of profit under Article 102, paragraph (2) refers to what can be called "marginal profit" obtained bydeducting from the sales amount of the infringing product any portion of the expenses for purchases, processing,packaging, storage, or transport which was required only for the manufacture and sales of the infringing product.

442

§8. Infringement

deducted.45[389]
The profit under paragraph (2) should be construed to be marginal profit on theinfringer's side, but in terms of proof, if the right holder proves the amount obtained bydeducting variable expenses from the infringer's sales amount, and the infringer proves thatthe damage actually suffered by the right holder is lower, for example by way of proving
the expenses directly required by the infringer for committing the act of infringement, thepresumption under paragraph (2) would be overturned to that extent. Since fixed cost, etc.
would not be deducted, in principle, paragraph (2) could be applied even if the infringer isnominally making no profit. Also, the amount would be reduced if the infringer proves that
his/her profit is smaller than the amount of profit proved by the right holder. For instance,
if the right holder has granted a license to another party, it could serve as a factor for
reducing the amount of damages.46 The infringer's selling capabilities and brand power, as
well as the rate of contribution of the patent in the infringing product may also serve asfactors for reducing the amount of damages, but opposite views have also been indicated.
[390]

45 In the Tokyo District Court Judgment, October 30, 1995, Hanji, No. 1560, p. 24/Hanta, No. 908, p. 69 (the Control
Program case; a case relating to former paragraph (1) of the Copyright Act), which is a case before the 1998 revision,
the court stated that “it is reasonable to consider that the profit obtained as a result of an act of infringement is anamount obtained by deducting only variable expenses for manufacturing and selling the defendant's product from theamount of sales of the defendant's product, and other expenses such as the cost for developing the defendant’s product,
the personnel cost required for the mastery of manufacturing skills (including the cost for the extra work hours required
due to the workers’ unfamiliarity with the manufacturing work at the start of the manufacturing), general administrative
cost, non-operating expenses, taxes and dues, and the amortization expenses for the manufacturing equipment should
not be deducted.” The same view has been indicated in the following judgments: the Tokyo District Court Judgment,
October 7, 1998, Hanji, No. 1657, p. 122/Hanta, No. 987, p. 255 (the Load Device System case; a case relating toformer paragraph (1)); the Tokyo District Court Judgment, May 29, 1998, Hanji, No. 1663, p. 129/Hanta, No. 990, p.
251 (the Bow-Legs Walking Correcting Apparatus case); the Osaka District Court Judgment, September 16, 1999,
Hanta, No. 1044, p. 246 (the Alinabig A25 case, a case relating to the Unfair Competition Prevention Act); and theTokyo District Court Judgment, February 8, 2001, Hanji, No. 1773, p. 130/Hanta, No. 1092, p. 266 (the Toy With
Automatic Bullet Supplying Mechanism case). In the Tokyo District Court Judgment, April 24, 2007, court website(the Film Unit with Lens case), the court called it "contribution margin" (marginal profit in the broad sense). In thisjudgment, the court held as follows: "For example, when a large company, which is engaged in manufacture and salesof multiple kinds of products, has manufactured and sold one kind of infringing goods, the deductible amount would
only be variable expenses such as the direct raw material cost and shipping cost. However, when a small company has
manufactured and sold infringing goods alone, or has built a new factory only for the purpose of manufacturing andselling the infringing goods, not only variable expenses should be deducted but fixed expenses including thedepreciation cost for the factory and machines and the wages for the factory workers should be regarded as individual
fixed expenses that have a reasonable causal relation with the manufacture and sales of the infringing goods, and thecontribution margin should be calculated by deducting such expenses from gross profit. Therefore, in calculating thecontribution margin, the expenses (variable expenses and individual fixed expenses) that have a reasonable causal
relation with the manufacture or sales of the infringing goods must be calculated, while comprehensively consideringvarious factors including the defendant company's size, the percentage of the sales of the product in question in the
defendant company's total sales, the facilities, machines and labor force that were required for manufacturing andselling the infringing goods, and the period during which the infringing goods were manufactured and sold." See theIntellectual Property High Court Judgment, April 11, 2013, Hanji, No. 2192, p. 105 (the Equipment for Separating andRemoving Foreign Substances from Raw Seaweed case).
46 In the Tokyo District Court Judgment, July 16, 1999, Hanji, No. 1698, p. 132/Hanta, No. 1017, p. 245 (the Equipment
for Freeing a Car Stuck in Rough Road case), the court held that, of the damages presumed based on the infringer's
profit, the amount corresponding to two-thirds of the quantity will be overturned, given that a non-exclusive licensee
was manufacturing and selling the product.

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§8. Infringement

Here, the concept of damage assumed in Article 102, paragraph (2) becomes an issue.
While Article 102, paragraph (2) is a provision on the legal presumption of facts, such aprovision is usually established when there is an empirical rule that backs up that conclusion,and such rule provides a basis for justifying the shift of the burden of proof. Then, is there
an empirical rule that allows for the presumption as set out it paragraph (2) in the case of apatent infringement? The answer is that, just as in the case of paragraph (1), there is noempirical rule that can sufficiently support such presumption. It is rare for the infringer togain profit through the act of patent infringement alone. Various factors are involved,
including the infringer’s efforts, management ability, selling capabilities, brand power,
capital strength, labor force, and know-how, as well as consumer preference, the presenceor absence of other competitors, and economic conditions. The circumstances on the rightholder’s part, such as whether he/she was capable of increasing production, would also
greatly affect the amount of damages. In addition, in an extreme case, the right holder evenincreases sales, owing to the market cultivation by the infringer. In short, the sales amountis not only decided by the patent right but by multiple intertwined factors. Thus, it can besaid that the presumption is not being made in accordance with an empirical rule, but merely
due to the existence of a presumptive provision.47 Since legislators have construed Article
102, paragraph (2) within the framework of tort law, the paragraph is stipulated in the formof a presumptive provision, which neither squarely stipulates the return of profit nor deems
the profit of the infringer to be the amount of damages suffered by the right holder.
Therefore, the presumption can be rebutted upon production of contrary evidence. However,even though rebuttable, the significance of having purposefully established a presumptive
provision that runs counter to the empirical rule should be reviewed.48 Since the paragraphpresumes the profit of the infringer to be the amount of damages suffered by the right holder,
contrary to the empirical rule, it could be interpreted that damages in a patent infringement
47 In the Osaka District Court Judgment, October 31, 1980, Mutai Saishū, Vol. 12, No. 2, p. 632 (the Children’s Vehicle
Tire case), the court stated in obiter dictum as follows: “In general, when the infringer has gained some profit throughthe act of infringement, there is no reasonable ground to always deem that the patentee has suffered the same amountof damages as the profit gained by the infringer. When damages have been claimed, the infringer’s profit isimmediately deemed to be the patentee’s damages only due to the existence of the presumptive provision stipulated in
Article 102, paragraph (1) (which is paragraph (2) under the current Act) of the Patent Act.” Also, in the Osaka District
Court Judgment, March 27, 1981, Mutai Saishū, Vol. 13, No. 1, p. 336 (the Float Indicator case), the court held that,
although it was a case where Article 38, paragraph (1) of the Trademark Act before the 1998 revision (a provisionsimilar to Article 102, paragraph (1) of the Patent Act before the revision) was analogically applied to a case violating
the (old) Unfair Competition Prevention Act, it was clearly against the empirical rule to consider that all of the profits
gained by the infringer resulted from selling the product that attached the indication in question, and that a considerable
part of the profits was acquired by the infringer’s own corporate efforts such as sales effort and management effort.
Akio Morishima, “Fuhō Kōi Hō Kara Mita Chieki Shoyūken” (Intellectual Property from the Perspective of Tort Law),
Tokkyo Kenkyū (Patent Studies), No. 8 (1989), p. 10; Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 237.
48 Kaoru Kamata, “Chiteki Zaisan Soshō Ni Okeru Songai Baishō Hōri” (Principle of Compensation for Damages inIntellectual Property Litigation), Tokkyo Kenkyū (Patent Studies), No. 17 (1994), p. 4 also explains that Article 102 of
the Patent Act was an attempt to allow the return of the profits gained by the infringer. Essays that urge reconsiderationof the concept of damage under the Patent Act include Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō[Shinpan].

444

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are not solely intended for compensating the actual damages that could be proved but arenormative damages that could serve as an incentive for not committing infringement,
although this may not comply with the intention of the legislators.49[391]
As new paragraph (1) was established in 1998, the significance of new paragraph (2)was questioned anew. One possible direction is to consider that, because the right holder's
circumstances are determined in paragraph (1), paragraph (2) only needs to take into
consideration the infringer's circumstances. The other direction is an idea to have paragraph(1) deal with lost profit, and to have paragraph (2) play the function of stripping theinfringer of his/her profit. However, since there is no change in the wording of paragraph(2), it would be unreasonable to construe that the nature of paragraph (2) has changed tothat of quasi-benevolent intervention in another's affairs due to the introduction of newparagraph (1). In view of the legislative purpose as well, paragraph (2) is intended formaking the damage compensation system practically effective, in combination withparagraph (1), so the conventionally built up interpretation would basically be useful.
However, there would be a need to reconsider what damage is in a patent infringement (aninfringement of information goods). It is an issue of generality in the case of an
infringement of information goods.
(4) Article 102, paragraph (3) of the Patent Act
In accordance with Article 102, paragraph (3) of the Patent Act, an amount equivalent
to a license fee can be claimed as the minimum amount of damages irrespective of whether
or not the right holder was working the invention. If an infringer were to work the invention
legally, the patentee may claim an amount equivalent to the license fee irrespective ofwhether or not the patentee is working or has the capability to work the invention, and there
is basically no upper limit to that amount. Because the infringer was supposed to pay alicense fee by concluding a license agreement, it is natural that the infringer must at least
pay an amount equivalent to the license fee if he/she were to work the patented invention
illegally. The provision is consequential from this viewpoint,50 but it is not so, theoretically,
from the viewpoint of lost profit of the right holder. If an infringer has used someone's land
without authorization, there would be no objection that an amount equivalent to the land
rent would at least be determined to be damages. In the same way, it would be astraightforward interpretation to consider that an amount equivalent to a license fee may beclaimed as damages, also in the case of a patent infringement. However, an amount49 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 237 states that “there may be room to recognize a return ofprofits under the name of compensation for damage,” and this also seems to assume a normative concept that isdifferent from the conventional concept of compensation for damage.
50 There was no provision corresponding to paragraph (3) under the former Act, but an amount equivalent to a license
fee had been awarded as damages in court judgments.

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equivalent to land rent will be determined automatically based on the average land rent in
the neighborhood, and it is not relevant who the infringer is, or whether the infringer
demonstrates superior selling capabilities and makes enormous profit or conversely fails to
make good sales and suffers large losses. In contrast, in the case of patent rights, there istheoretically no quantitative limit to the working of a patented invention, so an amountequivalent to a license fee differs completely depending on the quantity associated with the
infringer's working of the invention. Even if a patent has been infringed by the same method,
the amount of damages would be totally different between the case where a large company
committed the act of infringement in large quantities and the case where a small company
committed the act in small quantities. The right holder may happen to obtain an amount ofdamages that could never have been obtained on his/her own account, thanks to theinfringement. Thus, there remains the same question of whether paragraph (3) assumes thesame concept of damages as those caused by an ordinary act of tort.51[392]
Before the 1998 revision, Article 102, paragraph (2) had a provision to the effect thatthe amount of money that the right holder was “normally” entitled to receive for theworking of the invention could be claimed as damages. However, due to the presence of
the word “normally,” court judgments and many theories treated this license fee to be areasonable license fee at the time of the infringement, that is, the amount that would havebeen paid if a license contract had been concluded at the time of the infringement.
Specifically, the amount of damages was often calculated by referring to licensing contracts
previously concluded for the patent in question, the average license fee in the industry, or
the license fee for a state-owned patent.52
As a result, the amount of damages to be paid when the infringement was discovered
ex post facto and the amount of license fee to be paid by concluding a licensing contract inadvance would be the same. Considering the possibility that the infringement might gounnoticed and that the patentee might hesitate to file litigation, it would be more profitable
for the infringer to commit an infringement than not, simply with respect to compensation
for damage. There was even a risk that such system could encourage infringements,

51 Meanwhile, there is a theory stating that while a land owner is not obstructed from using the land and gaining profit
therefrom after the infringement, a patentee loses the opportunity to exploit the market due to the act of infringement,
which means that the value of the patent has diminished to that extent (Yoshiyuki Tamura, Chiteki Zaisanken To
Songai Baishō [Shinpan], p. 213). This may be reasonably explained by supposing the concept of the right holder'smarket opportunity, and considering that the market opportunity has been lost to the extent that the infringer has
worked the invention, in other words, that the right holder’s infinite power to grant licenses has been infringed.
However, the concept of market opportunity, which may be persuasive as a concept for explanation, would be unclear
in substance.
52 Court judgments on this issue are reviewed in Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p.
24.

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contrary to its purpose.53 Such problem had been criticized by many experts since the past.
Accordingly, in the revised Act, paragraph (2) was moved to paragraph (3), and the word
“normally” was deleted, making it possible to assess the amount by considering thecircumstances specific to individual cases. It became possible to consider an amountequivalent to a license fee to be a reasonable license fee at the time of the litigation, insteadof that at the time of the infringement, and to determine damages by taking into account allkinds of circumstances specific to individual cases that are found by the time the case isclosed, such as the maliciousness of the infringer.54 While a right holder is generally able
to impose various conditions including a license fee when concluding a licensing contract,and can control the market through such imposed conditions, if the court were to only award
an amount equivalent to a license fee normally charged in the industry, it would be
extremely disadvantageous for the right holder. Thus, this revision is considered to be anatural course.
[393]
Since the amount under paragraph (3) can be claimed as a minimum guarantee
irrespective of the damage actually suffered by the right holder, it is essentially different
from lost profit.55 If paragraph (3) is only dealing with the right holder's lost profit, it issufficient to apply the general principles under the Civil Code, and there would be no needto establish a special provision under the Patent Act.56 Also, it is interpreted that paragraph(3) provides for a minimum guarantee, so damages can always be claimed within this scope,
but whether or not damages can always be claimed without exception is not without
questions.57
53 Of course, if a company commits an infringement, it cannot continue the business after receiving an injunction, it earns
a disreputable reputation relating to the infringement, it must pay the litigation cost, and it may receive a criminal
penalty. Nevertheless, from the viewpoint of compensation for damage, mere payment of an amount equivalent to alicense fee would have little effect of restraining infringements. Considering that some malicious infringers only
engage in the infringement for a short period of time and are no longer working the invention when an injunction is
given, and that some do not care about disreputable reputation, charging a small amount of damages is meaninglessfor such infringers.
54 For the specific calculation method, see Nobuhiro Nakayama and Naoki Koizumi, eds, Shin/Chūkai Tokkyo Hō Ge(New Explanatory Notes on the Patent Act Vol. 2), p. 1692 (written by Kei Iida).
55 Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p. 211 describes that “the context of paragraph 2(before the 1998 revision) indicates the fact that the paragraph always considers the reasonable amount ofcompensation for the act of infringement to be the amount of damages, and inevitably assumes a concept of damages
other than lost profit.” It mentions that attention should be paid to “what the patentee has lost” instead of what kind oflicense agreement has been concluded, with regard to paragraph (2).
56 See Yoshiyuki Tamura, Chiteki Zaisanken To Songai Baishō [Shinpan], p. 211.
57 In the Supreme Court Judgment, March 11, 1997, Minshū, Vol. 51, No. 3, p. 1055 (the Kozo-Zushi case), which wasa trademark case and cannot be discussed on the same level as patent cases, the court stated that Article 38, paragraph(2) of the Trademark Act (paragraph (3) under the current Act) is a provision for reducing the injured party’s burdenof pleading and proof, and it exceeds the basic framework of tort law to find that the defendant has the obligation tocompensate for damage even when damage has clearly not occurred. The court has limited the scope of that decision
to trademarks by stating that a trademark does not have property value in itself like a patent, but is essentially intended
to protect general consumers by protecting business reputations and maintaining the distribution order, so if it clearly
has not contributed to the sales of a third party’s products, it has not caused damage of an amount equivalent to thelicense fee the right holder was entitled to receive. However, even in the case of patents, there could be cases where
the infringement had not contributed to the sales at all.

447

§8. Infringement[394]
A claim under paragraph (3) does not prevent any relevant party from claiming
compensation for damage in an amount exceeding the amount provided for therein (the first
sentence of Article 102, paragraph (4) of the Patent Act). This sentence stipulates what istaken for granted, just in case. When damages exceeding the amount under paragraph (3)have been claimed, if the infringer has committed the infringement without intent or grossnegligence (in the case of slight negligence), the court may take such circumstances into
consideration (the second sentence of Article 102, paragraph (4) of the Patent Act). This isbecause, compared to infringements of tangible property, it is often unclear whether an act
constitutes an infringement in patent infringement cases, and if a person has infringed apatent by mistake, it would be an excessively heavy burden on such person to have to pay
an enormous amount of damages. Since damages under paragraph (3) have the meaning ofminimum compensation, even if the amount of damages were reduced pursuant to thesecond sentence of paragraph (4), it cannot be lower than the amount prescribed inparagraph (3).
(5) Limits of tort law
In light of the circumstances above, there is a need to review whether or not it isappropriate to consider the compensation for damage caused by a patent infringement
within the framework of general tort law as has been intended by the legislators andexpressed in court judgments and the majority-view theories. It would also be necessary to
examine whether there is, first of all, no problem in considering an infringement of
information that is an asset like a patent in the same manner as an infringement concerning
tangible property. There are also some doubts as to the feasibility of concretely assessing
the lost profits regarding an infringement of a patent, which is a monopolistic right to use
information goods, and as to the appropriateness of considering the lost profit to be thedamages.
Additionally, since a patent infringement, which involves neither possession nor
seizure, is not restricted either in location or time, infringement is easier and its discovery
or prevention is more difficult than an infringement of tangible property. In addition, thefact that a patent infringement does not involve a direct or violent act of harm, such as
seizing another person’s possession, strengthens the temptation to infringe. The present tort
law is intended to compensate for losses, with no punishing function. Nevertheless,considering the above, the system for compensation for damage caused by a patent
infringement requires some institutional guarantee to prevent infringements, so it would448

§8. Infringement

not be irrational to add punishing functions to a certain extent.58 It might then become
possible to establish an interpretation of the amount of damages that is different from theconventional court judgments and majority of theories. At the very least, there is a need for
an interpretation that does not serve as an incentive for infringement. However, it must be
noted that patent rights and other intellectual property rights generally do not have clear
boundaries with regard to the protected subject matter, compared to the case of tangible
property, and, at the same time, many people would want to work the invention, if it issuperior technology. Therefore, it is not unjust to work technology that is extremely close
to such superior patent to the extent that it does not conflict with that patent right. As aresult, a person sometimes commits an infringement without having awareness of such, andis also presumed to have been negligent. In such a case, it is often very severe for the
infringer to have to pay an excessively large amount of damages, and it could have an effectof withering new technological development. From this viewpoint, it is reasonable toconclude that the amount of damages should be the same as the actual damage, but it is also
true that if such conclusion is always derived without exception, it could serve as anincentive for infringements. In short, it is an issue of balance.
[395](6) Peculiarity of an infringement of information goods
Since the conventional theories had considered the damage caused by patent
infringement to be within the scope of the principle of tort law, which was to compensate
for the damage suffered by the right holder, it was extremely difficult to secure necessary
and sufficient compensation for the right holder within the framework of Article 102 of the
Patent Act. As a result, Article 102 could not fully function, and many theories called forlegislative measures instead of trying to remedy the situation by interpretation.
Determination of the amount of damages resulting from an intellectual property
infringement or, even broader, an infringement of property information, always involvesdifficult issues. Fundamentally, information better contributes to enhancing social welfare
by sharing it among the public than allowing it to be monopolized, but that would reduce
people's incentive to create, and could lead to underproduction of information in the future.
Accordingly, the Patent Act deliberately allowed monopolistic use of information in order
to increase the incentive for invention, due to industrial and other needs. In the case of an
58 As long as the present Japanese tort law exists, it would be impossible to introduce a treble damage system or a punitive
damage system, which have extremely strong punishing functions, as are adopted in the United States (the Tokyo
District Court Judgment, February 18, 1991, Hanji, No. 1376, p. 79/Hanta, No. 760, p. 250 [the Vansei case]; and its
appellate instance, the Tokyo High Court Judgment, June 28, 1993, Hanji, No. 1471, p. 89/Hanta, No. 823, p. 126;
and its final instance, the Supreme Court Judgment, July 11, 1997, Minshū, Vol. 51, No. 6, p. 2573/Hanji, No. 1624,
p. 90/Hanta, No. 958, p. 93 [this was a complicated case where the court held that execution of a U.S. court judgment
ordering payment of punitive damages contravenes public order in Japan, but this is only an interpretation based onJapan’s current law]). However, it would not be impossible to add a small facet of punishment by changing thecomposition of the conceptual framework of damage caused by an intellectual property infringement.

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§8. Infringement

infringement of a patent, which has such character, it is not always clear what should be
regarded as damage, so it is natural that the matters to be considered are different from thecase of infringement of tangible property. It is said that due to the presence of a premisethat an infringement of a patent right should be dealt with within the framework of general
tort law, sufficient compensation is often not recognized, as a result of being bound to tort
law.59[396]
Tangible property and information are both important as economic goods, but it isquestionable whether or not the same legal principle is naturally applicable with respect todetermination of the amount of damages caused by an infringement in both cases. This
question goes to the issue of how information should be treated along with tangible property
under tort law, or more widely, under the Civil Code. It is in no way possible to fully discusssuch a vast issue, which even involves the possibility of transforming the legal paradigm in
an information society, but the following could be said about the issue.
As there is no exclusivity (competitive nature) in consumption of information, even
if another person uses the information without authorization, it does not obstruct the rightholder’s intended use of information. However, unless the market is practically limitless,existence of an unauthorized user may cause the right holder an economic loss bythreatening the right holder’s monopolistic status, so some kind of obligation to compensate
for the damage must be imposed. Nevertheless, since the size of the market is almost
impossible to determine, the causal relation between the act of infringement and the damage
is not clear in a strict sense, so determination of the amount of damages is fundamentallydifficult. In other words, caught between the idea of considering the damages to be theactual loss in a pure sense (the difference in the amount between when the infringement did
and did not occur) and the idea of considering the damages to be something similar to aquasi-benevolent intervention in another's affairs (stripping the infringer of his/her profit),
one arrives at a question of whether a solution should be sought to achieve balance between
these two extremes.
8.2.3.4. Facilitation of Proof60

59 As can be seen in the treble damage system and the punitive damage system, the idea of compensation for damage isfundamentally different between Japan and the United States, and Japan does not necessarily have to follow the U.S.
style. An excessive amount of damages can induce new problems in itself, so careful measures would be required, but
it is not so desirable to have a large gap between the two countries either, in this era of globalization. Accordingly,
Japan should investigate a truly appropriate amount of damages without being bound to the perspective ofcompensating the actual damage that has been proved.
60 See Yūkyō Hishida, “Chizai Soshō Ni Okeru Shōko Hō No Kadai” (Challenges Facing Rules of Evidence inIntellectual Property Litigation), Jurist, No. 1346 (2007), p. 26.

450§8. Infringement

Since production of proof for a patent infringement involves difficulties that differ
from the case of other acts of tort, provisions including presumption of the amount ofdamages, etc. in Article 102 were revised upon the 1998 revision. However, as difficulties
still remained in respect to proof, further revisions were made in 1999.61 The revision withregard to presumption of negligence (Article 103) has been discussed in an earlier section,
so it will be omitted in this section.
[397](1) Presumption of (patented) producing process (Article 104 of the Patent Act)
Generally, an invention of a producing process is often worked within the factory of
the infringer (suspected infringer), so it is often not only difficult to detect an infringement
but also difficult to produce proof even when an infringement is suspected. This is because,in the case of a product invention, the identity of the product can often be determined byanalyzing the commercially sold products, but in the case of an invention of a producing
process, it is often difficult to determine the identity of the producing process by analyzing
the products. Accordingly, as a rule, the party alleging an infringement bears the burden of
proof with regard to the fact of commission of an infringement, but with regard to a patenton a process of producing a product, if the product was not publicly known in Japan, an
identical product is presumed to have been produced by the patented process, and theburden of proof is transferred to the infringer, who will have to prove that he/she has notcommitted an infringement (Article 104 of the Patent Act). Article 34 of the TRIPS
Agreement is a similar provision. If the infringer has not committed an infringement, theinfringer can prove non-infringement by disclosing the process he/she implements, so thetransfer of the burden of proof would not cause much inconvenience. This presumptive
provision is applied both in the case of a claim for an injunction and a claim for damages.
However, it should be construed to be inapplicable to criminal cases involving an
infringement. 62 There is no need to apply a presumptive provision to criminal cases,
because in a criminal case, it is questionable to find a party to be guilty by presumption,and the police and public prosecutors have the right to investigate. Detection and proof ofan infringement are similarly difficult with regard to an invention of a simple process, but
no presumptive provision is in place for such invention, because there is no productproduced by such process.
As an interpretation of Article 104, there is a view insisting that it is sufficient for the

61 Kōichi Miki, “Tokkyoken Shingai Soshō Ni Okeru Tōjisha No Jōhō Shūshū Shudan No Kakujyū” (Expansion of theParties' Means to Collect Information in Patent Infringement Litigation), Jurist, No. 1162 (1999), p. 55.
62 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 1141 (written by Reiko Aoyagi).In contrast, Japan
Patent Office ed., Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 303 mentions that
presumption is construed to be also applied when determining a crime of infringement.

451

§8. Infringement

infringer to disclose the producing process he/she is implementing,63 and a view assertingthat the infringer needs to prove that he/she has not committed an infringement.64 If Article
104 is considered to be a provision established to ease the difficulty of proof, it may bepossible to find it sufficient for the infringer to only disclose the producing process he/she
implements. However, according to the wording of the provision to presume a product tohave been produced by the patented process, it would seem more reasonable to require theinfringer to prove that he/she has not committed an infringement. However, the infringer's
side holds most of the evidence related to infringement, and the purpose of Article 104 is
to have the infringer disclose such evidence. If the evidence is disclosed, both parties would
have equal weapons. It is not considered to be the purpose of Article 104 to makeinterpretation based on such evidence. In particular, the doctrine of equivalents has beenrecognized in recent years, and it would be too harsh on the infringer's side to have to prove
non-equivalence. While disclosure of a producing process involves a risk of leakage of
trade secrets, the later-explained protective order will be used against such risk.
[398]
The presumption applies only to a product that was not publicly known in Japan“prior to the filing of the patent application.” Since a product that was not publicly known
prior to the filing is highly probable to have been produced by the patented process, we cansay that there is sufficient empirical rule to make the presumption. The question is whether
the time of filing the patent application in the case of a patent application containing apriority claim is the priority date or the date of filing the application in Japan. While a theory
interpreting such date to be the date of filing the application in Japan is also popular,65 atheory interpreting such date to be the priority date (the filing date of the first application)

63 In the Tokyo District Court Judgment, February 10, 1978, Mutai Saishū, Vol. 10, No. 1, p. 1/Hanji, No. 903, p. 64 (theMethod of Producing Carboxylic Acids case), the court held that, in order to eliminate the presumption, it is sufficientfor the opponent to plead and prove his/her own manufacturing process, and the opponent does not need to plead andprove that his/her process is outside the technical scope of the patented invention. The same view was indicated in theTokyo District Court Judgment, March 23, 1979, Mutai Saishū, Vol. 11, No. 1, p. 157 (the Dipyridamole case; see thefollowing footnote for its second instance judgment). Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p.
1150 (written by Shigetoshi Matsumoto and Yūzō Yasuda).
64 In the Tokyo District Court Judgment, July 21, 1972, Mutai Saishū, Vol. 4, No. 2, p. 433/Hanji, No. 698, p. 77/Hanta,
No. 282, p. 100 (the Method For Producing Tetracycline case) and the Tokyo High Court Judgment, June 30, 1982,
Mutai Saishū, Vol. 14, No. 2, p. 484/Hanta, No. 499, p. 192 (the Dipyridamole case), the court stated that, in order tooverturn the result of presumption, it is insufficient for the opponent to disclose the process he/she implements, andthe opponent must plead and prove that his/her process differs from the process claimed in the patented invention, andthat it does not infringe the patent right.
65 Masao Miyake, “Tokkyo Hō 104 Jō Tekiyō No Jōken” (Conditions for Application of Article 104 of the Patent Act),
Toyosaki Mitsue Tsuitō Kinen Ronbun Shū, Mutai Zaisan Hō To Shōji Hō No Sho Mondai (Various Problems Relating
to Intangible Property Law and Business Law), p. 252; Kazuhiko Takeda, Tokkyo No Chishiki [Dai 8 Han], p. 406.

452

§8. Infringement

is more prevalent.66(2) Obligation to clarify the specific conditions (active denial) (Article 104-2 of the
Patent Act)67
While Article 79, paragraph (3) of the Rules of Civil Procedure provides that when
denying a fact alleged by the opponent, the party must state the reason therefor (this isreferred to as active denial or denial with a reason), the 1999 revision of the Patent Act
established Article 104-2 as a provision for further promoting the active denial under theRules of Civil Procedure.
Specifically, in order to deny the specific conditions 68 of a product (including a
program, etc.) 69 or process that a right holder claims as one that composed an act of
infringement, the adverse party must clarify the specific conditions of his/her act. The rightholder must first specify the specific conditions of the product or process subject toinfringement based on certain grounds. Then, it is not sufficient for the party denying theallegation to merely deny (simple denial) or indicate some reason (active denial under
Article 79 of the Rules of Civil Procedure) but he/she must make an active denial by meansof positively disclosing the conditions of his/her act. In the case of a patent infringement,
the product or process constituting the infringement often exists only on the alleged
infringer’s side, so this provision was established because the actual production of proof
can be extremely difficult without such a provision. This stipulation can be used to preventthe other party from taking a bad faith attitude in conducting the litigation.
[399]
The proviso to Article 104-2 stipulates that the provision does not apply when there
exist reasonable grounds preventing the adverse party from clarifying the specificconditions. The provision is not applied when the specific conditions of the infringer's act
include a trade secret, or when the right holder's pleading is merely an unfoundedaccusation (special provision on active denial). The adverse party bears the burden of proof
66 The Tokyo District Court Judgment, November 26, 1971, Mutai Saishū, Vol. 3, No. 2, p. 367/Hanji, No. 650, p.
52/Hanta, No. 271, p. 130 (the Vitamin B6 Manufacturing Method case); the Tokyo District Court Judgment, July 21,
1972, Mutai Saishū, Vol. 4, No. 2, p. 433/Hanji, No. 698, p. 77/Hanta, No. 282, p. 100 (the Method For Producing
Tetracycline case); and the Tokyo District Court Judgment, September 27, 1972 (the Propyl Carbamate case). Manycases involving Article 104 were filed at the time when substance patents were still not recognized. Many of themwere cases of infringement of foreign companies' patents on inventions which could not be claimed as inventions of
substances but had to be claimed in the form of processes for producing products. As a result, the meaning of the filingdate became a major issue.
67 See Hideo Ozaki, “Gutaiteki Taiyō No Meiji Gimu—Tokkyo Hō 104 Jō No 2 Wo Chūshin Ni” (Obligation to Clarify
the Specific Conditions: Centering on Article 104-2 of the Patent Act), Makino Toshiaki Sanju Kinen, Chiteki
Zaisanken Hōri To Teigen (Legal Principles of Intellectual Property and Recommendations), p. 63.
68 It is not sufficient to merely plead that the adverse party is committing an infringement. The right holder needs toindicate the conditions specifically to an extent that does not cause hindrance to the adverse party's defensive activity.
69 The word "bukken" (article) was used upon the 1999 revision, but since programs, etc. were included in "mono"(products) (Article 2, paragraph (3) of the Patent Act) upon the 2002 revision, the term under this provision was alsochanged to "product" so as to confirm that programs, etc. are included.

453

§8. Infringementwith regard to the reasonable grounds. Upon the 2004 revision, Article 105-4 (Protective
Order) was introduced, which together with the provision on active denial, form aneffective system. Specifically, application of the special provision on active denial would
not be permitted when a protective order has been issued.
There is no provision on sanctions to be imposed in the case where a party does not
respond according to the provision without a good reason, but the court is expected to derive
its conclusion based on its free determination in light of the entire purport of the pleadingsby also taking such circumstance into account. In addition, when a party does not respondaccording to the provision without a good reason, the court would be more likely to orderthe production of documents (Article 105 of the Patent Act), and such circumstance would
serve as a material for determining whether or not there are reasonable grounds for the party
to refuse the order to produce documents.
(3) Production of documents (order to produce documents) (Article 105 of the PatentAct)70Since the time of enactment of the current Act, Article 105 of the Patent Act hadprovided for an order to produce documents. The provision had only provided for the
production of “documents that are required to calculate the damages,” but since theobligation to submit documents was reinforced under Article 220 of the Code of Civil
Procedure as revised in 1996, and it became possible to submit documents for proving an
infringement, the provision on an order to submit documents under Article 105 was
reinforced upon the 1999 revision of the Patent Act, and it became possible to submit not
only “documents that are required to calculate the damages,” but also “documents that are
required to prove the act of infringement,” upon a motion of a party. The “reasonablegrounds” for the opponent to refuse production of the documents would most likely be thecase where the documents contain a trade secret. Reasonable grounds would also be foundwhen the opponent cannot be expected to possess the documents in question. An order toproduce documents under this Article may also be demanded by the infringer's side, often
for the purpose of proving that the damages under Article 102 are smaller than the presumed
amount.
[400]
While grounds for exemption from an obligation to submit documents under the
Code of Civil Procedure are listed (Article 220 of the Code of Civil Procedure), suchgrounds are only generally provided as “reasonable grounds” under the Patent Act. Under

70 With the 1999 revision, it became possible to demand production of documents also in the case of seeking an injunction,
but this matter is discussed in this section on compensation for damage, for the sake of convenience.

454§8. Infringement

the Patent Act, the opponent does not need to produce documents when there are reasonablegrounds to refuse the production of documents, and this has not changed since the time ofenactment of the current Act. However, with the 1999 revision, it was provided that, when
the court finds it necessary for determining whether or not there are such reasonablegrounds, it may cause the person possessing the documents to present such documents(Article 105, paragraph (2) of the Patent Act). However, even if the documents were
presented, in order to keep the documents confidential, no one can demand disclosure of
the documents, and as a result, the documents are only seen by the judge. This is the sameas in Article 223, paragraph (6) of the Code of Civil Procedure as revised in 1996 (incamera procedure). In this Japanese version of the in camera procedure, the judge sees thepresented documents and determines whether or not there are reasonable grounds to refuse
to produce those documents. In actuality, when documents contain technically difficult
issues, the court would have to make the determination by only hearing the one-sided viewof the party who has produced the documents (the person possessing the documents). Thus,
there remains a problem that the judge may gain a conviction in a process where theopponent or his/her agent cannot take part.
Thus, in line with the 2004 revision of the Court Act, Article 105, paragraph (3) was
introduced in the Patent Act. As a result, where the court finds it necessary to hear opinions
by disclosing the presented documents in order to make a decision concerning the existenceof reasonable grounds for refusing production of the documents, the court became able todisclose the documents even to the parties, etc.,71 attorneys or assistants, at its discretion.
When the documents are disclosed, the opponent will come to know the secrets against thewill of the party possessing the documents, so the later-mentioned protective order will be
used concurrently with such disclosure. This in camera procedure under the Patent Act is
a procedure that has taken the in camera procedure under the Code of Civil Procedure one
step further.
[401]
Given the presence of these procedures, it should be construed that a party would not
be able to refuse production of documents merely because they contain a trade secret.72
We should regard that a party can refuse to produce documents when, even with such incamera procedure, the disadvantage which the party would receive by producing the
documents exceeds the disadvantage which the person requesting the submission would
receive by non-submission of the documents. If so, the permissible grounds for refusing the

71 The "etc." refers to the following persons: if the parties are individuals, their agents (excluding attorneys and assistants),
employees and other workers; and if the parties are juridical persons, the parties (or, in the case of juridical persons,their representatives), their agents (excluding attorneys and assistant), employees and other workers.
72 The Tokyo High Court Judgment, May 20, 1997, Hanji, No. 1601, p. 143 (the Tranilast Preparation case).

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§8. Infringement

production of documents would be extremely limited.
When a party refuses an order to submit documents without reasonable grounds orwhen a party damages the documents in order to prevent the opponent from using them,
the principle under the Code of Civil Procedure will be applied, and the court may recognizethat the opponent's allegations are true (Article 224 of the Code of Civil Procedure).73
Furthermore, paragraph (4) (paragraph (3) until the 2004 revision) was introducedwith the 1999 revision, and the procedures set out under paragraphs (1) through (3) cameto be applied mutatis mutandis also to the presentation of the subject matter of theinspection that is required to prove the act of infringement. This provision was establishedsince, in patent litigation, inspection of manufacturing equipment, etc., which are also
infringing articles, is sometimes indispensable. Article 232 of the Code of Civil Procedure
also provides for presentation of the subject matter of observation, and since Article 105 of
the Patent Act is a special provision of the Code of Civil Procedure, the provision of theCode of Civil Procedure will be applied to matters that are not provided for under the Patent
Act.
(4) Expert for calculation of damages (Article 105-2 of the Patent Act)
Even if documents necessary for calculating damages were produced based on anorder to produce documents, etc. under Article 105 of the Patent Act, such documents areoften complicated and enormous in volume, and lawyers could have difficulty inunderstanding the contents. Thus, an effective means would be to utilize those having
knowledge of bookkeeping and accounting (e.g. a certified public accountant).
The expert for the calculation of damages is an expert witness under the Code ofCivil Procedure, and is designated according to the provision on expert witnesses under the
Code (Article 213 of the Code of Civil Procedure). However, although Article 133 of theRules of Civil Procedure provides that an expert witness has the right to attend examination
proceedings, the right to request examination to the presiding judge, and the right to ask
questions, it does not directly stipulate the parties’ obligation to cooperate in theexamination by the expert witness and the obligation to provide explanation to the expert
witness. When evidence is data output from computers, or when special codes andabbreviations are used, an expert who has been selected often cannot sufficiently perform
his/her duties without the appropriate cooperation of the parties. Thus, the party’s
obligation to provide explanation to the expert for the calculation of damages wasintroduced under Article 105-2 of the Patent Act with the 1999 revision. Nevertheless, there

73 In the Intellectual Property High Court Judgment, January 28, 2009, Hanji, No. 2045, p. 134/Hanta, No. 1300, p. 287(the Scrap Wood Cutter case), the court found the patentee’s allegation of the number of units sold for calculating theamount of damages to be true, pursuant to Article 224, paragraph (3) of the Code of Civil Procedure, because thealleged infringer failed to comply with an order to submit documents.

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is no provision on sanctions against a violation of the obligation of explanation, so when aparty fails to fulfill his/her obligation to provide explanation, the court would derive its
conclusion from the entire purport of the pleadings by also taking such circumstance into
account, as in the case of active denial.
[402]
The documents examined by the expert are documents produced in response to anorder to produce documents, documents voluntarily produced by the parties in the court
proceedings, and documents voluntarily produced by the party upon the expert examination.
The expert is designated by the court on a motion by a party, but the court decides whether
or not to order that an expert opinion be obtained, at its discretion. 74 The expert
examination under this provision is limited to matters necessary for calculating the damages.
The examination of other matters is performed as the ordinary expert examination under
the Code of Civil Procedure.
(5) Determination of reasonable damages (Article 105-3 of the Patent Act)75
The Patent Act has provisions on presumption of the amount of damages, and theseprovisions were further reinforced upon the 1998 revision (Article 102 of the Patent Act).
However, proof of the amount of damages could still be difficult in some cases despite
these provisions; for example, the amount of damages in the case where the degree ofcontribution of the patented invention in the infringing goods is difficult to calculate, where
the cause for a decline in the price of the product is complicated, or where it is practicallydifficult to investigate proof on a nationwide level due to monetary and time limitations.
Article 248 of the Code of Civil Procedure provides that, where it is found that any
damage has occurred, “if it is extremely difficult, from the nature of the damage, to prove
the amount thereof,” the court, based on the entire import of the oral argument and the resultof the examination of evidence, may determine a reasonable amount of damages. It is notquite clear whether the phrase “from the nature of the damage” only refers to cases where
the proof is extremely difficult unless based on a certain assumption, such as the damages
pertaining to the death of an infant, or if it also includes cases where, like the case of apatent infringement, it is not impossible to produce proof, but it is extremely difficult togather evidence, etc. Therefore, Article 105-3 of the Patent Act was established to clarify
that the court can also determine the reasonable amount of damages when it is extremely
difficult, due to the nature of the facts, to prove the facts necessary to determine the amount74 An expert for the calculation of damages was used in the following cases: the Tokyo District Court Judgment, April
22, 1999, Hanji, No. 1691, p. 131 (the Card Reader case); the Tokyo District Court Judgment, February 8, 2001, Hanji,
No. 1773, p. 130/Hanta, No. 1092, p. 266 (the Toy With Automatic Bullet Supplying Mechanism case).
75 See Ichirō Kasuga, “Tokkyo Ken Songai Soshō Ni Okeru Songaigaku No Nintei -- Minji Tetsuzuki Hō No Kanten
Kara” (Determination of Damages in Patent Infringement Litigation: From the Viewpoint of Civil Procedure Law),
Jurist, No. 1162 (1999), p. 43.

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§8. Infringementof damages. There may be an opinion that, since the Code of Civil Procedure has only beenrevised recently, implementation of such a measure should wait until the interpretation of
Article 248 of the Code of Civil Procedure takes shape. However, that would take aconsiderable amount of time, so Article 105-3 of the Patent Act was established based on a
judgment that the recent situation surrounding the Patent Act cannot wait until then.
[403]
The calculation of the amount of compensation for a patent infringement involves
items that are very difficult to prove, such as the degree of contribution of the patented
invention and the trend of the market. The revision has substantially facilitated thedetermination of damages suffered from a patent infringement.
(6) Protective order, etc. (Articles 105-4 through 105-6 of the Patent Act)
Since patent litigation is open to the public, there is a risk that both the plaintiff andthe defendant would refrain from submitting their trade secrets in fear of their disclosure to
the public, and would not be able to carry out sufficient litigation activities. While it issometimes necessary to disclose trade secrets in the briefs, etc., unless the disclosed trade
secrets are protected, the parties would hesitate to present their trade secrets, and the court
would not be able to render a proper judicial decision. Conventionally, there have beensuch procedures as the procedure for restricting inspection, etc. of records by third parties
under Article 92 of the Code of Civil Procedure, the procedure to seek an injunction under
the Unfair Competition Prevention Act, and the procedure to claim damages suffered due
to an act of tort. However, there are often cases where a party does not want to disclose
his/her trade secrets to the other party to the suit, and conventional legal systems wereinsufficient to deal with such situation. Therefore, the Patent Act was revised in line withthe 2004 revision of the Court Act. The revision took the provisions of the Code of Civil
Procedure one step forward, and introduced a provision to prohibit use of a trade secret fora purpose other than the litigation and to prohibit disclosure of a trade secret to a third party,
based on a trade secret protective order, in litigation concerning the infringement of a patentright or exclusive license (Article 105-4 of the Patent). However, this provision is only
applied to litigation concerning the infringement of a patent right or exclusive license.76
For example, although a trade secret often becomes an issue in litigation concerning an
employee's invention, Article 105-4 is not applied, so there are strong calls from companies
to revise this system.
[404]
Where there is prima-facie evidence of the fact that trade secrets (refers to trade
76 The Supreme Court Decision, January 21, 2009, Minshū, Vol. 63, No. 1, p. 271/Hanji, No. 2035, p. 127/Hanta, No.
1292, p. 154 (the LCD Monitor case) made it clear that the provision can also be applied in a case of provisional
disposition. However, possibly because the protective order is a grave procedure, its use has been scarce.

458

§8. Infringement

secrets as provided in the Unfair Competition Prevention Act) possessed by a party fallunder all of the following grounds, the court may, upon a motion of the party, order by aruling that the parties, etc., attorneys or assistants shall neither use the trade secrets for any
purpose other than those for the proceedings of the litigation nor disclose the trade secrets
to any person other than those who receive the trade secret protective order (the main clauseof Article 105-4, paragraph (1) of the Patent Act). The trade secrets can be used for
conducting the litigation, but they cannot be disclosed to any person other than those who
received the protective order, so, for example, they cannot be disclosed to a university
professor in order to hear his/her opinion.
The grounds of which prima-facie evidence should be shown are as follows:(i) the trade secrets possessed by the party are contained in the briefs or such trade secrets
are contained in the evidence to be examined; and(ii) it is necessary to restrict the use or the disclosure of the trade secrets to prevent any
possible interference with the party's business activities that might arise if the trade secrets
are used for any purpose other than those for the proceedings of the litigation or if the said
trade secrets are disclosed.
The order is addressed to the parties, etc., attorneys or assistants, but when there is aneed to disclose the trade secrets also to a technical expert within the company to study,
such technical expert would also be added to the recipients of the order as an assistant. It
should be noted, however, that if a technical expert who is a worker of the party learns a
trade secret, that expert will be under a confidentiality obligation thereafter, and may facedifficulty engaging in any related research and development after that.
A protective order does not apply to those trade secrets which are contained in briefs
but are already obtained or possessed by the recipients of the order (the proviso to Article105-4, paragraph (1)). This is because the protective order is a system for facilitating theparties to produce trade secrets in litigation in order to ensure fair judicial proceedings, andtrade secrets that have been obtained outside the litigation are unrelated to the purport ofthis system.77 It is a separate issue that trade secrets obtained outside litigation, which may
be unrelated to a protective order, may constitute violation of the Unfair Competition
Prevention Act or an act of tort, depending on how they were obtained.
[405]
According to the Code of Civil Procedure, litigation is open to the public in principle.
Apart from opening the judicial proceedings, any person may make a request to a court
77 Masaaki Kondō and Tomoyoshi Saitō, Chiteki Zaisan Kankei Ni Hō, Rōdō Shinpan Hō (Two Intellectual PropertyRelated Laws, Labor Tribunal) (Shojihomu, 2004), p. 94 states that, while only a civil injunction is recognized bywinning litigation on merit under the Unfair Competition Prevention Act, if a protective order could be issued in suchcase, the order would be guaranteed by criminal punishment, and the party would be able to obtain a result more
powerful than the case of having won litigation on merit, before the rendering of the judgment on merit.

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§8. Infringement

clerk for the inspection of a case record (Article 91, paragraph (1) of the Code of Civil
Procedure), and the parties and a third party who has made a prima facie showing of his/herinterest may make a request for the copying, etc. of the case record (paragraph (3) of said
Article), but if trade secrets are contained in the case record, upon the petition of a party
concerned, the court may, by an order, only allow the parties to make such request (Article
92, paragraph (1) of the Code of Civil Procedure). In the case of patent litigation, however,a party often wants to keep his/her trade secrets confidential from the opponent, who is acompetitor, more than anyone else, and if the opponent could freely inspect the case record,
the party would be reluctant to produce his/her trade secrets in the litigation proceedings.
Accordingly, the following procedure was established.
Where a party requests inspection etc. of a case record of litigation in which a
protective order was issued, but said requester is not subject to the protective order, thecourt clerk must immediately notify the party who filed the motion for the order (excluding
the person who filed the request) of the fact that said request has been filed (Article 105-6,
paragraph (1) of the Patent Act). The court clerk must not allow the requester to inspect etc.
the part in which confidential information is contained before a lapse of two weeks fromthe date of said request (or, where a motion requesting a protective order is filed before thelapse of two weeks, before the decision on the motion becomes final and binding)(paragraph (2) of said Article). The party who wishes to protect his/her trade secrets canprotect the secrets by filing a motion requesting a protective order within such two weeks
and newly adding the person who has requested the inspection, etc. to the recipients of theprotective order.
Since there is a penal provision against a breach of a protective order (Article 200-2of the Patent Act), a protective order takes effect as of the date the written ruling is servedto the person(s) to whom the protective order is issued, instead of the time when the orderis issued (Article 105-4, paragraph (4) of the Patent Act). An immediate appeal may be
filed against a decision dismissing a motion requesting the protective order (paragraph (5)of said Article). However, no immediate appeal may be filed against a judgment approving
such motion; a written ruling is served on the recipients of the order and the order takes
effect immediately. If a party is dissatisfied, he/she is to file an action for rescinding theprotective order. This is because, if an immediate appeal can be filed against a judgment
approving the motion, there will be a risk that the secrets may leak until a ruling is renderedby the court in charge of the appeal. Article 105-5, paragraph (l) provides for rescission ofa protective order, and stipulates the grounds for rescission to be that the requirements fora protective order are no longer met (e.g., the secret ceased to be a secret ex-post facto) or
have not been met (e.g., the information was not a secret at the time when the order was460

§8. Infringement

issued). The decision on a motion requesting the rescission of a protective order is subject
to immediate appeal (Article 105-5, paragraph (3) of the Patent Act). In this case, there isno risk for leakage of the secrets because the effect of the protective order continues untila ruling is rendered by the court in charge of the appeal.
[406]
Even when a trade secret subject to a protective order ceases to be a secret, aprotective order does not cease to be effective automatically. No time limit is set for a
protective order, so in order to extinguish the effect of a protective order, the person who
has filed a motion therefor or a person who has received the order files a motion requesting
the rescission of the protective order on the basis that the information is no longer a trade
secret, and the order ceases to be effective when a decision to the effect that a protective
order is to be rescinded becomes final and binding (Article 105-5 of the Patent Act). There
was a view that a balance cannot be achieved between third parties and a recipient of aprotective order, if third parties are able to freely use a trade secret that has ceased to be asecret but a recipient of the order cannot use it unless he/she files an action seeking
rescission of the protective order. However, because it is difficult to set a specific time limit
for protection of trade secrets and also difficult to determine whether certain requirements
are no longer met, the court's decision on rescission will be required.78
A person who fails to comply with a protective order is punished by imprisonment
with work for a term not exceeding five years or a fine not exceeding 5,000,000 yen (orcombination thereof) (Article 200-2, paragraph (1) of the Patent Act), and a person who
commits such crime outside Japan is also punished (paragraph (3) of said Article). Thesecriminal punishments are processed through a procedure under the Code of Criminal
Procedure, unlike in the case of punishments for criminal contempt in the United States.
Since criminal proceedings are open to the public, whether or not a criminal action iscommenced substantially affects the party who has requested the protective order.
Therefore, prosecution of the breach of a protective order may not be initiated unless acomplaint is filed (paragraph (2) of said Article). However, no complaint needs to be filed
to initiate such prosecution for a person who has committed the crime outside Japan(paragraph (3) of said Article). The party who possesses trade secrets may feel reluctant tobring an accusation since the judicial proceedings will be open to the public, but theestablishment of criminal punishments for the crime has a general deterrent effect.
78 Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han], p. 317, while stating that "a decision to the effect that aprotective order is to be rescinded only becomes effective when the decision becomes final and binding," mentionedthat "an act of breaching the order inevitably constitutes a crime of breach of the order, but the illegality of the act will
be denied." However, since the crime of breach of a protective order is not a crime of having infringed a trade secret,but a crime of having failed to comply with the order, under the current Act, the crime would have to be formallydetermined on the basis that a protective order remains effective until it is rescinded.

461

§8. Infringement

Since a protective order is a grave procedure backed by a criminal penalty, in
actuality, the matter is often dealt with by a non-disclosure contract between the parties tothe litigation.
(7) Ban on open examination of parties, etc. (Article 105-7 of the Patent Act)
When a party, etc. is examined as a party to the litigation or as a witness, if it isobvious that making statements in an open examination will significantly interfere with thebusiness activities of the party based on such trade secrets and a proper decision may not
be made based solely on other evidence, the court may, by a ruling, hold closed
examinations upon the unanimous consent of all judges (Article 105-7, paragraph (1) of the
Patent Act). This provision on ban on open examination was added upon the 2004 revision.
[407]
Article 105-7 is only applied to matters that will be a basis for the determination of
the existence or non-existence of an infringement of a patent right or exclusive license, andis not applied to matters concerning calculation of damages. It is not applied to litigation
concerning an employee's invention or litigation for rescinding a trial decision either. In
rendering a ruling of closed proceedings, the court must hear the opinions of the parties inadvance (paragraph (2) of said Article). In this case, if necessary, the court may cause theparties, etc., to present a document outlining the gist of the matters on which they will bemaking statements, and no person may request the disclosure of the document presented(paragraph (3) of said Article), but if necessary, the court may disclose the document to theparties, etc., their attorneys or assistants (paragraph (4) of said Article). When theexamination is to be conducted through closed proceedings, the court must declare suchfact and reasons therefor prior to requiring the public to leave the court (paragraph (5) of
said Article). The requirements are much stricter than those for inspection of records, andthe system is not easy to use, but this is because it makes an exception to Article 82 of theConstitution, which provides for open judicial proceedings. Among intellectual property
laws, a similar provision exists under the Utility Model Act, the Unfair Competition
Prevention Act and the Plant Variety Protection and Seed Act, but no such provision exists
under the Design Act, the Trademark Act and the Copyright Act. It is a result of having
established such provision only where suspension of open proceedings was typicallyrequired in spite of the requirement under the Constitution to make examination of parties,
etc. open to the public. If closed proceedings are required under the Design Act, etc., it may
be possible to carry out closed proceedings by directly applying Article 82, paragraph (2)of the Constitution, but such cases are considered to be rare.

462

§8. Infringement[408]
8.2.4. Right to Claim Return with Regard to Unjust Enrichment or Quasi Benevolent
Intervention in Another's Affairs
8.2.4.1. Unjust Enrichment (Article 703 of the Civil Code)
There are no provisions on unjust enrichment under the Patent Act, but according tocourt judgments and the prevalent theories, a person who works another person’s patented
invention without authority and earns a profit therefrom meets the requirements for unjust
enrichment (Article 703 of the Civil Code) in principle, so the right holder’s claim for returnof actual enrichment is approved.1 In short, the right to claim compensation for damage
and the right to claim return of unjust enrichment conflict with each other. However, even
if a certain amount of money corresponds to unjust enrichment in theory, the right holder
must prove the causal relation where the enrichment was acquired by an act of patent
infringement and that it caused a loss in order to claim return of that amount. Nevertheless,the enrichment acquired by the infringer is not solely attributable to the patent but involves
various elements as mentioned in the part on compensation for damage, so proof of thecausal relation is often difficult.2
Because of this, in actuality the right holder often claims an amount equivalent to thelicense fee also in the case of claiming return of unjust enrichment. In other words, theinfringer, having escaped from paying a due license fee, must have enjoyed enrichment atleast to that extent, and the right holder, having not received that receivable license fee,must have suffered a loss at least to that extent, so a certain causal relation can be observed

1 There used to be theories that denied unjust enrichment but today hardly any objections are expressed against applicationof the idea of unjust enrichment either in court judgments or theories. Fumio Umase, “Tokkyo No Mudan Jitsuyōka To
Futō Ritoku” (Unauthorized Commercialization of a Patent and Unjust Enrichment), Taniguchi Tomohei Kanreki Kinen,
Futō Ritoku/Jimu Kanri No Kenkyū (1) (Study on Unjust Enrichment/Management Without Mandate (1)), p. 259, p.
275; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 1123 (written by Reiko Aoyagi); Minoru Takeda,
Chiteki Zaisanken Shingai Yōron (Tokkyo/Ishō/Shōhyō Hen) [Dai 5 Han], p. 455; Honma Takashi, “Songai Baishō To
Futō Ritoku No Henkan No Dōji Seikyū No Mondai” (Issue of Concurrently Claiming Compensation for Damage andReturn of Unjust Enrichment), Tokkyo Kanri (Patent Management), Vol. 22, No. 6, p. 567.
2 Although there are theories to analogically apply the presumptive provision under Article 102 of the Patent Act also inthe case of unjust enrichment (Fumio Umase, “Tokkyo No Mudan Jitsuyōka To Futō Ritoku” [Unauthorized
Commercialization of a Patent and Unjust Enrichment], Taniguchi Tomohei Kanreki Kinen, Futō Ritoku/Jimu Kanri
No Kenkyū (1) (Study on Unjust Enrichment/Management Without Mandate (1)), p. 266, p. 268, p. 273), such analogicalapplication is considered to be not easy, because while tort is a system for compensating damage of the infringed party,
unjust enrichment is a system for having the infringer's enrichment returned, and the two systems differ in their purpose,
requirements and effects. Analogical application was denied in the following case: the Osaka District Court Judgment,
October 31, 1980, Mutai Saishū, Vol. 12, No. 2, p. 632 (the Children’s Vehicle Tire case), and the second instancejudgment on the same case, the Osaka High Court Judgment, January 28, 1982, Mutai Saishū, Vol. 14, No. 1, p. 41. As
an exception, in the Osaka District Court Judgment, October 14, 1987, Mutai Saishū, Vol. 19, No. 3, p. 389 (the Okeya
case; a trademark case), the court determined the amount of profits gained by the defendant to be the amount of losses
suffered by the plaintiff, stating that due to the fame of the plaintiff’s trademark, it could be assumed that the trademark
had wholly accounted for the defendant’s sales.

463§8. Infringement

between the two.3 In this respect, the amount would practically be the same as the amountof damages claimable under tort law, but while the period of prescription of the right toclaim compensation for damage caused by an act of tort is three years from the time ofcoming to know of the damages and the identity of the perpetrator, that of the right to claim
return of unjust enrichment is ten years, so the latter right is used as an alternative means
after the right to claim compensation for damage lapses by prescription. Even if the rightholder had not worked the invention, it would make no difference in that the infringer would
have had to pay a license fee to work the invention and the right holder was entitled toreceive a license fee, so such a right holder can also claim return of unjust enrichment4.
[409]
8.2.4.2. Quasi Benevolent Intervention in Another's Affairs (Article 697 of the Civil
Code)
An infringer of another person’s patent is conducting the act for himself/herself, andnot managing the affairs on behalf of another person, so the provision on benevolent
intervention in another's affairs (Article 697 of the Civil Code) is considered not to be
applicable. Thus, there is a question of whether or not to recognize quasi benevolent
intervention in another's affairs with regard to a patent infringement, although there is noprovision on quasi benevolent intervention in another's affairs under the Civil Code ofJapan. While quasi benevolent intervention in another's affairs is typically discussed inrelation to the sales, etc. of another person’s products, there are also theories which try torecognize quasi benevolent intervention in another's affairs with regard to unauthorized useof another person’s intellectual property.5
Since there is no provision on quasi benevolent intervention in another's affairs under
the Patent Act, it is basically left to the interpretation of the Civil Code. The council reportupon establishing current Article 102 of the Patent Act included a statement that “the3 The Tokyo District Court Judgment, July 3, 1967, Kamin, Vol. 18, No. 7/8, p. 739 (the Streptomycin case); the Osaka
District Court Judgment, March 28, 1975, Hanta, No. 328, p. 364 (the Coupler Attached in a Door-Latch Fashion case);
the Tokyo High Court Judgment, August 29, 1991, Chiteki Saishū, Vol. 23, No. 2, p. 618 (the Nibbling Die Mechanismcase). Meanwhile, Fumio Umase, “Tokkyo No Mudan Jitsuyōka To Futō Ritoku” (Unauthorized Commercialization of
a Patent and Unjust Enrichment), Taniguchi Tomohei Kanreki Kinen, Futō Ritoku/Jimu Kanri No Kenkyū (1) (Studyon Unjust Enrichment/Management Without Mandate (1)), p. 263 states that an amount equivalent to the license fee isthe minimum amount of unjust enrichment; thus, the amount can be higher. However, in reality it is often difficult toprove an amount exceeding the amount equivalent to the license fee.
4 The Toyama District Court Judgment, September 7, 1970, Mutai Saishū, Vol. 2, No. 2, p. 414 (the Melamine Resincase); the Osaka District Court Judgment, October 28, 1983, Hanta, No. 514, p. 303 (the Attachable Ventilator case);
the Osaka District Court Judgment, September 27, 1984, Tokkyo To Kigyō (Patents and Enterprises), No. 191, p. 63 (theRegister with Attached Plastic Cord case).
5 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 241; Kiyomitsu Yoshimi, “Jun-Jimu Kanri No Sai-Hyōka - Futō Ritoku Hō Nado No Kentō O Tsūjite” (Re-evaluation of Quasi Benevolent Intervention in Another's Affairs -Through Analysis of the Law of Unjust Enrichment), Taniguchi Tomohei Kanreki Kinen, Futō Ritoku/Jimu Kanri No
Kenkyū (3) (Study on Unjust Enrichment/Management Without Mandate (3)), p. 371.

464

§8. Infringement

patentee can claim return of the enrichment acquired through an infringement from theperson who intentionally or negligently infringed his/her patent right.” This report had theintention of stripping the infringer of his/her enrichment (profit), and it could be regarded
as practically equal to having recognized quasi benevolent intervention in another's affairs.
However, in the end, this proposal failed to be adopted, and the provision under the current
Act (Article 102 of the Patent Act) was adopted instead. When considering this matterwithin the framework of tort law, the idea proposed in the report would cause an imbalancewith other acts of tort, so after all it was decided to process the matter within the frameworkof tort law.
[410]
Supposing that quasi benevolent intervention in another's affairs were recognized,
the profits gained by the infringer would have to be delivered to the right holder, so theprovision under Article 102, paragraph (2) of the Patent Act to presume the profits gainedby the infringer to be the damages would lose most of its meaning. Due to such a legislative
circumstance, recognition of quasi benevolent intervention in another's affairs is regarded
to be difficult to accept as an interpretation of the current Act, although it is worth
considering from a legislative approach.
However, the unique concept of damage in an intellectual property infringement
makes it difficult to legally reckon quasi benevolent intervention in another's affairs as abasis for damages, but it may not be unreasonable to reach a similar conclusion by someconstructive theory or legislative measure. In sum, it seems to go against justice for the
infringer to retain the profits he/she has acquired through an illegal act on the one hand, buton the other hand, it seems to go against equity to deliver all of the profits acquired by the
infringer through his/her own ability, funds and efforts to the right holder. The challenge is
to find the most reasonable stance between these two considerations.
8.2.5. Measures to Restore Credibility (Article 106 of the Patent Act)The court may, upon the request of a patentee or exclusive licensee, order an
intentional or negligent 1 infringer to take measures necessary to restore the businesscredibility of the patentee or exclusive licensee (Article 106 of the Patent Act). The typicalcase is where the impression of the patent has deteriorated due to goods of poor quality,
and measures to restore credibility in such a case include publication of an advertisementof apology.2 However, unlike in the case of an infringement of a mark, such as a trademark,1 Since negligence is presumed under Article 103, this requirement hardly becomes a problem.
2 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 326.

465

§8. Infringement

it would be rare for an infringement of a patent to injure business credibility.3 That would
only happen in special cases where the products manufactured and sold by an act of
infringement were poor in quality and, at the same time, they created the impression of
being related to the patent.

3 As a case in which a demand for publication of an advertisement was approved, in the Osaka District Court Judgment,
April 26, 1984, Hanta, No. 536, p. 410 (the Protective Cover for Electric Wires case), which was a case related to the
Design Act, the court ordered that an advertisement of apology be published in a newspaper. Meanwhile, in the Kobe
District Court Judgment, April 21, 1986, Hanta, No. 620, p. 179 (the Fractured Rib Fixing Belt Design case), the court
ordered placement of an advertisement of apology (not in a general newspaper but in a trade newspaper), considering
the proportion of the plaintiff’s products in the plaintiff’s business, the damages suffered by the plaintiff from demand
for a discount, the number of the infringing products sold, the extent of similarity between the two designs, and the factthat the plaintiff had not claimed compensation for damage, as well as the fact that the defendant had already stopped
the manufacture and sales and that the plaintiff’s credibility was only directly injured in relation to medical equipment
dealers. (It is questionable whether the facts found in this case can be considered to be the factors for ordering placementof an advertisement of apology, but it is introduced here since it is one of the very few court judgments of this typewhich has been published.) Meanwhile, a demand for publication of an advertisement of apology was not approved in
the following cases: the Osaka District Court Judgment, June 8, 1965, Hanji, No. 459, p. 69/Hanta, No. 180, p. 193 (theSport Spike case); the Tokyo District Court Judgment, July 24, 1968, Hanta, No. 229, p. 231 (the Antibiotic Substance
Pulverizing Device case); the Tokyo District Court Judgment, May 25, 1973, Mutai Saishū, Vol. 5, No. 1, p. 128 (theMotorcycle Design case).

466§8. Infringement[411]
8.2.6. Exhaustion of Right
8.2.6.1. Exhaustion Theory(1) Significance of exhaustion
When products pertaining to a patent (patented products) are lawfully put on themarket1 by the right holder,2 the effect of the patent does not extend to the distributed
products, and the permission of the right holder is not required to be obtained every time
the products are resold, according to the common legal practice. If a person's act ofpurchasing a product sold by the right holder and reselling it or using it by himself/herself
is deemed to be a patent infringement, it would confuse the distribution system and disableproper economic activities. Thus, such an act of working by a third party is naturally
considered to be legal around the world, and the only remaining problems are its theoreticalstructure and interpretation of marginal cases such as repair or refurbishment, therelationship between exhaustion of components and finished products, and overseas
distribution (international exhaustion). An issue that may present a problem in the future is
exhaustion of organisms with a self-propagating function. For example, an act of using
seeds which are patented products is to produce them, and there is a problem of how tointerpret the relationship between the process of purchasing the seeds, sowing them andcultivating crops, collecting seeds from the crops and further propagating them, andexhaustion.3
While such an act of working an invention may seem to constitute an infringement
1 "Kakufu" (placement on the market) means to put products in the distribution system. In the Osaka High Court Judgment,
December 1, 2000, Hanta, No. 1072, p. 234 (the Paper Core for Drug Packaging Machine case), the court denied anagreement on retention of ownership, and approved exhaustion on the basis that the product was lawfully put on themarket.
2 The right holder refers to a patentee or licensee (including a statutory licensee and compulsory licensee). Even if alicensee puts the products on the market, the situation is no different from the case where they were put on the market
by the patentee. This fact was stated in the following court judgments: the Tokyo District Court Judgment, October 13,
1964, Hanta, No. 168, p. 152 (the Chain Joining Device case; the court held that an act of selling the products purchasedfrom a person who acquired a non-exclusive license based on prior use was legal); the Osaka District Court Judgment,
June 9, 1969, Mutai Saishū, Vol. 1, p. 160 (the Automatic Bowling Pin Setting Device case); the Nara District Court
Judgment, May 26, 1975, Hanta, No. 329, p. 287 (the Synthetic Resin Door Frame case; the court held that an act of aperson who sold the products purchased from the licensee was a justifiable act that did not infringe the utility modelright); the Chiba District Court Judgment, December 14, 1992, Chiteki Saishū, Vol. 24, No. 3, P. 894 (the Connecting
Device for Face Structural Members case; the court held that an act of a person who acquired products from a prior user
under the Design Act was legal). In the Osaka District Court Judgment, July 20, 2006, Hanji, No. 1968, p. 164 (theCarriage Fixing Device case), the court stated that a patent right is considered to have attained its purpose and isexhausted also when the patented product is assigned by the person who is to be the patentee and the establishment ofa patent right is subsequently registered.
3 Ryūta Hirashima, "Tokkyo Hō Ni Okeru Jisshi gainen To Shōjin Hōri Wo Meguru Aratana Rironteki Kadai—Nōgyō
Bun'ya Ni Okeru Genshō Wo Keiki To Shite" (New Theoretical Issues on the Concept of Working of an Invention andthe Exhaustion Doctrine under the Patent Act: Prompted by Phenomena in the Agricultural Field), Nakayama Nobuhiro
Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Spreading Wings - Intellectual Property Law in the
21st Century), p. 308.

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§8. Infringement

formally due to the lack of a provision that legitimatizes such an act under the Patent Act,various theories have been advocated in order to avoid this conclusion.
Among old court judgments, there was a case where the court held that the effect ofthe patent does not extend to a product that has been lawfully acquired, as part of the effectof the ownership to that product,4 but this judgment, which has confused patent rights withownership, is not supported today.
[412]
There is also a theoretical structure which considers that the right holder's act of
lawfully placing products pertaining to a patent on the market means that the right holder
has implicitly given authorization for working the invention, and such theory is prevalent
in some countries. However, if implicit authorization for working the invention isconsidered to have been given, it would be difficult to provide theoretical explanations for
special cases such as where authorization apparently has not been given. This is likely tobe the reason that this theory gins little support in Japan.5
The prevalent opinion in Japan is to consider that, when the right holder places
products pertaining to a patent on the market, it means that the patent has already attained
its purpose as far as those products are concerned, and the patent right has been exhausted
regarding those products. 6 The substantive grounds that are often mentioned for such
opinion are the safety of transactions and prevention of double profits. The purpose of thepatent system is to increase the incentive for invention through guaranteeing profits byrecognizing monopolistic working of the invention, and in terms of increasing the incentive
alone, the effect of a patent right should be as strong as possible. However, the effect must
always be determined in balance with the public interest. The limits of the effect of a patentright are not theoretically derived, but, rather, are determined based on policy. Because
guaranteeing phased distribution of products is essential for economic activities, if thepatent system were to obstruct such distribution, it would run contrary to the purpose of the
Patent Act to contribute to the development of industry (Article 1 of the Patent Act). In
light of this, the theory of exhaustion of rights should be recognized. Denial of exhaustion
would be equal to giving the patentee the authority to control distribution, which would
make the power of the patentee too strong, and could cause the Patent Act to approve an

4 The Supreme Court Judgment, October 9, 1912, Minroku, Vol. 18, p. 827.
5 Even if the theory of implicit authorization were adopted, it would be necessary to assume authorization as a legal
fiction, so the outcome would not be so different from the exhaustion theory.
6 The Supreme Court Judgment, July 1, 1997, Minshū, Vol. 51, No. 6, p. 2299/Hanji, No. 1612, p. 3/Hanta, No. 951, p.
105 (the BBS case); the Supreme Court Judgment, November 8, 2007, Minshū, Vol. 61, No. 8, p. 2989/Hanji, No. 1900,
p. 3/Hanta, No. 1258, p. 62 (the Ink Tank case).

468

§8. Infringement

act that is considered to be an unfair trading method under the Anti-monopoly Act.7 Fromsuch viewpoint as well, an exhaustion theory is required and it would be desirable toexpressly stipulate it in a provision, 8 but even without such statutory grounds, theexhaustion theory should be recognized.9[413]
Meanwhile, rights in products which were not lawfully distributed are not exhausted,and even a person who has acquired and used such product in good faith and without
negligence cannot assert exhaustion. Exhaustion is not an issue of acquisition in good faith,
but an issue of the effect of a patent right, i.e. that the effect does not extend to productsthat have been lawfully distributed by the right holder.
The problem of exhaustion does not occur in relation to a simple process invention,in principle, because the process itself is never distributed by the right holder. 10 With
regard to an invention of a process of producing a product, this matter should be dealt within the same manner as in the case of a product invention. Specifically, the patent right isalso construed to be exhausted when the products produced by that process are lawfully puton the market by the right holder. In addition, when the right holder of a process of
producing products has assigned any product to be used exclusively for that process or a
product indispensable for the resolution of the problem, exercise of the right on that productshould not be permitted.11

7 Article 21 (Article 23 before the 2000 revision) of the Anti-monopoly Act provides that the Act is not applicable to an
act that is recognizable as the exercise of a right under the Patent Act. There are arguments over the interpretation ofthis provision with regard to what kinds of acts of the patentee are excluded from the application of the Anti-monopoly
Act, but the details shall be left to studies in the field of economic law. Incidentally, a right of distribution (a nonexhaustible right to control distribution) is presently recognized for cinematographic works under the Copyright Act,and the question of whether sales and purchases of used game software (which are also often regarded to be
cinematographic works) can be prohibited became an issue, but the court held that the right is exhausted based on policy
determination in such case, in the Supreme Court Judgment, April 25, 2002, Hanji, No. 1785, p. 9 (the Used Softwarecase).
8 Article 12, paragraph (3) of the Act on the Circuit Layout of a Semiconductor Integrated Circuits expressly provides forthis exhaustion principle.
9 In the Supreme Court Judgment, July 1, 1997, Minshū, Vol. 51, No. 6, p. 2299/Hanji, No. 1612, p. 3/Hanta, No. 951,
p. 105 (the BBS case), which was a case of parallel import, the court recognized domestic application of the exhaustion
theory in its obiter dictum. The court also recognized domestic exhaustion as a generality, in the Supreme Court
Judgment, November 8, 2007, Minshū, Vol. 61, No. 8, p. 2989/Hanji, No. 1900, p. 3/Hanta, No. 1258, p. 62 (the Ink
Tank case).
10 It would not be appropriate to find infringement when a patentee has assigned any product to be used exclusively forthat process or any product to be used exclusively for that process which is indispensable for the resolution of the
problem by the invention and the assignee or a subsequent acquirer works the patented process by using that product.
However, there would remain a problem of whether it is exhaustion or implicit authorization (the same view is adopted
in the conclusion of the Intellectual Property High Court Grand Panel Judgment, January 31, 2006, Hanji, No. 1922,
p. 30/Hanta, No. 1200, p. 90 [the appellate instance of the Ink Tank case]).
11 The Intellectual Property High Court Grand Panel Judgment, January 31, 2006, Hanji, No. 1922, p. 30/Hanta, No.
1200, p. 90 (the appellate instance of the Ink Tank case).

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§8. Infringement

As exhaustion of a patent right limits the effect of the patent right for policy reasons,the right holder should not be given the power to change its effect by his/her intention.
Accordingly, even if the patentee prohibits sales of the patented products outside Hokkaido,
it only binds the contracting parties as an effect of the contract, and the patentee cannot stop
any third parties who have purchased the products from re-selling the products outside
Hokkaido. Any kind of contract can be concluded between the contracting parties unless it
violates other enforcible regulations (such as Article 90 of the Civil Code and the AntiMonopoly Act), so the right may sometimes appear not to be exhausted between the parties
as a result. For instance, it is possible to conclude a contract between the parties to the effectthat the assignee shall only use the product pertaining to the patent by himself/herself, andshall not assign the product to a third party. However, since the effect of such contract does
not extend to a third party, if the assignee further assigns the product to a third party inbreach of this contract, there would only be the problem of default of an obligation, in
principle, and the third party would be able to assert exhaustion of the patent right.
[414](2) Repair or refurbishment, processing, and replacement of a component
Exhaustion becomes a problem domestically almost only in relation to repair,refurbishment, and replacement of components.12 Even if a product has been distributedby the right holder and the patent right has exhausted with regard to that product, if its
material part has been refurbished (repaired) or modified, or its material component has
been replaced, it could be viewed as new production, and could constitute a patent
infringement. There is no objection to this generality, but as an actual issue, it is usual fora purchaser of a machine, etc. to use it by making repairs and improvements to some extent,
and it is difficult to determine the extent of refurbishment, modification, etc. that would be

Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 217 mentions that “there would still be a problem if themachine for such purpose were assigned to another person, but an implicit authorization to work the invention isconsidered to be granted if that machine is only used for working a process invention.” In the Intellectual Property
High Court Grand Panel Judgment, May 16, 2014, Hanji, No. 2224, p. 89/Hanta, No. 1402, p. 226 (the Apple vs.
Samsung case), the court stated for confirmation in the obiter dicta that when a patentee, etc. has assigned components,
exercise of the patent right should not be restricted because products that fall within the technical scope of the patented
invention are newly produced by using products that do not fall within the technical scope of the patented invention.
It stated, however, that "if the patentee can be considered to have impliedly consented to the production of a patented
product by the use of said Item (i) Product, the effect of the patent right does not extend to the production of thepatented product by the use of said Item (i) Product or the use, assignment, etc. of such patented product," indicating
an implicit authorization theory.
12 As a special example, there can be a case where a patentee assigns seeds of a patented plant, and its acquirer cultivatesplants from those seeds. The patent right would extend to the first cultivation carried out by the first acquirer of theseeds, but a question arises for an act of further collecting seeds from those plants and cultivating them. Treatment ofplants which have a self-propagating function had not been considered in the past. Plants such as grass which propagate
without having to collect seeds would present a greater problem.

470§8. Infringement

regarded as production.13 Recently, disposable products, such as disposable cameras andink tanks, have increased. There have been arguments over whether an act of modifying aused disposable camera and selling it after reloading film, or an act of sterilizing and reusing
a disposable syringe or contact lens, which is supposed to be disposed of in order to prevent
infection does not constitute an infringement on the basis that the right has exhausted orconstitutes an infringement on the basis that it is new production. When a used product has
been reused without being processed in any way, such as in the case of a disposable
syringe,14 it is normally difficult to consider the act to be reproduction. Thus, there has
been a judgment (later mentioned) stating that reuse of such product after having completed
its function also constitutes one type of exhaustion. However, while a theory that regards
such cases to be exhaustion is likely to have borne in mind in such case as where a personpurchases a large number of used syringes from many people, sterilizes them, and resells
them, there is slight strangeness in a conclusion whereby a doctor who uses a disposable
syringe twice will be immediately regarded to have committed a patent infringement (thefact that this can cause a hygienic problem is a different issue).
[415]
This issue generally tends to be considered an extension of the exhaustion theory.
Many court judgments dealing with this issue adopt a logical structure to examine in what

13 For details, see Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 434; Nobuhiro Nakayama and Naoki Koizumi,
eds., Shin/Chūkai Tokkyo Hō Jō (新・Explanatory Notes on the Patent Act Vol. 1), p. 1026 [written by Masabumi
Suzuki]. While it is a case concerning an indirect infringement, in the Osaka District Court Judgment, April 24, 1989,
Mutai Saishū, Vol. 21, No. 1, p. 279 (the Sand Producing Machine Hammer Case), the court held as follows: "In acase where a purchased machine or equipment breaks down before achieving the planned purpose of use, and thepurchaser, etc. who is no longer able to collect the amount of value he/she had paid to the utility model owner, etc. as
had been planned, replaces the broken component in order to restore the function of said broken machine or equipment,such an act can be considered to fall within the scope of an act of collecting the value paid, so it is permissible as anact of repair. However, in the case of using the machine or equipment by newly replacing a component after achieving
the purpose of use that had been planned at the time of purchase and after collecting the value that had been paid tothe utility model owner, etc. as had been planned, it would mean using the device beyond the value paid to the utility
model owner, etc. as a result of the replacement, so it would be reasonable to construe that such act is not automaticallypermitted. This is because an act of the purchaser, etc. to use a device beyond the value paid to the utility model owner,
etc. would harm the monopolistic interest that should be guaranteed for the utility model owner, etc. [...] Replacementof a component cannot be considered to be a mere act of repair, if, as a result of the replacement, the device will be
used beyond the value paid to the utility model owner, etc., and it would be reasonable to construe such replacement
to correspond to "manufacture" as prescribed in said provision [Article 28 of the Utility Model Act; due to thedifference in the protected subject matter, the Utility Model Act uses the term "manufacture" (author's note: Article 2,paragraph (3) of the Utility Model Act), but the term "production" is used under the Patent Act]. Court judgments inwhich the court held that an act of reselling a recycled product made from a defective product that has been assigned
to a third party for the purpose of disposal constitutes an infringement include the Osaka District Court Judgment,
February 29, 1996, Hanji, No. 1573, p. 113 [the Gas Sensor case].
14 Since a disposable syringe cannot bear reuse unless it is sterilized, it may not be impossible to deem the sterilization
as processing, but it feels unnatural to treat such case differently from the case where a disposable syringe is reused in
an unsanitary manner without sterilization.

471

§8. Infringementkinds of cases a right is exhausted.15 However, if a certain patented product is lawfully
sold, the right relating to the product will have been exhausted in the sales phase, so thepurchaser of the product is supposed to be able to freely use or assign the product. It is onlythat the purchaser cannot conduct a new act of production using a component of that
product. Such act of infringement constitutes an infringement not only in the case of a using
a component of a “product” for which the right has exhausted, but also in the case of reusing
a “product” for which the right has not exhausted (e.g., a still unsold product) and making
a product identical to the patented product. As long as the act corresponds to “production,”
it constitutes an infringement. In sum, the idea is not that a right, which has once been
exhausted as a result of sales, revives, and the purchaser's act of repair or refurbishment
conflicts with the revived right, but it would be sufficient to question whether or not therecycling business operator's act corresponds to production, irrespective of whether theright has been exhausted.16[416]
Even if a patented product partly breaks and has become unusable as a whole, someusable components still remain, so there can be cases where the usable components arereused to produce or they are recycled into a product identical to the patented product (apatent infringing product). Also, there can be cases where a product, which is not physicallyunusable but is unusable from a social viewpoint (e.g., disposable contact lenses or adisposable syringe), is reused. In such case, there is no need to question whether or not theright for that “product” has been exhausted, but it is sufficient to determine whether or not
the act of the recycling business operator deserves to be determined as “production.”
Ultimately, it comes down to the question of what “production” is in the sense intended by
the Patent Act, that is, whether the act of the recycling business operator corresponds torepair or refurbishment which is legal under the Patent Act, or if it goes beyond that andcorresponds to production, which is illegal. The determination of whether or not an act ofa person who has conducted repair or refurbishment corresponds to the “production” under
the Patent Act is a determination on infringement itself, which has a strong legal nature.
Therefore, when determining whether or not an act is production, not only the extent of

15 In the Intellectual Property High Court Grand-Panel Decision, January 31, 2006, Hanji, No. 1922, p. 30/Hanta, No.
1200, p. 90 (the Ink Tank case), the court divided cases where the right is not exhausted into two categories: (1) thecase where the patented product was reused or recycled after completing its function by ending its service life as a
product (Category 1); and (2) the case where a third party processes or replaces all or part of the components
constituting an essential part of the patented invention in the patented product (Category 2). The court held that, inthese categories of cases, the patent right is not exhausted, and the patentee will be permitted to enforce his/her rightbased on the patent right with regard to the patented product.
16 In the Tokyo District Court Judgment, December 8, 2004, Hanji, No. 1889, p. 110 (the Ink Tank case), the court stated
that, among the effects of a patent right, the right to produce cannot be exhausted, so even if a person has lawfully
purchased a patented product, if such person conducts an act that would be regarded as having produced a new, separate
subject matter that uses the patented invention, the act infringes the patent right.

472

§8. Infringement

repair or refurbishment should be determined but a normative determination on whether or
not the act deserves to be determined as production, or an infringement, would be required.
In that process, attention should be paid to the following points.
The first point is the relation between the specific contents of the repair or
refurbishment and the scope of claims. When an infringement becomes a problem, aproduct that conflicts with the scope of claims is actually being created, so the question will
be how much the recycling business operator needs to have been involved in completingthe product in order for the act to be regarded as infringing “production.” Since it is adetermination on patent infringement, it is naturally determined based on the contents ofthe scope of claims, and from such viewpoint, the person who has repaired or refurbishedmaterial elements of the features disclosed in the scope of claims would be determined tobe the producer. In addition, when a material part disclosed in the scope of claims has
become difficult to use (or has been destroyed), and as a result, the product has lost its
meaning as the patented product, an act of restoring it into its original form would be
regarded as “production” using such part as a component.
[417]
In addition to this, the determination should be made by comprehensively
considering such factors as the objective characteristics of the patented product including
its functions, structure, materials, and use, the contents of the patented invention(particularly the scope of claims), the normal mode of use of the patented product (e.g.,whether it is aimed at ensuring safety, such as the case of medical instruments, or aimed atachieving handiness and low cost, such as the case of disposable cameras), the extent of theprocessing, and the actual conditions of transactions.17 Similar issues are also recognizedin other countries as difficult issues, and they include delicate problems, but we should be
careful about broadening the concept of production to cases where the patented product has

17 In the Supreme Court Judgment, November 8, 2007, Minshū, Vol. 61, No. 8, p. 2989/Hanji, No. 1990, p. 3/Hanta, No.
1258, p. 62 (the Ink Tank case), the court held that, in the case where a patented product assigned by the patentee has
been processed or its component has been replaced, the question of whether the patentee is allowed to use his/herpatent right with regard to that patented product on the basis that such processing, etc. corresponds to new manufactureof the patented product should be determined by comprehensively considering the attributes of the patented product,
the contents of the patented invention, the mode of the processing or replacement of component, as well as the actual
conditions of transactions. The factors considered in the determination almost fully adhere to the standards forconstituting infringement indicated in its original instance by the Intellectual Property High Court Grand Panel
Judgment, January 31, 2006, Hanji, No. 1922, p. 30/Hanta, No. 1200, p. 90, and there seems to be no substantial
difference in their conclusions. Toshiaki Iimura, "Inku Tanku Jiken" (Ink Tank Case), Jurist, No. 1475 (2015), p. 31
states that this Supreme Court Judgment and the Intellectual Property High Court Grand Panel Judgment in the original
instance "seemingly take different approaches at a glance, but the Supreme Court has not particularly denied using thefactors determined in the 'exhaustion approach' by the Intellectual Property High Court as the factors to be consideredin this case, and has reorganized them to better comply with actual practices. See Tetsurō Nakayoshi, "Inku Kātorijji
Jiken Jōkokushin Hanketsu No Kaisetsu" (Explanation of the Judgment in the Final Appellate Instance in the Ink
Cartridge Case), L&T, No. 39 (2008), p. 69.

473

§8. Infringement

not been processed at all.18 With regard to such products as disposable contact lenses anddisposable syringes, there would be a problem in finding patent infringement merely by thefact that they have been sterilized and reused.
[418](3) Relationship between components and finished products
There is a question of whether an act of purchasing a component manufactured by apatentee of a certain finished product or a licensee thereof19 and then working a finishedproduct that incorporates said component constitutes patent infringement; in other words,
whether it can be said that, if the patent right for a component has exhausted, the patentright for a finished product using that component has also exhausted. A company often
purchases a large number of component parts from other companies when manufacturing
a single finished product. Such tendency is particularly noticeable for electronic products,
etc. It is not rare for a company to procure almost all components from other companies. If
the component is a general-purpose product, exhaustion of the patent right in the component
does not extend to a finished product (a patented product) that incorporates the component
manufactured by the patentee, etc.20 For example, if a person legitimately purchases a
general-purpose semiconductor chip manufactured by the patentee, etc. of the finished

18 The Tokyo High Court Judgment, November 29, 2001, Hanji, No. 1779, p. 89/Hanta, No. 1104, p. 259 (the Acyclovircase) was a peculiar case where a party purchased 7,000 tablets of a drug containing Aciclovir as an active substance(Zovirax), which was a product using the patent in question, disintegrated the tablets, extracted and purified the active
substance, Acyclovir, and manufactured and sold a drug containing Aciclovir as an active substance (Acirovec). The
court held as follows: "With regard to a patented product assigned by the patentee, if the subject matter using thepatented invention which was used in such product remains within the scope of identity, the rights to use, assign, etc.
the patent right, from among the rights to work the patent right, have been exhausted and are no longer effective, andwhen the patented product has been deformed, the effect of the patent right only extends to the case where there has
been an act that is regarded under the Patent Act to be an act of newly producing a product that uses the patented
invention. Even in the case of an act of deforming a patented product, as long as the subject matter that uses the patented
invention remains within the scope of identity, an act of merely repairing the patented product by replacing its
components or through overhaul and making the product last throughout its service life is still construed as not being
an act of production. Meanwhile, whether an act of deforming a patented product remains within the scope of mere
repair, etc. of the patented product or is regarded to be an act of producing new subject matter that uses the patented
invention depends on whether or not the act of deformation can be regarded as an act of production, which is an act ofworking the patented invention. A typical case where such act can be regarded as an act of production is an act of
replacing a component which is a main constituent feature of the patented invention with a component manufactured
by a third party. Then, whether or not the act can be regarded as an act of production, which is an act of working thepatented invention, should be determined by concretely understanding the act of deformation conducted with regard
to the patented product, and evaluating whether, in view of the objective nature and mode of use of the patented productand the subject matter using the patented invention, such act corresponds to production of new subject matter using
the patented invention, or if it is an act conducted within the scope of identity of the subject matter using the patented
invention, such as a repair for making the patented product last through its service life, based on the constitution andworking effects or the technical idea of the patented invention."
19 While there is no problem when a licensee of a patented product distributes the product, but when a licensee of acomponent distributes the component, a complicated problem could arise due to the relationship between the patenteeof the finished product and the licensee of the component. See Toshiaki Iimura, "Kanseihin Ni Kakaru Tokkyo No
Hoyūsha Ga Buhin Wo Jōto Shita Baai Ni Okeru Tokkyoken No Kōshi No Kahi Ni Tsuite" (Possibility of Exercise
of a Patent Right in the Case Where the Patent Holder of the Finished Product Assigns Components), Nakayama
Nobuhiro Koki Kinen Ronbunshū, Habataki - 21 Seiki No Chiteki Zaisan Hō (Spreading Wings - Intellectual Property
Law in the 21st Century), p. 351.
20 Intellectual Property High Court Grand Panel Judgment, January 31, 2006, Hanji, No. 1922, p. 30/Hanta, No. 1200,
p. 90 (the Ink Tank case).

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§8. Infringement

product and manufactures a finished product (a patented product) that incorporates the chip,it cannot be said that the exhaustion of the patent right in the component has caused
exhaustion of the right in the finished product, and that the patent right does not extend to
the finished product.
There is an Intellectual Property High Court Grand Panel Judgment21 regarding thisissue. In the obiter dicta,22 the court cited the Supreme Court Judgments in the BBS case23
and the Ink Tank case,24 stating as follows: when a patentee, etc. has assigned a component
that would constitute an indirect infringement as referred to in Article 101 of the Patent Act(a product exclusively used or designed to be used for the working of the invention;
hereinafter referred to as "said component"), the patentee is not permitted to exercise thepatent right for said component, as long as said component retains its original form;
however, when a third party produces a patented product by using said component, thepatentee is not restricted from exercising the patent right, because a product that falls within
the technical scope of the patented invention is newly produced by using a product that
does not fall within the technical scope of the patented invention. Yet, the court stated that,even in such case, the effect of the patent right does not extend to the finished product if
the patentee is found to have implicitly accepted the production of a patented product byusing said component. In practice, if a contract has been concluded to prohibit productionof a patented product by using said component, the effect of the patent right would extend
to the finished product even if the counterparty produces a finished product by using thecomponent sold by the patentee or a licensee. This Intellectual Property High Court
Judgment does not take a theoretical approach to conclude that the patent right in thecomponent is exhausted when the right holder assigns a component which is an exclusive
product and the purchaser manufactures and sells the finished product. Instead, it takes anapproach to assess whether the right holder had given implicit authorization. The approachof implicit authorization would allow a more flexible interpretation than the exhaustion
theory in determining the cases in which implicit authorization is regarded to have been
given. This Intellectual Property High Court Grand Panel Judgment dealt with an issue thatwas easy to resolve by an explicit or implicit contract, because it was a dispute between a

21 Intellectual Property High Court Grand Panel Judgment, May 16, 2014, Hanji, No. 2224, p. 89/Hanta, No. 1402, p.
166 (the Apple vs. Samsung case).
22 Exhaustion does not become a problem because the licensing contract between the patentee and the component
manufacturer has terminated, but since the court made the statement while "supposing that the license contract has not
terminated and the Baseband Chip is covered by the contract," this part constitutes obiter dicta. The Intellectual
Property High Court is likely to have wanted to indicate a court judgment on the issue of components and exhaustion.
While the Intellectual Property High Court is a trial court, Grand Panel Judgments in particular also have the role ofunifying court judgments, given the background of establishment of the court, so it is considered that the court
purposefully provided such an explanation as a generality.
23 Supreme Court Judgment, July 1, 1997, Minshū, Vol. 51, No. 6, p. 2299 (the BBS case).
24 Supreme Court Judgment, November 8, 2007, Minshū, Vol. 61, No. 8, p. 2989 (the Ink Tank case).

475§8. Infringement

person who purchased a component from a licensee of a patent right and the patentee, andnot a case in which said component was distributed from one to another. In general terms,
there would be a problem in that the effect of exhaustion extends to third parties in the caseof the exhaustion theory, but the effect of a contract does not extend to third parties in thecase of the implicit authorization theory.25[419]8.2.6.2. Exhaustion of a Patent Right and Parallel Imports (International Exhaustion of
a Patent Right)(1) Identification of the problem
Apart from the case of repair, refurbishment, etc., hardly any problems occur inrecognizing the exhaustion theory as a general concept when the transactions are completed
within Japan. The disputes actually observed are mostly cases of parallel imports (importsof genuine products). When a patented product is lawfully distributed (put on the market)
overseas by the right holder or an equivalent person, a problem arises as to whether or not
the Japanese patent right is exhausted, which is the issue of international exhaustion of apatent right.
[420]
Then, what kinds of problems do parallel imports give rise to in relation tointerpretation of the law?26 Article 2, paragraph (3) of the Patent Act includes the act ofimporting within the scope of working the invention, and provides for no exceptions.
Therefore, to be formalistic, it is possible to interpret that unauthorized import of all
products that fall within the scope of the patent right, including genuine products,
constitutes an infringement. On the other hand, however, many people oppose prohibiting
the import of genuine products, interpreting that the act of importing under Article 2,paragraph (3) of the Patent Act does not include genuine products. The questions of whichconclusion should be adopted and on what theoretical grounds are the issues regarding
parallel imports. With regard to parallel imports, various discussions were held in theprocess of establishing the WTO's TRIPS Agreement, but agreement could not be reached.
Article 6 of the Agreement provides that “For the purposes of dispute settlement under thisAgreement, (omitted) nothing in this Agreement shall be used to address the issue of theexhaustion of intellectual property rights.” While the negotiation process involved
complicated circumstances, in conclusion, no agreement whatsoever could be reached with
25 Components can vary from general-purpose products to exclusive products, and some components are almost in theform of a finished product, so determination would be made case by case.
26 With regard to this point, see Nobuhiro Nakayama, “Tokkyo Seihin No Heikō Yunyū Mondai Ni Okeru Kihonteki
Shiza” (Basic Viewpoint concerning the Issue of Parallel Imports of Patented Products), Jurist, No. 1094 (1996), p.
59.

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§8. Infringement

regard to parallel imports. Therefore, if Japan allows parallel imports or prohibits them, it
will not be a breach of the TRIPS Agreement either way.27
In the past, there were strong views to formalistically deny international exhaustionof a patent right based on the independence of patents, without demonstrating theappropriateness of this conclusion.28 As long as the world’s present patent systems are
based on the independence of patents (Article 4bis of the Paris Convention), a patent rightin one country is independent from a patent right for an identical invention in anothermember country. However, the lapse of a right on a specific product pertaining to a patentcannot be discussed in the same manner. The independence of patents merely means thatpatents in other countries and patents in one’s own country exist independent from eachother, so the patents in other countries do not affect the patents in one’s own country. The
independence of patents does not prohibit one from taking into consideration a fact that
occurred in another country when determining the concrete effect of a patent right in one’s
own country. For instance, it does not conflict with the independence of patents to refuse
or invalidate a patent application or a patent registration based on the reason that theinvention was described in a printed publication that was distributed in another country(Article 29, paragraph (1), item (iii) and Article 123, paragraph (1), item (ii) of the Patent
Act). Each country can freely decide on such matter. The same idea should basically apply
in the case of parallel imports, and the question of how the fact that the right holder lawfully
put the product on an overseas market should influence the effect of the patent right inJapan should be free for Japan to decide as an interpretation of the Japanese Patent Act. In
other words, whether or not to prohibit import is not a matter of the independence of patents
under the Paris Convention, but a matter of interpretation or legislation of Japan's patentlaw. Exhaustion is not an issue of whether the patent right itself lapses, but an issue of
whether or not the effect of the patent extends to the parallel import products.29 The issue
27 With regard to this issue, see Naoki Koizumi, “Heikō Yunyū No Kokusai Keizai Hō Teki Kisei -- Kokusai Kōgyō
Shoyūken Hō/Chosakuken Hō No Shiten Kara” (Regulations on Parallel Imports from the International Economic
Law Aspect -- From the Viewpoint of International Industrial Property Law and Copyright Law), Nihon Kokusai
Keizai Hō Gakkai Nenpō (Annual of the Japan Association of International Economic Law), No. 6 (1977), p. 45.
28 In the Osaka District Court Judgment, June 9, 1969, Mutai Saishū, Vol. 1, p. 160 (the Automatic Bowling Pin Setting
Device case), the court stated as follows: “A patent right has geographical limitations, and the patents of each country
are independent from each other, so the theory of exhaustion of a patent should only be applicable within the territoryof the country in which the patent was granted. If so, even if a patent in one country were to be exhausted with regard
to a certain product, there is no reason to consider that a patent in another country should also be automaticallyexhausted based on the same grounds.” A similar view is indicated in the commentary of Teruo Doi, Jurist, No. 460(1970), p. 141. Teruo Doi, "Chosakuken Hogo No Zokuchi Shugi To Chosakubutsu No Fukuseibutsu Oyobi
Rokuonbutsu No Yunyū Ni Yoru Chosakuken Shingai (Jō) (Chū) (Ge)" (Territoriality Principle of CopyrightProtection and Copyright Infringement by Import of Reproductions and Sound Recordings of Works (Vol. 1)(Vol.
2)(Vol. 3)), Kōsei Torihiki (Fair Trade), No. 362 (1980), p. 16 / No. 363, p. 38 / No. 364 (1981), p. 35 states thatparallel imports of genuine products are unacceptable, although this statement is about copyright.
29 This has been recognized as a natural fact in the BBS case by the district court, the high court and the Supreme Court.
The following is a related essay concerning copyright: Naoki Koizumi, “Chosakuken Ni Yoru Kokusai Shijō No
Bunkatsu -- Heikō Yunyū Ron No Kōzō” (Division of International Markets by Copyright -- Structure of Parallel
Imports), Kōbe Hōgku Zasshi (Kobe Law Journal) Vol. 40, No. 1 (1990), p. 133.

477

§8. Infringementof exhaustion is an issue of infringement, and merely an issue of whether or not parallel
import can be construed to correspond to the act of importing as prescribed in Article 2,paragraph (3) of the Patent Act. In other words, while the independence of patents is an
issue of the validity status of patents, exhaustion is an issue of the scope of effects of apatent right.
[421]
As mentioned earlier, when the transactions are completed within Japan, an act thatcan be considered to be illegal formalistically is regarded as being legal by applying thetheory of exhaustion, which is not stipulated in law. Similarly, in the case of parallel imports,
the rightfulness of the interpretation should ultimately be derived from the appropriatenessof the conclusion. In short, this issue can only be solved by formulating a desirable
interpretation based on the desired conclusion.
(2) Court judgments
Although many academic theories exist regarding parallel imports of patented
products,30 for a long time, only one court judgment was given on the issue, in 1969.31 In
the judgment, the court held that international exhaustion of a patent right does not takeplace due to the independence of patents, in other words, even a genuine product could
constitute a patent infringement if it is imported into Japan. Since this judgment was
extremely advantageous for the right holder, it would have been natural for instances ofpatent enforcement to increase. Regardless of this decision, however, it is a known fact that
there have been many cases of parallel imports of automobiles and other genuine products.
Court judgments were successively rendered in relation to the Trademark Act, butsomehow no such court judgments were handed down in relation to the Patent Act for as
long as a quarter of a century. After that, the BBS case triggered many lawsuits, but the

30 For theories, see those listed in note 2 of Nobuhiro Nakayama, “Tokkyo Seihin No Heikō Yunyū Mondai Ni Okeru
Kihonteki Shiza” (Basic Viewpoint concerning the Issue of Parallel Imports of Patented Products), Jurist, No. 1094
(1996), p. 68. Other references include: Takashi Ōseto, “Tokkyo Seihin No Heikō Yunyū” (Parallel Import of Patented
Products), Ritsumeikan Hōgaku (Ritsumeikan Law Review), No. 243/244 (1966), p. 1608; Seiji Ōno, “BBS Jiken
Saikōsai Hanketsu To Jitsumu Jō No Taiō” (Supreme Court Judgment on the BBS Case and Practical Measures),
CIPIC, Vol. 71 (1997), p. 43; Shōen Ono, “BBS Tokkyo Heikō Yunyū Jiken Hanketsu” (Court Decisions on the BBS
Patent Parallel Import Case), AIPPI, Vol. 42, No. 8 (1997), p. 2; Naoki Koizumi, “Heikō Yunyū No Kokusai Keizai
Hō Teki Kisei -- Kokusai Kōgyō Shoyūken Hō/Chosakuken Hō No Shitenkara” (Regulations of Parallel Imports fromthe International Economic Law Aspect -- From the Viewpoint of International Industrial Property Law and CopyrightLaw), Nihon Kokusai Keizai Hō Gakkai Nenpō (Annual Report of the Japan Association of International EconomicLaw), No. 6 (1997), p. 45 ; Hiroaki Niki “Tokkyo Seihin No Heikō Yunyū Ni Tsuite No Hitotsu No Shiron” (ATentative Assumption concerning Parallel Imports of Patented Products), Patent, Vol. 49, No. 9, (1996) p. 2;
Yoshiyuki Tamura, “Heikō Yunyū To Tokkyoken -- BBS Jiken Saikōsai Hanketsu No Igi To Sono Kentō” (Parallel
Import and Patent -- Objections against and Discussions of the Supreme Court Decision on the BBS Case), NBL, No.
627 (1997), p. 29; Hideyuki Murata, “Heikō Yunyū Ni Tsuite -- Sōsaku Hō To Hyōshiki Hō” (Parallel Imports -- Laws
concerning Creativity and Laws concerning Marks), Kōgyō Shoyūken Hō Kenkyū (Studies on Law of Industrial
Property Rights), No. 116 (1996), p. 8; Eiji Katayama, “Heikō Yunyū” (Parallel Import), Toshiaki Makino andToshiaki Iimura eds., Shin Saiban Jitsumu Taikei 4 Chiteki Zaisan Kankei Soshō Hō, p. 133.
31 The Osaka District Court Judgment, June 9, 1969, Mutai Saishū, Vol. 1, p. 160 (the Automatic Bowling Pin Setting
Device case).

478§8. Infringement

problem was finally settled in practice in 1997 when the Supreme Court rendered a
judgment on the BBS case.32[422]
The BBS case, being a revolutionary court judgment regarding the parallel importissue, needs to be studied in detail. In this case, the courts from the first through the final
instance did not adopt the theories of denying international exhaustion based on the
independence of patents or the principle of territoriality, but instead derived theirconclusions as an issue of interpretation of the Japanese Patent Act.
The Tokyo District Court in the first instance 33 ruled as follows. International
exhaustion could not have been the common understanding at the time of legislation of the
Patent Act, and also from the economic viewpoint, recognition of parallel imports is notconsidered to comply with the purpose of the Patent Act at present, so parallel importconstitutes patent infringement. On the other hand, the Tokyo High Court in the second
instance34 stated that, considering the actual conditions of current international economictransactions, it is sufficient to remunerate the patentee once for disclosing his/her invention,and it should be construed that the patent right has been exhausted and parallel imports arelegal.
Against this judgment, the Supreme Court stated the following. The patent right isexhausted when the patented product is assigned within Japan, but the same does notnecessarily apply when it is assigned overseas. The patentee may not own a corresponding
patent right in the country in which the patented product was assigned, and even if he/she
does, exercise of the right in Japan does not immediately mean that the patentee gains
double profits. However, in light of the present situation where international economictransactions are developing more widely and becoming more advanced in modern society,freedom of distribution of products needs to be respected as much as possible, and even in
the case of economic transactions outside Japan, transactions generally take place on theassumption that the assignor transfers all of his/her rights on the product to the assignee,and it can naturally be expected that the assignee or a person who has acquired the productfrom the assignee would import the product into Japan. Therefore, it would be
impermissible for the patentee to exercise the patent right in Japan against the assignee,
except when an agreement has been concluded with the assignee to exclude Japan from thelocations of sales or use of the product, or against a person who acquired the product from32 The Supreme Court Judgment, July 1, 1997, Minshū, Vol. 51, No. 6, p. 2299/Hanji, No. 1612, p. 3/Hanta, No. 951, p.
105 (the BBS case). It was a pure and simple parallel import case where BBS, the plaintiff, owned German andJapanese patents on an aluminum wheel and the defendant engaged in parallel import of the plaintiff’s product that
had been lawfully sold in Germany.
33 The Tokyo District Court Judgment, July 22, 1994, Chiteki Saishū, Vol. 26, No. 2, p. 733 (the BBS case).
34 The Tokyo High Court Judgment, March 23, 1995, Chiteki Saishū, Vol. 27, No. 1, p. 195 (the BBS case).

479

§8. Infringement

the assignee, except when an agreement to the same effect has been concluded with theassignee and an indication to that effect is attached to the patented product. If the patentee
has assigned the patented product overseas without concluding an agreement withreservations, the patentee should be considered to have implicitly granted the right tocontrol the product in Japan, without any patent restrictions, to the assignee or the person
who subsequently acquires the product from the assignee. In this regard, the conclusion
would not differ based on the existence of a foreign patent right corresponding to theJapanese patent right. In this case, no pleadings or proof was made to the effect that theabovementioned type of agreement had been concluded or that such fact had been indicatedon the product in question, so no injunction or compensation for damage could bedemanded based on the patent right.
[423]
This Supreme Court judgment denies international exhaustion of the patent right asa generality, but, from the viewpoint of the international distribution of products, finds thepatentee to have given an implicit authorization to accept parallel imports except when thepatentee has concluded an agreement to exclude Japan from the locations of sales and use
with regard to the assignee and when a statement to that effect has also been clearly
indicated on the product with regard to a person who acquired the product from the assignee.
Given that the Supreme Court has stated that the right to control the product free from theeffects of the patent is considered to have been implicitly granted when the right holder
assigns the product overseas without concluding an agreement with such reservations, it ispossible to construe that the Supreme Court regards parallel imports to be illegal inprinciple, but legal only when the right has been granted either expressly or implicitly.
Nevertheless, since the purport of the judgment is not necessarily clear, it is also possible
to read it as stating that parallel imports are legal in principle, but exercise of the right is
exceptionally recognized only when said agreement and indication have been made. 35
Apart from theoretical problems, in practice, the legality would likely be determined by thepresence or absence of the agreement and indication on the product. Therefore, theproblems in actual practice are expected to shift to issues including what kind of agreement
should be sufficient for blocking parallel imports, how the indication to that effect should
be made36, what happens if that indication is erased or vanishes in the course of distribution,

35 Explanation given in Hanta, No. 951, p. 108.
36 Specific issues would be whether it should be indicated on the product or whether it is sufficient to indicate it on the
packaging or the tag, and how the country to which export is prohibited should be indicated. The question is, forexample, whether it is sufficient to indicate that export to countries other than the country where the product was soldis prohibited, or if there is a need to specifically indicate that export to Japan is prohibited.

480§8. Infringement

and which language should be used for the indication.37[424]
Nevertheless, the theoretical ground for the Supreme Court judgment is notnecessarily convincing, so arguments are expected to continue in the academic world in the
future. A party naturally cannot import products covered by the scope of a patent right if
there is an implicit agreement with the right holder not to carry out parallel imports.
Accordingly, an important point in this case is that, as long as there is the indication, an
effect to disallow imports will arise also against third parties other than the counterparty to
the agreement, and the Supreme Court judgment is considered to be significant in stating
that, under the present international economic situation, lack of an agreement and indication
would mean implicit authorization (the judgment stated that authorization was implicitly
granted).
The judgment adopted the theory of implicit authorization, but it is considered tohave adopted an idea close to estoppel in reality. Therefore, even if the theory set forth by
the Supreme Court were to be adopted, the same conclusion could have been derived
regarding a person who acquired the product from the assignee, merely based on thepresence or absence of the indication attached to the product, without considering the issueof agreement (provided, however, that an agreement is required between the right holder
and the assignee). Since the issue is whether or not the patentee can exercise the rightagainst a person who acquired the product from the assignee, it is considered sufficient for
the right holder to create an appearance of not exercising the right, that is, to not attach theindication to the product. In that case, lack of the indication would be considered as a“conclusive presumption” rather than a “rebuttable presumption” of implicit authorization
and, in actuality, the permissibility of the parallel import would depend not on the intentionof the right holder but on the fact of whether the indication has been attached to the product.
There is room for future argument over the meaning of the phrase “implicitly granted” thatis used in the judgment. For instance, dispute will continue in the future over whether
parallel imports would be allowed when there are circumstances that negate the grant of
implicit authorization, such as a case where the right holder thoroughly made it known tothe public by newspaper advertisements, etc. that import of the product is prohibited, or
where the right holder directly notified the parallel importer that the import of the productis prohibited, even if he/she did not attach a clear indication to the patented product, and as
to whether or not the presence of the indication itself is an absolute requirement.
[425]
37 If the emphasis were to be laid on the agreement, it would be important that the language can be understood by both
the right holder and the first assignee, but in view of safe trading, it would also be important that the language can beunderstood by the import trader.

481

§8. Infringement(3) Theoretical problems
If the admissibleness of parallel imports were to be determined based on the existenceof an agreement and an indication as in the Supreme Court judgment, the right holder would
be able to block parallel imports by concluding the agreement and attaching the indication
with regard to the products, excluding those that cannot carry the indication due to theirnature. With regard to this issue, however, we must first examine whether or not parallel
imports should be allowed in the first place.38
At present, the economy is rapidly becoming more borderless, and companies are
becoming more multinational. Today, production bases of companies are no longer limited
to within their home countries, but rather, products are produced in countries with highproduction efficiency, etc., and they are distributed across national borders. On the other
hand, national borders still exist in terms of law, and applicable laws differ by country. The
issue of parallel imports can be considered as a phenomenon that has occurred between
those two worlds of law and economy.
If parallel imports were prohibited, it would practically be possible to divide theinternational market, and right holders would be able to maximize their profits, but
consumers would be deprived of choices and opportunities to buy products at low prices.
Therefore, in the absence of express provisions, the ultimate conclusion would depend on
policy determination under the Patent Act: whether to consider that (i) unless excess profits
are allowed for patentees by prohibiting parallel imports, the incentive for new
technological development would be lost and a negative effect would occur on economic
growth; or (ii) no negative effect would occur either on technological development or
economic growth even if parallel imports were allowed and the world market would beconsidered to be unified as far as genuine products are concerned. The effects, particularly
the economic effects, that arise by either allowing or not allowing parallel imports have notnecessarily been clarified.39 They will have to be clarified in future economic studies, butthere would be a wide range of factors that must be considered.
What can be said at least is that to prohibit parallel imports means to allow
international division of market with regard to that product by use of the patent right, which
has an economic effect similar to that of division of market by an international cartel, andto allow right holders to acquire excess profits gained by the disparity between domestic
and foreign prices (profits gained by dividing the market).
38 For details, see Nobuhiro Nakayama, “Heikō Yunyū To Tokkyoken Shingai” (Parallel Imports and Patent
Infringement), Chizaiken 5 Shūnen Kinen Ronbunshū (Articles Commemorating IIP 5th Anniversary), p. 273;
Nobuhiro Nakayama, “Tokkyo Seihin No Heikō Yunyū Mondai Ni Okeru Kihonteki Shiza” (Basic Viewpoint
concerning the Issue of Parallel Imports of Patented Products), Jurist, No. 1094 (1996), p. 59.
39 The following provides an economic analysis: Hirokazu Hamada, “Tokkyoken Ni Yoru Heikō Yunyū Sashidome No
Zehi Ni Tsuite -- Keizaigaku Teki Kōsatsu” (Appropriateness of Giving an Injunction against Parallel Imports Basedon a Patent -- Economic Examination), Jurist, No. 1094 (1996), p. 73.

482

§8. Infringement[426]
In contrast, to allow parallel imports means that, disregarding other factors such as
distribution channels and tariff- or non-tariff barriers, the right holder or the licensee would,
in theory, produce the products in the country that best conforms with economic rationality
and export the products worldwide at the price in that country, so international price gaps
would disappear. In reality, however, there is no international market that is close to sucha conceptual form, and there are public interventions in prices as in the case ofpharmaceuticals, so, it can be easily assumed that the allowing of parallel imports alone
would not lead to the unification of world markets or the disappearance of the disparity
between domestic and foreign prices. Nevertheless, it would undoubtedly serve as one of
the effective means toward correction of the situation. An internationally unified market isdesirable from the viewpoint of the world economy, and allowing parallel imports is basedon the fundamental judgment that creation of such market should be the appropriate
direction of the policy. The issue of parallel imports is an issue of determining which of theabove two contradictory views should be regarded as reasonable.
Next, some of the specific problems that would arise when parallel import of apatented product is prohibited shall be pointed out. The first problem is the relation withtrademarked products. It has become more or less established that parallel imports shouldbe allowed in principle under the Trademark Act,40 and this idea is supported by academic
theories.41 Therefore, if parallel imports of patented products were prohibited, the patented
products and trademarked products would, practically, become incompatible. Many of thepatented products subject to parallel imports are consumer goods, so they are trademarked
products at the same time. Accordingly, even if the parallel import could not be stopped
under the Trademark Act, it could be stopped by using the Patent Act. Since cases under
the Utility Model Act and Design Act can be considered to be the same as cases under the
Patent Act,42 parallel imports of a handbag that is a famous trademarked product could be
stopped by, for instance, registering a design on the handbag or a utility model on the clasp
of the bag.
The relationship of rights would be extremely complicated when a product involves

40 The Supreme Court Judgment, February 27, 2003, Minshū, Vol. 57, No. 2, p. 125/Hanji, No. 1817, p. 33/Hanta, No.
1117, p. 216 (the Fred Perry Parallel Import case).
41 In actuality, they are not all typical parallel import cases, but many of them involve complicated facts, but as a
generality, parallel imports of trademark products are regarded to be legal.
42 The Patent Act, the Utility Model Act and the Design Act are all industrial property laws concerning creativity, having
a similar law structure, so there is no reason to interpret their provisions differently from each other. They are also
treated the same in the Japan Custom's notice revised on March 26, 1998 (Notice No. 257 of the Japan Customs,
Ministry of Finance) (it is set out in "Control of Intellectual Property Infringing Goods," 5. "Treatment of Parallel
Import Products Pertaining to Trademark Rights, etc.," (3) that the treatment of parallel import products pertaining topatent rights should be applied mutatis mutandis to that of such products pertaining to utility model rights and design
rights).

483

§8. Infringementa large number of patents, such as an automobile or an electric home appliance. For instance,
one car involves patent rights of most of the world’s leading automobile manufacturers andparts manufacturers, and possibly even the patents of individual inventors. If patentees were
to be able to stop parallel import of such products, then there would be a considerably large
number of people in the world who would have the right to seek an injunction against theparallel import of an automobile, which may cause confusion.
[427]
In addition, prohibition of parallel imports would also have the negative effect ofcompelling Japanese nationals to purchase products at a price higher than that overseas. To
begin with, parallel importing is in principle a method of importing products that have beensold overseas, which is not a rational importing method considering import costs, lots, andother factors. Thus, the fact that parallel import is conducted indicates that the disparity
between domestic and foreign prices is considerably large.43
Conversely, there is the idea that allowing parallel imports would obstructinternational licensing. The reasoning behind this idea is that the incentive for licensing
would be lost if a product that was licensed from Japan to overseas, especially to developing
countries, were sold at a low price and imported back into Japan. Nevertheless, there seems
to be little concern about such outcome at present with regard to patents, so the relevancyof the theory is unknown. If this theory were to be adopted, however, parallel imports oftrademarked products and copyrighted works44 would particularly have to be prohibited
for achieving balance.
There is also a theory stating that even if parallel imports were to be allowed, Japan
would be disadvantaged if they were allowed by Japan alone, so at least all industrializedcountries should adopt the same policy together by a treaty, etc. This is a fair argument in
a sense, but such a treaty is not likely to be established in the near future, and it would be a
violation of national treatment or most-favored-nation treatment to conclude a treaty onlywith some countries and allow parallel imports only between such countries (Article 3[national treatment] and Article 4 [most-favored-nation treatment] of the TRIPS
Agreement). Also, the same practice would have to be applied for trademarked products
under this theory, but in reality, parallel imports of trademarked products are allowed.
Judging comprehensively from the above, it seems appropriate to allow parallel
43 The disparity between domestic and foreign prices is not decided solely by the allowance or prohibition of parallel
imports. For instance, Japan’s land prices and business practices also affect the disparity. However, since many suchfactors are also borne by parallel importers as well, they can be considered as a cause of the disparity between domestic
and foreign prices but not as a cause of an unjust price difference.
44 Although there are no provisions prohibiting parallel imports under the Copyright Act in general, Article 113,
paragraph (5) of the Copyright Act revised in 2004 provides that import of a commercial phonogram for domestic
distribution to Japan may be prohibited exceptionally under certain requirements. This provision was legislated for the
purpose of preventing domestic right holders from suffering losses, and to promote their overseas advance.

484

§8. Infringement

imports. The greatest reasons for this are, above all, to promote international distribution
and to ensure the safety of transactions. As a matter of course, given that the present world
does not have a unified market, the question of which policy should be prioritized in theinterpretation of the law is important.
[428]
Supposing parallel imports were to be allowed, the next problem would be thespecific requirements. It should be considered that the fact that parallel imports are allowed
as an interpretation of the Patent Act is not because the patentee has given authorization but
because genuine products do not constitute an infringement since they are not included in
the concept of the act of importing under Article 2, paragraph (3) of the Patent Act, although
this differs from the Supreme Court judgment. The rationale behind this would be the ideaof international exhaustion of the patent right. International exhaustion of a patent right is
not a concept under positive law but is merely used for convenience to justify the idea ofallowing parallel imports. Therefore, it is not appropriate to derive specific contents fromthe word “exhaustion” itself. Instead, the word has to be given a specific meaning. Its
requirements and grounds are not under any logical necessity, so they are naturally different
depending on the theory. Assumable grounds include prevention of double profits andsecuring international distribution of the product (safety of transactions). The central
ground seems to be to secure distribution, but various opinions are set forth in theories andcourt judgments.
In order for a parallel import to be allowed, the import goods must be genuine
products to begin with. Since there is no notion to allow parallel imports of infringing goods,
the requirement of genuineness is considered to be natural, but it is often difficult in
actuality to judge whether or not a product is genuine. Particularly, when the product has
been illegally sold by a subcontractor of the right holder, judgment is difficult because theproduct is genuine in quality, but it merely has not received the authorization of the rightholder. In addition, as the seller is the subcontractor of the right holder, it can also be
difficult to even judge whether or not its sale was illegal. There could also be cases wherea genuine product that has been processed in a third country is imported into Japan.
Nevertheless, this is not an issue specific to parallel imports but an issue that can also occur
in ordinary infringement cases.
Next, the right holder needs to have placed the product into distribution lawfully andvoluntarily. Although “lawfully” is a natural requirement, if the parallel import product isgenuine but a stolen product, the parallel import will not be allowed. If only the safety of
distribution were to be emphasized, parallel import may need to be allowed as long as the
product is genuine, even if it had been stolen from the right holder. However, no theory485§8. Infringement

supports the idea of allowing parallel import in such case. In contrast, the requirement of“voluntarily” presents a problem. If emphasis were to be placed on the safety of distribution,
perhaps exhaustion should also be recognized for products that were involuntarily put on
the market, but that would be too disadvantageous for the right holder. If the safety of tradealone were to be emphasized, perhaps parallel import should be allowed even for a productstolen from the right holder. It is a question of what the treatment should be when thegovernment intervenes in prices and distribution, and the right holder is unable to control
the market, as in the case of pharmaceuticals, or a question of whether an act ofmanufacturing and selling a product based on a ruling of compulsory license can be
regarded as the right holder's voluntary act. Consequently, the issue is to find a balance
between the interest of society (safety of distribution being part of this) and that of the rightholder.
[429]
The holder of the Japanese patent and the person who placed the product into
distribution overseas must be the same or must be able to be deemed as such. Thisrequirement also involves ambiguous borderline cases. For instance, there would be a
problem when a foreign patent has been assigned and the foreign patentee becomesdifferent from the Japanese patentee, or when the parties who used to conclude a licensing
contract between them no longer have a contractual relationship.
Then, there would be a question of whether or not the existence of a corresponding
foreign patent right should be required. Many of the theories that support allowing parallel
imports require the existence of a corresponding patent right. Therefore, they face trouble
in explaining the cases in which there was a difference in the claims, or a difference in the
duration of the patent between the Japanese patent right and the corresponding foreign
patent right, and come to a dead-end as a result. With regard to this point, it should beconsidered that the existence of a corresponding patent right is not required from theviewpoint of the safety of distribution, as stated in the Supreme Court judgment on the BBS
case. This is because, when considering the present situation of the international economy,
it is reasonable to interpret that the right holder's act of placing a product into distribution
in any country in the world is deemed as placing the product on the international market,
regardless of the existence of a patent in that country (the theory of double profits should
not be the ground for allowing parallel imports.)(4) The remaining problem
Supposing that parallel imports of patented products were allowed as a generality,
there would still be cases where it would not be reasonable to allow them. That would be486

§8. Infringement

when the patentee involuntarily places a patented product on the market due to public
regulations, etc. The cases can be divided into those where a compulsory license has been
established45 and those where there is a compulsory price.46 The main ground for allowing
parallel imports is that the right holder voluntarily put the product on the market at his/herown pricing in a country of his/her choice. The right holder would have been able to set themost advantageous conditions by considering various circumstances with the international
market in view, so there should be no need to further allow international division of market
based on the patent right. This voluntary distribution, however, does not have a statutory
ground, but should be dealt with by a legislative measure. However, it is too arbitrary andelaborate to allow parallel imports as a generality when there are no statutory grounds forallowing parallel imports, and to further recognize exceptions to it without statutory
grounds. On the other hand, although some legislation is required for parallel imports, it isdifficult for Japan to take a legislative measure in the present situation where nointernational consensus has been reached. As there are weak points in both allowing and
not allowing parallel imports, the current law would undeniably have to be interpreted in
an unnatural manner under either conclusion.
[430]
The issue of parallel imports arises because while a product is transferred acrossnational borders by trade, the intellectual property right attached to it is not transferred but
remains with the right holder. Therefore, this issue does not only involve patent rights but
intellectual property rights in general. Since technologies are often substitutable, serious
problems do not occur so much from prohibiting parallel imports when the product is an
ordinary commodity, at least as a generality, although there may be a price issue. However,when the technology is particularly brilliant and unrivalled, the patented product is not so
substitutable, so competition does not occur easily. Thus, when parallel import is prohibited,unreasonable situations are likely to occur in relation to the disparity between domestic andforeign prices and other aspects, and it could yield to international market segmentation.
Also, when technology has been standardized, stoppage of parallel import products could
cause a problem, but it may be sufficient to deal with such cases under the Anti-monopolyAct.
On the other hand, as trademarked products can be differentiated by brand power andcannot be substituted easily, greater problems would occur from prohibiting parallel
45 It is also possible to interpret that such a person who obtained a compulsory license does not correspond to a licensee
in terms of parallel imports in the first place, so he/she should not be considered to be the same as the patentee.
46 Some products such as pharmaceuticals are subject to public pricing or pricing close to it. Even if a product was placed
into distribution voluntarily, the fact of not being able to set a voluntary price has an extremely important meaning in
the free economy, and it should naturally be evaluated rather similarly to the involuntary case, since it could cause
prices to be substantially different between countries. However, this decision is difficult to make for some priceregulations, such as the case of an administrative directive, so problems remain.

487

§8. Infringement

imports. The problems would be even greater in the case of copyright. Accordingly, theissue of parallel imports is expected to be discussed as an issue of whether the right toimport should be recognized as one of the bundle of rights of copyright in the future.47

47 Unlike the Patent Act and the Trademark Act, the Copyright Act does not provide that the right extends to the act ofimporting itself, in principle (Article 123, paragraph (1), item (i) of the Copyright Act). Therefore, it is easier under
the Copyright Act to recognize parallel imports compared to the Patent Act. However, there is presently aninternational argument over the right to import with regard to copyright, so there would be a need to examine thepermissibility of parallel imports separately from Japanese positive law. The issues involved with copyright shall not
be described in detail here, but as a generality of intellectual property law, products that can be reproduced (or worked)
at lower costs are more vulnerable to parallel imports. For instance, in the case of a patented product like an automobile,
it is difficult to create a massive disparity between domestic and foreign prices since production thereof requires a fairamount of cost. On the other hand, a computer program requires a considerable amount of cost to create, but once it iscomplete it can be reproduced merely at a negligible amount of cost that is needed for the medium, etc. Therefore, as
the program can be sold at a minimum price (it is at least more profitable than not selling it), it can be sold at aconsiderably different price in each country depending on the national income level and other factors. If parallel
imports were allowed without limitation, the products would flow in from countries where the price was set extremely
low, which could make such country-by-country pricing meaningless. This problem, which particularly applies todigital copyright works in general, needs to be addressed in the future. However, discussions on parallel imports via
customs may become meaningless with regard to digital works, if they come to be distributed internationally via theInternet without passing through customs with the future progress of communications technology.

488

§8. Infringement[431]
8.3. Indirect Infringements (Acts Deemed to Be Infringement) (Article 101 of the Patent
Act)
The technical scope of a patented invention is determined based on the patent claim(Article 70, paragraph (1) of the Patent Act), and an act of working the entire claim, inprinciple, constitutes an infringement (direct infringement) (an exception is when thedoctrine of equivalents applies).1 However, certain acts, which do not directly constituteinfringement, are specially deemed to constitute infringement, as preliminary acts orcontributory acts with a high likelihood of infringement (Article 101). These are called“acts deemed to constitute infringement” in the text of the Patent Act, and are also referred
to as indirect infringements, fictitious infringements in academic studies. There were noprovisions on indirect infringement under the old Act, and such an act was handled as an
issue of joint tort. Under the current Act, the following acts are stipulated as “acts deemed
to constitute infringement” (indirect infringement).
[432](i) in the case of the invention of a product, acts of producing, assigning, etc., importing
or offering for assignment, etc. any product to be used exclusively for the producing2 ofthe said product as a business (sometimes referred to as “nomi hin” or “senyō hin” inJapanese) (item (i));(ii) in the case of the invention of a product, acts of producing, assigning, etc., importing
or offering for assignment, etc. any product (excluding those widely distributed within
Japan) to be used for the producing of the said product and indispensable for the resolution
1 It is not necessarily a requirement that the infringer independently works the invention in its entirety. Direct infringement
can be found where the alleged infringer makes use of another person but the act performed by such other person can bedeemed to be performed by the alleged infringer. With regard to this issue, see “8.2.1.(3) Infringement in which multiple
people are involved.”
2 “Producing” here is a concept that includes the following acts besides the literal act of producing in the ordinary meaning:assembly, installation of parts (Tokyo District Court judgment on February 25, 1981, Mutai Saishū, Vol. 13, No. 1, p.
139 (Single Lens Reflex Camera Case)); and repair of an important portion of the product (Osaka District Court
judgment on April 24, 1989, Mutai Saishū, Vol. 21, No. 1, p. 279 (Sand Producing Machine Hammer Case). The act of
installing a program in a computer also falls within the scope of the concept of “producing” (Intellectual Property High
Court Grand Panel judgment on September 30, 2005, Hanji No. 1904, p. 47, Hanta No. 1188, p. 191 (Ichitaro Case). In
the Osaka District Court judgment, September 27, 2012, Hanji, No. 2188, p. 108/Hanta, No. 1398, p. 326 (thePioglitazone case), the court stated that the producing of a product means an act of newly creating “a product that fulfils
all constituent features of the invention” by using a “product that does not fulfill the constituent features of the invention”
as a material, and it is not construed to include an act of merely using the material for its originally intended purpose,and held that an act of merely using a material for its originally intended purpose does not constitute the producing of a
product. The Tokyo District Court judgment on May 15, 2002, Hanji No. 1794, p. 125, Hanta No. 1108, p. 275 (Ceramic
Blade Case) is a rare case in which the court held that, while the constituent requirement of the patented invention is that“the ceramic cover coat consists of a layer with a maximum thickness of 0.25 mm,” the person who purchased theaccused product, which does not meet this requirement (with a thickness of between 0.525 and 0.313 mm), used the
product as a material, without making any modifications to it, and due to such use, the product might be worn andbecome thinner to a level where it falls within the scope of the patent claim only in appearance; however, this resultsfrom the ordinary way the product is used, and according to the socially accepted idea, such use by the purchaser of the
product cannot be regarded as the act of producing the product.

489

§8. Infringementof the problem by the said invention as a business, knowing that the said invention is apatented invention and the said product is used for the working of the invention (item (ii));(iii) in the case of the invention of a product, acts of possessing the said product for the
purpose of assigning, etc. or exporting it as a business (item (iii));(iv) in the case of the invention of a process, acts of producing, assigning, etc., importing
or offering for assignment, etc. any product to be used exclusively for the use of the said
process as a business (item (iv));(v) in the case of the invention of a process, acts of producing, assigning, etc., importing
or offering for assignment, etc. any product (excluding those widely distributed within
Japan) to be used for the use of the said process and indispensable for the resolution of the
problem by the said invention, knowing that the said invention is a patented invention andthe said product is used for the working of the invention as a business (item (v)); and(vi) in the case of the invention of a process, acts of possessing the product produced by
the said process for the purpose of assigning, etc. or exporting it as a business (item (vi)).
These provisions have been established because, although these acts do not directly
infringe the claim, they are performed as preliminary acts of infringement, and are likely to
induce an infringement if left unaddressed, and it would be difficult to arrest the
infringement once it has been committed. The provisions on indirect infringement aredesigned to set up a system for practically securing the actual effects of a patent right, buton the other hand, they must be carefully employed so as not to expand the scope of a patentright unjustly.
Opinions are divided regarding whether or not the constitution of an indirect
infringement is premised on the existence of a direct infringement. There is a “dependent”
theory that states infringement is premised,3 and an “independent” theory that states it is
not premised.4 By strictly adhering to each theory, acts of providing parts, which could be
an indirect infringement, to the person having title to the working of the invention (e.g. alicensee), providing such parts to a person who merely works the invention for the purposeof experiment or research, providing such parts to a person who does not conduct a business,

3 The dependent theory is advocated in Takashi Hashiba, “Kansetsu Shingai Ni Tsuite (Sono 1) (Sono 2)” (Indirect
Infringement, (I) (II)), Tokkyo Kanri (Patent Management), Vol. 26, No. 11 (1976), p. 1115, Vol. 27, No. 5 (1977), p.
479 (1971). The Osaka District Court judgment on April 24, 1989, Mutai Saishū Vol. 21, No. 1, p. 279 (Sand Producing
Machine Hammer Case) can also be read as supporting a dependent theory. Nobuhiro Nakayama, ed., Chūkai Tokkyo
Hō (Jō) [3 han] (Annotated Patent Act), 1st volume [3rd ed.]), p. 959 (written by Shigetoshi Matsumoto, KatsuhikoMise), can also be read as supporting a dependent theory but the authors point out the necessity of modification of thistheory.
4 The independent theory is advocated in Kosaku Yoshifuji, Tokkyo Hō Gaisetsu [13 han] (Outline of Patent Act [13thed.]), p. 461; Kentarō Fukuda, “Kansetsu Shingai Seiritsu Yōken No Handan Kijun Ni Tsuite (Criteria for the Elements
for constitution of an Indirect Infringement),” Patent, Vol. 51, No. 5 (1998), p. 37. In the Tokyo District Court judgment
on February 25, 1981, Mutai Saishū, Vol. 13, No. 1, p. 139 (Single Lens Reflex Camera Case), the court denied
constitution of an indirect infringement as a conclusion in its judgment, but stated in obiter dicta that supply to a person
not engaged in business can also constitute an indirect infringement.

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§8. Infringement

providing such parts to a person who works the invention after the expiration of the durationof the patent right,5 or importing such parts to be assembled at the country of destination(the export counterpart), would not be infringements under the dependent theory due to alack of the existence of a direct infringement, whereas these acts would be infringements
under the independent theory. However, strict adherence to either theory causes
inconvenience, so the present academic theory of indirect infringement makes someadjustments to both of them to attain soundness.6 This academic theory does not try toderive a conclusion directly from the independent theory or the dependent theory, but tries
to derive a reasonable conclusion either from whether or not the working leads to the sameprofitable status as a direct infringement, or from the purpose of the Patent Act. Althoughsome court judgments seem to discuss the issue from either of these standpoints, it often
merely means that such an interpretation was appropriate in that specific case. The courts
rather seem to be solving cases individually depending on the circumstances of each case.
[433]
Then, a question arises as to whether or not there can be indirect infringement of an
indirect infringement, that is, whether or not an act of producing, assigning, etc. a productthat can only be used for indirectly infringing the patent further constitutes infringement. If
a claim of such further indirect infringement were recognized, an indefinite series of linked
acts would also be found to constitute infringement. Therefore, infringement must be
denied in such case.7 If such acts were to be recognized as infringement, a legislative
measure should be taken to make an arrangement so that such indefinite chain of
infringements can be avoided.
The next question is how to evaluate an act of exporting a product that would
indirectly infringe a patent right, that is, an act that would assist the production of theinfringing products overseas. The 2006 revision modified the definition of “working” set
forth in Article 2, paragraph (3), and exporting now falls within the category of working.
5 This is exemplified by the case where after the plant is completely constructed, it is obvious that the duration of thepatent right will expire before the production of the product that falls within the scope of the patent right starts.
6 Kazuko Matsuo, “Kansetsu Shingai (Indirect Infringement) (1),” Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō
Shoyūken Soshōhō (Outline of Judicial Practice 9, Industrial Property Litigation Law), p. 271; Minoru Takeda, Chiteki
Zaisanken Shingai Yōron (Tokkyo, Ishō, Shōhyō Hen) [5 han] (Summary of Intellectual Property Infringements; Patents,
Designs, Trademarks) [5th ed.], p. 241; Shinya Yoshii, Tokkyoken Shingai Soshō Taiyō (Outline of Patent Infringement
Litigation), p. 88; Kazuo Masui, Yoshiyuki Tamura, Tokkyo Hanrei Gaido (3 han) (Guide to Patent-related Court
Decisions) [3rd ed.], p. 182.
7 In the Intellectual Property High Court Grand Panel judgment on September 30, 2005, Hanji No. 1904, p. 47, Hanta No.
1188, p. 191 (Ichitaro Case), the court held that use of a computer in which word-processing software manufactured andsold by the appellant (defendant) is installed can constitute the indirect infringement prescribed in Article 101, item (iv)of the Patent Act pertaining to an “information processing method,” but an act of manufacturing and assigning, etc. thesoftware that is used to produce the computer does not constitute indirect infringement (the court found an indirect
infringement with regard to the product invention, but denied infringement by accepting a defense of invalidity). See
Kiyokazu Yamagami, “Sofutowea Tokkyo To Kansetsu Shingai: Ichitarō Jiken Kōsoshin Wo Sozai Ni” (Software
Patents and Indirect Infringement: Focusing on the Appellate Instance of the Ichitaro Case,” Chizai Kanri (Intellectual
Property Management), Vol. 56, No. 2 (2006), p. 195; Naho Ebata, “Ichitarō Jiken” (The Ichitarō Case), Jurist, No.
1475 (2015, p. 13). There are many arguments against a theory that denies tertiary infringement.

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§8. Infringement

However, as exporting is not included in any of the acts that shall be deemed to constituteinfringement as provided in the items of Article 101, an act of exporting a product thatwould indirectly infringe a patent right is not deemed to constitute infringement.8 This isbecause the effect of a Japanese patent right does not extend to any act of producing a
product overseas, and if the exporting of such product is deemed to be an infringement, thiswould practically result in making the Japanese Patent Act effective outside the country,
even with respect to production overseas. Therefore, exporting as set forth in Article 2,paragraph (3) refers to the exporting of a product that directly infringes a patent right, anddoes not include the exporting of a product that assists overseas production. However, there
would be room to construe that a law-evading act of disassembling a product completed inJapan, exporting the individual parts, and re-assembling the product overseas corresponds
to an act of exporting an infringing product, by deeming these acts to be one collective act.9[434]
Before the 2002 revision, the Patent Act included the provisions corresponding toitems (i) and (iv) of the current Act but did not include those corresponding to other items,
and only such acts as producing, etc. any product to be “exclusively” used for producing
the invented product, or producing, etc. any product to be “exclusively” used for using theinvented process, were to constitute indirect infringement. If products that could also be
used for other purposes were made subject to an indirect infringement, it would also coveracts other than preliminary or contributory acts; that is, acts that do not constitute an
infringement of the patent right, and that would unjustly expand the patent right. The term
“exclusively” was used to set a limit from this viewpoint. However, in reality, a number ofdisputes took place over the interpretation of the term “exclusively.” According to court
judgments, it was considered that such “other purposes” cannot merely be the possibilityof abstract or experimental use, but must be purposes that can be recognized to be economic,

8 The following is the case before the 2006 revision: the Osaka District Court judgment on October 24, 2000, Hanta No.
1081, p. 241 (Bread Machine Case). In the Osaka District Court judgment on December 21, 2000, Hanta No. 1104, p.
270 (Polyolefin Clearing Agent Case), the court denied indirect infringement, stating that the defendant exclusively
exported the product that could indirectly infringe the patent, and there is no likelihood that the defendant will
manufacture or sell the product in Japan in the future. The following is the case after the 2006 revision: the Tokyo
District Court judgment on February 27, 2007, Hanta No. 1253, p. 241 (Articulated Conveying Equipment Case).
9 Tetsu Iwatsubo, “Kokugai Seisan No Tameno Kikan Buhin No Yushutsu” (Export of Key Components for Overseas
Production), Chizai Kanri (Intellectual Property Management), Vol. 58, No. 2 (2008), p. 211.

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§8. Infringement

commercial or practical in accordance with socially accepted ideas.10 In actual disputes,
infringement was sometimes denied even where the defendant was apparently engaged in
infringement, just because the product in dispute could be used for other purposes, and thistendency was subject to criticism. Furthermore, when discussing an indirect infringement,
there usually seemed to be a matter-of-course premise that the indirectly infringing productwould also fully serve other purposes as it was. However, as in the Single Lens Reflex
Camera Case,11 a new issue arose as to whether appropriate determination can be made at
all with regard to a systematized product or a multi-functional product, by applying
conventional criteria alone.
[435]
Recently, indirect infringements have become highly problematic in relation to

10 There are slight differences in nuance, but the following court judgments take the same stance: the Tokyo District Court
judgment on November 10, 1975, Mutai Saishū, Vol. 7, No. 2, p. 426 (Olefin Polymerization Catalyst Case); the Osaka
District Court judgment on February 16, 1979, Mutai Saishū, Vol. 11, No. 1, p. 48 (Decorative Laminate Case); theTokyo District Court judgment on February 25, 1981, Mutai Saishū, Vol. 13, No. 1, p. 139 (Single Lens Reflex Camera
Case); the Tokyo High Court judgment on March 29, 1990, Mutai Saishū, Vol. 22, No. 1, p. 245 (Hoya Clean Case);
the Osaka District Court judgment on September 30, 1991, Chiteki Saishū, Vol. 23, No. 3, p. 711 (Water Tank Case);
the Tokyo District Court judgment on July 29, 1994, Hanji, No. 1513, p. 155, Hanta, No. 871, p. 281 (Wet Rice Milling
Method Case), and its appellate instance, the Tokyo High Court judgment on May 18, 1995, Chiteki Saishū Vol. 27,
No. 2, p. 332; the Osaka District Court judgment, October 24, 2000, Hanta, No. 1081, p. 241 (the Bread Making
Machine case); the Tokyo High Court judgment, February 27, 2004, Hanji, No. 1870, p. 84 (the Ligand Molecule
Search Method case). In the Osaka District Court judgment on January 31, 1972, Mutai Saishū, Vol. 4, No. 1, p. 9
(Tube Mat Case), the court strictly interpreted the requirement of “exclusively,” and stated that other uses must be
objectively unknown, but it was a case where the existence of other uses was apparent. In the Tokyo District Court
judgment on February 29, 1988, Mutai Saishū Vol. 20, No. 1, p. 76, Hanji No. 1267, p. 134, Hanta No. 663, p. 188(Soft Contact Lens Washing Method Case), the court denied infringement, stating that the patented method can also
be used for washing hard contact lenses.
11 The Tokyo District Court judgment on February 25, 1981, Mutai Saishū, Vol. 13, No. 1, p. 139 (Single Lens Reflex
Camera Case). The point of dispute was whether or not an act of producing and selling an interchangeable lens for asingle lens reflex camera constituted an indirect infringement of a patent right. The interchangeable lens in question
could both be installed in a TTL stop-down metering camera relating to the patented invention and an old model camerathat was unrelated to the patent. However, the preset stop-down lever, which was the main portion of the patent, was
not in use when used in the old model camera. Thus, the court held that the case did not satisfy the requirement“exclusively” because the interchangeable lens could also be used in an old model camera that was unrelated to thepatent. In its appellate instance, no determination was made regarding an indirect infringement, but the defendant lostthe case merely based on claim interpretation (the Tokyo High Court judgment on July 14, 1983, Hanji, No. 1095, p.
139). Meanwhile, in the Osaka District Court Judgment, October 24, 2000, Hanta, No. 1081, p. 241 (the Bread Making
Machine case), the court found indirect infringement in a case where a bread making machine was a multifunctional
product which could be used without using a certain function. In the Intellectual Property High Court Judgment, June23, 2011, Hanji, No. 2131, p. 109 (the Food Wrap-Shaping Method and Device case; appeal dismissed/appeal
unaccepted), which was rendered after the revision of the provision on indirect infringement, the court stated that“exclusively” needs to be interpreted as a purpose which is found to be economical, commercial, or practical undersocial conventions, as in the past. On such a basis, the court found indirect infringement, holding that “even if a productused for the method pertaining to a patented invention could be used in such a way that does not work the patented
invention, unless a mode of use that only uses a function that does not work the patented invention and does not use afunction that works the patented invention at all is recognized as an economic, commercial, or practical mode of useof that product, the manufacture, sale, etc. of that product is highly likely to induce an act of infringement which is still
the same.” In this case, however, the delivered product was a non-infringing product, but it was possible to change thestopper position, remove the stopper, and replace the nozzle material, and such remodeling made the product morepractical. Since it was a case where the product, which was a non-infringing product when delivered, became an
infringing product by slight modifications, it may have been reasonable to dispute it as an issue of Article 101, item (ii)after the 2002 revision, but in that case, the subjective requirement needs to be proved. See Shunji Matsuda and Ichirō
Ueda, “Tokkyo Hatsumei Wo Jisshi Shinai Taiyō De Nōnyū Sareta Seihin Ni Yoru Kansetsu Shingai No Seiritsu”(Establishment of Indirect Infringement by a Product Delivered in the Form of Not Working the Patented Invention),
Chizaiken Fōramu (Institute of Intellectual Property Forum), No. 87 (2011), p. 11.

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§8. Infringement

patents on software-related inventions. While patents on software-related inventions used
to be granted only in the form of an apparatus claim or process claim, in reality, software
is often sold while being stored on a storage medium. Therefore, the act of manufacturing
or selling the storage medium on which such software is stored is the working of only partof the claim, and in order to find an infringement, it was necessary to adopt a theoreticalstructure to the effect that the manufacturing or sale of the storage medium constitutes
indirect infringement. In this context, the question of whether or not such act met therequirement of “exclusively” had been argued in actual cases. 12 However, theImplementing Guidelines for Inventions in Specific Fields was revised in 1997 to permit
describing a storage medium that has a program recorded on it as an invention of a “product”
in the claim. Then, the 2002 revision included a computer program itself in the category of
the subject matter of a patent. These legislative measures made it easier for the right holder
to allege direct infringement and seek an injunction as well as damages, and thereby mostly
eliminating the need for taking the ambiguous approach of applying the concept of indirect
infringement regarding software-related patents.
[436]
Meanwhile, the council report for the revision in 1959, which led to the establishmentof the current Act, proposed a subjective requirement for the constitution of an indirect
infringement, stating that the perpetrator must “have the intent to infringe a patent or
knowing that the product would be mainly used for patent infringement.” In the end,
however, it was changed to an objective requirement expressed with the term “exclusively,”
without setting forth such subjective requirement. In other words, it was decided that
subjective elements concerning the perpetrator shall not be taken into account indetermining the constitution of an indirect infringement under the current Act, and only thecases which satisfied the objective requirement, i.e. where no other purposes exist, were
supposed to be judged as resulting in a direct infringement. Nevertheless, due to this strict
limit imposed on using the term “exclusively,” there was considerable difficulty inestablishing an indirect infringement. To cope with this problem, in addition toconventional cases wherein indirect infringement is to be established if the product meetsthe objective requirement of “exclusively” (an exclusive product), the 2002 revision added
new types of indirect infringements by combining the objective requirement and the
12 It does not cause much of a problem if the patented software is produced and sold together with specific equipment,such as a washing machine or a refrigerator. However, when a medium storing the software is produced and soldseparately from specific equipment, the medium alone cannot constitute a direct infringement, so the issue of an indirect
infringement arises. In cases of financial and inventory control devices (e.g. Patent Publication No. 1123814; generally
known as the YES Case), the most popular mode of use would be to purchase the commercially available software anduse it on a multi-purpose computer. Nevertheless, since the software alone would only constitute part of the claim,
there is the problem of whether or not the production and sale of this commercially available software constitutes anindirect infringement.

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§8. Infringement

subjective requirement, wherein indirect infringement is to be established if the product indispute is to be used for producing the invented product (or to be used for using the invented
process), it is not widely distributed within Japan (it is not a general-purpose product), it isindispensable for the resolution of the problem by the invention,13 and the alleged infringer
knows that the invention is a patented invention and the product in dispute is used for theworking of the invention (such types of infringements are also referred to as non-exclusiveproduct indirect infringement, multifunction indirect infringement, or subjective indirect
infringement) (items (ii) and (v)). Also, if a patented product is distributed widely, there isa possibility that products which are indispensable for the resolution of the problem andwhich constitute an indirect infringement are also distributed widely, so determination
should be made by focusing on not merely the distribution volume, but whether or not the
product is a general-purpose product.14[437]
In order for the indirect infringement under items (ii) and (v) to be established, theproduct to be produced, assigned, etc. must be "indispensable for the resolution of the
problem by the invention." This is a restrictive requirement for preventing improper
expansion of the scope of indirect infringements, but its specific details present an issue.
Items (ii) and (v) provide "indispensable for the resolution of the problem" instead of"indispensable for the working of the invention." Therefore, it does not simply mean thatthe product is required for working the invention, but it must constitute an essential part ofthe invention, in other words, it must be indispensable for resolving the problem which
could not be resolved by prior art.15 Such product is often likely to be indispensable forrealizing the essential part of a constituent element of the invention that is described in thepatent claim, but it would also include a component, raw material, tool, etc. which is used
for an invention of a process of producing a product and which is indispensable for the

13 In the Tokyo District Court judgment on April 23, 2004, Hanji No. 1892, p. 89, Hanta No. 1196, p. 235 (the case of
Jig Clips for Printed-Circuit Boards), the court held that even a component, ingredient, etc. described in the scope ofthe claims would not be regarded as an indirectly infringing product if it does not directly form the characteristic
technical means that is newly disclosed by the invention for the purpose of solving the intended problem. In theIntellectual Property High Court Grand Panel Judgment, September 30, 2005, Hanji, No. 1904, p. 47/Hanta, No. 1188,
p. 191 (the Ichitarō case), the court found that the text editing software was indispensable for the invention to solve theproblem, but in conclusion, the patentee lost the case on the basis of lack of an inventive step.
14 As a literal interpretation, the nuance of “general-purpose” could be conveyed through the word “generally.”
15 Legislative Affairs Office, General Affairs Division, General Affairs Department, Japan Patent Office ed., Heisei 14
Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu (Explanation of the 2002 Revision of Industrial Property Acts), p. 27. For
example, supposing that there are publicly known technologies, A+B, and a person makes a new invention, A+B+C,
and obtains a patent for it, A+B are constituent elements of the invention but also publicly known technologies, andthe essence of the invention for solving the problem is in the addition of C. Thus, A+B are not essential parts of theinvention, and an act of supplying components, etc. relating to them basically does not constitute the non-exclusiveproduct-type indirect infringement referred to in items (ii) and (v). This is because A+B themselves are known elements
and their manufacture, sales, etc. do not constitute indirect infringement.

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§8. Infringement

resolution of the problem, even if it is not a constituent element of the invention. 16
Nevertheless, such product can also be used for a lawful purpose, so if the court were tofind an indirect infringement, there would be a difficult problem in writing the main text of
the judgment. It is not a problem specific to an indirect infringement; a similar problem
occurs, for example, in the case of a use invention relating to a pharmaceutical.
It is clear in light of the provisions that general-purpose products are excluded even
if they are material components, but there is a question of whether an indirect infringement
is never established in the case of an invention that combines only general-purpose products.
In such case, it should be considered that an indirect infringement will not be established,in principle, except in such case as where a party sells the components while enclosing amanual for making an infringing product by combining the components (this treatment also
relates to the case of good faith mentioned below).
[438]
To “know” that the product is used for the working of the invention, the alleged
infringer must actually have knowledge of it, and he/she shall not be held liable for indirect
infringement if he/she fails to have knowledge of it by negligence. This means that the
supplier of a component does not have to investigate how the component is actually used.
If a product is a non-exclusive product, often the supplier does not know how thecomponent will be used, so this requirement was established because it is not desirable fromthe viewpoint of legal stability to find an infringement even when such non-exclusive
products are indispensable for the resolution of the problem by the patented invention.
However, how to determine that a person has known that the product is used for the workingof the invention is a difficult question. 17 It may be relatively easy to find that the
manufacturer/seller of the component had the knowledge if the manufacturer/seller has
supplied the components while actually being aware that the purchaser is using thecomponents for an illegal purpose, or if the manual or explanatory document, etc. contains
a statement to the effect that the component can be used for manufacturing the patented
invention, but such cases would be rare. Most cases are where there is high probability thatthe component will be used also for an illegal purpose, and whether or not the
16 In the Tokyo District Court judgment on April 23, 2004, Hanji No. 1892, p. 89, Hanta No. 1196, p. 235 (Case of Jig
Clips for Printed-Circuit Boards), the court stated that “when the ‘problem to be solved by the invention’ can only besolved by using the component, tool, raw material, etc., such component, tool, raw material, etc. is regarded to be‘indispensable for the resolution of the problem to be solved by the invention.’” In the Osaka District Court, February
21, 2013, Hanji, No. 2205, p. 94/Hanta, No. 1401, p. 341 (the case of Particulate Material Mixing and Fine Powder
Removing Method and Apparatus), the court stated that “with regard to the distinctive technical means that cannot befound in prior art, which the invention newly discloses as the means for solving the problem in prior art, a distinctive
component, raw material, tool, etc. which directly brings about the specific composition or component thatcharacterizes said means” is regarded to be indispensable for the resolution of the problem to be solved by the invention.
17 See Rika Nishi, “Hisenyōhin-Gata Kansetsu Shingai (Tokkyo Hō 101 Jō 2 Gō/5 Gō) Ni Okeru Sashidome No Han’i
To Shukanteki Yōken” (Scope of Injunction for Non-Exclusive-Product-Type Indirect Infringement [Article 101, Items(ii) and (v) of the Patent Act]), L & T, No. 63 (2014), p. 8.

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manufacturer/seller can be found to have had the knowledge in such cases as well presents
a question. Since penal provisions are stipulated for indirect infringements (Article 196-2),
there is a problem in overly expanding the scope of manufacturers/sellers who are found tohave the knowledge. In the case of non-exclusive products, if a manufacturer/seller is only
found to have the knowledge when the person who uses the product for an illegal purpose
has been identified, the scope of establishment of indirect infringements would be too
narrow, and the purpose of the 2002 revision would be lost. Also, if a manufacturer/seller
is found to have the knowledge when he/she is generally aware of the possibility that the
product may be used for an illegal purpose, it may result in excessive prohibition. The key
point is to pay attention so as to ensure the effectiveness of the law while preventing
overprotection. The meeting point is considered to be in-between. A manufacturer/seller
should be found to have the knowledge when there is extremely high probability that the
product is used for an illegal purpose, and when the manufacturer/seller accepts such use.18
Meanwhile, the burden of proof of the subjective requirement is to be borne by the claimant(usually the patentee), and it may be difficult to prove this in many cases. When proving isdifficult, the claimant may issue a warning, etc. to the potential infringer in advance to makethe latter aware of the situation. A manufacturer/seller, which could legally work acomponent that has another usage before receiving a warning, can no longer work thecomponent after receiving the warning due to gaining the knowledge. Even in such case,however, the component is a non-exclusive product, so it should be construed that the
manufacturer/seller will only become unable to supply the component to the infringer, andwill not be obstructed from manufacturing the component and supplying it to persons who
use it for another purpose. Otherwise, the effect of the patent right will extend to other actsof working the component which are practically beyond the effect of the patent right. The
subjective requirement does not need to be applied to patent right infringement cases, inprinciple, but indirect infringement cases are exceptional.19[439]
18 In the Tokyo District Court Judgment, June 10, 2011, court website (the Stomach Wall Fixing Tool case). Meanwhile,in the Supreme Court Judgment, December 19, 2011, Keishu, Vol. 65, No. 9, p. 1360/Hanji, No. 2141, p. 135/Hanta,
No. 1366, p. 103 (the Winny File-Sharing Software case), which is a case of accessoryship to copyright infringement,
the court stated that “(Winny) can be used both for legitimate purposes and for the unlawful purpose of infringing
copyrights, and it is basically left to each user to decide whether he/she will use Winny for the purpose of infringing
copyrights or for other purposes,” and “ providing a software program should not be regarded as constituting an act ofaiding copyright infringement only because there is a general possibility that the software program would be used forthe purpose of infringing copyright, the provider has released and provided the software program while perceiving andaccepting such possibility, and copyright infringement has actually been committed with the use of said software. In
order for such act of providing a software program to constitute accessoryship, there must be not only said general
possibility but further the specific circumstances where the software program is used in a manner that infringes
copyright, and it is also required that the provider perceives and accepts such circumstances.” Although this judgment
is not directly linked to interpretation of the Patent Act because the Copyright Act does not provide for indirect
infringement and this case is a criminal case, it would provide a useful reference.
19 Also in the case where multiple people infringe a patent right based on a joint intent, the prevalent theory asserts thatthe subjective requirement of jointly committing an act of infringement needs to be met as an exception.

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The 2006 revision further introduced Article 101, items (iii) and (vi), providing thatthe act of possessing an infringing product or a product produced by an infringing method
for the purpose of assigning or exporting it shall be regulated as an indirect infringement.
These new provisions were designed with the aim of remedying the situation where, unlessthe infringing products are seized at the stage of possession (before assignment or export
takes place), it would be difficult to prevent their spreading. The introduction of theregulation on possession for the purpose of exporting was in line with the inclusion ofexporting in the category of acts of working (Article 2, paragraph (3)).
The fact that the provisions on indirect infringement have been established meansthat an injunction will be granted within the scope of these provisions; or, to put it the otherway round, an injunction would not be granted against a person who has merely induced or
aided infringement.20 However, although mere inducement or the aiding of infringement
would not constitute indirect infringement, and would not be subject to an injunction, suchacts might constitute a joint tort under the Civil Code. Whether or not a particular act
constitutes a joint tort depends on the specific facts; therefore, even an act of merely
providing a general-purpose component might be regarded as a joint tort, depending on themode of the act. In such case, the provisions on the presumption of negligence or thepresumption of the amount of damages shall not apply but the case shall be subject to thegeneral rules under tort law, so there would be considerable difficulty in proving
infringement. Furthermore, there is the possibility that inducing or aiding infringement
would constitute the crime of inducement or accessoryship (Article 61 or Article 62 of thePenal Code), but no penalty shall be imposed if it is committed by negligence. The existing
legal framework might seem to be somewhat ill-balanced in that an injunction cannot be
claimed against a person who has induced or aided infringement, whereas damages in tort
can be claimed and a penalty might be imposed against such person, but this is inevitable
under the current Act.
[440]
Determination as to the time of satisfaction of the requirement for indirect
infringement in connection with the claim for an injunction is to be made based on the timeof the conclusion of oral argument. If indirect infringement is found despite the fact thatthe product in question was intended for an exclusive purpose at the time of the
20 In the Tokyo District Court judgment on August 17, 2004, Hanji No. 1873, p. 153, Hanta No. 1172, p. 302 (Iron
Manhole Cover Replacement Method Case), the court stated that a person who is infringing or is likely to infringe apatent right as referred to in Article 100 means a person who independently performs or is likely to perform the workingof the patented invention or any of the acts prescribed in Article 101, and does not include a person who induces oraids such working or acts. Meanwhile, as an interpretation of the Copyright Act, the Osaka District Court judgment on
February 13, 2003, Hanji No. 1842, p. 120, Hanta No. 1124, p. 285 (Hit One Case) granted an injunction against theperson who aided infringement, but in this judgment, the court stated that this case under the Copyright Act is different
from cases under the Patent Act.

498

§8. Infringement

infringement but has acquired other intended purposes by the time of the conclusion of oral
argument, the effect of the patent right would even extend to other purposes that are
unrelated to the patent claim, which would unjustly expand the patent right. Also, in cases
where a person who did not know the patent at the time of the infringement but has becomeaware of the patent by the time of the conclusion of oral argument, it is unavoidable thatsuch person should be ordered to stop the alleged act afterward (if litigation starts, theperson would be found to have become aware of the patent in most cases). Nevertheless, adetermination of compensation for damage should be made based on the time of theinfringement, because the point at issue is compensation for an act in the past.21 Since there
was no other purpose of use at the time of the infringement and the patent right would havebeen infringed at that stage, it would be reasonable to award compensation for damage.
Before the 2006 revision, there had been no penal provisions specifically applicable
to indirect infringement, and those regarding patent infringement were thought to be
applied. However, upon the 2006 revision that increased the level of the severity ofpenalties, Article 196-2 was introduced as a penal provision applicable to the crime ofindirect infringement, clearly stipulating the punishment of imprisonment with work for
not more than five years or a fine of not more than five million yen, or both, which is lighter
than the penalty for the crime of direct infringement.

21 Makiko Takabe, Jitsumu Shōsetsu Tokkyo Kankei Soshō [2 Han] (Detailed Explanation of Practice of Patent-Related
Litigation [2nd Ed.]), p. 162. In contrast, Ken’ichi Tomioka, “Kansetsu Shingai Ni Okeru ‘Nomi’ No Kaishaku To
Sono Handanji” (Interpretation and the Timing of Determination of “Exclusively” in Indirect Infringement), Chizai
Kanri (Intellectual Property Management), Vol. 39, No. 7 (1989), p. 824 states that indirect infringement should bestrictly restricted, and asserts that compensation for damage should also be determined at the time of the conclusion oforal proceedings.

499

§8. Infringement

8.4. Defense of Invalidity
8.4.1. Background
In Japan, since the Meiji era, a patent had been treated as valid until a trial decisionof invalidation became final and conclusive, and even the court had been considered
incapable of determining its validity either in civil or criminal cases. 1 One could neither
claim invalidation of the patent nor seek declaration of invalidity in infringement
litigation, and the same applied in criminal cases. Under such circumstances, a patent
involving a ground for invalidation must first undergo a trial for invalidation. However,
the trouble of going through both the lawsuit and the JPO’s trial procedure is undesirablefrom the perspective of judicial economy. It is desirable for a dispute to be settled by asingle procedure in as short a time as possible. This issue relates to all of the grounds forinvalidation listed in Article 123 of the Patent Act, but the following arguments focus on
the cases of novelty and inventive steps, which account for the majority of the grounds
for which the invalidity of patents is disputed and which are also important in practice.
[441]
A patent is granted for a technology that exceeds publicly known technologies(technologies that are novel and involve an inventive step) in existence at the time offiling. However, it is difficult to conduct a complete search of such technologies, andthere are cases where the scope of claims includes a publicly known technology. How
then the court should deal with such claims in an infringement case presents a great issue.
Where a patent is granted for a publicly known technology, it is unfair if a person
who is merely working the publicly known technology is judged to be an infringer,
prohibited from working the technology, held liable for damages and, in some cases,
given a criminal penalty, only because he/she had not undergone a trial for invalidation(a case involving a prior user’s right is another issue).2 This can be considered as a naturallimitation inherent in a private right, rather than an issue of patent law. Since the JPO’s
granting of a patent is an administrative act, many of the theories and court rulings in
1 This conception was adopted in the Supreme Court Judgment (in pre-war Japan), September 15, 1904, Keiroku No.
10, p. 1679 (Fuse Manufacturing Appliance Case) and many court rulings thereafter.
2 In the Osaka District Court Judgment, April 17, 1970, Mutai Saishū Vol. 2, No. 1, p. 151 (Metal Wire Woven Basket
Case), the court stated as follows: “Considering the major principle of the Civil Code that a private right shall comply
with the welfare of the public, just as the idea that a technology that was publicly known or used at the time of filingshould be the common property of all people, there is no reason to easily permit property that had been commonly
owned by all people until then to be prohibited from use by the public and be made subject to exclusive use by aspecific applicant alone under the name of a utility model.” Meanwhile, Shinya Yoshii, Tokkyoken Shingai Soshō
Taiyō (Outline of Patent Infringement Litigation), p. 39 states that, since a publicly known technology (freetechnology) is property commonly shared by all people, which has been released to the public, irrespective of theexistence of a patent right, “the view that the restriction of its working cannot be helped until the a trial decision ofinvalidation of the patent becomes final and conclusive is equal to giving a disposition to a kind of expropriation by
the administrative disposition of granting a patent, which is irrational.”

500§8. Infringement

Japan tended to cite the general rules about administrative acts, and distinguish theauthority of the JPO from that of courts in order to establish a sanctuary that cannot beinterfered with by the courts. Then, in order to break through this tendency, theories andcourt judgments emerged that tried to allow some kind of defense for the infringer.3[442]
Conventionally, courts had not treated a defective patent and a patent without adefect in the same manner. Even if the invalidation of a patent was under the exclusive
authority of the JPO, determination of the scope of a patent was under the authority of thecourts, so conventional court judgments had derived reasonable conclusions while taking
publicly known technologies into account through the process of determining the scopeof rights. The Supreme Court held that publicly known technologies must naturally betaken into account when determining the scope of a right,4 and later, the court further
stated that when a publicly known portion is included in a portion of the claim, the scopeof a right should be determined by excluding that portion (theory of excluding the publicly
known portion).5 This means that if any of the technical ideas comprised in a patented
invention were publicly known, the relevant portion should be excluded. Reasoning
conversely, it is almost equivalent to considering that when the technology worked by the
infringer is publicly known, it does not constitute an infringement. In cases where theclaim was entirely constituted by a publicly known technology, many court judgments
have denied the existence of an infringement by interpreting the scope of a right mostnarrowly as having the literal content of the statements of the claim or by interpreting the
3 Takashi Hashiba, “Kōchi Gijutsu To Tokkyo Tōzen Mukō (Publicly Known Technologies and Justifiable Invalidationof a Patent),” Kigyō Hō Kenkyū (Study of Business Act), No. 148 (1967), p. 12; Ryūichi Murabayashi, “Zenbu Kōchi
No Hatsumei To Tokkyoken (Invention Entirely Constituted by a Publicly Known Technology and Patent Rights),”
Kigyō Hō Kenkyū, No. 257 (1976), p. 20; Akio Noguchi, “Saibansho Ha Tokkyoken No Mukō Ni Tsuite Shinri Wo
Surukotoga Dekiruka (Whether a Court is Eligible to Examine Invalidity of a Patent Right),” Patent, Vol. 23, No. 4(1970), p. 45. Nobuhiro Nakayama, “Tokkyo Shingai Soshō To Kōchi Gijutsu (Patent Infringement Litigation andPublicly Known Technologies),” Journal of the Jurisprudence Association, The University of Tokyo, Vol. 98, No. 9(1981), p. 1115. The following court judgment, though it was a case about a design, recognized the defense of apublicly known technology: the Tokyo District Court Judgment, April 25, 1997, Chiteki Saishū Vo. 29, No. 2, p. 435(Rubber Ball Case). In this case, the court stated that the party against whom a claim for injunction was filed basedon a defective design right could allege as a defense that such a claim had not come into existence.
4 In the Supreme Court Judgment, December 7, 1963, Minshū, Vol. 16, No. 12, p. 2321 (the Coal Tub Push Car
Derailment Prevention Device case), which was a case to seek confirmation of the scope of right under the old Act,the court stated as follows: “When taking into account the kind of invention to which the patent right had been granted,
one must inevitably think about the technological level at the time. This is because the portion that had been publicly
known at that time cannot be regarded as a novel invention, as long as a patent right is granted to a novel industrial
invention.” This judgment had a significant influence on the court rulings rendered thereafter.
5 In the Supreme Court Judgment, August 4, 1964, Minshū, Vol. 18, No. 7, p. 1319 (the Rotary Fuel Oil Firing
Equipment case), which was a case to seek confirmation of the scope of right under the old Utility Model Act, thecourt stated as follows: “According to the empirical rule, the applicant often describes in the claim matters that are
not the gist of the device but merely relate to the device, or conversely, fails to describe matters that are judged to be
the gist of the device, so when determining the scope of right of a utility model, the gist of the device should always
be practically determined by also taking into account the nature and the purpose of the device, as well as the overall
descriptions in the detailed explanation and the attached drawings, without being bound solely to the literal meaningof the statements of the claim. Also, when determining the scope of right of a utility model that includes a device that
was already publicly known or publicly used at the time of filing, those publicly known or publicly used portions
should be excluded and the tenor of that new device should be clarified.” Many later lower court judgments followed
this precedent.

501§8. Infringement

scope of the right to be limited to the working example, based on the idea that as long as
the patent is established as a right, it cannot be treated as having no content.6 These court
judgments all denied the existence of an infringement based on interpretation of the scopeof right, and in reality, the technology was treated as not being an infringement if theentire claim were made up of a publicly known technology. This measure would provide
a remedy to most of the infringers who were merely working a publicly known technology,
but theoretically, as far as the measure is based on the theory of excluding the publicly
known portion, there remains the problem of researching the remainder after exclusion;that is, determining the extent of the remaining scope of a right. Such an interpretation
can be evaluated as a reasonable method of settling a case, but it would be difficult totheoretically explain a case where the claim is entirely constituted by a publicly known
technology.7[443]
In contrast, some other court judgments did not uphold a claim of infringement by
judging that such a case corresponded to an abuse of rights,8 or did not uphold such claim
for the reason that publicly known technologies are property that is commonly owned by
all people.9 However, most of the court judgments tried to draw acceptable conclusions
in order to settle specific disputes by interpreting the scope of right. In conclusion, thecourts denied infringement in almost all cases where the claim was entirely constituted
by a publicly known technology; what remained to be solved was only the matter oftheoretical structure.
Accordingly, a new approach to interpretation came into fashion, advocating thedefense of a publicly known technology (the defense of “free technology”), which means
6 The Tokyo District Court Judgment, September 29, 1972, Mutai Saishū, Vol. 4, No. 2, p. 517 (the Work Gloves case),and many other cases took this approach.
7 In the Supreme Court Judgment, August 4, 1964, Minshū, Vol. 18, No. 7, p. 1319 (the Rotary Fuel Oil Firing
Equipment case), which is considered to be a case in which the claim was virtually publicly known in its entirety, thecourt interpreted the scope of right extremely flexibly, and by determining the part that was not concretely describedin the claim to be the gist of the device, held that the act was not an infringement because the alleged infringer was
not working the gist of the device. The court seemed to have inevitably applied a forced theoretical structure as aresult of following the attitude of the conventional court judgments in handling the issue of publicly known
technology as an issue of determining the scope of right, and pursuing a practical and reasonable way to offer aremedy to those who merely worked a publicly known technology.
8 The Osaka District Court Judgment, November 30, 1970, Mutai Saishū, Vol. 2, No. 2, p. 612 (the Gauge Box
Synthetic Resin Cover case; the court recognized room for interpreting the case as an abuse of rights, but in actuality,
judged that it did not correspond to an abuse of rights); the Nagoya District Court Judgment, November 26, 1976,
Hanji, No. 852, p. 95 (the Glass Container Manufacturing Method case); the Urawa District Court Judgment, May 2,
1984, Hanta, No. 536, p. 324 (the Honeycomb Core Manufacturing Method case; while the court recognizedapplication of the principle of abuse of rights as a generality, it held that the case was not abuse of rights byrecognizing the involvement of an inventive step); the Nagoya District Court Judgment, July 31, 1991, Hanji, No.
1423, p. 116, Hanta, No. 771, p. 240 (the Game Hall Thin Lending Machine case; the court suggested the possibilityof the case being an abuse of rights); the Osaka District Court Judgment, October 31, 1995, Chiteki Saishū, Vol. 27,
No. 4, p. 736 (the Etching Metal Plate Design case; the court held that the case was an abuse of rights, considering
the circumstance that the applicant had filed the application knowing that the invention included grounds forinvalidation due to it being publicly known).
9 The Osaka District Court Judgment, April 17, 1970, Mutai Saishū, Vol. 2, No. 1, p. 151 (the Metal Wire Woven
Basket case).

502

§8. Infringementthat a person can avoid being held liable for an infringement if the technology that he/she
is working is a publicly known technology, irrespective of whether or not the subject
article is covered by the scope of the patent right.10 The defense of a publicly known
technology is unrelated to the validity of the patent but is designed with the aim ofdrawing a conclusion from the axiom that the effects of a patent right does not extend toany publicly known technology, so it does not step into the argument over power sharing
between the JPO and the courts.
Nevertheless, not all problems are solved by the mere defense of a publicly known
technology. There are cases where the technology worked by the alleged infringer is not
publicly known, but it is apparent that there are grounds for invalidating the patent (e.g.,
unlawful division of an application). When it is apparent that such a ground forinvalidation exists, it is not reasonable for the patentee to win in an infringement lawsuit.
Thus, new theories emerged, arguing that a defense of patent invalidity can be claimed in
an infringement lawsuit against the exercise of a patent right that includes a ground forinvalidation. 11 This view was adopted by the lower courts, 12 and when the Supreme
Court decided the Kilby Case,13 the defense of invalidity became established in court
judgments. Since the practical reason for allowing a defense of invalidity is almost the

10 Regarding the defense of a publicly known technology, see: Nobuhiro Nakayama, “Tokkyo Shingai Soshō To Kōchi
Gijutsu (Patent Infringement Litigation and Publicly Known Technologies),” Journal of the Jurisprudence
Association, The University of Tokyo, Vol. 98, No. 9 (1981), p. 1115; Nobuhiro Nakayama, “Kōchi Gijutsu No
Kōben No Kyohi (Whether Defense of a Publicly Known Invention is admissible),” Umase Fumio Koki Kinen,
Hanrei Tokkyo Shingai Hō (Case Law on Patent Infringements), p. 305; Ryūichi Shitara, “Tokkyo Hatsumei Ga
Zenbu Kōchi De Aru Bāi No Gijutsuteki Han’i No Kaishaku (Interpretation of the Technical Scope When the
Patented Invention is Entirely a Publicly Known Technology),” Toshiaki Makino, ed., Shin Saiban Jitsumu Taikei
9 Kōgyō Shoyūken Soshōhō (New Outline of Judicial Practice 9, Industrial Property Litigation Law), 149; Shinya
Yoshii, Tokkyoken Shingai Soshō Taiyō (Outline of Patent Infringement Litigation), p. 40; Takashi Hashiba, “Kenri
Hogo Han’i Kakutei Ni Kansuru Kōsatsu Hōhō (Approach to Determination of the Scope of Protection of the Right)
II,” Tokkyo Kanri (Patent Management), Vol. 19, No. 2 (1969), p. 47. The following court judgments clearly denied
the defense of a publicly known technology: the Tokyo District Court Judgment, June 7, 1974, Hanta, No. 315, p.
310 (the Pachinko Ball Counter case); the Osaka High Court Judgment, February 10, 1976, Mutai Saishū, Vol. 8,
No. 1, p. 85 (the Metal Wire Woven Basket case); the Tokyo District Court Judgment, November 28, 1990, Mutai
Saishū, Vol. 22, No. 3, p. 760 (the Ion Tooth Brush case).
11 Yoshiyuki Tamura, “Tokkyo Shingai Soshō Ni Okeru Kōchi Gijutsu No Kōben To Tōzen Mukō No Kōben (Defenseof a Publicly Known Technology and Defense of Justifiable Invalidity in Patent Infringement Litigation) (1) (2),”Tokkyo Kenkyū (Study on Patents), No. 21 (1996), p. 4/No. 22, p. 4; Naohiko Tatsumi, “Tokkyo Shingai Soshō Ni
Okeru Tokkyo Hatsumei No Gijutsuteki Han’i To Saibansho No Kengen (Technical Scope of the Patented Invention
and the Authority of the Court in Patent Infringement Litigation),” Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No.
17 (1993), p. 41; and others.
12 In the Osaka District Court Judgment, October 30, 1991, Hanji, No. 1407, p. 34 (the t-PA case), the court first stateda generality that when there is a serious and apparent ground for invalidation, such as when the claim is entirelycomposed of a publicly known technology, the court can judge it to the extent required to resolve the case, and thenheld that such ground for invalidation was not found in the case in question. In the Tokyo High Court Judgment,
September 10, 1997, Chiteki Saishū Vol. 29, No. 3, p. 819, Hanji, No. 1615, p. 10 (the Kilby Case), which was a
lawsuit for confirmation of the non-existence of the right to claim compensation for damages, the court stated that
because it was highly probable that the division of the patent was judged to be illegal and invalid, exercise of theright against a third party based thereon was an abuse of rights.
13 In the Supreme Court Judgment, April 11, 2000, Minshu Vol. 54, No. 4, p. 1368, Hanji No. 1710, p. 68, Hanta No.
1032, p. 120 (the Kilby case), the court held that, even if it is before the patent invalidation trial has become final
and binding, since there are apparent grounds for invalidation of the patent, and special circumstances such as wherea request for correction has been filed cannot be found, the claim for damages based on the patent right in question
constitutes an abuse of the right and therefore it is impermissible.

503

§8. Infringement

same as that for the defense of a publicly known technology, now that the defense ofinvalidity can be recognized, the role of the defense of publicly known technology has
almost ended.14[444]
The view that the courts shall have the authority to determine invalidity had been
subject to much opposition. This is considered to be because there had been a stronglyheld idea that determination of the validity of patents should always be made consistently.
The invalidity of a patent used to be regarded as meaning invalidity that is effective in
relation to everyone (invalidation in the sense of annulling a patent registration), so there
was no such idea that a single patent right was valid for one person and invalid for anotherperson, and it was considered to be difficult to accept the concept of the invalidity of apatent between the parties concerned. However, although consistent determination isrequired for an invalidation that is effective against the public, in ordinary civil cases, theeffect of a court judgment only extends, in principle, to the parties concerned, and it is
not rare in civil actions to have varied determinations depending on how the parties
carried out the litigation. On an international basis, it is common to claim invalidity ininfringement lawsuits. While the defense of a publicly known technology does notformally need to involve the issue of the validity of the patent, the defense of invalidity
would require a determination of the validity of the patent. In other words, the defense ofinvalidity is also related to the effect of an administrative act of granting a patent (it isdiscussed as an issue concerning the tentative validity of an administrative act), andinvolves complicated issues, so it took a long time to arrive at a court decision that cansolve this issue.
[445]
Then, the abovementioned Supreme Court judgment on the Kilby Case presented
a new approach and brought some fresh air to the situation, exerting a decisive impact on
the subsequent legal revision. In this case, the court employed the doctrine of abuse ofrights and dismissed the exercise of the patent right that apparently involved the grounds
for invalidation. The doctrine of abuse of right usually means that where the right itself
contains no defect but the exercise thereof is defective, such exercise of the right shall not
be permitted. As compared to this, the approach of applying this doctrine when theexercise of the right is not defective but the right itself contains a defect seems to play therole of a transitional measure for allowing a new type of defense. In this respect, theSupreme Court judgment on the Kilby Case gave a direction to the subsequent legislative
14 In the case of a defense of invalidity, non-infringement is established when grounds for invalidation exist, whereas
in the case of a defense of publicly known technology, non-infringement is established when the technology one isworking is a publicly known technology, regardless of the claims. Since the objects to be proved in these two cases
differ, it cannot be said that a defense of publicly known technology has become completely meaningless, but it canbe regarded to have almost ended its role.

504

§8. Infringement

process and played that exact role. In this judgment, the court stated that the abuse of aright is found where it is apparent that the patent involves the grounds for invalidation(this is called the requirement of apparent grounds for invalidation). In the subsequent
legislative process, there was a fierce controversy over whether or not to legislate thisrequirement. In the end, this requirement was not introduced, and the courts are now
authorized to determine all of the grounds for invalidation. In this judgment, the court
also stated that the abuse of a right could be found “unless there are special circumstancessuch as where the request for a trial for correction has been filed.” Even where a patent
involves any grounds for invalidation, the patentee can sometimes remove such grounds
by correcting the patent, and if an invalidation trial is filed, the patentee can also request
such correction as a measure for avoiding the invalidation of the patent. This is the resultof having given consideration to the patentee’s opportunity to make a correction, while
recognizing a defense of invalidity.
Following this judgment, it became common for the alleged parties in infringement
suits to raise the defense of invalidity, which has been recognized in many court
judgments. This trend led to the subsequent solution by legislation.
8.4.2. Legislative Solution (Article 104-3 of the Patent Act)
Since the Kilby Case, the issue of whether or not to legislate the defense of theinvalidity of a patent was discussed at the Office for Promotion of the Justice System
Reform and the Intellectual Property Strategy Headquarters. As a result, Article 104-3
was introduced upon the revision to the Patent Act in 2004, to make a legislation that isbasically close in content to the judgment on the Kilby Case.1 This new clause provides
that, in litigation concerning patent right infringement,2 the exercise of a patent right shallnot be allowed where the patent is recognized as one that should be invalidated by a trial
for patent invalidation, or where the registration of an extension of the duration of a patentright is recognized as one that should be invalidated by a trial for invalidation of theregistration of an extension of duration according to which the courts are authorized to

1 For an essay that criticizes the defense of invalidity, see Hidetaka Aizawa, “Shinpan Tetsuzuki To Mukō No Kōben”(Trial Procedure and Defense of Invalidity), Gakkai Nenpō, No. 34 (2010), p. 231.
2 Naturally, Article 104-3 is also applied to a case concerning provisional disposition.

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§8. Infringement

examine basically all of the grounds for invalidation.3 The effect of a judgment in an
infringement case only extends to that case; it is not possible to cancel the patentregistration based on that judgment, and the registration continues to exist after the
judgment of invalidation becomes final and binding, so the patentee is able to file
litigation against another infringer. Meanwhile, as a premise for the determination ofinvalidation under Article 104-3, the gist of the patented invention needs to be identified.
It is identified in the same manner as the specific contents of patent claims which the JPO(trial body) should identify in the procedure for requesting a trial for patent invalidation.4
The validity of a patent came to be examined both by the JPO and the court (the so-called"double track") with the introduction of this defense for invalidation, and public attention
was drawn to how the adverse effects of this double track can be eliminated.
Article 104-3 is usually used as a defense, but it can also be used as an offensivemeans in an action seeking a declaration of non-existence. This clause is subject to thecondition that the court may, upon a motion or ex officio, render a ruling to the effect thatthe allegation or defense of invalidity is to be dismissed when the court considers thatsuch allegation or defense is submitted for the purpose of unreasonably delaying theproceedings (Article 104-3, paragraph (2)). Even where the dismissal ex officio is notregarded as an allegation or defense submitted belatedly as referred to in Article 157,
paragraph (1) of the Code of Civil Procedure, it shall be dismissed if it is found to havebeen submitted for the purpose of unreasonably delaying the proceedings. No appeal may
be filed independently against a ruling to dismiss this defense. However, even if a defense
of invalidity is dismissed because it will unreasonably delay the proceedings or because
it was submitted belatedly, if a trial for invalidation is requested based on the same ground,that ground for invalidation will be disputed in the trial, so for this reason, it is sometimes
not useful for early resolution of a dispute.
[446]
The legislative purpose of Article 104-3 is to realize the principle of equity and3 After a heated debate, the “requirement of apparent grounds for invalidation” indicated in the Kilby judgment was
decided not to be introduced. As a result, it seems that the courts can examine all of the grounds for invalidation inlitigation. However, the “apparentness” referred to in the Kilby Case means that the court is convinced that the patentin question is bound to be invalidated, and the case “where the patent is recognized as the one that should beinvalidated” set forth in the text of the current Act also means that the court is convinced that the patent in questionis bound to be invalidated. Thus, practically, there may not be so much difference between the two. Makiko Takabe,“Chiteki Zaisanken Soshō—Kongo No Kadai (Jō)” (Intellectual Property Right Litigation—Future Issues (1stvolume)), NBL No. 859 (2007), p. 16; Nobuhiro Nakayama and Naoki Koizumi, ed., Shin Chūkai Tokkyo Hō Jō, p.
1818 (written by Hiroyuki Morisaki). Meanwhile, Yutaka Koike, “Tokkyo Hō 104 Jō No 3 No Seitei Ni Itaru Haikei
To Sono Un’yō Ni Tsuite” (Background of Establishment of Article 104-3 of the Patent Act and Its Application),
Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 34 (2010), p. 263 recognizes the “requirement of apparent grounds
for invalidation” as an interpretation of the current Act.
4 The Intellectual Property High Court Grand Panel Judgment, January 27, 2012, Hanji, No. 2144, p. 51/Hanta, No.
1397, p. 199 (the Pravastatin Sodium case). Whether there is any difference in the identification of the gist between
the case of infringement litigation and a JPO trial (or patent examination) had been controversial, but since Article104-3 was introduced, they should be construed to be the same. See Ryō Shimanami, Tatsuhiro Ueno, and Hisayoshi
Yokoyama, Tokkyo Hō Nyūmon (Introduction to the Patent Act), p. 337.

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§8. Infringement

ensure the prompt settlement of disputes. This clause has rectified the problematic
situation where invalidity cannot be claimed in litigation unless the patent in question firstundergoes an invalidation trial procedure, and in this respect, it is conducive to the prompt
settlement of disputes. However, even after the introduction of this clause, it was possible
to request a trial for invalidation, and the right holder has had to defend the validity of
his/her right both in an invalidation trial procedure before the JPO and in an infringement
suit before the court, that is, the right holder is now forced to take measures on the double
tracks, the JPO procedure and the litigation, with regard to the same issue in dispute. Also,
multiple invalidation trials can be filed at the same time, or an invalidation trial can be
filed multiple times by the same person or different persons. Right holders, who need towin both in the invalidation trial and the infringement litigation, began to complain. Since
this double track did not necessarily contribute to the one-time resolution of a dispute, it
was frequently criticized by the industry, and it imposed a heavy burden on SMEs andventure companies with limited financial resources, in particular. Accordingly, provisions
on restrictions on the period for making corrections and those on restrictions on retrials
were reviewed upon the 2011 revision.
[447]
In the examination process, the JPO needs to handle a vast amount of applications,
so it cannot take much time for examining every application, while in the infringement
suits, the court is supposed to examine and collect references available all around theworld and it is often able to find some grounds for the invalidation of a patent.
Accordingly, the defense of invalidity has been more frequently recognized by the courts
and it has become usual practice to submit a defense of invalidity in an infringement suit.
Since the introduction of Article 104-3, the probability of the right holder winning theinfringement case has been low. This tendency is considered to discourage right holders
from filing infringement suits In particular, given that the number of patents containing
reasons for invalidation has grown since the opposition system was abolished upon the2003 revision, the defense of invalidity plays a significant role. However, the opposition
system was revived with the 2014 revision (see “3.1. Opposition System”).
Article 104-3 stipulates that the exercise of a patent right shall not be allowed“where the patent is recognized as one that should be invalidated by a trial for patent
invalidation.” This clause is established while taking into account a trial for correction ora request for correction. The patentee, against whom a trial for invalidation is filed, shallhave the opportunity to file a request for the correction of his/her patent in order to avoid
invalidation; however, in an infringement suit, if the patentee would not be given suchopportunity to correct his/her patent when it involves any grounds for invalidation andwould be immediately given a court decision to dismiss his/her claim of infringement,
this would be inconsistent with the system of an invalidation trial and would also be unfair507

§8. Infringement

to the patentee. There would be no problem if a JPO trial decision on correction has
become final and binding by the time of the conclusion of oral argument in theinfringement suit, but there may be cases where correction has yet to be finally determinedin the procedure of a trial for correction. In such cases, if the court, while giving no
consideration to the possibility of correction, finds the patent to be invalid and dismisses
the claim of infringement, this could lead to an unreasonable consequence if the JPO trial
decision on correction later becomes final and binding. The abovementioned condition
has been established in order to avoid such a situation.5 However, the court practice isthat, in order to make this re-defense of correction, it is not sufficient to merely assert thatthe patent right could escape invalidation by making a correction, but it is necessary forthe patentee to be actually requesting a trial for correction or requesting a correction in atrial for invalidation.6 If re-defense of correction can be made by mere assertion, theplaintiff could win the suit without actually making the correction, and the uncorrected
patent right could survive. Thus, the above court practice is implemented in order to avoid
such situation. Even when correction is allowed, if the correction does not eliminate theground for invalidation or if the target article does not fall within the technical scope ofthe corrected patented invention, it cannot be said that “special circumstances” exist.
[448]
In the case of a misappropriated patent or a patent in violation of an obligation of
joint application, the person entitled to request a trial for invalidation of said patent wasan “interested person” before the 2011 revision; but after the revision, it was revised to a“person having the right to obtain a patent” (Article 123, paragraph (2) of the Patent Act).
This is because it became possible for the true right holder to request the owner of amisappropriated patent or a patent in violation of an obligation of joint application totransfer that patent right or a share of the right (Article 74 of the Patent Act) with the 2011
revision, and it is not appropriate to allow a person other than the true right holder torequest a trial for invalidation and to cause a patent right to be extinguished. In line with
this, a revision was also made to the defense of invalidity so that a person other than thetrue right holder will not be precluded from submitting materials used for an allegation
5 In the Tokyo District Court Judgment, February 27, 2007, Hanta No. 1253, p. 241 (Articulated Conveying Equipment
Case), the court stated that ‘whether or not the patent is recognized as the one that should be invalidated in a trial
for patent invalidation’ should be determined depending on whether or not the patent will still be recognized as suchwhen the correction of the patent becomes final and binding in the future.
6 Makiko Takabe, Jitsumu Shōsetsu Tokkyo Kankei Soshō [2 Han] (Detailed Explanation of Practice of Patent-Related
Litigation [2nd Ed.]), p. 201 states that “it may be an idea to interpret that it would be sufficient for the patentee toassert the specific claims in the form of ‘definitely making such correction during the period in which correction canbe requested’ before the time is overdue, and to request (a trial for) correction by the time of conclusion of oralproceedings in fact-finding proceedings. Meanwhile, in the Supreme Court Judgment, April 24, 2008, Minshū, Vol.
62, No. 5, p. 1262/Hanji, No. 2068, p. 142/Hanta, No. 1317, p. 130 (the Knife Working Device case), which is a casebefore the 2011 revision, Justice Tokuji Izumi indicated an opinion stating that it is not required for a trial forcorrection to have already been requested, but it is sufficient to allege and prove that the invalid part could be
eliminated if a trial for correction is requested at all and that the defendant's products would fall within the technicalscope of the invention based on the restricted scope of claims.

508

§8. Infringement

or defense to show that the patent is invalid due to misappropriation (Article 104-3,
paragraph (3) of the Patent Act). There is no problem in recognizing a defense ofinvalidity by a person other than the true right holder, because the effect of the judgment
will be limited to the parties, and the registration of a right will not be cancelled based on
the invalidity of the right in an infringement suit. Moreover, even if a defense of invalidity
is recognized in the infringement suit, the true right holder is still able to request the ownerof a misappropriated patent to transfer the patent. Also, when the true right holder’srequest for a transfer is accepted, the patent right is deemed to have been owned by thetrue right holders from the start (Article 74, paragraph (2) of the Patent Act), so the true
right holder will never request a trial for invalidation after the transfer. In addition, after
the transfer of the patent, a defense of invalidity due to misappropriation will no longer
be accepted in an infringement suit, because the reason for the invalidation has alreadybeen cured.
[449]
Incidentally, before the 2011 revision, it had been provided that a person may not
file a request for a trial on the basis of the same facts and evidence (Article 167 of the
Patent Act before the revision). Thus, there was a question of whether, after a trial
decision to the effect that an invalidation trial has failed becomes final and binding, asuspected infringer who is a third party is permitted to submit a defense of invalidity
based on the same facts and evidence in an infringement suit. However, because Article
167 was revised upon the 2011 revision, and a trial decision became effective only against
the parties to the trial and the intervenors, there was no longer a problem in a third party
submitting a defense of invalidity based on the same facts and evidence in an infringement
suit.
The defense of invalidity being recognized in an infringement suit means that thereis the possibility that the court and the JPO might examine the same matter with regard
to the validity of the patent concurrently. Although there are no direct provisions on thecase where an inconsistency occurs between the determinations made by the court and
the JPO, the court has been able to suspend the court proceedings at the request of theparty when it has found it necessary (Article 168, paragraph (2)),7 and the trial examiner
has also been able to suspend the trial proceedings when he/she has found it necessary(paragraph (1) of said Article). In this connection, the 2004 revision has introduced
additional rules in order to promote the linkage between the court proceedings and thetrial proceedings: upon receiving an infringement action and upon conclusion of the court
proceedings, the court shall notify the JPO Commissioner of such action (paragraph (3)7 In the past, suspension of court proceedings had caused prolongation of the litigation period, because the JPO trial
took a long time. However, the JPO has made efforts to expedite the trial in recent years, and according to the 2011
statistics, the average time required for processing a trial was 8.5 months for trials for invalidation and 1.9 months
for trials for correction.

509

§8. Infringementof said Article); the JPO Commissioner shall notify the court as to whether a request fora trial with regard to the patent right has been filed (paragraph (4) of said Article); if arequest for a trial has been filed, the court shall notify the JPO Commissioner of the
document submitted thereto which states the allegation or defense (paragraph (5) of said
Article); and the JPO Commissioner who has received said notice may request the court
to deliver copies of any record of the action which the trial examiner considers necessary
for the trial (paragraph (6) of said Article). In practice, ordinarily, the trial examiner canacquire the relevant documents submitted in the infringement suit through the hearings in
the trial proceedings, but if the parties do not cooperate with this, he/she would request
such documents from the court pursuant to Article 168, paragraph (6). These measuresare expected to reduce the inconsistency between court judgments and trial decisions.

510§8. Infringement[450]
8.5 Retrial (Article 104-4 of the Patent Act)990
With the 2004 revision, it also became possible to dispute invalidity in an
infringement suit. However, since court proceedings are based on an adversary system,
whereas the JPO trial procedure is based on an ex officio system, or since there can be adifference between the determination by a court judge and that by a trial examiner, thedetermination on the patent validity may differ between an infringement suit and aninvalidation trial. As long as a double track system of litigation and trial is adopted, a certain
degree of difference is inherent in the system. Nonetheless, in order to realize a one-time
resolution of disputes, that is, to eliminate detrimental prolonged disputes and ensure legal
stability, a provision on the restriction on retrials was introduced upon the 2011 revision(Article 104-4 of the Patent Act). In litigation, the submission of an allegation or defense
out of time and the rehashing of disputes should not be admitted as a generality, andalthough this revision premises the use of the double track system, it aims to achieve aneffect equivalent to prohibiting the out-of-time submission of an allegation or defense andthe rehashing of disputes. Even before the 2011 revision, various theories had been
proposed to prevent the rehashing of disputes by retrials (application of the fair andequitable principle in litigation or application of the proviso to Article 338, paragraph (1)of the Code of Civil Procedure by analogy), but this issue was resolved through legislation
under this revision. Article 338, paragraph (1), item (viii) of the Code of Civil Proceduresets forth “the ... administrative disposition, based on which the judgment pertaining to theappeal was made, has been modified by a subsequent judicial decision or administrative
disposition” as a ground for a retrial. This is a remedial measure for not being able to disputethe validity of a subsequent administrative disposition in the relevant litigation. In the caseof a patent right infringement, however, the validity of a patent can be disputed in therelevant litigation (Article 104-3 of the Patent Act), so if a retrial were allowed, it would bepossible to dispute the invalidity of a patent at the court twice. Accordingly, the recent
revision which prohibited retrial is an appropriate measure.
Even where a double track system is adopted, if a trial decision of invalidation
becomes final and binding first, the patent right will be deemed never to have existed as aresult of the retroactive effect of the trial decision, where the only small problem is that thepatentee loses in the infringement suit.

990 See Makiko Takabe, “Shingai Soshō Hanketsu Kakuteigo No Shinketsu No Kakutei” (Trial Decision Becoming Final
and Binding After Judgment Becomes Final and Binding in Infringement Suit), Gakkai Nenpō, No. 34 (2010), p. 195;
Takashi Shimizu, “Saishin No Uttae Ni Kansuru Tokkyo Hō Kaisei” (Revision of the Patent Act Concerning an Action
for Retrial), Jurist, No. 1436 (2012), p.60; Jun’ichi Kitahara, “Saishin” (Retrial), Jurist, No. 1438 (2012), p. 81.

511

§8. Infringement

If, after the court renders a judgment to dismiss the plaintiff’s claim in an
infringement suit (the patentee loses the suit), a trial decision to the effect that the request
for an invalidation trial is invalid991 becomes final and binding in an invalidation trial, it
does not mean that the administrative disposition on which that court judgment was
rendered is changed by the subsequent administrative disposition, and it will not serve as
grounds for a retrial.992 The determination in the court judgment that the patent is found todeserve to be invalid is only stated in the reason for judgment, and it does not have the forceof res judicata.
[451]
The biggest problem is the case where a trial decision of invalidation becomes final
and binding after a court judgment becomes final and binding in an infringement suit won
by the right holder’s side. When a trial decision of invalidation becomes final and binding,the decision has a retroactive effect (Article 125 of the Patent Act), so it means that theadministrative disposition on which the court judgment on the infringement case was based
was changed by the subsequent administrative disposition, which corresponds to grounds
for a retrial according to a principle under Article 338, paragraph (1), item (viii) of the Codeof Civil Procedure.993 In addition, since there is no time limit for requesting an invalidation
trial, and an invalidation trial can be requested repeatedly unless it is based on the samefacts and evidence,994 a final and binding judgment lacked stability, facing the risk of being
overturned at any time by a retrial, which obstructed the one-time resolution of a dispute.
There were also cases where the right holder’s claim was dismissed in an infringement suitdue to the existence of a reason for invalidation, but where a subsequent trial decision forcorrection to narrow the scope of the right995 became final and binding. This removed thereason for the invalidation so it was possible to establish an infringement on the premise of
the scope of the patent claims which had been corrected; however the right holder rehashedthe dispute by requesting a retrial.
In infringement litigation, the defendant (the suspected infringer) can assert patent
invalidity, and the plaintiff (the patentee) can request a trial for correction in response,
which means that the parties have opportunities to submit allegations or defenses. Allowing
991 This trial decision only signifies that there are no grounds for invalidation of the patent on the basis of the same facts
and evidence as those examined in the trial proceedings, and it does not declare that the patent right is definitely valid.
992 Masaaki Kondo, Tomoyoshi Saito, Chiteki Zaisan Kankei Ni Hō, Rōdō Shinpan (Two Intellectual Property-RelatedLaws, Labor Tribunal) (Shojihomu, 2004), p. 62.
993 In the Intellectual Property High Court Judgment, July 14, 2008, Hanji, No. 2050, p. 137/Hanta, No. 1307, p. 295(the Equipment for Separating and Removing Foreign Substances from Raw Seaweed case), the court accepted a retrial
for a case where a trial decision of invalidation became final and binding after a judgment upholding an injunction
became final and binding, and dismissed the patentee’s claim by revoking the final and binding judgment (nonacceptance of the final appeal).
994 After the 2011 revision, it became possible for a third party to request a trial for the invalidation of a patent based on
the same facts and evidence (the term “no one” was deleted from Article 167).
995 The same applies to the case of a correction made by filing a request for correction (Article 134-2).

512§8. Infringement

a person who has lost in an infringement suit to continue the dispute in an invalidation trial,and further dispute in a retrial after obtaining a trial decision of invalidation in spite of
having such opportunities would lead to the unnecessary lengthening of a dispute. In
particular, SMEs with a weak economic foundation may not be able to financially afford tocover the expenses for such prolonged dispute.
Thus, with the 2011 revision, it was provided that, after a final judgment in a patent
infringement suit, an exclusive license infringement suit, or a suit to claim compensation(Article 65, paragraph (1) and Article 184-10, paragraph (1) of the Patent Act) becomes
final and binding, a person who was a party to that suit cannot assert the fact that a trial
decision of patent invalidation, a trial decision of invalidation of the registration of an
extension of the duration, or “a trial decision to the effect that the description, scope ofclaims or drawings attached to the application of the patent is to be corrected, which is
specified by Cabinet Order” became final and conclusive after said judgment was rendered,
when requesting a retrial (Article 104-4, items (i) through (iii) of the Patent Act). Amongthe trial decisions on correction rendered after the court judgment became final andconclusive in an infringement suit, those that cannot be asserted in a retrial are limited tothose specified by Cabinet Order (Article 104-4, item (iii) of the Patent Act).996 Due to thisrevision, this type of request for a retrial is dismissed by an order on the basis of lack ofgrounds for a retrial because the fact that a trial decision became final and binding cannot
be asserted (Article 345, paragraph (2) of the Code of Civil Procedure). After the revision,a retrial cannot be requested against a court judgment finding an infringement, even if atrial decision of invalidation or a trial decision of correction, etc. becomes final and binding
after a final judgment in infringement litigation, etc. becomes final and binding, so theparties need to do everything they can in the infringement litigation. Legislation restricting
the retroactive effect of a trial decision of invalidation could have also been possible,997 but
the revising Act adopted the approach of restricting the matters that can be asserted in a
retrial.
There are no provisions on filing the same action seeking a future injunction for acase where, after a defense of invalidity is accepted and the plaintiff loses the case, a trial

996 The trial decisions on correction based on which a retrial cannot be requested are limited to the following types oftrial decisions on correction under Article 13-4 of the Patent Act Enforcement Order.
“1. If the final judgment that became final and binding in the litigation prescribed in Article 104-4 of the Patent Act is a
judgment in favor of the patentee, exclusive licensee, or other person who claimed compensation: a trial decision for
ensuring that the patent will not be invalidated in a trial for patent invalidation based on a fact other than that proved in
the litigation.
2. If the final judgment that became final and binding in the litigation prescribed in Article 104-4 of the Patent Act is a
judgment against the patentee, exclusive licensee, or other person who claimed compensation: a trial decision for
ensuring that the patent will not be invalidated in a trial for patent invalidation based on a fact proved in the litigation.”
997 The Patent System Subcommittee Report p. 28 states that arrangements will be made with regard to the retroactive
effect of a final and binding trial decision.

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§8. Infringement

decision of correction to narrow the scope of claims becomes final and binding and thedefendant’s article falls within the technical scope of the patent. If the court dismisses suchaction, would it constitute a violation of the fair and equitable principle in litigation?
[452]
When damages have been paid after the judgment was rendered in an infringement
suit, a trial decision of invalidation cannot be asserted in a retrial, so a retrial cannot berequested (such a request is dismissed by an order), and damages which have already been
paid are not regarded as unjust enrichment.998 However, if a trial decision of invalidation
becomes final and binding after an injunction has been recognized in an infringement suit,the patent right is extinguished retroactively as a result of the trial decision becoming final
and binding and the invention falls within the public domain, so it is unfair for only the
defendant of the infringement suit to be barred from working the invention. In reality, there
would not be a case where the plaintiff of the infringement suit demands the execution of
an injunction under the former judgment after a trial decision of invalidation becomes final
and binding, but if such a demand were made, an action to oppose such an execution canbe filed because the right that serves as the basis for an injunction would have been
extinguished after the judgment became final and binding as a result of the trial decision ofinvalidation becoming final and binding (Article 35 of the Civil Execution Act). 999
Meanwhile, money already paid by an indirect compulsory execution cannot also be
claimed back as unjust enrichment.
[453]
The same applies to an action for claiming damages or claiming the return of unjust
enrichment against an obligee effecting a provisional seizure or an order of provisional
disposition (the portion in parentheses in the main clause of Article 104-4 of the Patent
Act); even after a trial decision of invalidation becomes final and conclusive, no damages
will be claimed for a provisional disposition which has already been effected on the basisthat the provisional disposition was unlawful and no money paid by an indirect compulsory
execution under a provisional disposition will be claimed back as unjust enrichment.
Even if a trial decision of invalidation were to become final and conclusive after the

998 For a case where a trial decision of invalidation becomes final and binding after a judgment upholding a claim fordamages has become final and binding but before the damages have been paid, theories are divided between one that
insists that a compulsory execution can be effected because the effect of the former judgment exists as long as a retrial
cannot be requested, and one insisting that that will be an abuse of a right.
999 Ryōichi Mimura, “Heisei 23 Nen Kaisei Tokkyo Hō Shikō Go Ni Okeru Tokkyo Kankei Soshō No Genjō To Ryūiten”(Situation of Patent-Related Litigation After the Patent Act as Revised in 2011 Became Effective and Points ofAttention) (L & T, No. 60 (2013), p. 26) stated that, while it would also be possible to file an action to oppose theexecution, it can also be construed to be abuse of the right of compulsory execution because the text of the judgment
implicitly assumes that “the patent right remains valid.” Roundtable Discussion, “Tokkyo Hō Kaisei No Igi To Kadai”(Significance and Challenges of the Patent Act Revision) (a statement by Toshiaki Iimura), Jurist, No. 1436 (2012), p.
29.

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§8. Infringement

conclusion of oral proceedings in fact-finding proceedings and before the court judgment
becomes final and conclusive, because Article 104-4 reads “an action for a retrial against
the final judgment,” there is no restriction on matters that can be asserted in a retrial; thispoint was not changed upon the 2011 revision.1000 However, although there is no statutory
restriction on matters that can be asserted in a retrial, there would be many cases where a
dispute over grounds for a retrial is not accepted in light of the fair and equitable principle
in litigation or in light of the purpose of Article 104-3 of the Patent Act, according to thespecific situation.1001
As long as a judgment awarding damages cannot be overturned by a retrial after it
becomes final and binding, the infringer can neither refuse to pay the amount due nor filean action to oppose execution.1002
In normal litigation, the court may dismiss allegations or evidence advanced out oftime by an order (Article 157, paragraph (1) of the Code of Civil Procedure), and if they
are dismissed, the parties can no longer dispute those allegations and evidence. In contrast,
under the conventional Patent Act, it was possible to request an invalidation trial based on
the same allegations or defenses as those dismissed in infringement litigation due to the
double track system of trial and litigation, so the dismissal did not necessarily contribute topreventing prolonged disputes. After the 2011 revision, even if a trial decision ofinvalidation becomes final and binding, it is not possible to request a retrial against an
already final and binding judgment on the basis of said trial decision. Thus, it will benecessary for the defendant to exert every possible effort in making a defense of invalidity
and the plaintiff in making a re-defense of correction in infringement suits, and the adverse
effects of the double track will be eliminated to a considerable extent. As a result of the2011 revision, it became sufficient for the court to conduct proceedings without being
concerned about a trial for invalidation, even if infringement litigation and the trial forinvalidation coexist, and there would be less need to apply Article 168, paragraph (2) of the1000 Kimiko Yagi, “Saishin No Seigen” (Restriction of Retrials), Toshiaki Makino, Toshiaki Iimura, Makiko Takabe,Yōichirō Komatsu, and Tomoki Ihara eds., Chiteki Zaisanken Soshō Jitsumu Taikei II (Outline of Intellectual Property
Lawsuit Practices II), p. 90.
1001 The Supreme Court Judgment, April 24, 2008, Minshū, Vol. 62, No. 5, p. 1262/Hanji, No. 2068, p. 142/Hanta, No.
1317, p. 130 (the Knife Processing Equipment case) was a case before the 2011 revision of the Act, where a trial
decision on a correction to narrow the scope of claims became final and binding after the judgment by the court ofsecond instance in an infringement case became final and binding. In this case, the court held that, premising thecircumstances including the fact that a request for a trial for correction and its withdrawal were repeated twice during
the proceedings of the appellate instance that were carried out for more than one year, and that the trial decision on thecorrection in question was rendered in response to a request for a trial for correction that was filed after the conclusionof oral proceedings in the appellate instance, although there is room for a retrial, disputing the matter in a retrial cannot
be permitted in light of the purpose of the provision of Article 104-3.
1002 Ryōichi Mimura, “Heisei 23 Nen Kaisei Tokkyo Hō Shikō Go Ni Okeru Tokkyo Kankei Soshō No Genjō To Ryūiten”(Situation of Patent-Related Litigation After the Patent Act as Revised in 2011 Became Effective and Points ofAttention) (L & T, No. 60 (2013), p. 25) stated that, if the infringer is allowed to evade payment of the amount due, itwould mean allowing the infringer to evade both the final and binding judgment and performance of payment by
obtaining a trial decision of invalidation while circumventing compulsory execution through concealing property.

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§8. Infringement

Patent Act, which provides that “the trial proceedings may be suspended until the decisionin another trial has become final and binding.” Not allowing a retrial is a peculiar measure
under litigation law, but since the defendant is given sufficient opportunities for submitting
allegations and defenses in an infringement suit, there is no need to allow a defendant who
does not use those opportunities to request a trial for invalidation and further request aretrial.
[454]
Incidentally, retrials should not be restricted in criminal cases from the viewpoint of
the protection of human rights, so the 2011 revision only applies to civil cases.
8.6. Penal Provisions (Crime of Infringement)1(1) Crime of patent infringement (Article 196 of the Patent Act)
While there are various criminal penalties stipulated under the Patent Act, thissubsection will only explain about the crime of infringement of a patent right and exclusive
license. Explanations on other crimes will be provided in “§12 Criminal Penalties.”
The general provisions of the Penal Code provide that they also apply to crimes forwhich punishments are provided by other laws and regulations (Article 8 of the Penal Code),so the general principle of the Penal Code is applied in regard to whether or not an act meetsthe requirements for constituting a crime, the illegality of the act, and the liability of theoffender. Since the Patent Act has no provisions concerning crimes committed throughnegligence, only intentional crimes are punished.2 While an act must have been intentionalin order to constitute the crime of patent infringement, the intent in this case means to beaware of facts constituting a crime and intend to realize such facts or at least allow for suchfacts to be realized. In the case of a patent infringement, the offender needs to have beenaware of the patent infringement. Attempted crimes are not punished either since there are
1 With regard to the crime of patent infringement in general, see Shigeki Itō and Keiji Ono and Kunio Shōji, eds.,
Chūshaku Tokubetsu Keihō Dai 5 Kan Keizai Keihō Hen (2) (Annotated Special Penal Code, Vol. 5, Economic Criminal
Law (2)) (Tachibana Shobo, 1984), p. 149 [written by Kunio Harada]; Yosoji Ibayashi, Kōgyō Shoyūken Ni Kansuru
Keiji Jō No Sho Mondai” (Various Penal Issues concerning Industrial Property), Kōgyō Shoyūken Hō Kenkyū (Studies
on Law of Industrial Property Rights), No. 21 Rinji Zōkan Go [Special Additional Issue]); Arata Yamamoto, Mutai
Zaisanken Kankei Hōrei No Bassoku No Kenkyū (Study on Penalties under Intangible Property Laws and Regulations),
Hōmu Kenkyū Hōkokusho (Research Reports on Legal Affairs), Vol. 43, No. 1, (Hōmu Kensyūjo [Research and Training
Institute] 1955); Minoru Takeda, Chiteki Zaisanken Shingai Yōron (Tokkyo/Ishō/Shōhyō Hen) [Dai 5 Han], p. 603;
Ryūichi Hirano and Shirō Sasaki and Yukiharu Fujinaga, eds., Chūkai Tokubetsu Keihō Dai 4 Kan Keizai Hen III Tokkyo
Hō [Dai 2 Han] (Explanatory Notes on Special Penal Code, Vol. 4, Economics III, Patent Act [2nd ed.]) (Seirin-Shoin,1991), p. 32 [written by Sōtarō Ishikawa].
2 Determination of involvement of intent is often difficult. There is a case where the court denied criminal liability of theaccused person since that person had asked for and followed the expert opinion of a patent attorney (the Sendai High
Court Judgment, September 26, 1968, Hanrei Kōgyō Shoyūken Hō Genkō Hō Hen (Industrial Property Case Law Current
Law Version), 7, 2455, p. 53); and a case where the court held that no criminal intent is involved when it is reasonable
to consider that the party has been given the implicit authorization of the right holder (the Toyama District Court
Judgment, October 5, 1961, Kakei, Vol. 3, No. 9/10, p. 930).

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no provisions about them.
[455]
In principle, infringement of a patent right refers to an act whereby a person works
subject matter that falls within the technical scope of another person's patented invention
as a business, without authorization. Article 104 of the Patent Act provides for presumptionof an infringement with regard to a process invention, but when an infringement is foundbased on this presumptive provision, this cannot be regarded as facts found on the basis ofevidence (Article 317 of the Code of Criminal Procedure), so no criminal penalty shouldbe imposed.3 From a practical point of view, as well, the police and public prosecutors
have the right to investigate, so it would not be reasonable to impose a criminal penalty
based on presumption.
Although there was controversy over whether an indirect infringement constitutes acrime of infringement (deemed infringement), provisions on criminal penalty on indirect
infringement were stipulated (Article 196-2 of the Patent Act) with the 2006 revision, andit was clarified that an indirect infringement constitutes one type of infringement. 4
However, an indirect infringement is a more minor crime than a direct infringement.
Conventionally, a patent right was valid unless it was invalidated in an invalidation
trial, so with regard to criminal penalties as well, patent rights containing reasons forinvalidation were treated as valid, and the crime of infringement was found in many cases.
However, with the 2004 revision, Article 104-3 was stipulated, and it became possible tofile a defense of invalidity. Thus, invalidation can also be pleaded in a criminal suit.5 It is
not appropriate for an act to be denied to be infringement in a civil case but be found to be
an infringement in a criminal case.
When a trial decision to the effect that a patent is to be invalidated becomes final andbinding or a court judgment voiding a patent is rendered after a judgment of guilt has
become final and binding, a request for a retrial may be filed (Article 435, item (v) of theCode of Criminal Procedure).
The punishment for the crime of patent infringement used to be imprisonment withwork for a term not exceeding five years or a fine not exceeding five million yen, but with
As an opposing theory, the Japan Patent Office ed., Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai19 Han], p. 303 states that the provisions of this Article are construed to be applicable also when determining the crime of
infringement.
4 Even prior to the 2006 revision, the following was a trademark case in which the court held that even an indirect
infringement constitutes an infringement: the Tokyo District Court Judgment, August 3, 1981, Hanji, No. 1042, p. 155(the Morimitsu case).
5 There is also a view saying that an act of an alleged infringer could be considered to be unintentional if he/she had known
the existence of the reason for invalidation (Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Ge[New Explanatory Notes on the Patent Act Vol. 2], p. 2704 [written by Morisaki Hiroyuki and Makoto Okada]), but itwould be more straightforward to simply allow the alleged infringer to file a defense of invalidity.
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§8. Infringement

the recent trend of imposing heavier punishment, the provisions were revised upon the 2006
revision. Today, a direct infringer is punished by imprisonment with work for a term notexceeding ten years or a fine not exceeding 10 million yen or a combination thereof (Article
196 of the Patent Act) and an indirect infringer is subject to a lesser punishment of
imprisonment with work for a term not exceeding five years or a fine not exceeding fivemillion yen or a combination thereof (Article 196-2 of the Patent Act). The reasons for thislegislation of imposing heavier punishment include the fact that patented inventions
become susceptible to imitation once they are disclosed to the public, and because theamount of damages caused by an infringement is becoming higher due to a general increasein the values of patents, stricter punishments were needed in order to deter infringements
and to achieve a balance with statutory punishments for other property offenses.
[456]
A juridical person used to be charged the same amount of fine as a natural person,
but with the establishment of a provision on dual liability upon the 1998 revision, a juridical
person became liable to a heavier fine not exceeding 150 million yen, and the maximum
amount was further raised to 300 million yen with the 2006 revision (Article 201, paragraph(1), item (i) of the Patent Act). As a result of the lengthening of the maximum term of
imprisonment with work to 10 years for direct infringement and five years for indirect
infringement, the statute of limitations for instituting prosecution became seven years(Article 250, item (iv) of the Code of Civil Procedure) and five years (item (v) of said
Article), respectively. However, when a juridical person is punished by a combination of
imprisonment and a fine, the statute of limitations will be three years (item (vi) of said
Article), and this will cause an imbalance between the case of a juridical person and thecase of an individual. Thus, the statute of limitations for instituting prosecution was
stipulated as seven years in the case of an individual and five years in the case of a juridical
person, corresponding to that for direct infringement and indirect infringement by anindividual (Article 201, paragraph (3) of the Patent Act).
(2) Crime that can be prosecuted without a complaint
In the past, while a trademark infringement could be prosecuted without a complaintsince a trademark serves the public interest through preventing consumers from being
misled or confused, a patent infringement had been a crime prosecutable upon a complaint(Article 196, paragraph (2) of the Patent Act before the 1998 revision). However, a patent
infringement also became a crime that can be prosecuted without a complaint upon the1998 revision (deletion of the provision on the crime prosecutable upon a complaint in
Article 196, paragraph (2) of the Patent Act). The reason for the legislation was the growth518§8. Infringementof the need to provide stronger protection for patents compared with general property rights
in line with the fact that patents have become extremely important property, and the great
reduction of the need to protect personal rights due to the increase in the share of patentapplications filed by legal entities (about 97 percent as of 2014; JPO Annual Report 2015,
Statistics and Appendixes, p. 47). In short, the crime has become closer to theft, but aheavier fine is imposed on the crime of patent right infringement. However, even in thecase of an application filed by a juridical person, the right of credit (a personal right) of theactual inventor of the technology is not extinguished, so the name of the inventor has to be
written in the inventor column of a patent certificate, etc. Accordingly, the increase in thenumber of patent applications filed by juridical persons is not directly connected with themeasure to make a patent infringement prosecutable without a complaint, and is notconsidered to be a reason for such legislative measure. Upon legislation, more in-depth
study should have been made on the difference between stealing tangible property andstealing information.
[457]
With regard to infringements of property information, the question of what kinds ofcases should require no complaint in order for prosecution to be instituted involves adifficult problem. Technological information, which is public property, should be available
for free use in principle, but the Patent Act specially permits its monopolistic use. Therefore,
there is some hesitation in providing strong legal protection and requiring no complaint for
prosecution, similarly to a natural crime. On the other hand, if there is a need to provide
strong legal protection for a patent right on the basis that it is an artificial right, which iseasily infringed and of which infringement is more difficult to monitor compared to thecase of tangible property, it is reasonable to consider it a crime that requires no complaint
for prosecution. After all, even if the patent were a right purely designed for protecting a
private interest, if it becomes generally recognized that a patent infringement harms thesocial order to an extent similar to theft, a patent infringement would be prosecutablewithout a complaint. Thus, the 1998 revision is considered to have been made under therecognition that patent rights in modern society have grown to such a level, and it is certain
evidence of the present pro-patent era, but whether it was truly necessary to make a patent
infringement prosecutable without a complaint is not free of doubts.
[458]
8.7. Scope of Protection519

§8. Infringement

8.7.1. Technical Scope of a Patented Invention
In patent right infringement litigation, the interpretation of the scope of patent claims,
which is whether or not the allegedly infringing product or process falls within the technicalscope of the patented invention, becomes an issue. While claim interpretation also becomes
an important issue in patent examination and trial, such interpretation is referred to as“identification of the gist of the invention” in such case. The technical scope of a patented
invention indicates the technical idea embodied by the statements in the scope of claims(claims).1 A patent right is significant in that it excludes others from infringing the rightwith regard to a certain invention. Apart from some exceptional cases, the technical scopeis the scope in which an act constitutes a patent infringement, so infringement litigation isoften centered on a battle over the technical scope. The scope determined in the case of an
infringement is sometimes referred to as the scope of protection. This scope is not
absolutely fixed, but is decided in relation to the technology allegedly being infringed in
the course of an actual infringement case.
A patented invention is a technical idea, and it does not exist as a concrete object, but
is an abstract existence described as statements in the claims or the description. A machine,
etc. which exists as a patented product is one mode of embodiment of the technical idea
and not the invention, which is the technical idea, itself. While the technical scope of apatented invention is defined literally, it is impossible to completely express the technicalscope in words, so the technical scope must always be decided through the interpretationof the wording of the scope of claims (claim interpretation). While the technical scope isdetermined on the basis of the statements in the scope of claims (Article 70, paragraph (1)of the Patent Act), there are questions as to the extent of materials that can be used as
references and how the scope should be determined.
[459]
The former Act (Act of 1959) did not have a provision corresponding to Article 70of the current Act, so it was also possible to interpret that the technical scope of a patented
1 The technical scope is used both in the same meaning as the scope of protection and in a different meaning. This bookintends to consider the scope that actually constitutes a patent right infringement as the scope of protection, so there is aslight difference between the scope of protection and the technical scope in that sense. Terminology aside, the technicalscope embodied in the scope of claims and the scope of infringement differ in the case of an indirect infringement (Article
101 of the Patent Act) and the case of a patent right whose duration has been extended (Article 68-2 of the Patent Act).
There is also a theory that, regarding the difference between the technical scope and the scope of protection, the technicalscope is determined by the JPO, and it is just as described in the statements of the scope of claims, while the scope ofprotection is the technical domain recognized by the courts (equivalent, incomplete working, circumvention, etc.)(Kenjirō Ōe, “Tokkyo Seikyū No Han’i To Tokkyo Hatsumei No Hogo Han’i Tono Kakusa” [Difference Between the
Scope of Patent Claims and the Scope of Protection of the Patented Invention], Tokkyo Kanri [Patent Management], Vol.
25, No. 7 [1975], p. 713; Kenjirō Ōe, “Tokkyo No Hogo Han’i Ni Tsuite” [Scope of Protection of a Patent], Patent, Vol.
21, No. 10 [1968], p. 6; Kenjirō Ōe, “Tokkyoken No Kenri Han’i No Kaishaku Ni Tsuite No Ichi Kōsatsu” [Examinationof the Interpretation of the Scope of Right of a Patent], Gakkai Nenpō, No. 2 [1979], p. 39). However, now that a defenseof patent invalidity may be made at the court, both scopes should be determined based on the same standards.

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invention should be determined based on the entire description. However, under the current
Act that includes Article 70, it became conclusive that the technical scope must be
determined on the basis of the claims. Nevertheless, even under the current Act, there is anargument over the extent to which one can refer to materials other than the claims. Many
conventional court judgments have stated that although the claims indicate the scope of thepatent, it is not completely prohibited to refer to other materials, and items such as thedetailed explanation of the invention can also be taken into consideration.2[460]
Later, a Supreme Court judgment (the Lipase case) 3 was handed down that

2 The Osaka District Court Judgment, May 4, 1961, Kamin, Vol. 12, No. 5, p. 937 (the Expanded Polystyrol case). In thiscase, which is a case under the former Act, the court stated that the determination of the technical scope should naturally
be made based on the statements of the scope of claims, but it is not inadmissible to use other materials for supplementing
the determination, so the determination can be made by also taking into account the statements of the description otherthan the scope of claims, the technological level at the time of the filing, the intention of the applicant at the time of thefiling indicated by the prosecution history, and interpretation of the JPO’s intention on whether or not to grant the patent.
There are many other court judgments to the same effect. See Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3Han], p. 690 [written by Shigetoshi Matsumoto].
3 The Supreme Court Judgment, March 8, 1991, Minshū, Vol. 45, No. 3, p. 123 (the Lipase case). This case concerned aninvention of a method to measure triglyceride (neutral fat) for diagnosing hyperlipemia by using Ra lipase (a kind of
enzyme for decomposing fat). While the term “lipase” was used in the plaintiff’s patent claim, the explanation in thedescription was centered on Ra lipase, and only Ra lipase was mentioned in the working example. The examiner and thetrial examiners refused the application by stating that the lipase described in the scope of claims also included lipases
other than Ra lipase, so that part did not involve an inventive step. However, in litigation for rescinding the trial decision(the Tokyo High Court Judgment, October 29, 1986, Minshū, Vol. 45, No. 3, p. 145), an assertion was made for the firsttime that said lipase should be construed to mean Ra lipase, and the court rescinded the trial decision, mentioning that inlight of the statements of the detailed explanation of the invention, it was reasonable to consider the lipase to be Ra lipase.
In the final instance, the Supreme Court judgment stated as follows: “Determination of the gist of the invention should
be made based on the statements of the scope of claims in the description attached to the request, unless there is a special
circumstance. The statements of the detailed explanation of the invention in the description can also be taken into
consideration only under special circumstances, such as when the technical meaning of the statement of the scope ofclaims cannot be understood in a singular and clear manner or when the statement is apparently erroneous at a glance
when compared with the statements of the detailed explanation of the invention in the description. This fact is clear fromthe provision of Article 36, paragraph (5), item (ii) of the Patent Act (author's note: revised at present), which stipulates
that only matters that are indispensable for the composition of the invention for which the patent is sought should besated in the scope of claims.” When the plaintiff received the decision of refusal, the plaintiff should have amended theterm “lipase” stated in the scope of claims to “Ra lipase,” but failed to do so (probably with the aim to make the scopeof claims broader), but later insisted that the “lipase” described in the scope of claims should be interpreted as “Ra lipase”
by taking into account the entire description. However, even if a patent is granted, a lipase other than the Ra lipase is not
likely to constitute an infringement as an interpretation of the technical scope in an infringement case. Since this case
was litigation for rescinding a trial decision, the point at issue was what scope of materials could be referred to by theexaminer in making the decision to grant a patent, so the extent of applicability of the theory in this Supreme Court
judgment to infringement cases could have been considered as a different matter (this was a case before the defense ofinvalidation (Article 104-3) became allowed by the 2004 revision). It is considered that this Supreme Court judgment
did not strictly prohibit one from taking into consideration the statements in the description, but prohibited addition ofmatters stated in the description beyond the scope of claims in determining the gist of the invention. However, thejudgment had a great influence on actual practice, and served as a motivation for revising Article 70 of the Patent Act,
which was a provision on interpretation of the scope of claims in the infringement phase. Incidentally, in the following
case, which took place immediately after this Lipase case, the statements of the detailed explanation of the invention andthe drawings were taken into consideration based on the reason that, although the claim itself had not been corrected, thescope of claims had been narrowed by the corrections made to the detailed explanation of the invention and the drawings:
the Supreme Court Judgment, March 19, 1991, Minshū, Vol. 45, No. 3, p. 209 (the Clip case). It is possible to derive areasonable conclusion depending on the interpretation of the “special circumstances” as mentioned in the Supreme Court
judgment of the Lipase case, and the Clip case can be considered as one such example. Other such examples include theTokyo High Court Judgment, September 19, 1991, Chiteki Saishū, Vol. 23, No. 3, p. 681 (the Diesel Oil Composition
that is Fluid at Low Temperatures case); the Tokyo High Court Judgment, September 10, 1997, Chiteki Saishū, Vol. 29,
No. 3, p. 819/Hanji, No. 1615, p. 10 (the Kilby case).

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considerably limited the room for taking the description into consideration in litigation for
rescinding a trial decision, and this induced great confusion in actual practice. Partly due tothis incident, a provision that “the meaning of each term used in the scope of claims shallbe interpreted in consideration of the statements in the description and drawings attachedto the application” was added (Article 71, paragraph (2) of the Patent Act). This confirmedthat determination of the technical scope cannot deviate from the statements of the scopeof claims, and while maintaining the conventional premise that if any inconsistency ordifference of scope were found between the statements of the scope of claims and those of
the description, the determination should be based on the statements of the scope of claims,4
it confirmed that the meaning, etc. of the terms used in the scope of claims should beinterpreted by referring to the detailed explanation of the invention, the drawings, and thebrief explanation of the drawings. 5 There are many court judgments concerning thetechnical scope, and some of the generalities stated in them appear to be contradictory toeach other, but this is because practical determination is made in accordance with therelevant facts of the individual cases. Specifically, there is a need to provide protection
suitable for the invention on the one hand, but on the other hand there is a need for thescope of claims to be definite since it serves as the borderline between the rights of thepatentee and the public domain, and it is necessary to achieve a balance between the two.
In actual cases, determination should be made independently for each case, and it is often
meaningless to make a discussion by only focusing on the generalities stated in the court
judgments. Thus, the following part shall briefly examine the materials that can bereferenced for determining the technical scope and the method of determination in
infringement lawsuits. Meanwhile, the abstract that was added as a matter to be stated in
4 In the Supreme Court Judgment, December 14, 1972, Minshū, Vol. 26, No. 10, p. 1888 (the Phenothiazine Derivative
Manufacturing Method case), which cannot be discussed on the same plane as infringement cases since it is a case against
a trial decision concerning correction, the court found that the statements of the scope of claims should be prioritized bystating that “the importance of the scope of claims within the description in no way matches that of the detailed
explanation of the invention or the drawings.” Meanwhile, in the Osaka District Court Judgment, May 23, 1986, Mutai
Saishū, Vol. 18, No. 2, p. 133 (the Fiber Separating Device case), which was an infringement case, the court stated that“the statements of the scope of claims take priority when the statements of the scope of claims and those of the detailed
explanation of the invention are inconsistent.” In the second instance judgment on the same case, the Osaka High Court
Judgment, July 15, 1988, Mutai Saishū, Vol. 20, No. 2, p. 323, the court stated that even if the matters stated in the scopeof claims were described as being not indispensable in the detailed explanation of the invention, it cannot be considered
as an ancillary feature as long as it is described in the scope of claims. There are many other court judgments holding to
the same effect. However, there are old cases where the court held that when features that are not described in the scopeof claims are required for attaining the working effect of the patented invention, they can be recognized as indispensablefeatures (the Tokyo District Court Judgment, December 11, 1967, Hanta, No. 218, p. 239 [the Expanded-Mouth Seine
case]), or that although the scope of claims does not state the extent of the softening by heat, according to the detailed
explanation of the invention and the written answer, it is meant that the object should be heated to the melting point (theOsaka District Court Judgment, April 11, 1975, Hanta, No. 326, p. 328 [the Coherent Pressure-Resistant Hose case]), orthat although the upper limit of the temperature is not defined in the scope of claims, it would not be lower than the upper
limit described in the description (the Toyama District Court Judgment, September 7, 1970, Mutai Saishū, Vol. 2, No. 2,
p. 414 [the Melamine Resin case]).
5 Article 69, paragraph (1) of the European Patent Convention provides that although the extent of protection is determinedby the claims, the description and the drawings are used to interpret the claims. The Japanese provisions are similar interms of content

522

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the description upon the 1990 revision is required for the convenience of searching patent
information, and cannot be taken into account when interpreting the technical scope(Article 70, paragraph (3) of the Patent Act). Meanwhile, the 2003 Examination Guidelines
have changed the support requirements. Today, even if a statement is included in the scopeof claims, it needs to be supported substantially by the detailed explanation of the invention,
so the detailed explanation inevitably has to be taken into consideration when interpretingthe scope of claims.
[461]
It is often difficult to understand the contents of an invention sufficiently from thestatements in the scope of claims alone, and they can sometimes be understood more
precisely by also referring to the detailed explanation of the invention or the drawings, so
those parts of the description are taken into account in such cases (Article 70, paragraphs(1) and (2)). While the statements of the description use academic terms, and the terms areused in their general meanings in principle, it is also possible to use them with special
meanings by defining them (Form 29, Article 24 of the Patent Act Enforcement Ordinance).
Therefore, when the meaning of a term used in the scope of claims is not clear or when theterm is defined in the detailed explanation of the invention or other parts of the description,
those parts are taken into consideration.6 As a patent is granted on the part that exceeds thetechnological level at the time of the filing, the technological level at the time of the filing

6 In the Supreme Court Judgment, August 4, 1964, Minshū, Vol. 18, No. 7, p. 1319 (the Rotary Fuel Oil Firing Equipmentcase), which was a case of a trial for confirmation of the scope of right under the former Utility Model Act, the court
stated that “according to the empirical rule, the applicant often describes in the claim matters that are not the gist of thedevice, but merely relate to the device or, conversely, fails to describe matters that are judged to be the gist of the device,
so when determining the scope of right of a utility model, the gist of the device should always be practically determinedby also taking into account the nature and the purpose of the device, as well as the overall statements in the detailed
explanation and the attached drawings, without being bound solely to the literal meaning of the statements of the scopeof claims.” Partly because it is a case under the former Act, the court’s determination of the scope was too lax to be a
general rule, and such extreme view is considered to be rare at present (this judgment was rendered when the defense ofpatent invalidity had not been allowed, so it can be considered as a result of pursuing specific justice). Cases under thecurrent Act include the Supreme Court judgment, May 27, 1975, Hanji, No. 781, p. 69 (the Oar case). In this case, thecourt stated that there is no harm in considering the structure and the effects of the device that are described in parts ofthe description other than the scope of claims as materials for judging the meaning and the contents of the statements ofthe scope of claims more specifically and precisely. There are many other court judgments ruling to this effect. For
instance, in the Tokyo District Court Judgment, August 31, 1994, Hanji, No. 1510, p. 35/Hanta, No. 862, p. 108 (theKilby case), the court concluded that the elements in question were not included in the technical scope, but as a general
theory it stated that “when determining the technical scope of a patented invention, the statements of the scope of claims
should be interpreted and determined in light of the detailed explanation of the invention and the drawings attached to
the request when necessary as supplements, and in making the above interpretation, it is reasonable to consider that the
publicly known technology, which indicates the level of technology at the time that had been assumed by the description,and the intentions expressed by the applicant in the prosecution history, can also be taken into account” (this was apeculiar case at a time when the duration of a patent had not been limited based on the filing date, in which a Japanese
patent application was filed in 1960 based on a U.S. patent application filed in 1959, and it was registered 30 years fromthe filing of the first application, in 1989, after repeated division of the application). In contrast, in the Tokyo High Court
Judgment, February 14, 1995, Hanji, No. 1539, p. 126 (the Module-shape Electric Connector case), which was an
infringement case, the court stated almost the same opinion as in the Supreme Court judgment on the Lipase case. For adetailed explanation of actual cases, see Administrative Affairs Bureau, General Secretariat, Supreme Court “Chiteki
Zaisan Kankei Minji Gyōsei Saibanrei Gaikan” (Overview of Civil Administrative Suits Related to Intellectual Property
Rights), p. 52 onward.

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must be taken into consideration in determining the contents of the invention.7[462]
During the course of progress from the filing to registration, various interactions
often take place between the applicant and the examiner.8 Sometimes, the patent becomesregistered after the applicant makes clarification to limit the technical scope or submits awritten opinion in the course of those interactions and, sometimes, the technical scope
becomes clear due to such clarification. 9 Those documents that were submitted in theprosecution history are called a “file wrapper,” and are subject to public inspection (Article
186, paragraph (1)). They can serve as effective materials in determining the technicalscope or applying the doctrine of equivalents. In many cases, the prosecution history is used
as a material for limiting and interpreting claims, so inspection of these documents isregarded as an extremely important process for an alleged infringer in infringement lawsuits.
On the applicant’s side, this process has the significance of file wrapper estoppel;10 that is,
not being able to deny what he/she has asserted in the prosecution history. Meanwhile, an
act of asserting matters that are contradictory to matters asserted in an invalidation trial
procedure after the patent grant is not referred to as file wrapper estoppel; rather, it would
be a violation of the fair and equitable principle in litigation or a violation of the principleof estoppel.11 It would be most desirable from the point of view of legal stability to be able
to completely determine the technical scope based on the scope of claims and thedescription. In reality, however, a patent comes into existence only after the various
interactions between the applicant and the JPO. Therefore, it is not reasonable to determine
the technical scope solely based on documents that have been made public, while
disregarding such interactions. There is also a view that, when determining the technical
7 While there are many judgments indicating the same view, the Supreme Court Judgment, December 7, 1962, Minshū,Vol. 16, No. 12, p. 2321 (the Coal Tram Derailment Prevention Device case) is famous.
8 The most excellent article on prosecution history is Shiori Nishii, “Tokkyo Hatsumei No Hogo Han’i No Kakutei To
Shutugan Keika (1)–(8)” (Demarcation of the Scope of Protection of a Patented Invention and Prosecution History (1)–(8)) Journal of the Jurisprudence Association, The University of Tokyo, Vol. 130, No. 6, p. 130 to Vol. 131, No. 3, p.
131 (2013–2014). Although it is almost taken for granted in Japan to take into account the prosecution history documents,
the Nishii article demonstrates that it is not a popular theory in the world.
9 The same applies to interactions between the applicant/patentee and a trial examiner in a JPO trial or patent opposition
procedure.
10 File wrapper estoppel is estoppel that is categorically recognized, rather than the general estoppel of disallowing theparties to infringement litigation to make assertions that betray the trust between them. The documents involved fromthe filing until the registration used to be filed in bulk in a bag called a file wrapper, and the assertions by the applicant
in the prosecution history (e.g. interactions between the applicant and the examiner) were clear from the documents
contained therein. The file wrapper refers to not the mere bag, but its content, and because the right holder is not allowed
to make an assertion contrary to his/her words and deeds revealed by the content of the file wrapper, it has come to becalled file wrapper estoppel or prosecution history estoppel. Incidentally, file wrappers used to be moved to and fromdifferent divisions in line with the progress of the procedure, but the present advanced electronic filing system transmits
all the information online between the different divisions, so the file wrappers are no longer used. However, the term
“file wrapper estoppel” still remains.
11 In the Tokyo District Court Judgment, September 27, 2000, Hanji, No. 1735, p. 122/Hanta, No. 1042, p. 260 (theContinuous Wall Construction Method case), the court held that it is not acceptable under the principle of estoppel torestrictively interpret the technical scope of the invention in order to circumvent grounds for invalidation in a casewhere a trial for invalidation is requested, or to assert a reverse opinion after filing litigation.

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scope, the subjective intention of the applicant, such as the prosecution history, should not
be taken into consideration, and the scope should be objectively determined fromdocuments that have been made public,12 and there are many countries that adopt such an
idea. However, it is not appropriate for an applicant to acquire a right by clarifying a narrow
scope and then assert a broad scope in an infringement phase. Since the organization
granting the right (the JPO) and the organization determining the scope of the right (court)
are separate, there is risk that the right holder would make contradictory assertions to thetwo organizations. Therefore, file wrapper estoppel plays the role of preventing
contradictory conclusions between the two organizations. This can be viewed as an effectof the fair and equitable principle. Nevertheless, a system under which prosecution history
must not be taken into account is also reasonable in a way. Under such system, an
infringement can be found solely based on claim interpretation, and it would contribute tolegal stability. There would be no need to search enormous file wrappers, and the burdenof litigation would be reduced. In order to do so, however, it is necessary to change theexamination practice of allowing clarification of statements instead of requiring theiramendment. Also, in infringement litigation, the court should not identify a narrow scopeof claims by taking into account the prosecution history; instead, the alleged infringer
would need to squarely use the opposition system or a trial for invalidation or make adefense of invalidity, and the patentee would need to fight back by filing a request forcorrection or a trial for correction.
[463]
The prosecution history does not bind the court but may only be discretionally taken
into account.13 Therefore, the file wrapper is not taken into account in some cases.14 In
reality, an application would rarely become registered as a result of the applicant clarifying
to the effect that a broader interpretation should be adopted in the course of prosecution
history.15 Thus, taking the prosecution history into account is practically equivalent tomaking an amendment to narrow the scope of claims, which is disadvantageous for the

12 File wrappers are not made public, but they can be inspected and photocopied (Article 186, paragraph (1) of the PatentAct).
13 The Toyama District Court Judgment, September 7, 1970, Mutai Saishū, Vol. 2, No. 2, p. 414 (the Melamine Resincase).
14 The Tokyo District Court Judgment, September 18, 1972, Hanta, No. 288, p. 378 (the Golf Glove case).
15 Making a broad interpretation increases the risk of incorporating grounds for invalidation. Therefore, applicants often
assert a narrow interpretation in the filing phase to establish a patent right, and assert a broad interpretation in theinfringement phase.

525§8. Infringement

applicant.16 This originates from the general legal principle called estoppel, but in applying
the idea to the Patent Act, requirements specific to the Patent Act would have to beinvestigated.17[464]
Matters that are determined to be intentionally excluded from the description by theapplicant are excluded from the technical scope, in principle, but it is difficult to determine
what matters correspond to those that have been intentionally excluded from the description,
so the determination must be made case by case.18 Since strict application of the intentional
exclusion theory would lead to an unjust conclusion in which there would hardly be any
room for application of the doctrine of equivalents, it should only be applied when it isapparent that the exclusion was intentional.19 The theory of the limit of awareness is asimilar idea. This idea tries to grant protection within the limit of which the inventor was
16 Masao Miyake, Tokkyo Hanrei Hyakusen (100 Selected Patent-related Court Decisions) (1966), Case 66; Mitsue
Toyosaki, Tokkyo Shingai Soshō (Patent Infringement Litigation) Jitsumu Minji Soshō Kōza (Practical Civil Litigation
Lecture), Vol. 5 (Nippon-Hyoron-sha, 1969), p. 217. It is considered to be rare to have to take into account theprosecution history when the technical scope is clear from the description, but there can be cases where an applicant
who should be making an amendment tries to take an easier approach of only making a clarification, or where a patentis registered in spite of the fact that an examiner has erroneously failed to order an amendment. For a detailed
explanation of court judgments, see Administrative Affairs Bureau, General Secretariat, Supreme Court “Chiteki
Zaisan Kankei Minji Gyōsei Saibanrei Gaikan” (Overview of Civil Administrative Suits Related to Intellectual
Property Rights), p. 68.
17 Essays on estoppel include the following: Nobuhide Ōtomo, “Shinsa Keika Kinhangen No Hōteki Seishitsu” (Legal
Nature of Prosecution History Estoppel), Institute of Intellectual Property, ed., Tokkyo Kurēmu Kaishaku No Kenkyū(Studies on Interpretation of the Patent Claims) (Shinzansha, 1999), p. 1; Nobuhide Ōtomo, “Kintō Ron No Hōteki
Seishitsu” (Legal Nature of Doctrine of Equivalents), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 29 (2006), p. 1;
Nobuhide Ōtomo, “Tokkyo Kurēmu Kaishaku Ni Okeru Kintō Ron No Ichizuke Oyobi Sono Yakuwari (1)–(4)”(Relation between the Patent Claim Interpretation and the Doctrine of Equivalents (1)–(4)), Hōkyō, Vol. 126, No. 6(2009), p. 1163/No. 8, p. 1623/No. 9, p. 1743/No. 10, p. 1997.
18 While there are many court judgments that have recognized the intentional exclusion theory, a famous one is the Tokyo
District Court Judgment, January 31, 1972, Hanta, No. 276, p. 358 (the Insecticide Composition case). In this case, inwhich the scope of claims was described by a generic concept at the time of the filing, but was later limited to five
types of substances based on more specific concepts, the court stated that the substances other than those five types had
been intentionally excluded by the applicant. In the Tokyo District Court Judgment, August 30, 1976, Hanta, No. 353,
p. 211 (the Aerial Wire Built-in Holder case), the court held that the applicant corrected the original term “resin
insulators” to “thermosetting insulators” in order to intentionally limit the scope to thermosetting insulators. Meanwhile,the court did not easily recognize the intentional exclusion theory by stating that there was no reason to limit theinterpretation as long as there were no clear statements to intentionally limit the scope included in the description orother filing documents in the Tokyo District Court Judgment, April 26, 1985, Mutai Saishū, Vol. 17, No. 1, p. 199 (theArticle Conveyer case). In the Osaka District Court Judgment, May 27, 1991, Chiteki Saishū, Vol. 23, No. 2, p. 320(the Double Mixer case), the court held that as long as the patent right has been established, the technical scope should
be determined objectively, separately from the subjective intention of the applicant, so the gist of the written answer is
not considered to limit the technical scope, and it is neither against the “fair and equitable” principle nor estoppel,
because there is no circumstance where the objection was dismissed as a result of the explanation in the written answer
being accepted by the examiner (the court did not necessarily deny the application of the estoppel itself). Toshiaki
Makino, “Tokkyo Hatsumei No Gijutsuteki Han’i No Kakutei Ni Tsuite No Kihonteki Na Kangaekata” (BasicApproach to Determination of the Technical Scope of a Patented Invention), Toshiaki Makino, ed., Saiban Jitsumu
Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 101.
19 In the Tokyo District Court Judgment, April 26, 1985, Mutai Saishū, Vol. 17, No. 1, p. 199 (the Article Conveyer case),
the court held that the intentional exclusion theory is only applicable when the intention is apparent. An academic
theory to the same effect is that of Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 496. Intentional exclusion
may often be asserted to counter a claim of equivalence, but even if it were recognized, it would not mean complete
denial of the claim of equivalence. See Sumio Shinagawa, “Tokkyo Hatsumei No Gijutsuteki Han’i No Kettei To Yōtai
Kinhangen No Gensoku Narabini Ishiki Jogai/Ishiki Gentei” (Determination of the Technical Scope of a Patented
Invention and the Principle of the File Wrapper Estoppel, Intentional Exclusion, and Intentional Limitation), Tokkyo
Kanri (Patent Management), Vol. 31, No. 6 (1981), p. 659..

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actually aware, which in reverse means that the content that the inventor was not aware ofshould not be protected. However, thorough application of this idea would drastically limit
the room for applying the later-mentioned doctrine of equivalents, so it must be carefully
applied, as in the case of the intentional exclusion theory.
[465]
The technical scope is not restricted by the literal meaning of the scope of claims or
the working examples, but there can be cases where it is restricted by the working examples.
As long as the technical idea is expressed in words, it cannot be avoided that the peripheryof the technical scope becomes ambiguous to a certain level. In addition, in an infringementcase, the technical scope is not only determined purely by a technical point of view, but
could also involve normative elements. The extent of the difference with other inventionsin the same technical field would also be taken into consideration, and the scope ofprotection should naturally be different between the case of a pioneer invention and an
invention of improvement. In a field in which many similar inventions exist, the scope ofprotection would inevitably be small.

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8.7.2. Doctrine of Equivalents1
8.7.2.1. Basic Concept of the Doctrine of Equivalents
As a general principle, the inventor should be given protection corresponding to theactual substance of the invention. This is why it is often said abstractly that great protection
should be given to a large invention and small protection to a small invention. Emphasis on
this viewpoint results in advocacy of the central definition doctrine, 2 which had been
adopted by Germany in the past. On the other hand, when a patent right is viewed as
economic property, it is not possible to solely focus on the circumstances of the inventor(right holder), but instead, consideration must also be given to foreseeability by third parties
and the legal stability of the right in order to maintain the economic order. If emphasis were
to be placed on such a viewpoint, the aspect of demarcating the limits of the right based on
the scope of patent claims would become important (the doctrine of peripheral definition).
[466]
Since the technical scope of a patented invention is determined on the basis of thestatements of the scope of claims (Article 70, paragraph (1) of the Patent Act), the mostimportant element is obviously the literal meaning of the scope of claims. The main reason
for stating the scope of claims in the description is in its public notice function of clarifying
the technical scope of the claims for third parties, and if this point were to be prioritized,
the technical scope should be limited within the literal meaning of the scope of claims.
However, when the technical scope is determined by being strictly bound by the literalmeaning of the scope of claims, it sometimes leads to an unreasonable result. While it isfundamentally difficult to accurately express the intangible technical idea of an invention
in words, it is also difficult to state the scope of claims by assuming all modes ofinfringement at the time of filing, and it is sometimes almost impossible to make statements
about interchange of its parts with other materials having the same effect that had not

1 See Nobuhide Ōtomo, “Tokkyo Kurēmu Kaishaku Ni Okeru Kintō Ron No Ichizuke Oyobi Sono Yakuwari (1)–(4)”(Relation between the Patent Claim Interpretation and the Doctrine of Equivalents (1)–(4)), Hōkyō, Vol. 126, No. 6(2009), p. 1163/No. 8, p. 1623/No. 9, p. 1743/No. 10, p. 1997; see “Kintō Ron, Kakusei Ka Shi Ka” (Doctrine ofEquivalents—Awakening Or Death), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 38 (2014).
2 The idea that the scope of claims expresses the core part of the invention, and that protection should be extended to thegeneral concept of the invention.

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§8. Infringement

existed at the time of the filing. 3 Therefore, the patent right would often be easily
circumvented if the literal meaning of the claim were strictly interpreted. This would reducethe incentive for obtaining a patent and the incentive for technological development, which
would be against the primary purpose of the Patent Act (Article 1 of the Patent Act) to aim
at industrial development by raising the technological level in society by having inventors
make their inventions public. However, if the scope of protection is substantially expanded
by interpretation, it will damage the legal stability and will be unfavorable for thedevelopment of technologies. In sum, with regard to the doctrine of equivalents, it will be
important to look for a balance between the need to achieve legal stability by securing the
public notice function of the scope of claims and the need to give incentives to inventors.
The technical scope is identical to the wording of the scope of claims under the
principle of the Patent Act, but “identical” in that case means that it is not only identical ina purely technical or literal sense, but that it can be expanded to the extent that can beconsidered normatively identical from the legal perspective. An instrumental concept used
for determining such identity in the legal sense is called the “doctrine of equivalents,” andsubordinate concepts thereof include such terms as “very minor difference in design,”“equivalents,” “interchange of materials,” “circumvention method,” and “incomplete use”
(mentioned later).4 In any case, the doctrine of equivalents is intended to adequately protect
the patented invention by expanding the interpretation of the scope of claims to a certain
extent from the literal scope, while giving consideration to not harming third parties’interests. From a legal point of view, it is necessary to clarify the grounds, requirements,
and the framework for this determination. Ultimately, the point at issue is how a balanceshould be achieved between the right holder’s interests and the interests of third parties

3 An often cited model example case in which the doctrine of equivalents should be recognized is the case of natural
rubber and artificial rubber. At a time when the only rubber existent was natural rubber, it was impossible to state
artificial rubber (a material having the same effect) in the scope of claims, but after the development of artificial rubber,it was extremely easy to interchange natural rubber with artificial rubber. If an act of working the invention by replacing
natural rubber with artificial rubber is found to be a non-infringement, the effectiveness of the patent would be lost.
However, in this case, too, determination should be made by reviewing more detailed facts in actuality. There would
also be a question of whether or not there was a need to limit the statements in the scope of claims to “natural rubber,”
and whether or not it was difficult based on the technological level at the time to use a more general statement like a“buffer material.” It may also be possible to state the scope of claims in a manner that would include materials having
the same effect that do not exist at present. However, there are hardly any court judgments relating to materials having
the same effect in actuality.
4 These should be considered as subordinate concepts of the doctrine of equivalents, but since the doctrine of equivalents
had not been accepted in court judgments, counsels used to assert that the subject matters were substantially the same as
the invention by using these subordinate concepts, because they would lose the suit if they squarely asserted the doctrineof equivalents.

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§8. Infringement(general society).5[467]
8.7.2.2. Changes in the Circumstances Surrounding the Doctrine of Equivalents
With the existence of opposing theories 6 and many negative court judgments 7
against the doctrine of equivalents, it had been difficult for the doctrine of equivalents tobe openly recognized. This was partly due to the specific circumstances at the time. Whentechnical levels were low in general, there was a demand for a narrower scope of protection
instead. This can be said not only about the doctrine of equivalents. In the past, strong
protection had not been sought for intellectual property in general. Also, during the era
5 Masashige Ōba, “Tokkyo Hatsumei No Jisshitsuteki Hogo Han’i -- Tokuni Kagaku Tokkyo O Chūshin Ni” (Actual
Scope of Protection of a Patented Invention -- Focusing on Chemical Patents), Toyosaki Mitsue Tsuitō Kinen Ronbun
Shū, Mutai Zaisan Hō To Shōji Hō No Sho Mondai (Various Problems Relating to Intangible Property Law and Business
Law), p. 45 mentions that, after all, this is also an issue of balance between how explicitly the right holder can be expected
to state the description and how much effort can be expected from a person skilled in the art to understand the describedinsufficient statements by supplementing them with his/her own expertise knowledge. Even when the same doctrine ofequivalents is discussed, the scope of equivalents is not interpreted identically, but the scope is somewhat wide or narrowdepending on the scholar. There is an idea that views the doctrine of equivalents as a mere issue of literal interpretationof the claim for determining the technical scope on one hand, and an idea that tries to apply the concept of equivalence
to the portion that cannot be covered by literal interpretation on the other hand.
6 Toshiaki Makino, “Tokkyo Hatsumei No Gijutsuteki Han’i No Kakutei Ni Tsuite No Kihonteki Na Kangaekata” (BasicApproach to Determination of the Technical Scope of a Patented Invention), Toshiaki Makino, ed., Saiban Jitsumu
Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 104. (However, as this essay states that a case where the opponent is accountable
for a social accusation that is more serious than a mere formality deficiency on the right holder’s side, such as being atreasonous person in bad faith, should be treated as a different issue, Makino’s theory cannot be regarded as a theory ofcomplete denial of the doctrine. Toshiaki Makino, “Tokkyo Hatsumei No Gijutsuteki Han’i Kakutei No Mondaiten”[Issues of Determining the Technical Scope of a Patented Invention], Toshiaki Makino and Hiroshi Saitō, eds., Saiban
Jitsumu Taikei 27 Chiteki Zaisan Kankei Soshō, p. 442 was written in consideration of the later “increase anddiversification of the value of information and economic globalization” as well as several law revisions made “with theaim of upgrading the environment for promoting creative business activities of Japanese industry,” and it describes therequirements for the doctrine of equivalents on the basis of recognizing the theory.). Hiroaki Ōhashi, “Shingai Soshō Ni
Okeru Kintōron” (Doctrine of Equivalents in Infringement Litigation), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9Kōgyō Shoyūken Soshōhō, p. 179. See Yasuyuki Echi, “Shutuganji Ni Okeru Kurēmu Eno Kisai Kanōsei To Kintōron - Genrikan Kōryō Moderu O Mochiite” (The Possibility of Stating the Scope of Claims at the Time of Filing and theDoctrine of Equivalents: Using a Principle-Balancing Model), Nakayama Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki
Zaisan Hō No Riron To Gendaiteki Kadai (Theories of Intellectual Property Law and Modern Issues), p. 218.
7 There are many theories that do not deny the doctrine of equivalents itself but are negative about its application. For
instance, the Osaka District Court Judgment, May 4, 1961, Kamin, Vol. 12, No. 5, p. 937 (the Expanded Polystyrenecase); the Osaka District Court Judgment, October 24, 1967, Hanji, No. 521, p. 24 (the Polyester case); the Osaka District
Court Judgment, June 19, 1968, Hanta, No. 223, p. 200 (the Automatic Zigzag Sewing Machine case); the Tokyo District
Court Judgment, October 20, 1976, Hanta, No. 353, p. 247 (the Basic Substitution Diphenylalkane Derivative
Manufacturing Method case); the Tokyo District Court Judgment, March 28, 1983, Mutai Saishū, Vol. 15, No. 1, p. 253(the Wheel Mud Removing Device case); the Shizuoka District Court Hamamatsu Branch Judgment, September 30,
1991, Chiteki Saishū, Vol. 23, No. 3, p. 699 (the Night Soil Treatment Product Usage case); the Osaka District Court
Judgment, October 27, 1994, Chiteki Saishū, Vol. 26, No. 3, p. 1200 (the t-PA case) (for details see Kazuo Masui and
Yoshiyuki Tamura, Tokkyo Hanrei Gaido [Dai 4 Han] [Guide to Patent-related Court Decisions] [4th ed.], p. 144
onward, and Administrative Affairs Bureau, General Secretariat, Supreme Court “Chiteki Zaisan Kankei Minji Gyōsei
Saibanrei Gaikan” [Overview of Civil Administrative Suits Related to Intellectual Property Rights], p. 95 onward).
Nevertheless, the appropriateness of application of the doctrine of equivalents greatly depends on the factual relations,so there are also many cases in which the theory should justifiably be denied. For example, there were cases that involved
a complex situation like repeated amendments or where the right holder claimed the doctrine of equivalents despite thefact that the principle of estoppel or intentional limitation could be applied, and the right holder’s claim was denied as aresult. There are also court judgments which did not use the term "equivalents," but indicated a conclusion close to thedoctrine of equivalents by using the term "substantially the same."530§8. Infringement

when chemical substances were unpatentable (before the 1975 revision), many applicants
had no choice but to obtain process patents for such subject matter, but after chemical
substance patents were permitted, such patentees often sought an unreasonably expanded
interpretation for process patents by referring to the doctrine of equivalents.8 In addition,
as there was a flood of broken up patents under the single claim system, application of thedoctrine of equivalents could induce inconveniences, such as conflicts of rights.9[468]
In the United States, the doctrine of equivalents gathered attention when a pro-patent
policy was promoted during the 1980s, and various academic theories and court judgments
accumulated as a result.10 Now, there is an international trend to recognize the applicationof the doctrine of equivalents. Also in Japan, supporting views have become stronger withimprovements in technological levels and with the strengthening of the trend to attach
importance to basic patents and the introduction of the multiple claim system in recent
years.11 Further, when enacting the current Act, it was mentioned that, while determinationof the technical scope should basically be centered on the scope of claims, “it is considered
8 For example, see the Tokyo District Court Judgment, December 23, 1981, Mutai Saishū, Vol. 13, No. 2, p. 977 (theIbuprofen case).
9 Etsuji Kotani, “Kintōron” (Doctrine of Equivalents), Uchida Osamu Sensei Sanju Kinen, Hanrei Tokkyo Shingai Hō II(Case Law on Patent Infringements II), p. 599; Toshiaki Makino, “Tokkyo Hatsumei No Gijutsuteki Han’i Kakutei No
Mondai” (Issue of Determining the Technical Scope of a Patented Invention), Toshiaki Makino and Hiroshi Saitō, eds.,
Saiban Jitsumu Taikei 27 Chiteki Zaisan Kankei Soshō, p. 444.
10 Since the legal system of each country functions as a whole, it is risky to discuss only the issue of the doctrine ofequivalents separately. For instance, the doctrine of equivalents in the United States is closely linked with the jury systemand the reissue system and the relation between common law and equity. Until recently, no Supreme Court judgments
had been handed down concerning the doctrine of equivalents, ever since Graver Tank & Mfg. Co. v. Linde Air Products
Co., 339 US 605, 85 USPQ 328 (1950). However, after a blank period of about half a century, a decision was renderedin Warner-Jenkinson Co. inc. v. Hilton Davis Chemical Co., 117 S. Ct. 1040, 41 USPQ 2d 1865 (1997) (the WarnerJenkinson case; referred to as the Hilton Davis case until the previous instance). This case involves various points ofdispute, and although the court reversed and remanded the case, it basically recognized the doctrine of equivalents. The
Japanese translation of the entire text of this decision is in IPR, Vol. 11, No. 3, p. 124 (1997). Essays related to thisdecision include the following: Ryūichi Shitara, “Beikoku No Tokkyoken Shingai Soshō No Jitsujō To Nihon No
Kintōron Ni Tsuiteno Ichi Kōsatsu -- Hiruton Dēbisu Hanketsu No Yōyaku To Sono Bunseki” (Study of the Actual
Conditions of U.S. Patent Infringement Litigation and the Doctrine of Equivalents in Japan -- Summary and Analysesof the Decision in the Hilton Davis case) (1) (2), Hōsō Jihō (Lawyers Association Journal), Vol. 48, No. 6 (1996), p.
49/No. 8, p. 25; Michael Bednarek and Richard Peterson, “Hilton Davis Jiken Saikō Saibansho Hanketsu Ga Ataeru
Eikyō” (Impact of the Supreme Court Decision in the Hilton Davis case), Chizai Kanri (Intellectual Property
Management), Vol. 47, No. 5 (1997), p. 645. Comparative studies on the doctrine of equivalents include the following:
Shigetoshi Matsumoto and Takashi Ōseto, eds., Hikaku Tokkyo Shingai Hanketsu Rei No Kenkyū -- Kintōron O Chūshin
To Shite (Comparative Study on Patent Infringement Court Decisions -- Centering on the Doctrine of Equivalents),
Chiteki Zaisan Kenkyū Ronshū (Treatises on Intellectual Property) 1, (Shinzansha, 1996); Hideo Ozaki, “Kintōron Ni
Tsuite No Nichibei No Hikakuteki Kōsatsu” (Comparative Study of the Doctrine of Equivalents in the United States andJapan), Makino Toshiaki Hanji Taikan Kinen, Chiteki Zaisan Hō To Gendai Shakai (Intellectual Property Law andModern Society), p. 187.
11 The following are some of the many theories that favor application of the doctrine of equivalents: Shigetoshi
Matsumoto, Tokkyo Hatsumei No Hogo Han’i [Shinpan]; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han],
p. 707 [written by Shigetoshi Matsumoto]; Shin'ya Yoshii, Tokkyoken Shingai Soshō Taiyō (Outline of Patent
Infringement Litigation), p. 43; Kenjirō Ōe, “Tokkyo Seikyū No Han’i To Tokkyo Hatsumei No Hogo Han’i Tono
Kakusa” (Difference Between the Scope of Patent Claims and the Scope of Protection of the Patented Invention), Tokkyo
Kanri (Patent Management), Vol. 25, No. 7 (1975), p. 723; Kenjirō Ōe “Tokkyoken No Kenri Han’i No Kaishaku Ni
Tsuite No Ichi Kōsatsu” (Examination of the Interpretation of the Scope of Right of a Patent), Nihon Kōgyō Shoyūken
Hō Gakkai Nenpō, No. 2 (1979), p. 39; Masashige Ōba, “Tokkyo Shingai Ni Okeru Kintō No Mondai” (Issue of
Equivalence in a Patent Infringement), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 2, p. 70.

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reasonable to interpret that some room is left for determining that such matters recognizedby an ordinary expert as the content of the invention from the statements of the scope ofclaims are included within the scope of the patent right, instead of being strictly bound by
the literal interpretation of the claims.”12 Although the term “equivalence” is not used, asimilar idea is indicated there. An idea to put the doctrine of equivalents in a statutory form
was considered upon the 1994 revision, but it was shelved due to the various problems thatwould occur in relation to the establishment of such provisions. However, the Industrial
Property Council stated that Article 70 and Article 36, paragraph (5), item (ii) of the Patent
Act (before the 1994 revision) do not preclude application of the doctrine of equivalents,
and reasonable consideration should be made case by case, and that they do not preclude
the idea of regarding a material having the same effect at the time of the infringement as
being interchangeable.13[469]
As mentioned above, court judgments had been negative about application of the

12 Kōgyō Shoyūken Seido Kaisei Shingikai Tōshin Setsumeisho (Explanation on the Council Report on Amendment of
the Industrial Property System), p. 8.
13 Japan Patent Office, Heisei 6 Nen Kaisei Kōgyō Shoyūken Hō No Kaisetsu (Explanation of the 1994 Revision ofIndustrial Property Laws), p. 122.

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doctrine of equivalents in general, 14 but in 1996, the Osaka High Court found an
infringement by openly recognizing the doctrine of equivalents for the first time in Japanin the t-PA case.15 The scope of claims is an intangible technical idea of an invention
expressed in words, so unlike in the case of a tangible property, its outer limits are inevitably
ambiguous. The problem is how the limits should be determined. Irrespective of the use of
the term “equivalence,” some kind of interpretation must be made in any case. It is possible
to either broadly recognize the literal meaning by simply discussing it as a literalinterpretation of the claim or to apply the legal concept of the doctrine of equivalents. There

14 Many court judgments have judged that the products were substantially the same when recognizing an infringement.
These are considered to be not so different from recognizing the doctrine of equivalents. Court judgments in which thecourt rendered a judgment similar to recognizing the doctrine of equivalents through expanded interpretation of the claim
include the following: the Tokyo District Court Judgment, September 29, 1964, Hanta, No. 168, p. 140 (the Watch Ring
Band case); the second instance judgment on the same case, the Tokyo High Court Judgment, June 2, 1969, Hanta, No.
241, p. 248; the Osaka District Court Judgment, April 2, 1969, Hanta, No. 278, p. 82 (the Velcro Fastening case; in thisjudgment, the court found infringement on the basis that the infringing product uses an equivalent means because it
could be easily estimated without conducting particular research that the same effect can be achieved by interchanging
that means, but in its second instance judgment, the Osaka High Court Judgment, June 26, 1972, Mutai Saishū, Vol. 4,
No. 1, p. 340, the court held that the means was not equivalent); the Osaka District Court Judgment, July 30, 1974, Hanji,
No. 790, p. 87/Hanta, No. 322, p. 294 (the Basic Ester Manufacturing Method case; this decision, which used the term
“equivalence,” was repealed by the Osaka High Court Judgment, April 27, 1977, Mutai Saishū, Vol. 9, No. 1, p. 406);
the Tokyo High Court Judgment, May 20, 1982, Hanji, No. 1065, p. 178 (the Liquid Filtering Machine case; this was aunique case where application of the doctrine of equivalents was recognized, but since the defendant did not appear
before the court within the time limit for the oral proceedings, it was more like a constructive confession, and thus did
not create a great sensation); the Osaka District Court Judgment, March 14, 1986, Hanji, No. 1200, p. 142/Hanta, No.
617, p. 153 (the Electric Razor case; though the court did not use the term “equivalence,” it stated that “when interpretingor determining the literal meaning or content of the scope of claims, the interpretation or determination should be madeobjectively and reasonably without being bound by the general abstract meaning or content of the wording itself, butrather by examining the technical meaning expressed by the wording, also referring to the purpose of the device
described in the column of the detailed explanation of the invention, the technical features employed as means for
attaining the purpose, and the effect of the invention,” and held a view close to the doctrine of equivalents); the Kyoto
District Court Judgment, December 21, 1987, Tokkyo To Kigyō (Patents and Enterprises), No. 230, p. 79 (the Textile
Coloring and Patterning Method case); the Tokyo High Court Judgment, February 3, 1994, Chiteki Saishū, Vol. 26, No.
1, p. 34 (the Ball Spline case; the original instance of the later-mentioned Supreme Court judgment; although the court
did not exactly use the term “equivalence,” it held that the technology was covered within the technical scope byrecognizing the interchangeability and the ease of interchange, which are the common ideas of the doctrine of equivalents,
so the decision can be acknowledged to be virtually equivalent to recognizing the doctrine of equivalents). The Supreme
Court Judgment, May 29, 1987, 1985 (O) No. 381 (the Barking Machine Raw Wood Operating Position Adjustment
Device case; a dispute over whether or not the crank mechanism was equivalent to an invention for which the patentclaim included a reference to a cylinder) was a case where the Asahikawa District Court Judgment, March 24, 1983,
1980 (Wa) No. 61 which recognized the doctrine of equivalents was upheld by its second instance, the Sapporo High
Court Judgment, December 25, 1984, 1983 (Ne) No. 116/No. 224, and the final appeal was dismissed by the Supreme
Court. It was an illustrative court judgment that found the recognition of the doctrine of equivalents in the original
instance to be just. Takashi Honma, “Kintōron No Tekiyō O Shijishita Saikin No Saikōsai Hanketsu” (Recent Supreme
Court Judgments Supporting the Doctrine of Equivalents), Jurist, No. 903 (1988), p. 85 estimated that the Supreme
Court recognized the doctrine of equivalents in this case, but said that it would be too hasty to consider from thisjudgment that the Supreme Court has openly recognized the doctrine of equivalents. Administrative Affairs Bureau,
General Secretariat, Supreme Court “Chiteki Zaisan Kankei Minji Gyōsei Saibanrei Gaikan” (Overview of Civil
Administrative Suits Related to Intellectual Property Rights), p. 94 throws doubt on positioning it as a decision that
adopted the doctrine of equivalents, stating that it was an illustrative judgment which did not positively indicate grounds
for adopting the doctrine of equivalents.
15 The Osaka High Court Judgment, March 29, 1996, Chiteki Saishū, Vol. 28, No. 1, p. 77 (the t-PA case). In this case,where an allegedly infringing article of a patent right relating to modified tissue-type plasminogen activator (t-PA) was
only different in respect to one of the amino acid sequences in the statements of the claim, the court held that the twowere equivalent and the allegedly infringing article was covered within the technical scope of the patented invention,
because the two had the same distinctive features, the same effects, and were interchangeable, and at the same time, theinfringing article was highly foreseeable and could be easily arrived at. This judgment also mentioned theinterchangeability and the obviousness of interchange as the requirements for applying the doctrine of equivalents.

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is also an idea that the doctrine of equivalents is not about expanding the scope of claims
by interpretation, that is, an issue of an ordinary technical scope, but that it gives special
protection that goes beyond that. In any case, as long as the specific requirements of thedoctrine of equivalents have been indicated in the 1998 Supreme Court judgment, there isno great difference between the two theories, and the question would be which is moreconvincing as a legal theory.
[470]
While recent academic theories were trending toward recognizing the doctrine ofequivalents, in 1998, the Supreme Court finally rendered a judgment (the Ball Splinecase)16 openly recognizing the doctrine of equivalents, and the issue was settled for allpractical purposes. The Supreme Court quashed the original decision that recognizedapplication of the doctrine of equivalents, and then indicated the requirements forapplication of the doctrine of equivalents. After stating a general theory that, if there is apart that is different from the allegedly infringing product in the composition of the claim,
the product is not covered by the technical scope of the patented invention, the court
indicated the five requirements for equivalence. The requirements were that, even if there
is a part that is different from the allegedly infringing product in the composition of theclaim, it is covered by the technical scope of the patented invention as an equivalent when:(1) that part is not the essential part of the patented invention; (2) the objective of the
purpose of the invention can be achieved and the same effect can be obtained even if thatpart were interchanged; (3) that interchange could be easily arrived at by a person skilledin the art at the time of manufacturing (at the time of infringement); (4) that part was not
identical to a publicly-known technology at the time of the filing or could not be easily
conceived of by a person skilled in the art at the time of the filing; and (5) there is no special
circumstance, such as that part being intentionally excluded from the claim during the filingprocedure. As a substantial basis for this judgment, the Supreme Court stated that it isextremely difficult to state the scope of claims by predicting all sorts of modes of future
infringements at the time of the filing, and if one could escape an infringement by replacinga part of the composition of the scope of claims with a substance or technology that emerged
after the filing, it would not only reduce the incentive for invention and run contrary to the
purpose of the Patent Act, but would also be against social justice and oppose the equitableprinciple, so the substantial value of a patented invention should extend to art which a third
party can easily arrive at from the composition stated in the scope of claims, and third

16 The Supreme Court Judgment, February 24, 1998, Minshū, Vol. 52, No. 1, p. 113/Hanji, No. 1630, p. 32/Hanta, No.
969, p. 105 (the Ball Spline case). In this case, the original judgment was quashed and remanded, and the action waswithdrawn on remand, so the solution of the specific case is unknown, but the judgment drew enormous attention in that
the Supreme Court clearly indicated the general theory of the doctrine of equivalents.

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§8. Infringement

parties should anticipate this fact. Such substantive determination can be observed in all
domains of law, and it is not specific to the Patent Act. Rather, in the field of the Patent Act,
where the formality principle had been prevalent, may have been behind other legal
domains in terms of adoption of such substantive determination.
[471]
Meanwhile, after the Supreme Court judgment on the Ball Spline case, assertions of
the doctrine of equivalents surged in infringement cases, but it should be noted that thedoctrine has only been recognized by the court in a relatively few cases.17[472]
8.7.2.3. Requirements of the Doctrine of Equivalents18
Many academic theories have mentioned interchangeability and the obviousness ofinterchange (also referred to as the ease of interchange) as the two requirements forapplication of the doctrine of equivalents. 19 However, the above-cited Supreme Court
judgment mentioned five requirements. The new requirements mentioned were as follows:
Requirement 1 “the differing part is not an essential part of the patented invention”;
Requirement 4 “the allegedly infringing product is not identical to publicly known
technology or one that could have been easily conceived of by a person skilled in the art at
the time of the filing”; and Requirement 5 “there are no special circumstances such as
17 With regard to the trends of court judgments after the Supreme Court judgment on the Ball Spline case, see Kei Iida,“Kintōron Ni Kansuru Kinnen No Saibanrei No Dōkō To Kadai Ni Tsuite” (Trends of and Changes in Court Judgmentson the Doctrine of Equivalents in Recent Years), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 38 (2014), p. 75.
Meanwhile, the cases in which the subject matter was determined to be an equivalent after the Supreme Court judgment
include the following: the Osaka District Court Judgment, May 27, 1999, Hanji, No. 1685, p. 103 (the Pen-shaped
Syringe case); the second instance judgment on the same case, the Osaka High Court Judgment, April 19, 2001, court
website; the Tokyo District Court Judgment, March 23, 2000, Hanji, No. 1738, p. 100/Hanta, No. 1059, p. 205 (theEquipment for Separating and Removing Foreign Substances from Raw Seaweed case); the second instance judgmenton the same case, the Tokyo High Court Judgment, October 26, 2000, Hanji, No. 1738, p. 97/Hanta, No. 1059, p. 202(this judgment became final and binding due to non-acceptance of the final appeal, but a separate invalidation trial was
filed, and a trial decision of invalidation became final and binding, but this was rescinded in a retrial); the Tokyo District
Court Judgment, May 22, 2001, Hanji, No. 1761, p. 122/Hanta, No. 1094, p. 261 (the Distributing Board Device of
Telephone Line Security Connectors case); the Osaka District Court Judgment, April 16, 2002, Hanji, No. 1838, p. 132(the Streaky Devil's Tongue Jelly Manufacturing Process and Device case); the Nagoya District Court Judgment,
February 10, 2003, Hanji, No. 1880, p. 95 (the Fluid Cylinder case); the Tokyo District Court Judgment, March 26,
2003, Hanji, No. 1837, p. 101/Hanta, No. 1135, p. 262 (the Chair-type Air Massage Machine case); the Osaka High
Court Judgment, November 27, 2007, court website (the Shelves case), the Intellectual Property High Court
Interlocutory Judgment, June 29, 2009, Hanji, No. 2077, p. 123 (the Mid-air Golf Club Head case; the original instancejudgment, the Tokyo District Court Judgment, December 9, 2008, court website, denied equivalence); the Intellectual
Property High Court Judgment, June 23, 2011, Hanji, No. 2131, p. 109 (the Dough Wrapping Process and Device case).
18 See Ryūichi Shitara, “Bōru Supurain Jiken Saikōsai Hanketsu No Kintōron To Kongo No Shomondai” (The Doctrineof Equivalents in the Supreme Court Judgment in the Ball Spline Case and Future Issues), Makino Toshiaki Hanji Taikan
Kinen, Chiteki Zaisan Hō To Gendai Shakai (Intellectual Property Law and Modern Society), p. 299; Nobuhiro
Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (New Explanatory Notes on the Patent Act Vol. 1), p.
1087 (written by Tetsu Iwatsubo); Ryū Takabayashi, “Kintōron Wo Meguru Ronten No Seiri To Kōsatsu” (Identificationand Study of Issues Concerning the Doctrine of Equivalents), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 38 (2014),
p. 53.
19 The Osaka District Court Judgment, May 4, 1961, Kamin, Vol. 12, No. 5, p. 937 (the Expanded Polystyrol case); theOsaka High Court Judgment, March 29, 1996, Chiteki Saishū, Vol. 28, No. 1, p. 77 (the t-PA case), and many othercourt judgments cite interchangeability and the obviousness of interchange as the requirements.

535

§8. Infringement

intended exclusion.” This Supreme Court judgment went beyond resolving the case to also
refer to issues that were not the actual points in dispute and present a general theory on thedoctrine of equivalents. The five requirements shall be reviewed below.
(1) Essential part of the patented invention20
As Requirement 1 for applying the doctrine of equivalents, the Supreme Court
mentioned that the differing part between the scope of claims and the accused product is
not an essential part of the patented invention. An essential part refers to a characteristic
part of the resolution of the problem when comparing the claimed patented invention as awhole with prior art.21 An essential part of a patented invention should be determined notbased on the invention made by the inventor, that is, the inventive concept independent
from the claims and the description, but solely based on the problem to be solved and themeans for solving the problem that can be identified from the statements in the claims andthe description.22 This Requirement 1 used to be considered as a requirement that is taken
for granted, and conventional academic theories seem to have determined this aspect in theprocess of determining interchangeability. However, as discussed later, this Requirement 1
would function as a tool for preventing the scope of equivalents from becoming too broad
as a result of determining the obviousness of interchange based on the time of infringement.
[473]
If the interchanged part is an essential part of the scope of claims, it would mean thatthe patented invention and an allegedly infringing product use different solution principles,and if said part is interchanged with another composition, the product can be considered as

20 With regard to this issue, see Yoshiyuki Tamura, “Kintōron Ni Okeru Honshitsuteki Bubun No Yōken No Igi –Kintōron Wa ‘Shin No Hatsumei’ O Kyūsai Suru Seido Ka? (1) (2)” (Use of Extrinsic Evidence in the Assessment ofEssentiality in the Doctrine of Equivalents (1) (2)), Intellectual Property Law and Policy Journal, No. 21 (2008), p. 1,
No. 22 (2009), p. 55.
21 In the Osaka District Court Judgment, September 17, 1998, Chiteki Saishū, Vol. 30, No. 3, p. 570/Hanji, No. 1664, p.
122 (the Osaka case of Sustained-release Formulations of Diclofenac Sodium), the court stated that “of the constitution
described in the scope of claims in the description, the distinctive part which serves as the core of the technical idea that
produces the operation and effect specific to the patented invention is the essential part of the patented invention.” In theTokyo District Court Judgment, January 28, 1999, Hanji, No. 1664, p. 109/Hanta, No. 994, p. 292 (the Tokyo case of
Sustained-release Formulations of Diclofenac Sodium), the court held as follows: "It is reasonable to construe that anessential part of a patented invention is, among the composition of the patented invention disclosed in the scope of claims,
a characteristic part that serves as the basis for the means for solving the problem specific to the patented invention, that
is, a part which, if interchanged into another composition, would make the subject matter different from the technicalidea of the patented invention as a whole."
22
In the Intellectual Property High Court Judgment, March 27, 2007, court website (the Drying Device case), the court
stated that “the essential part of a patented invention is identified from the statements of the description pertaining tosaid patented invention.”536

§8. Infringementa different technical idea from the patented invention as a whole. 23 If the allegedly
infringing product achieves the same operation and effect, it can be said that the product isinterchangeable, but it cannot necessarily be said that its essential part is the same as thatof the patented invention. If the essential part of the invention and that of the accused
product are different, that product is a different invention, and the patent right naturally
does not extend to that product. However, determination of an essential part would differ
depending on the technical field. To see if the interchanged part is an essential part of theinvention, examination will be made as to whether the accused product constitutes adifferent invention as a whole due to having a differing part. In actuality, if the differing
part is interchangeable and the interchange is obvious, that part is often determined not tobe an essential part of the patented invention, and conversely, if the essential part of the
product and that of the product differ, the differing part would likely lack interchangeability
and obviousness of interchange. Since equivalence is often denied in actual cases due tothe failure to satisfy this Requirement 1, it is an important requirement in practice.24(2) Interchangeability
Interchangeability, which is mentioned as Requirement 2, means that the purpose of
the invention can be attained and the same operation and effect can be achieved byinterchanging a part of the constituent elements of the invention with another process or
product. While Requirement 1, an essential part of the invention, is determined based on
the solution principle and technical idea of the entire invention, the interchangeability isdetermined mainly from the viewpoint of the operation and effect.25 When determining
interchangeability, the point to consider is not the sameness with the subjective invention
made by the inventor, but the sameness with the inventive concept or the operation and
23 With regard to interpretation of this point, see Yoshiaki Nishida, “Shingai Soshō Ni Okeru Kintō No Hōri” (The
Doctrine of Equivalents in Infringement Litigation), Toshiaki Makino and Toshiaki Iimura eds., Shin Saiban Jitsumu
Taikei 4 Chiteki Zaisan Kankei Soshō Hō, p. 190; Ryūichi Shitara, “Kintōron Ni Tsuite” (Doctrine of Equivalents),
Toshisuke Kiyonaga and Ryūichi Shitara, Gendai Saiban Hō Taikei 26 Chiteki Zaisanken, p. 72. The Tokyo District
Court Judgment, January 28, 1999, Hanji, No. 1664, p. 109/Hanta, No. 994, p. 292 (the Tokyo case of Sustained-release
Formulations of Diclofenac Sodium). In contrast, Tatsuki Shibuya, “Chiteki Zaisan Hō Kankei No Saikōsai Hanrei”(Supreme Court Judgments Relating to Intellectual Property Law), Makino Toshiaki Hanji Taikan Kinen, Chiteki Zaisan
Hō To Gendai Shakai (Intellectual Property Law and Modern Society), p. 223 states that “the doctrine of equivalents isa theory which attempts to establish infringement of a patent right under the requirements of interchangeability and easeof interchange, even when the essential part differs.” 24 For example, in the Intellectual Property High Court
Interlocutory Judgment, June 29, 2009, Hanji, No. 2077, p. 123 (the Hollow Golf Club Head case), which related to apatent on a golf club head with a hollow structure, the court found equivalence on the basis that the “stitching material
made of fiber-reinforced plastic” was not an essential part of the invention. However, in the original instance judgment,
the Tokyo District Court Judgment, December 9, 2008, court website, the court denied equivalence.
24 For example, in the Intellectual Property High Court Interlocutory Judgment, June 29, 2009, Hanji, No. 2077, p. 123(the Hollow Golf Club Head case), which related to a patent on a golf club head with a hollow structure, the court foundequivalence on the basis that the “stitching material made of fiber-reinforced plastic” was not an essential part of theinvention. However, in the original instance judgment, the Tokyo District Court Judgment, December 9, 2008, court
website, the court denied equivalence.
25 In contrast, Takashi Ōseto, “Tōka Riron (Kintōron) No Genzai” (Present Situation of the Doctrine of Equivalents),
Doshisha University Intellectual Property Law Research Group ed., Chiteki Zaisan Hō No Chōsen (Challenges ofIntellectual Property Law), p. 132 states that “identity of the operation and effect” is mere evidence of “identity of thetechnical idea.”537

§8. Infringement

effect observed from the statements of the claims and the description. The invention
claimed in a filed patent application could be modified by amendment, but sinceamendment becomes effective retroactively from the time of the filing, the invention statedin the scope of claims and the description can be regarded as being fixed at the time of thefiling, and the content of the invention does not change with time. Accordingly, in the caseof interchangeability, it is sufficient to determine the sameness of its purpose and its
operation and effect with those of such fixed invention stated in the scope of claims and thedescription, and there would be no use arguing the timing of determination as in the caseof obviousness of interchange.
[474]
With regard to interchangeability, interchange with a material having the same effectwhich did not exist at the time of the filing can be accepted relatively easily. In contrast, inthe case of interchange with a material having the same effect which existed at the time of
the filing, if such interchange could be easily arrived at by a person skilled in the art,
equivalence may be denied, since it would be regarded as a failure to state what shouldhave been stated in the scope of claims, and could constitute the intentional exclusion
mentioned in Requirement 5. However, interchange with a product that had existed at thetime of the filing does not automatically lead to denial of equivalence, but the determination
would be made case by case.26
One of the practical issues involving interchangeability is the issue of incomplete use.
Incomplete use indicates the working of an invention in such a way that a part of theconstituent elements described in the claim is missing. In the past, the theory of incomplete
use was usually denied in court judgments or even if it was not denied in theory, the act in

26 Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 5 Han] (Patent Law from the Ground Up [5th ed.]), p. 156 states thatapplication of the doctrine of equivalents should be allowed in the case of interchange with art that did not exist at thetime of the filing, and that interchange with art that existed at the time of the filing should be regarded as a case of apseudo doctrine of equivalents, which should be applied only to the extent of the range of flexible literal interpretation.
The Supreme Court Judgment, February 24, 1998, Minshū, Vol. 52, No. 1, p. 113/Hanji, No. 1630, p. 32/Hanta, No.
969, p. 105 (the Ball Spline case), which states that "by replacing a part of the composition of the scope of claims witha substance or technology that emerged after the filing," can be read as discussing a material having the same effectwhich emerged after the filing, but it is not considered to be denying application of the doctrine of equivalents for an
existing material having the same effect. However, the doctrine of equivalents is very likely to be denied when theapplicant could have included such existing material having the same effect when stating the scope of claims. Otherwise,a balance cannot be achieved between a person who stated the scope of claims in good faith from the start and a person
who has stated the scope of claims in bad faith.

538

§8. Infringement

question was judged to be a non-infringement in practice.27 Since the stipulation in the Act
before the 1994 revision had set forth that the claim should only include matters that are
indispensable to the constitution of the invention, the commonly derived conclusion wasthat technology lacking a part of the constitution was no longer the same invention, so theact was not an infringement. The same principle applies under the current Act, and workingof technology lacking a part of the constitution of the invention is considered not to be an
infringement, in principle. However, as long as the technology practically meets therequirements for equivalence, there is no reason to particularly distinguish between a casewhere a part of the constituent elements of the claim was interchanged and a case wheresuch part was missing.28 Considering the purpose of the doctrine of equivalents, which isto remedy the right holder under certain defined requirements due to the difficulty of stating
the scope of claims by assuming all modes of infringement at the time of the filing, thetheory of incomplete use should also be considered as one kind of doctrine of equivalents.29
Although the number is small, there are some court judgments in which the theory ofincomplete use was recognized.30
27 In the Tokyo District Court Judgment, May 30, 1973, Hanji, No. 717, p. 64 (the Hand Dryer case), the court stated: “Itis clear that an invention or device that lacks what is regarded to be a basic constituent part.....should be considered toconstitute a separate invention or device.”). The Shizuoka District Court Hamamatsu Branch Judgment, June 25, 1975,
Mutai Saishū, Vol. 7, No. 1, p. 188 (the Pachinko Ball Circulating Device case). In the Tokyo District Court Judgment,
February 16, 1983, Mutai Saishū, Vol. 15, No. 1, p. 49 (the Door Knob Decoration case), the court held that the theoryof incomplete use does not deserve to be adopted under the current Act. In the Tokyo District Court Judgment, May 25,
1983, Mutai Saishū, Vol. 15, No. 2, p. 396 (the Door Hinge case), the court stated that the theory of omitted invention
or the theory of unimproved invention should not be adopted under the current Act. The Tokyo District Court Judgment,
September 28, 1983, Tokkyo To Kigyō (Patents and Enterprises), No. 179, p. 53 (the Pump Device case). Theories that
do not recognize the theory of incomplete use include the following: Kishirō Kawashima, “Fukanzen Riyō Ron” (Theoryof Incomplete Use), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 184; Minoru Takeda,
Chiteki Zaisanken Shingai Yōron (Tokkyo/Ishō/Shōhyō Hen) [Dai 5 Han], p. 179. Shin'ya Yoshii; Tokkyoken ShingaiSoshō Taiyō (Outline of Patent Infringement Litigation), p. 75 states that while the technical unity of the patented
invention is maintained in the case of interchange, the original unity is not maintained in the case of incomplete use due
to lack of a part of the constitution, so it is not acceptable to extend the same level of protection in such a case as in thecase of equivalence in the narrow sense for it would open the path to protection of general inventive concepts. However,
it further states that an act of working an invention by omitting a part of its constitution when it is extremely easy torecognize that the importance of that part is relatively low among the constituent elements is against justice and equity,
so it should be subject to a claim of compensation for damage as an act of tort.
28 Ryō Shimanami, Tatsuhiro Ueno, and Hisayoshi Yokoyama, Tokkyo Hō Nyūmon (Introduction to the Patent Act), p.
275, Note 15.
29 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 532 argues that the theory of incomplete use and the doctrineof equivalents are separate concepts, but because they have commonalities in distinctive aspects, there may be cases
where a product can be found to fall within the technical scope of the invention based on the same idea as allowing
application of the doctrine of equivalents. Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 5 Han] (Patent Law from the
Ground Up [5th ed.]), p. 163 states that incomplete use can be considered as a varied form of the doctrine of equivalents.
30 In the Osaka District Court Judgment, May 17, 1968, Kamin, Vol. 19, Nos. 5/6, p. 303 (the Toy Block case), the court
held that “when a person manufactures a product resembling a utility model product by using technology that omits suchpart of the constituent elements of the device that is of relatively low importance, although it does not have any
outstanding effects other than lowering the effect of the device of the utility model, only for the purpose of evading apatent infringement,” the act infringes the scope of protection of the device. Although the court has not used the term“incomplete use,” it can be considered as practically recognizing the theory of incomplete use. The Fukushima District
Court Koriyama Branch Judgment, April 26, 1984, Patent News, Nos. 6649/6654/6655 (the Heat Insulating Materialcase). Theories recognizing the theory of incomplete use include the following: Keiko Someno, “Fukanzen Riyō To
Tokkyo Shingai” (Incomplete Use and Patent Infringement), Shin Jitsumu Minji Soshō Kōza (New Practical Civil
Litigation Lecture), Vol. 5 (Nippon Hyoronsha, 1983), 425; Midori Tanaka, “Fukanzen Riyō Ni Tsuite” (IncompleteUse), Kigyō Hō Kenkyū (Study of Business Law), No. 254 (1976), p. 22.

539

§8. Infringement

[475]
[476]
(3) Obviousness of interchange (ease of interchange)31
The obviousness of interchange, which is mentioned as Requirement 3, means thatthe interchange is obvious to a person skilled in the art. In other words, it means that it iseasy to arrive at the fact that the same operation and effect as the patented invention can beachieved by adopting the interchanged composition of the accused product. The
obviousness of interchange should be considered as a level which a person skilled in the art
can arrive at without a special effort and that, generally, the level does not have to be as
high as an inventive step. An inventive step indicates some distance from publicly known
technology, and is a measurement for defining the scope for which monopoly should not
be recognized. In contrast, the obviousness of interchange under the doctrine of equivalents
indicates the distance from the patented invention, and is a measurement for defining thescope for which monopoly should be recognized. In this manner, the two are the same inthat they are concerned with how easily a person skilled in the art could arrive at the idea,
but they are different in the direction of their approaches. Since an inventive step is arequirement for granting a patent right, and the obviousness of interchange is a requirementfor deciding the scope of a granted patent right in court, the two do not necessarily have tobe the same.32
Next, there is an issue of the level of knowledge that should be required for a person
skilled in the art, who is the subject of the determination. Particularly in fields such as
biotechnology where changes occur rapidly, there can be a considerable difference in thelevel of knowledge between a scientist engaged in the most-advanced technology and anengineer engaged in manufacturing. Supposing that the doctrine of equivalents is intended
only to exclude people whose acts are highly malignant, it can also be interpreted that thelevel of a person skilled in the art differs depending on the individual infringement. In otherwords, even if the mode of infringement was the same, the conclusion may differ between
the case of a Nobel Prize winner and the case of a back-street factory. However, it does notseem appropriate for the scope of protection of a patent right to be dependent on the
See Yuriko Inoue, “Kintōron Ni Okeru ‘Chikan Yōisei’ No Yōken Ni Kansuru Ichi Kōsatsu” (Study of the “Ease ofInterchange” Requirement of the Doctrine of Equivalents), Makino Toshiaki Hanji Taikan Kinen, Chiteki Zaisan Hō To
Gendai Shakai (Intellectual Property Law and Modern Society), p. 625.
32 In the Osaka District Court Judgment, October 31, 1980, Mutai Saishū, Vol. 12, No. 2, p. 632 (the Children’s Tire
Manufacturing Method case), the court held that, unlike the requirement of an inventive step, the requirement of the easeof interchange for application of the doctrine of equivalents is that the technology could be easily conceived of to suchan extent that it can be naturally conjectured by a person skilled in the art without requiring any particular additional
tests. In the Tokyo District Court Judgment, October 7, 1998, Hanji, No. 1657, p. 122/Hanta, No. 987, p. 255 (the Load
Device System case), the court stated that “the degree of ease of interchange should be construed to be such degree ofease whereby any person skilled in the art can recognize the invention in the same manner as it specified in the scope ofclaims, unlike in the case where a person skilled in the art ‘would have been able to easily make the invention’ based ona publicly known invention as prescribed in Article 29, paragraph (2) of the Patent Act.”31

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§8. Infringement

situation of individual cases to this extent. The patent system should have a somewhat
standardized criterion, and the most convincing criterion would be an average engineer.
Accordingly, the criterion of an average engineer would even be applied to a dealer having
little technological knowledge. The result from this criterion may be rather severe for the
dealer and the act could be judged as an infringement by application of the doctrine ofequivalents. In such a case, the dealer would not be able to escape an injunction, but could
possibly have the amount of damages adjusted by the court in the course of determining
negligence or in the course of determination of the amount of damages under Article 102,
paragraph (4) of the Patent Act. (See the relevant part of “8.3.3.2. Presumption of
Negligence (Article 103 of the Patent Act).”)[477]
Opinions are divided regarding the timing of determination of the obviousness ofinterchange, and the prevalent theory in Japan had been the time of filing.33 The theories
supporting the time of filing seem to assume that as long as the first-to-file system isadopted, the scope of a patent right should be decided at the time of filing. However, there
is no necessity that the timing of determination of equivalence and the first-to-file systemshould be linked with each other, and in fact the theory supporting the time of infringement
is also widely accepted under the first-to-file system.34 Such linkage depends on how thesystem of the doctrine of equivalents is positioned. If obviousness of interchange is
33 Fumio Umase, “Kintōron” (Doctrine of Equivalents) (1), Tokkyo Kanri (Patent Management), Vol. 33, No. 2 (1983),
p. 132; Shigetoshi Matsumoto, Tokkyo Hatsumei No Hogo Han’i [Shinpan], p. 294, and many other theories consider
the time of filing as a natural premise.
34 Keiko Someno, “Hatsumei Ni Okeru Kintō Ni Tsuite” (Equivalence in Inventions) (3), Kōgyō Shoyūken Kenkyū (Studyof Industrial Property), Vol. 12 (1966), p. 23; Junpei Ishiguro, “Poriesuteru Tokkyo Shingai Jiken No Mondaiten”(Controversial Points in the Polyester Patent Infringement Case), Ishiguro Junpei and Umase Fumio Kanreki Kinen,
Kōgyō Shoyūken Hō No Shomondai (Various Problems in Industrial Property Law), p. 119; Shin'ya Yoshii, Tokkyoken
Shingai Soshō Taiyō (Outline of Patent Infringement Litigation), p. 52; Kazuo Morioka, Kōgyō Shoyūken Hō Gaisetsu[Dai 4 Han] (Outline of Industrial Property Law [4th ed.]), p. 90; Hiroya Kawaguchi, Tokkyo Hō Kōgi (Lecture on
Patent Law), p. 55; Ryūichirō Sengen, Tokkyo Hō Kōgi [Dai 4 Han] (Lecture on Patent Law [4th ed.]), p. 189.
Meanwhile, the world trend is coming to adopt the method of determining equivalence based on the time of filing, while
adopting the first-to-file system, and determination based on the time of filing is also adopted in Article 21 of WIPO’s
Patent Act Treaty (this treaty has not been enacted yet, but the member states’ general consensus has been gained withregard to the issue of equivalence). In contrast, Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 720(written by Shigetoshi Matsumoto and Yutaka Koike) states that the theory of determination at the time of infringement"is an interpretation theory equivalent to the court granting a new patent right at the time of infringement, and would
lead to overprotection of patents," and that "in the case of adopting that theory, it is essential that the replaced technicalmatter is only a matter incidental to the patented invention, and that the essential element, that is, the technical idea issubstantially the same." Sumio Shinagawa, “Kintō To Tokkyo Seikyū No Han’i” (Equivalence and the Scope of the
Patent Claim), Kigyō Hō Kenkyū (Study on Business Law), Vol. 270 (1997), p. 11 states that the determination should
inevitably be based at the time of filing, but as it is too inequitable considering that a dependent invention is regarded as
an infringement, technology that involves the obviousness of interchange at least at the time of infringement should beconsidered as a dependent invention by slightly modifying the definition of the dependent invention (this way, theinconsistency and the imbalance between equivalence and dependency can be solved).35 Shigetoshi Matsumoto,“Tokkyo Hō 70 Jō No Gijutsuteki Han’i To Tokkyo Shingai Soshō Ni Okeru Kintōron” (Technical Scope under Article
70 of the Patent Act and the Doctrine of Equivalents in Patent Infringement Litigation), Chizaiken 5 Shūnen (IIP 5th
Anniversary) Chiteki Zaisan No Chōryū (Current Trends in Intellectual Property), p. 358 (the determination on the
differing important part should be based at the time of infringement); Tokkyo Iinkai Dai Ni Shō Iinkai (Second
Subcommittee of the Patent Committee), “Kintōron Ni Kansuru Ichi Kōsatsu” (Examination Concerning the Doctrineof Equivalents) (Part 2) (Final), Chizai Kanri (Intellectual Property Management), Vol. 47, No. 3 (1977), p. 348.

541

§8. Infringement

determined based on the time of infringement, the knowledge of a person skilled in the art
would have increased according to technological progress, and the scope of obviousness ofinterchange would have broadened with time. Therefore, the resulting scope of equivalence(the scope of protection) would be broader. There is a criticism that this would also
incorporate matters that were not included in the original invention made by the patentee
or incorporate inventions that have been made by others on later dates into the scope of thepatentee’s exclusive right. However, even if the public announcement function of the scopeof claims were to be emphasized, the infringer would actually be able to judge whether or
not to work the technology by considering the various circumstances at the time of
infringement, so there should be no inconvenience in determining the obviousness ofinterchange based on the technological situation at the time of infringement. In addition, if
the international trend were to be taken into account, it would be more appropriate todetermine the obviousness of interchange based on the time of infringement.35[478]
The Supreme Court judgment (the Ball Spline case) has adopted the theory ofdetermining the obviousness of interchange based on the time of infringement, so future
practice is expected to follow suit. While adoption of the theory of determination at thetime of infringement raises concern about the risk of abuse of the doctrine of equivalents,
application of the doctrine of equivalents is an exceptional case in itself, so such risk is
considered to be small in actuality. One of the problems of the theory of determination at
the time of infringement is that there can be a case where the doctrine of equivalents was
not applied for a first infringer due to lack of obviousness of interchange, but when a second
infringer emerges, the interchange may have already become obvious for a person skilledin the art by then. There is a problem of whether the second infringer's act, although being
the same as the first infringer's act, can be found to constitute an infringement only because
it was committed later. However, it does not mean that a product always falls within thescope of equivalents as long as the interchange is obvious. Requirements 1 and 2 serve as
brakes. As a point of reference, the obviousness of interchange is determined at the time of
infringement, but the literal interpretation of the scope of claims is based on the time of thefiling. Therefore, when interpreting certain wording in the scope of claims, theinterpretation should be decided by taking into account materials at the time of the filing,
and not based on materials at the time of the infringement. The meaning of the wording
35 Shigetoshi Matsumoto, “Tokkyo Hō 70 Jō No Gijutsuteki Han’i To Tokkyo Shingai Soshō Ni Okeru Kintōron”(Technical Scope under Article 70 of the Patent Act and the Doctrine of Equivalents in Patent Infringement Litigation),
Chizaiken 5 Shūnen (IIP 5th Anniversary) Chiteki Zaisan No Chōryū (Current Trends in Intellectual Property), p. 358(the determination on the differing important part should be based at the time of infringement); Tokkyo Iinkai Dai Ni
Shō Iinkai (Second Subcommittee of the Patent Committee), “Kintōron Ni Kansuru Ichi Kōsatsu” (Examination
Concerning the Doctrine of Equivalents) (Part 2) (Final), Chizai Kanri (Intellectual Property Management), Vol. 47, No.
3 (1977), p. 348.

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§8. Infringement

should be determined based on the time of the filing, and then the question of whether or
not the product is equivalent to it should be considered.36
The next issue is the specific content of the obviousness of interchange. Although
the interchange needs to be easy as a natural requirement, it is a question whether theoperation and effect resulting from the interchange must also be obvious. In the machineryor electric fields, a person skilled in the art is likely to find the operation and effect arisingfrom the interchange obvious in many cases, if the interchange itself is easy. However, inthe chemical field, particularly biotechnology, the operation and effect arising from theinterchange often cannot be precisely understood until it is tested, even if the interchange
itself is easy.37 Therefore, if the obviousness of the operation and effect arising from theinterchange were to be strictly required for application of the doctrine of equivalents, it
might become difficult to apply the doctrine in the chemical field. However, theobviousness of interchange should be recognized even in the chemical field, as long as theinterchangeable technology has been established in general, and it is known among persons
skilled in the art that such interchange would generally bear the same operation and effect.
Incidentally, the term “ease of interchange” is also used frequently, but from the above
viewpoint, it is considered to be more appropriate to use the term “obviousness ofinterchange” as in the Supreme Court judgment.
[479](4) Ease of conception from publicly known technology
As Requirement 4, the Supreme Court judgment excludes from equivalents
technologies that are the same as or easily conceivable from publicly known technologies
at the time of the filing of the patented invention. Such part fundamentally cannot be
incorporated into the scope of protection of the patent right, and if such part had been
included in the scope of claims, the application should have been refused due to lack ofnovelty or inventive step or invalidated. Even if, formally, the differing part is a nonessential part, and it is interchangeable and the interchange is obvious, it would be improperto judge publicly known technology at the time of infringement or technology that can be
36 Ryūichi Shitara, “Kintōron Ni Tsuite” (Doctrine of Equivalents), Toshisuke Kiyonaga and Ryūichi Shitara, Gendai
Saiban Hō Taikei 26 Chiteki Zaisanken, p. 74.
37 In the Osaka High Court Judgment, March 29, 1996, Chiteki Saishū, Vol. 28, No. 1, p. 77 (the t-PA case), which wasa case relating to a patent on human tissue-type plasminogen activator (t-PA), the court recognized equivalence regarding
a variant that is only different in respect to position 245 of a sequence of about 500 amino acids. However, how different
the operation and effect would be by interchanging the amino acid of position 245 cannot be found in a strict sense until
it is tested. The difference in position 245 in this case seems to have merely been caused by a cloning error, but this may
have been a case where no definite answer could be given regarding whether it was possible to manufacture a variant byspecifically trying to modify position 245 or whether it was easy to predict the effect of such a variant. In the original
instance (the Osaka District Court Judgment, October 27, 1994, Chiteki Saishū, Vol. 26, No. 3, p. 1200/Hanta, No. 868,
p. 80), the court derived the opposite conclusion by stating that it is difficult to determine that a person skilled in the art
could have easily interchanged the amino acid at position 245 of the invention in question solely based on the statementsin the description ... and could have easily arrived at the idea that it would have the same activity as the invention inquestion.

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§8. Infringement

easily conceived therefrom as an infringement, because it would be the same as recognizing
a monopoly on technology that should essentially belong to the public domain.38 Thus, theSupreme Court is considered to have purposefully mentioned this point as a requirement
for equivalence. In short, rather than being an issue specific to the doctrine of equivalents,
it is natural to find non-infringement as long as the technology is fundamentallyunpatentable, so the Supreme Court is considered to have merely mentioned natural facts
under the name of the doctrine of equivalents. The idea of not making publicly known
technology or technology that is easily conceivable therefrom an infringement is not only
applicable when the technology is covered within the scope of equivalence, but the effectof a patent should not be extended to such technology in the first place, irrespective of thedoctrine of equivalents. Consequently, it should not be considered as a mere issue of thedoctrine of equivalents, but rather as an issue concerning the entire Patent Act. In particular,
since Article 104-3 of the Patent Act was established in 2004 and it became possible to
make a defense of patent invalidity in an infringement case, there would be many cases
where the case would be disputed as an issue of the defense of invalidity before it is disputed
as an issue of the doctrine of equivalents.
[480](5) Intentional exclusion
As Requirement 5, the Supreme Court mentioned that there are no special
circumstances such as the technology having been intentionally excluded from the scopeof claims. Basically, this would refer to such cases as where the applicant or the patentee
has excluded the technology by amendment or correction,39 where it can be identified fromthe prosecution history that the applicant has given an explanation that indicates the
exclusion and that the exclusion has been registered,40 or where the technology is stated in

38 Ryūichi Shitara, “Kintōron Ni Tsuite” (Doctrine of Equivalents), Toshisuke Kiyonaga and Ryūichi Shitara, Gendai
Saiban Hō Taikei 26 Chiteki Zaisanken, p. 78 calls this requirement a "requirement of re-examination of patentability"with regard to the domain of equivalence. Since the patent application should have been refused in the first place, thisnaming practically describes the actual situation well.
39 See Setsuko Asami, “Hosei To Kintō No Dai 5 Yōken No Tekiyō Ni Tsuite” (Amendment and Application of
Requirement 5 for Equivalence), Nihon Kōgyō Shoyūken Hō Gakkai Nenpō, No. 38 (2014), p. 159.
40
In the Intellectual Property High Court Judgment, September 26, 2012, Hanji, No. 2172, p. 106/Hanta, No. 1407, p.
167 (the case of Method of Producing Visible Images for Medical Use), the court denied equivalence, holding that thedefendant’s product lacked Requirement 5 as well as Requirement 2 for equivalence.

544§8. Infringement

the description but not in the scope of claims.41 There can also be cases where generalprinciples of private law, such as estoppel and the fair and equitable principle, or the fairand equitable principle in litigation would be applied. What kinds of cases can beconsidered as intentional exclusion would be determined by taking into account all relevant
circumstances. The principle of estoppel derives from general principles of private law, andis also naturally applied in the general process of determining the scope protected by thescope of claims (See the relevant part in 8.6.1. “Technical Scope of a Patented Invention”).
Accordingly, it is natural that the principle is also taken into account in interpreting thetechnical scope. The reason that the Supreme Court purposefully mentioned this principle
as a requirement for the doctrine of equivalents is not quite clear, but even if it was not arequirement for the doctrine of equivalents, it would be naturally taken into account when
determining the technical scope, so it would not make much difference whether it isincluded in the requirements for the doctrine of equivalents. Nevertheless, even if
intentional exclusion, etc. is to be determined by taking into consideration the prosecution
history, etc., this has a function of excluding technology that literally falls within thetechnical scope in the case of normal claim interpretation, whereas it has a function of
denying expansion of the scope of protection to cover technology that literally does not fallwithin the technical scope in the case of the doctrine of equivalents. There is also a viewthat these two functions differ and should be interpreted separately, but both the case ofnarrowing the scope of protection and the case of disallowing expansion have the effect ofnarrowing the scope of protection asserted by the patentee in identifying the intent of
exclusion, although the degree of such effect is considered to differ between the two cases.
It is not necessarily clear from the text of the Supreme Court judgment whether
41

In the Intellectual Property High Court Judgment, September 25, 2006, court website (the Chair-type Air Massage
Machine case), the court stated, “only by the reason that the patentee, in light of the publicly known art at the time of thefiling of the patent application, could have easily arrived at the constitution of the alleged product, but did not include
such constitution in the scope of claims, we should not conclude that the patentee intentionally excluded the constitutionof the alleged product from the scope of claims.” In contrast, in the Intellectual Property High Court Judgment, August25, 2009, Hanji, No. 2059, p. 125/Hanta, No. 1319, p. 246 (the Cutting Method case), the court stated as follows: “Aperson ordinarily skilled in the art could have easily stated the scope of claims based on a generic concept that includes
a wider range of objects to be cut, not limited to a ‘semiconductor wafer’ from the beginning. However, the appellant
filed the patent application by limiting the objects to be cut to a ‘semiconductor wafer’ and by covering only
‘semiconductor wafer,’ and also deleted the original Claim 1, which does not limit the objects to be cut to asemiconductor wafer. Therefore, it must be said that, in terms of appearance, the appellant is unavoidably considered tohave intentionally excluded objects to be cut other than a ‘semiconductor wafer’ from objects to be cut.” In theIntellectual Property High Court Judgment, September 26, 2012, Hanji, No. 2172, p. 106/Hanta, No. 1407, p. 167 (thecase of Method of Producing Visible Images for Medical Use) as well, the court stated that “where the applicant has
intentionally chosen to state only a particular constitution of an invention in the scope of claims even though he has
disclosed another possible constitution in the description and could have easily stated such other constitution in the scopeof claims, it is impermissible to apply the doctrine of equivalents to such other constitution because this is contrary to
the fifth requirement under the doctrine of equivalents.” In short, the question is whether the patentee formally appears
to have intentionally excluded the constitution in light of all actions the patentee has taken. See Yasuyuki Echi,“Shutsuganji Ni Okeru Kurēmu E No Kisai Kanōsei To Kintōron—Genrikan Kōryō Moderu Wo Mochiite” (Possibiliyof Description in the Claims at the Time of Filing and the Doctrine of Equivalents: Using a Principle-Balancing Model),Nakayama Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai (Theories ofIntellectual Property Law and Modern Issues), p. 218.

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§8. Infringement

Requirements 4 and 5 above are grounds for petition or defenses. Judging from how theSupreme Court judgment has been written and the fact that the case was quashed andremanded, they seem to be grounds for petition (the defendant has not asserted them as
defenses). However, it is not easy for the plaintiff to prove the distance of the accused
product from publicly known art, so they are likely to function as defenses in actuality, andit should be interpreted that the party denying equivalence (the infringer) bears the burdenof proof.42[481]
8.7.2.4. Positioning of the Doctrine of Equivalents in the Patent System
The Supreme Court judgment (the Ball Spline case) fixed the requirements for thedoctrine of equivalents, and international practices also developed in such a manner thatdenial of the doctrine of equivalents has become quite unrealistic. However, underlying thedoctrine of equivalents are fundamental problems of the Patent Act. Thus, the problems ofthe doctrine of equivalents relating to the system of patent shall be examined briefly. Twotypes of concepts can be assumed as the basic approach to the doctrine of equivalents.
[482]
The first type is based on the following concept. A patent right has an effect similar
to a real right, so its technical scope must be definite, and the scope is fixed by the scope ofclaims. However, since the scope of claims is a technical idea expressed in words, itsborderline is, unlike in the case of land, inapparent. Therefore, the court has to determine
the borderline. In other words, because the scope of claims is expressed in words, the court
clarifies the borderline that is supposed to be decided objectively. Thus, application of thedoctrine of equivalents would mean such a process taken by the court. As a matter of course,
even if this idea were adopted, a reasonable conclusion would be derived in the end by also
taking into account the various circumstances of the right holder besides the doctrine ofequivalents; for instance, by applying estoppel or by recognizing intentional exclusion.
The second type is based on the following concept. Because the scope of a patentright is decided based on the literal meaning of the scope of claims, the borderline cannot
be changed ex post facto, and the scope must be interpreted according to the literal meaningof the scope of claims, in principle. However, application of the doctrine of equivalents
42 In the Tokyo District Court Judgment, October 7, 1998, Hanji, No. 1657, p. 122/Hanta, No. 987, p. 255 (the Load
Device System case), the court stated that it is reasonable to construe that, due to the nature of the matter, the burden of
proof with regard to the Supreme Court's facts 1 and 3 concerning substantial sameness should be borne by the party
asserting equivalence, and the burden of proof with regard to facts 4 and 5 concerning grounds for exclusion fromapplication should be borne by the party denying equivalence. With regard to Requirements 4 and 5, there is a theory
stating that the burden of proof is on the patentee's side, and a theory stating that the burden of pleading is on thepatentee's side but the burden of evidence is on the side of the infringer who is denying equivalence.

546§8. Infringement

should be recognized when it is judged to be particularly necessary, by comprehensively
considering the various circumstances including the bad faith of the infringer43 and thecause attributable to the right holder. 44 According to this concept, the doctrine ofequivalents is not a process of determining the essential physical scope of the patent rightbut a process of prohibiting a certain act from the viewpoint of ideal economic order, thatis, in a sense, a process of incorporating an element having the aspect of unfair competition
law into the issue of the scope of right. Determining the obviousness of interchange basedon the time of infringement has a stronger tendency of unfair competition law compared todetermination based on the time of the filing. Even in the case of adopting this concept, theconclusion would not always be fixed, but various elements should be taken into
consideration.45This issue relates to the fundamental concept of the ground for recognizing
the doctrine of equivalents and relates to an ultimate issue of the patent system. If a patentright were considered to be one kind of real right whose scope is fixed, there would be noroom to consider the subjective circumstances of the infringer. On the other hand, if the
Patent Act were considered to be part of the system of competition law for maintaining

43 For instance, Toshiaki Makino, “Tokkyo Hatsumei No Gijutsuteki Han’i No Kakutei Ni Tsuite No Kihonteki Na
Kangaekata” (Basic Approach to Determination of the Technical Scope of a Patented Invention), Toshiaki Makino, ed.,
Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 106 basically denies application of the doctrine of equivalents,
but states that “in order to evaluate use of an equivalent technical means as an infringement, it would be necessary toindicate that the opponent is accountable for a social accusation that is more serious than the mere formality deficiency
on the right holder’s side, to the extent of the theory of a treasonous person in bad faith, who is discussed as a third party
against whom one's right can be asserted without registration under the system of public notice of a change in rights onreal property.” Such an idea places importance on the framework of the public announcement function of the scope ofclaims, but attempts to process the case in an exceptional manner when the opponent is particularly malignant.
44 For example, when the claim statement is poor in quality.
45 No consensus has been reached on what should be regarded as such elements. Assumable circumstances for the rightholder would be estoppel and intentional exclusion. Assumable circumstances for the infringer would include thequestion of whether the technology has been independently developed and other special malignancies (e.g. illegal
acquisition of know-how). Toshiaki Makino, “Tokkyo Hatsumei No Gijutsuteki Han’i Kakutei No Mondai” (Issue of
Determining the Technical Scope of a Patented Invention), Toshiaki Makino and Hiroshi Saitō, eds., Saiban Jitsumu
Taikei 27 Chiteki Zaisan Kankei Soshō, p. 448 states that "protection based on equivalence should be provided only tothe extent to which one depends on another person's creation that has come to fruition as a patented invention and uses
its substance," and indicates that such idea "matches the idea that should serve the basis of intellectual property law,"emphasizing that application of the doctrine of equivalents should not be recognized for a person who has independently
developed the technology (i.e. such person's act should not be regarded as an infringement). See Ryūichi Shitara,“Beikoku No Tokkyoken Shingai Soshō No Jitsujō To Nihon No Kintōron Ni Tsuiteno Ichi Kōsatsu -- Hiruton Dēbisu
Hanketsu No Yōyaku To Sono Bunseki” (Study of the Actual Conditions of U.S. Patent Infringement Litigation and theDoctrine of Equivalents in Japan -- Summary and Analyses of the Decision in the Hilton Davis case) (1) (2), Hōsō Jihō
(Lawyers Association Journal), Vol. 48, No. 6 (1996), p. 1319/No. 8, p. 1691.

547

§8. Infringement

economic order, it would not be irrational to consider the circumstances of the infringer46.
[483]This problem is not merely an issue of the doctrine of equivalents, but an issue
involving the entire Patent Act with respect to how much consideration of the competition
law aspect can be brought into a patent right, which is regarded as having the nature of areal right. More broadly speaking, it is an issue of how much emphasis should be placed on
the function of the Patent Act to maintain the competitive order. Considering the matterconversely, it is also an issue of how much emphasis should be placed on the publicannouncement function of the scope of claims and how that function is connected totechnological development. Conventionally, the patent right was often viewed as a rightresembling ownership of land, but the competition law aspect seems to have graduallygrown stronger, and that aspect should probably become even stronger in the future. In thatsense, it is considered reasonable to bring the competition law aspect also into the doctrineof equivalents, but as this is an issue that needs to be studied more carefully, it is regarded
as one of the future issues to be discussed in the world of intellectual property law.

46 Yutaka Koike, “Tokkyo Seikyū No Han’i (Kurēmu) To Tokkyo Hatsumei No Gijutsuteki Han’i Ni Tsuite” (Scope of
the Claim and Technical Scope of a Patented Invention), Katayama Kinshō Sensei Tuitō Ronbun Shū/Hō to Hōgaku No
Asu O Motomete (Essays in Memory of Professor Kinshō Katayama/Seeking a Bright Future for Law and Jurisprudence)(Keiso Shobo, 1989), p. 332 states that it is difficult to adopt the doctrine of equivalents based on the provisions ofArticles 70 and 36 of the Patent Act (before the 1994 revision), but the purpose of the Unfair Competition Prevention
Act should be analogized instead. This Koike theory was proposed before the Supreme Court judgment in the Ball Spline
case, and setting aside the reasonableness of the conclusion of this theory, there is a problem in the theoretical structure
to make an act that cannot be considered as an infringement under the Patent Act an infringement by applying the
purpose of the Unfair Competition Prevention Act by analogy. Since the Japanese Unfair Competition Prevention Act
adopts a restrictive citation principle, one must be careful to take in matters that are not cited. Every time the Unfair
Competition Prevention Act has been revised, there has been a discussion over whether or not to establish generalprovisions, but that has been postponed each time due to the reason that it was too early for such a measure. Supposingthat the ground for the doctrine of equivalents could be sought in the Unfair Competition Prevention Act, it would beequal to establishing general provisions in interpretation, so the impact on other fields would be too large. It may bepossible to say that the competition law aspect should also be taken into account to address the matter as an issue of theentire Patent Act, but it would not be possible to refer to the Unfair Competition Prevention Act to address a specificissue.

548

§8. Infringement[484]
8.7.3. Product-by-Process Claim (PBP Claim)
A product-by-process claim (PBP claim) refers to the scope of claims that has been statedby defining a product invention in the form of a process of manufacturing. A productinvention should fundamentally be expressed by the structure or characteristics1 of the
product, but when that is impossible, difficult, or inappropriate, 2 inventions havesometimes been allowed to be defined by their manufacturing process. The need for suchclaim is considered to be high in chemical, pharmaceutical and biotechnology fields, but in
actual court judgments, such claim has also been allowed in cases of other fields. A PBP
claim is formally stated as a product invention, but because the claim includes a process ofmanufacturing, which is a chronological element, various problems occur. Also,interpretation of a PBP claim becomes a problem in identifying the gist of the invention in
the examination phase, as well as in determining the technical scope or identifying the gistof the invention in determining the defense of invalidity in the infringement litigation phase.
There is a controversy over whether, in determining the technical scope and identifying thegist of a claim stated by the PBP method, the ideal pattern of the scope of the right shouldbe the product itself (the substance identity theory) or the product within the scope limitedby the process (the manufacturing process restriction theory).3
According to the substance identity theory, the identification of the gist and thedetermination of the technical scope include not only the product manufactured by the

1 As mentioned later, there are two Supreme Court judgments rendered on the same date for the same case which arealmost the same in content: the Supreme Court Judgment, June 5, 2015, Minshū, Vol. 69, No. 4, p. 700, 2012 (Ju) No.
1204 (the Pravastatin Sodium case) and Minshū, Vol. 69, No. 4, p. 904, 2012 (Ju) No. 2658 (the Pravastatin Sodiumcase). According to the concurring opinion by Justice Katsumi Chiba in these judgments, the term “characteristics”
means “characteristics that are appropriate and significant in distinguishing the product in question from other productsin the course of determining the novelty and involvement of an inventive step in the invention.”
2 The Examination Guidelines used to cite “inappropriate” cases as well (Examination Guidelines 2.2.2.4(2)[2](ii)). In thelater-mentioned Intellectual Property Grand Panel Judgment, January 27, 2012, Hanji, No. 2144, p. 51/Hanta, No. 1397,
p. 199 (the Pravastatin Sodium case), “impossible” and “difficult” cases were cited, while in the Supreme Court
judgments mentioned in supra note 1, “impossible” and “impractical” cases were cited. Meanwhile, in the concurring
opinion in the abovementioned Supreme Court judgments, Justice Katsumi Chiba stated that “the criterion of ‘where it
is inappropriate’ ... relies too much on an aspect of value judgment,” and “even when it is not so difficult to define theproduct by means of its structure, etc., this criterion could lead to allowing the applicant to recite the manufacturing
process in the claim merely for the purpose of making it easier to understand the constitution of the invention.” In any
case, the “appropriate” requirement is not used today.
3 For details of the academic theories, see Jun’ichi Kitahara, “Purodakuto Bai Prosesu Kurēmu No Kenri Han’i No
Kaishaku Ni Tsuite -- Purabasutachin Natoriumu Jiken No Daigōgi Shinri Ni Saishite” (Interpretation of the Scope ofRight of a Product-by-Process Claim: Upon Grant Panel Examination in the Pravastatin Sodium Case), IIP Forum, No.
87 (2011), p. 57; Takeshi Maeda, “Purodakuto Bai Purosesu Kurēmu No Yūkōsei To Teisei No Kahi—Purabasutachin
Natoriumu Jiken Saikōsai Hanketsu To Sono Go No Kadai” (Validity and Correctability of Product-by-Process Claims:
the Supreme Court Judgments in the Pravastatin Sodium Case and Subsequent Challenges), AIPPI, Vol. 60, No. 8 (2015),
p. 706.

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§8. Infringement

process disclosed in the claim, but also the product manufactured by all other processes.4
This is an idea that the effect of the right extends to identical products as long as theinvention is claimed as a product invention. 5 The JPO has consistently adopted thesubstance identity theory.6 When the substance identity theory is adopted, the identity of
products will have to be determined, but when the product cannot be defined by a method
other than the process of manufacturing, it is difficult to determine the identity between a
product manufactured by the claimed process and a product manufactured by anotherprocess, so there can be cases where the right does not extend to products other than thatdefined by the claimed process as a result (the doctrine of equivalents is a different issue).
[485]
In contrast, according to the manufacturing process restriction theory, the inventor
has invented the product manufactured by the manufacturing process, and the identificationof the gist and the determination of the technical scope are restricted to the product definedby the manufacturing process. 7 This cannot be neglected as long as a manufacturing
process is stated in the claim (Article 70, paragraph (1) of the Patent Act), and the scope towhich the effect of the patent extends is restricted to products manufactured by that
4 The Supreme Court Judgment, June 30, 1981, Minshū, Vol. 35, No. 4, p. 848/Hanji, No. 1008, p. 145/Hanta, No. 446,
p. 68 (the Plywood case, a utility model case); the Tokyo District Court Judgment, September 30, 1999, Hanji, No. 1700,
p. 143/Hanta, No. 1017, p. 225 (the Acid Glycoprotein case; the court held that the subject matter of the patent includes
the same product manufactured by different processes, but that the product in question does not satisfy the constituent
elements of the invention in this case); the Tokyo High Court Judgment, July 17, 1997, Chiteki Saishū, Vol. 29, No. 3,
p. 565/Hanji, No. 1628, p. 101 (the Human Leukocyte Interferon case; the court held that the "human leukocyte
interferon" is not limited to that obtained from a "human leukocyte" which is a productive cell, but that obtained from adifferent cell is also included in its technical scope, as long as it is the same product); the Tokyo High Court Judgment,
June 11, 2002, Hanji, No. 1805, p. 124 (the Polycarbonate Molding Material For Optical Disk Substrate case; it was
litigation for rescinding a ruling on opposition to a patent); the Tokyo High Court Judgment, September 26, 2002, Hanji,
No. 1806, p. 135/Hanta, No. 1118, p. 234 (the Fixer and String Fixer Device case); the Intellectual Property High Court
Judgment, December 7, 2006, court website (the Method for Manufacturing Diaphragm for Speaker case). Meanwhile,in the Intellectual Property High Court Judgment, September 20, 2007, court website (the Holographic Grating case),
the court stated that a PBP claim is a description method which is allowed when it is impossible, difficult, or
inappropriate to directly define the constitution of a product, and that an invention defined in that manner is categorized
as a “product invention,” and not a “process invention” or a combination of a “product invention” and a “process
invention.”
5 In actuality, however, there would be a possibility that the invention is construed as not satisfying the enablement
requirement or the support requirement on the basis that the claim extends beyond the technical content disclosed in thedescription.
6 Examination Guidelines for Patent and Utility Model in Japan, Part I, Chapter 1, 2.2.2.4, etc. Also, in the Tokyo High
Court Judgment, June 11, 2002, Hanji, No. 1805, p. 124 (the Polycarbonate Molding Material for Optical Disk case),
the court stated that, in the case of a PBP claim, it is necessary to examine the significance of the manufacturing method
requirement as a requirement for defining the product, but it is not necessary to further examine its patentability as aprocess for manufacturing the product. In contrast, Ryū Takabayashi, “Purodakuto Bai Purosesu Kurēmu No Gijutsuteki
Han’i To Hatsumei No Yōshi” (Technical Scope of a Product-by-Process Claim and Gist of the Invention), Makino
Toshiaki Sanju Kinen, Chiteki Zaisanken Hōri To Teigen (Doctrines of and Recommendations Concerning Intellectual
Property Rights), p. 303 states that, “if ‘substance identity theory’ is an idea to make determination by disregardingwhether requirements are met and to conclude that a product is covered by the patented invention if it is the same as theclaimed product, there is no room for such theory to exist in the first place,” but states that the doctrine of equivalents
would be another issue.
7 In the Tokyo District Court Judgment, January 28, 2002, Hanji, No. 1784, p. 133/Hanta, No. 1102, p. 258 (the Stopper
and Cord Stopper Device case), the court held that the patented invention is restricted to products manufactured by the
manufacturing method, considering that the invention could have been defined as a product without describing the
manufacturing method and because it was a limitation added in response to a notice of reasons for refusal.

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§8. Infringement

manufacturing process. The PBP claim is a shortcut method for claiming products
characterized by the manufacturing process. It is an interpretation which tries to protect theinvention to the extent that matches its actual status, without being bound by the distinction
between a product invention and a process invention.
[486]
Partly because the JPO has adopted the substance identity theory, the substanceidentity theory had conventionally been prevalent in court decisions and academic theories.
However, there have been actual cases in which a reasonable conclusion has been derived
under the substance identity theory by such techniques as the file wrapper estoppel,8 and
it is also possible to derive a reasonable conclusion under the manufacturing process
restriction theory by applying the doctrine of equivalents, etc.
In contrast, a judgment by the Grand Panel of the Intellectual Property High Court in2012 9 took an in-between theory. The court categorized PBP claims into a claim thatdefines a product by a manufacturing process due to a circumstance that it is “impossible”
or “difficult” to directly define the product by its structure or characteristics at the time of
the filing (a genuine PBP claim) and a claim that defines a product by a manufacturing
process in absence of a circumstance that it is impossible or difficult to directly define theproduct (a non-genuine PBP claim). Then it stated that the technical scope of a genuine
PBP claim extends to the products in general, where as that of a non-genuine PBP claim islimited to products manufactured by the claimed manufacturing method (the claim in thiscase was determined to be a non-genuine PBP claim). The court held that, because thematters stated in the claim cannot be neglected, the statement of the manufacturing process
should be construed to have the meaning of restricting the claim, in principle. It mentioned
that, when a manufacturing process is stated in the scope of claims of a product invention,
the statement is literally limited to the manufacturing process, but as an exception, if aperson asserting a genuine PBP claim (the patentee, etc.) proves that it is impossible or

8 In the Supreme Court Judgment, November 10, 1998, 1998 (O), No. 1579 (the Collar Stand case), which is a caseseeking return of unjust enrichment, the court, while adopting the substance identity theory, upheld the determination
made in the original judgment (the Hiroshima High Court Matsue Branch Judgment, April 24, 1998, 1996 (Ne), No. 16),
which dismissed the claim on the basis that the alleged infringer failed to provide pleadings or proof to the effect thatthe accused product has the same shape as that obtained by the drawing process.
9 In the Intellectual Property High Court Grand-Panel Decision, January 27, 2012, Hanji, No. 2144, p. 51/Hanta, No.
1397, p. 199 (the Pravastatin Sodium case), which was an infringement case, the court concluded that the allegedly
infringing product did not fall within the technical scope of the invention and accepted a defense of invalidation. In its
original judgment, the Tokyo District Court Judgment, March 31, 2010, court website, the court basically adopted the
manufacturing method restriction theory, and held that the technical scope is limited to products manufactured by the
manufacturing process, and stated that, the right extends to products manufactured by other manufacturing processes
only when there are special circumstances where the product must be specified by the process to manufacture it, but
special circumstances cannot be found in this case. This was a case in which there were both a claim with description of
the manufacturing process and a claim without such description, but the former was deleted by amendment due to being
refused for lack of an inventive step, and the latter remained.

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§8. Infringement

difficult to directly define the product by its structure or characteristics,10 the technicalscope extends to the product itself.11 In other words, the manufacturing process restriction
theory is adopted in principle, but if the right holder proves the impossibility or difficulty,
the substance identity theory is adopted instead. According to this judgment, if the rightholder fails to prove that the claim is a genuine PBP claim, the claim is found to be a nongenuine PBP claim which is hardly any different from a patent for an invention of a process
for producing a product.12 However, unlike the later-mentioned Supreme Court judgment,
if the claim is described as a PBP claim, it would at last be treated as a non-genuine PBP
claim even if the right holder fails to prove the impossibility or difficulty.
[487]This Intellectual Property High Court Grand Panel judgment was quashed andremanded by the Supreme Court.13 Opposite to the Intellectual Property High Court Grand
Panel judgment, the Supreme Court adopted the substance identity theory, stating that thetechnical scope of a PBP claim extends to products that have the same structure,
characteristics, etc. as a product manufactured by the manufacturing process. The court
held that, if the technical scope was to be determined or the gist was to be identified onsuch assumption, “it is generally unclear what structure or characteristics of the product are
represented by the manufacturing process, or whether the technical scope of the patented
invention is limited to products manufactured by the manufacturing process, although thesubject matter of the invention is the product, and this would prevent those who read therecitation of the claim, etc. from clearly understanding the content of the invention andmake it impossible for them to predict the scope of the exclusive right to be conferred to
10 In the Osaka District Court Judgment, March 13, 2014, court website (the case of Composition for Preventing
Withering of Pines and Prevention Method), the court held that the claim is construed to be a “non-genuine PBP claim”
because there were no pleadings or proof to the effect that it is a “PBP claim.”
11 Ryūichi Shitara, “Purodakuto Bai Purosesu Kurēmu No Yōshi Nintei To Kurēmu Kaishaku Ni Tsuite No Kōsatsu—
Chizai Kōsaid Tokubetsu Bu 24 Nen 1 Gatsu 27 Nichi Hanketsu Wo Keiki To Shite” (Study of Identification of the Gist
and Claim Interpretation of Product- by-Process Claims: Prompted by the Intellectual Property High Court Special
Division Judgment, January 27, 2012), Makino Toshiaki Sanju Kinen, Chiteki Zaisanken Hōri To Teigen (Doctrines ofand Recommendations Concerning Intellectual Property Rights), p.295 states that it is legitimate to expand the technicalscope of a genuine product-by-process claim to that under the operation and effect theory at a maximum by using literal
infringement if the manufacturing methods are the same and using the doctrine of equivalents if the manufacturingmethods differ. In other words, the article sets forth that it would be more practical to apply interpretation that results inan outcome between the manufacturing process restriction theory and the substance identity theory by actively applying
literal interpretation and the doctrine of equivalents (p. 290 of the article). In contrast, Masabumi Suzuki, “Purodakuto
Bai Purosesu Kurēmu No Kaishaku” (Interpretation of Product-by-Process Claims), L&T, No. 57 (2012), p. 68 statesthat the substance identity theory should be adopted, in principle.
12 Yasufumi Shiroyama, “Purodakuto Bai Purosesu Kurēmu Jiken” (Product-by-Process Claim Cases), Jurist, No. 1475
(2015), p. 41 points out that if such processes as a screening process or a process for stabilizing a substance after
purification are described as PBP claims, they will not be identified as simple processes, and also when multiple people
undertake the respective steps, it would be more effective to obtain a patent with PBP claims.
13 Two judgments were rendered on the same date for the same Pravastatin Sodium case (the Supreme Court Judgment,
June 5, 2015, Minshū, Vol. 69, No. 4, p. 700, 2012 (Ju) No. 1204 and Minshū, Vol. 69, No. 4, p. 904, 2012 (Ju) No.
2658). See Tetsu Iwatsubo, “PBP Kurēmu Saikōsai Hanketsu No Inpakuto” (Impact of the Supreme Court Judgments
on PBP Claims), Jurist, No. 1485 (2015), p. 18; Masahiro Nanjō, “PBP Kurēmu Saikōsai Hanketsu To Kongo No
Jitsumujō No Kadai” (The Supreme Court Judgments on PBP Claims and Future Challenges in Practice), Jurist, No.
1485 (2015), p. 26.

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§8. Infringement

the patentee, leading to an inappropriate situation,” and indicated that such PBP claim failed
to satisfy the clarity requirement. On such basis, the court stated that a PBP claim satisfies
the clarity requirement only if there are circumstances where it was “impossible” or utterly“impractical” to directly define the product subject to the invention by means of its structureor characteristics at the time of the filing of the application (the impossible/impracticalrequirement), and remanded the case to the court of prior instance to have it determine thetechnical scope and further examine whether the claim satisfies the clarity requirement. In
other words, unlike the Intellectual Property High Court Grand Panel judgment, theSupreme Court held that a PBP claim lacks the clarity requirement and is, therefore,
unacceptable unless it satisfies the impossible/impractical requirement.
[488]
Future practices are expected to be formed with focus on these Supreme Court
judgments, but since the Supreme Court judgment has not provided a clear definition of a
PBP claim, it would be necessary to discuss what a PBP claim is to start with. A claim thatdefines a product solely by its manufacturing process would apparently be a PBP claim,
but the manufacturing process is often described as part of the claim in actual cases. The
Supreme Court judgments only state “when a claim of a patent for an invention of a productrecites the manufacturing process of the product,” but there would be a problem in treating
all claims that recite a chronological element as PBP claims and including them in the scopeof application of the Supreme Court judgments.14 It is unknown how practices will develop
in the future, but surmising from the Supreme Court judgments, a patent examiner who
determines a case to be “when a claim of a patent for an invention of a product recites the
manufacturing process of the product” would give notice of reasons for refusal based on
the failure to satisfy the clarity requirement, and if the applicant fails to prove satisfactionof the “impossible/impractical” requirement, the application would be refused due toviolation of the clarity requirement. The Supreme Court judgments are characteristic in that,while adopting the substance identity theory, they regard that PBP claims fail to satisfy theclarity requirement, in principle, which differs from the conventional substance identity
theory. The Supreme Court judgments accept PBP claims only when it is

14 There may be cases where the claim includes a chronological element but it merely indicates a state of the subject
matter, such as “a product in which layer b is arranged above layer a.” There can also be such claim statement as “aproduct in which layer b is arranged above layer a by means of adhesion by process c.” In the examples of “when aclaim concerning an invention of a product recites a manufacturing process of the product” shown in the Japan Patent
Office, July 6, 2015, “ Purodakuto Bai Prosesu Kurēmu Ni Kansuru Tōmen No Shinsa No Toriatsukai Ni Tsuite”(Interim Handling Procedures for Examinations and Appeals/Trials involving Product-by-process Claims), p. 4, “adevice comprising a fixed part made by inserting (the bolt) to engage in (the concave region) and screwing a nut onto
the end of the bolt” is not acceptable due to being a PBP claim, but if it is corrected into “ a device comprising a fixedpart wherein (the bolt) is inserted to engage in (the concave region) and a nut is screwed onto the end of the bolt,” itbecomes acceptable because it no longer includes chronological elements. It is somewhat questionable whether thismatter can be converged into such play on words without examining the substance.

553

§8. Infringement“impossible/impractical” to directly define the structure or characteristics of the product,but the specific content of “impossible/impractical” is not clear. The Supreme Court
judgments mention that “impractical” is when the work to define the structure or
characteristics of the product could require excessive economic costs and time. However,while it may be easy for a large company fully equipped with analytical instruments, etc.
to define a product, it may be impractical for SMEs, so the determination standards becomea problem. Given how the judgments are written, the court seems to interpret“impossible/impractical” quite strictly, and the hurdle for accepting PBP claims seems to
be considerably high, but this would be a future challenge. In the concurring opinion,
Justice Katsumi Chiba stated that the JPO will not be able to strictly require the applicant
to prove the impossible/impractical circumstances and would be very likely to find theexistence of such circumstances unless there is a reasonable doubt.15 Close attention shouldbe paid to the future development of patent examination practices.
[489]
According to the Supreme Court judgments, only PBP claims that satisfy the“impossible/impractical” requirement would be lawful. In that case, the subject matter ofthe patent is the “product” in general, so theoretically, a later application claiming the same
product invention made by a different manufacturing process would be refused in patentexamination. However, there remains a difficult question of how the identity with a productmanufactured by a different process should be determined when it is impossible or
impractical to define the structure or characteristics of the product by means other than the
manufacturing process. The same question arises also in an infringement case.
If these Supreme Court judgments are applied, there will be a large number of patentrights in violation of the clarity requirement, so requests for a trial for invalidation anddefenses of invalidation are likely to increase. Thus, there will be a question of whether
existing patent rights for PBP claims can be saved by correction. When a claim includes a
description of the manufacturing process, but it is still possible to define the structure or
characteristics of the product by deleting that part, a correction to delete that manufacturing
process will be allowable. However, in many cases, the invention would fail to satisfy theclarity requirement or the novelty/inventive step requirement if the patentee only deletes
the description of the manufacturing process. Therefore, there will be a question of whether
a “product invention” can be corrected into an “invention of a process of producing a

15 However, the extent of circumstances that the applicant needs to prove and the kinds of circumstances required for thepatent examiner to determine that the impossible/impractical requirement has been cleared are unknown at the present
stage, and they need to be determined based on future court judgments. Nevertheless, if the patent examiner grants
patents in examination by applying a relaxed interpretation of the impossible/impractical requirement, it will cause anincrease in defenses of invalidation in infringement litigation, and simply carry the problem over to the court. It is adifficult issue, but as the first step, a substantive interpretation would need to be established.

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§8. Infringement

product.” In the past, it was believed that a correction that changes the category of invention
is impermissible.16 Nevertheless, Article 126, paragraph (6) only prohibits correction of
the description, scope of claims, or drawings that enlarges or alters the scope of claims, anddoes not mention and therefor does not explicitly prohibit a change in category. A change
in category may correspond to the alteration as referred to in Article 126, paragraph (6) inmany cases, but the purpose of prohibiting alteration is to protect third parties, 17 so it
should not be construed that the provisions uniformly prohibit all changes in category.18
Since a PBP claim recites that the product can be manufactured by the process, even if thecategory is changed, it would practically restrict the scope of claims from the product ingeneral to products produced by the manufacturing process, so such change can beconsidered not to be enlargement or alteration.19 If such correction is allowed, the effect ofthe patent right would weaken, but at least it would be able to survive as an “invention of aprocess of producing a product.” Allowing such correction would be equivalent to allowing
practically the same effect as the non-genuine PBP claim as referred to in the Intellectual
Property High Court Grant Panel judgment. In other words, in the Intellectual Property
High Court judgment, if the patentee fails to prove satisfaction of the requirements for agenuine PBP claim, the claim becomes a non-genuine PBP claim, and the effect of thepatent right will only extend to products produced by the process. Meanwhile, if a changeof category is allowed by correction, the claim is corrected into a process of producing a
product by a trial decision of correction, and the effect of the patent right will only extend
to products produced by the process. In short, allowing a change in category by correction
is to allow practically the same effect as that under the Intellectual Property High Court
16 In the Intellectual Property High Court Judgment, September 20, 2007, court website (the Holographic Grating case),
which is a judgment before the Supreme Court judgments, the court stated, “ Even if it describes a process of producing
a product, a product-by-process specifies a product invented and is not for seeking a patent for a process of producing
it. An invention described in the form of a product-by-process claim is classified as an invention of a product. It is neither
an invention of a process nor an invention of a product combined with the invention of a process.” On such basis, thecourt stated that a category change from an invention of a product to an invention of a process simply means a claim forrights that have an effect that differs from that of the rights originally sought in connection with the invention of a product,
and that the amendment at issue was hence aimed at changing the claim and falls under none of the items in Article 172, paragraph (4) of the Patent Act (paragraph (5) of the current Act). While this is a case on amendment, it also applies
to correction. The same applies to JPO practices.
17 Japan Patent Office, ed., Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 372 states
that, because alterations could cause unexpected detriments to third parties, Article 126, paragraph (6) guarantees thatno such situation would occur.
18 In the concurring opinion by Justice Katsumi Chiba in the abovementioned Supreme Court judgments, Justice Chiba
stated, “ it is also expected that requests for invalidation trials will be filed or the defense of invalidity will be raised in
infringement suits,” but that it is inevitable. Justice Chiba further pointed out, “To avoid such a situation, procedures
such as a request for correction in a patent invalidation trial and a request for a trial for correction may be helpful. How
these procedures will actually be handled is an issue to be addressed in the future.” This can be read as suggestingcorrection of a change in category, though not explicitly. Takeshi Maeda, “Purodakuto Bai Purosesu Kurēmu No
Yūkōsei To Teisei No Kahi—Purabasutachin Natoriumu Jiken Saikōsai Hanketsu To Sono Go No Kadai” (Validity andCorrectability of Product-by-Process Claims: the Supreme Court Judgments in the Pravastatin Sodium Case andSubsequent Challenges), AIPPI, Vol. 60, No. 8 (2015), p. 717 also supports correction of a change in category.
19 According to the substance identity theory, the subject matter to be examined is the product and not the manufacturing
process, so it may be said that the manufacturing process is excluded from the scope of examination, but a PBP claim
would never actually be examined by ignoring the manufacturing process.

555§8. Infringement

judgment, although the procedure differs.
[490][491]556§9. Patent Right as the Subject of a Transaction[492]§9. Patent Right as the Subject of a Transaction
A patent right, which is a property right, is subject to transactions. Accordingly, it
can be assigned, can be made subject to a security right, can be seized, can be made subject
to licensing, and is treated similarly to other property rights.
9.1. Transfer of Right
Since a patent right is a property right, it can be transferred freely, but certain typesof succession must be registered in the Patent Registry at the JPO in order for it to takeeffect (Article 98, paragraph (1), item (i) of the Patent Act). Under the former Act (Act of1921), registration was a requirement for countering third parties, similar to the case of real
property, but it was changed to being a requirement for succession to take effect under thecurrent Act. This measure was intended to clarify relations with other rights, and to ensure
safe transactions. The assignment of a patent right is usually conducted between specialized
dealers, so there would be no inconvenience in making registration a requirement for theassignment to take effect, and it would also be useful for clarifying the relationship withother rights. However, the registration does not serve as prima facie evidence, so it ispossible to dispute the legal relationship that caused the registration. Therefore, those whotrusted in the registration may not be protected in some cases. In the case of a general
succession, it is impossible to make the registration a requirement in order for the
succession to take effect, so the effect of the transfer arises upon inheritance or corporate
merger (the portion in parentheses in Article 98, paragraph (1), item (i) of the Patent Act).
There is an obligation to report the transfer to the Commissioner of the JPO without delay
in such a case (paragraph (2) of said Article), but that is not a requirement for the transfer
to be effective. Unless there are provisions on exceptional treatment, a patent right is
inseparable (Article 185, etc.) and cannot be transferred claim-by-claim (divisionaltransfer).
When a patent right is jointly owned, one person's share of the patent cannot betransferred without the consent of the other joint owners (Article 73, paragraph (1) of the
Patent Act). As opposed to the case of joint ownership under the Civil Code (Article 249of the Civil Code), the joint owners of a patent right are not restricted to working theinvention according to their respective share, but can work it without limitation in terms ofquantity. Thus, the question of the identity of the other joint owners is extremely important
for the joint owners of a patent. This is why the transfer is restricted (for details, see “6.2.

557

§9. Patent Right as the Subject of a Transaction

Joint Ownership”). However, as this provision is a default rule and it is possible to provide
otherwise by contract, it would be desirable to conclude a detailed contract in advance inthe case of carrying out joint research, etc. Issues such as liability for defects that occur
upon the transfer of the right are settled according to the principles of the Civil Code.

558

§9. Patent Right as the Subject of a Transaction[493]
9.2. Security Rights
9.2.1. Right of Pledge (Articles 95 and 96 of the Patent Act)
Since a patent right is a property right, it is subject to security rights, and the Patent
Act provides for the right of pledge (Article 95 of the Patent Act). Because the valuation ofa patent right upon conversion into money is unclear compared to cases of real property ormarketable securities, and there is hardly any market for buying and selling patent rights,
pledges are not used frequently, in reality. However, the security system for patents,
including the right of pledge, is expected to become more important in the future. In
particular, for venture businesses that have no outstanding assets other than theirtechnologies, the offering of technologies as security is an important means of obtaining
loans for the working of the inventions. Financial institutions would also be able to expand
their business opportunities if they could utilize patent rights as security. To this end, it isinsufficient for the provision on the right of pledge to be stipulated in the Patent Act unlesspatent right valuation standards and a patent market are established first. If such a market
were created, it would not only solve the issue of security, but would also increase patenttransactions and licensing, and would contribute to fostering companies that run businesses
based on high-quality technologies.
In Japan, subcontractors are well developed, but it is said that there are few cases inwhich SMEs having original technologies make great developments by utilizing theirtechnologies. A company does not develop merely by owning high-quality technologies; itmust make good use of them and, to this end, a method should be established to turn thetechnologies into assets.1 A possible approach would be to use not only the right of pledge,
but also the trust system, etc.
The rights subject to a pledge are, apart from the patent right itself, exclusive licenses
and non-exclusive licenses (Article 95, Article 77, paragraph (4), and Article 94, paragraph(2) of the Patent Act). A right to obtain a patent cannot be made subject to a pledge (Article
33, paragraph (2) of the Patent Act). A pledge on a patent right or an exclusive license must
be registered in order to take effect (Article 98, paragraph (1), item (iii) of the Patent Act).
1 With regard to assessment of intellectual property rights, see Institute of Intellectual Property, Chiteki Zaisanken Tanpo
Kachi Hyōka Shuhō Kenkyūkai Hōkokusho (Report by the Study Group on the Assessment Method of the Security Valueof Intellectual Property Rights) (1996); Yoshikazu Takaishi, ed., Chiteki Shoyūken Tanpo (Intellectual Property
Security) (Banking Education, 1997); Gordon Smith and Russel Parr (translated by the Institute of Intellectual Property),
Chiteki Zaisan To Mukei Shisan No Kachi Hyōka (Valuation of Intellectual Property and Intangible Assets) (Chuo
Keizaisha, 1996); Kōichirō Suda, “Kōgyō Shoyūken No Tanpo No Jitsujō To Kaisei No Yōbō” (Actual Conditions ofIndustrial Property Security and the Prospect for Change), Patent, Vol. 49, No. 2 (1996), p. 27; Special feature “Chiteki
Zaisanken Tanpo” (Intellectual Property Security), Ginkō Hōmu (Legal Affairs of Banks) 21, No. 516 (1996).

559

§9. Patent Right as the Subject of a Transaction

In the case of a pledge on a non-exclusive license, the registration used to be a requirement
for countering third parties (Article 99, paragraph (3) of the Patent Act before the revision;
currently deleted) in the past, but since a non-exclusive license was revised to be effective
against third parties by operation of law without registration upon the 2011 revision, apledge on a non-exclusive license also became effective against third parties by operationof law without registration accordingly. A pledge on an exclusive license requires theconsent of the patentee (Article 77, paragraph (4) of the Patent Act), and a pledge on a nonexclusive license requires the consent of the patentee, while a pledge on a non-exclusive
license on an exclusive license requires the consent of the patentee and the exclusive
licensee (Article 94, paragraph (2) of the Patent Act). It should be construed that once thepatentee, etc. gives his/her consent, he/she can no longer make an objection against thewinning bidder. There are also theories that again require the consent of the patentee, etc.
upon the transfer of the right to the winning bidder, but that equates to ruining thefundamentals of the pledge system and may lead to a malfunction of the pledge, so the idea
is hardly adoptable.
[494]
A pledge on a patent right is one kind of a pledge on rights, which virtually resembles
a mortgage.2 The working of a patented invention often requires a substantial amount ofinvestment and technology, so it would be inefficient to allow the working of the invention
by the pledgee. Therefore, it is often more desirable to have the pledger continue to work
the invention, and the pledgee receive payment in preference to others from the money
obtained from the working of the invention. Thus, the Act provides that the pledgee cannot
work the patented invention unless otherwise stipulated by a contract, and the title to work
the invention is held by the pledgee. The pledgee can exercise the right of pledge not only
against any consideration to be paid for the subject of the pledge, but also against any
money or goods to be received by the patentee, exclusive licensee, or non-exclusive
licensee for the working of the patented invention, but the consideration, money, or goods
must be attached prior to the payment of money or delivery of goods (extension of security
interest to the proceeds of the collateral; Article 96 of the Patent Act). This is because, if
the exercised pledge is recognized as an item that has been mixed into the general propertyof the debtor, it is likely to damage the interests of the other obligees.
When a pledge has been established, the patentee can neither waive the patent right(Article 97, paragraph (1) of the Patent Act) nor request a trial for correction (Article 127

2 The report of the Industrial Property Council stated that “pledge” should be revised to “mortgage” (Kōgyō Shoyūken
Seido Kaisei Shingi Kai Tōshin Setsumeisho (Explanation on the Council Report on Amendment of the Industrial
Property System, p. 38). However, in the process of legislation a problem was pointed out in relation to auctions, and it
was decided that the term “pledge” would be used, similarly to the former Act.

560

§9. Patent Right as the Subject of a Transactionof the Patent Act) without the consent of the pledgee.
[495]
9.3.2. Transfer of Title for Security Purposes
The Patent Act provides for pledges as part of the security system, but they are notused frequently. In practice, it is considered to be easier to use a transfer of title for security
purposes or a sale with a right of return, but the actual status of their use is not quite clear.
A transfer of title to a patent right for security purposes is a transfer as a security, so
its content is fundamentally the same as an ordinary transfer of title for security purposes.
Registration cannot be made to the effect that a certain transfer is a transfer of title forsecurity purposes, so, a formal registration of the transfer of the patent right is made.

561

§9. Patent Right as the Subject of a Transaction

9.3.3. Foundation Mortgage and Enterprise Mortgage
A foundation mortgage is a way of establishing a mortgage on collective property
consisting of a company's assets, including facilities, under the Factory Mortgage Act.
According to the Factory Mortgage Act, industrial property can be considered to be aconstituent part of a foundation (Article 11, paragraph (5) of the Factory Mortgage Act).
Although the concept of industrial property is questionable with respect to this point,1 there
is no objection to the fact that patent rights are included therein.
The purpose of the Enterprise Mortgage Act is to establish a mortgage on the entire
property of a stock company in order to secure the corporate bonds issued by that company,
and there is no problem in having the mortgage established on patents and other industrial
property.
9.3. Compulsory Execution
The Patent Act does not have provisions on compulsory execution, but as a patentright is a property right, it can be made subject to compulsory execution. Furthermore, inthe case of bankruptcy, patents are included in the bankrupt estate (Article 34, paragraph(1) of the Bankruptcy Act). When a court clerk seizes a patent or cancels such seizure,he/she commissions the JPO to register the seizure or to cancel such registration (Article
24 of the Patent Registration Order). Provisional seizure and provisional disposition for
securing execution proceedings only take effect upon registration (Article 98, paragraph(1), item (iii) of the Patent Act). However, seizure of a non-exclusive license becomes
effective by operation of law without registration, since there is no registration system for
it.
[496]
With regard to compulsory execution against the right to obtain a patent, see“1.4.2.4. (3) Compulsory Execution.”
9.4. Licenses
9.4.1. Significance of a License
Although the Patent Act does not obligate a patentee to work the patented invention,

1 For instance, it is not clear whether the right to obtain a patent or a trade secret is also included in the concept. See"1.4.2.4.(2)(D) Foundation Mortgage and Enterprise Mortgage."562

§9. Patent Right as the Subject of a Transaction

an invention is only meaningful when it is worked. Of course, disclosure of the patent
undeniably contributes to improving the technological level of society even withoutworking the invention, but, still, there is a great meaning in diffusing the technology
through working it. Accordingly, the Patent Act provides for a system under which thepatentee grants the title to working the invention to another person even if the patentee does
not work the invention himself/herself. Specifically, the Patent Act provides for exclusive
licenses, provisional exclusive licenses, non-exclusive licenses, and provisional nonexclusive licenses that are established by the intent of the patentee, compulsory licenses
that deem an award by the Minister of Economy, Trade and Industry or the Commissionerof the JPO to be the fictitious intention of the patentee, and statutory licenses that arise by
operation of law irrespective of the intention of the patentee.
The patentee is free to grant whatever kind of title he/she wishes to the working of
the invention to another person as long as it does not violate compulsory laws andregulations according to the principle of the freedom of contract. The Patent Act provides
for two kinds of licenses—exclusive licenses and non-exclusive licenses—as licenses
based on an agreement. These two licenses are often respectively likened to a superficies,
which is a usufruct having a real right aspect, and the leasehold, which is a claim-like rightto use in the world of real property.2 However, the legal nature of a patent right is decisively
different from that of ownership of real property, so its licenses inevitably have different
natures from a superficies or leasehold. While the real property needs to be possessed inorder to be used, the concept of possession does not apply to an invention, so it can virtually
be worked by multiple persons at the same time. Thus, there could be multiple licensees.
However, as there is also a strong demand for monopolistic working, the Patent Act
specially provides for exclusive licenses. In other words, the difference between an
exclusive license and a non-exclusive license is in whether or not the establishment ofmultiple licenses is allowed. Specifically, an exclusive licensee has the right to work theinvention monopolistically within the scope of the license, so he/she has a similar status as
the patentee, but multiple non-exclusive licenses can be established for the same agreed
scope of license, so the licensee is merely free from being subjected to an injunction or
having to suffer a claim for damages from the patentee and the exclusive licensee.
[497]
Although compulsory licenses and statutory licenses are stipulated as non-exclusive
licenses under the Patent Act, their nature is quite different from ordinary non-exclusive
licenses, so they should be discussed separately.
Upon the 2008 revision, the system of a provisional exclusive license and the system
2 Japan Patent Office, Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 251.

563

§9. Patent Right as the Subject of a Transactionof a provisional non-exclusive license were introduced for the right to obtain a patent. With
regard to these licenses, see “1.4.2.3. Provisional Exclusive License and Provisional Nonexclusive License (Articles 34-2 and 34-3 of the Patent Act).”564

§9. Patent Right as the Subject of a Transaction

9.4.2. Exclusive License (Article 77 of the Patent Act)9.4.2.1. Nature of an Exclusive License
An exclusive license gives authority to work a patented invention exclusively to theextent permitted by the contract granting the license (Article 77 of the Patent Act). While
the former Act stipulated that “a patent right can be transferred by either imposing or not
imposing limitations” (Article 44, paragraph (1)), the provision was not intended forallowing the transfer, but for indicating that limitations can be imposed when transferring
a patent right. However, the details of the system of transfer with limitations were not quite
clear and the system was hardly used, so the provision was deleted upon enactment of thecurrent Act. Therefore, under the current Act, the system was revised from the form of atransfer to the form of an exclusive license. Since a transfer with limitations under theformer Act was often considered to be analogous to a usufructuary real right in spite of theword “transfer,” it can be regarded as being almost identical to the system under the current
Act. However, whereas the transfer of a right with limitations under the former Act, which
took the form of a transfer of a right, allowed a retransfer without the consent of the former
patentee, an exclusive license is different in that its transfer requires the consent of thepatentee in principle (Article 77, paragraph (3) of the Patent Act).
After the establishment of an exclusive license, the patentee cannot work theinvention with respect to the scope covered by the license contract without the consent of
the exclusive licensee.1 An exclusive license is more likely to be established when the twoparties are in a special kind of relationship, such as in cases where the companies party to
the contract are in a parent-subsidiary relationship, where technology is imported fromoverseas but the patentee will not work the technology, and where an independent inventor
licenses his/her invention to a company. Compared to a non-exclusive license, an exclusive
license is used less frequently.2[498]
9.4.2.2. Establishment and Extinguishment of an Exclusive License
Although registration is a requirement for an exclusive license to take effect, it
1 It would be possible to construe that an exclusive licensee's act of giving his/her consent to the patentee’s working of
the invention is identical to the licensee's act of granting a non-exclusive license to the patentee. Nobuhiro Nakayama
and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (New Explanatory Notes on the Patent Act Vol. 1), p. 1020 (writtenby Masabumi Suzuki).
2 The number of exclusive licenses registered during 2013 was 217 (Japan Patent Office Annual Report 2014 (Statistics
and Appendixes), p. 82).

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§9. Patent Right as the Subject of a Transaction

merely means that the license does not become effective as an exclusive license as
stipulated in the Patent Act unless it has been registered. This requirement has only been
set up because an exclusive license, based on which an injunction can be sought, has a great
influence on third parties. Thus, effects that are close to the intentions of the parties
concerned should be recognized between themselves, as long as they do not conflict withcompulsory laws and regulations. For instance, even if an exclusive license contract thathas been concluded were not registered yet, the license should be treated as a monopolistic
non-exclusive license because the grant of the right to work the invention exclusively has
already been agreed upon between the parties.3
With regard to an exclusive license, not only its establishment but any transfer(excluding an ordinary succession), modification, extinguishment, restriction on its
disposal (Article 98, paragraph (1), item (ii) of the Patent Act), or matter regarding a pledge
thereon (Article 98, paragraph (1), item (iii) of the Patent Act) must be registered in orderfor it to become effective. When a patent right is jointly owned, an exclusive license cannot
be established without the consent of all the joint owners (Article 73, paragraph (3) of the
Patent Act).
Since an exclusive license is established based on a patent right, it is extinguishednaturally when the patent right is extinguished. In other words, the exclusive license is also
extinguished when the patent right is extinguished due to a trial decision of invalidation
becoming final and binding, on the expiration of the duration of the patent, waiver of thepatent right (however, if there is an exclusive licensee, this requires the consent of the
exclusive licensee; Article 97, paragraph (1) of the Patent Act), absence of heir (Article 76of the Patent Act),4 or revocation of the patent right (Article 100 of the Anti-MonopolyAct). There are also grounds for the extinguishment of the exclusive license itself, which
only becomes effective by registration (Article 98, paragraph (1), item (ii) of the Patent
Act). An exclusive license is extinguished upon the termination of the contract between theparties (expiration of the term of contract, cancellation of the contract, etc.), waiver of the
exclusive license, or revocation of the exclusive license (Article 100 of the Anti-MonopolyAct). When the patentee and the exclusive licensee merge, the exclusive license isextinguished by the merger. Registration is required for the extinguishment to become
effective except in cases of the merger and extinguishment of the patent right (Article 98,
3 The Osaka District Court Judgment, February 28, 1979, Mutai Saishū, Vol. 11, No. 1, p. 92 (the Artificial Hair
Transplantation Device case); the Osaka District Court Judgment, December 20, 1984, Mutai Saishū, Vol. 16, No. 3, p.
803 (the Hair Brush Design case); the Kobe District Court Judgment, March 18, 1987, Hanta, No. 645, p. 234 (the Pile
Burying Method case). See Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 813 [written by Nobuhiro
Nakayama].
4 While ordinary property will belong to the National Treasury in the absence of an heir (Article 959 of the Civil Code),a patent right is said to become extinguished in such case. In the case of the absence of an heir to an exclusive license,
the exclusive license would be extinguished, and the patentee would acquire a right with no exclusive license.

566§9. Patent Right as the Subject of a Transaction

paragraph (1), item (ii) of the Patent Act).
[499]
Upon the 2008 revision, the matters to be disclosed with regard to a non-exclusive
license were limited, and the non-exclusive license registration system itself was abolishedupon the 2011 revision, but with regard to an exclusive license, the conventional style ofdisclosing the registered matters was maintained due to the substantial influence it has on
third parties and the strict necessity of publicly notifying the contents of the license in lightof such influence. However, the consideration for the license was excluded from the mattersto be registered, since it is often a trade secret.
9.4.2.3. Content of an Exclusive License(1) Scope of an Exclusive License
An exclusive license can either be established for the entire scope of a patent right orfor a limited part of the patent right (Article 77, paragraph (2) of the Patent Act). Any
working exceeding that limitation would not merely be a violation of the contract, butwould be a patent infringement. An exclusive license must be registered in order to become
effective, and such limitation of the scope of a patent right must also be registered at thesame time (Article 43, paragraph (1) of the Patent Registration Order). Unless the limitationof the scope of a patent right is registered, the license would allow unlimited working of
the invention. Therefore, even if the licensee works the invention exceeding that limitation,
it would not cause a problem of patent infringement, but if the limitation has been agreed
upon between the parties, there would be a problem of default of an obligation due to theeffect of the contract.
The modes of limitation include limitation of time, limitation in location andlimitation in the content.
In terms of time, any limitation can be imposed under the Patent Act as long as it iswithin the duration of the patent. For instance, though this is unrealistic, it is possible tolimit the license for a short period of time such as to one day. A non-exclusive license would
usually be used for such a short-term license, but theoretically, it would also be possible toestablish an exclusive license. The validity of such a time limit is not an issue of the Patent
Act, but an issue of laws such as the Civil Code or the Anti-Monopoly Act. For instance, if
a short-term license is renewed repeatedly while assuming a long-term contract, for theconvenience of being able to stop the contract at any time, the sudden rejection of a renewal
could be considered as a contravention of public order and morality or an abuse of adominant bargaining position in some cases (the issue of a continuous contractual567

§9. Patent Right as the Subject of a Transaction

relationship and renewal of contract), but it would not be an issue of the Patent Act.
[500]
The same applies in the case of a limitation in location, and any limitation would bevalid under the Patent Act. The working could be limited to specific administrative districts,
or it could be limited to manufacturing within a specific factory or to sales only within
Shinkansen bullet trains. However, once the patented product is lawfully placed in the
distribution process, the patent right is exhausted with regard to that product, so re-selling
the product outside the limited area would not constitute a patent infringement (See “8.2.6.
Exhaustion of Right”).
Conventionally, exports could not be limited, because limitation on exports
practically means imposing limitation with regard to foreign countries where the Japanese
patent right is not effective. As a matter of course, it had been possible to limit exports by
a contract, but not as the content of an exclusive license. However, as the act of exporting
was added to the concept of working an invention upon the 2006 revision (Article 2,paragraph (3) of the Patent Act), it became possible to prohibit exports as the content of an
exclusive license.
Limitation of the content of an exclusive license can take various modes. It is possible
to limit the mode of working the patented invention. Some of such examples are a license
limited to sales, a license limited to exhibition, and a license limited to manufacture andsales. It is also possible to limit the working to the working of only one of the multiple
patent claims. A limitation can also be imposed regarding product category. For instance,
if the technology can be used both for radios and televisions, the working of the invention
could be limited to radios alone.
A problem arises with limitation in quantity. 5 The parties are able to impose alimitation in quantity by a contract, as long as it does not conflict with other compulsory
laws and regulations, but its registration as a limitation to the exclusive license should not

5 Limitation in quantity can be divided into limitation in the maximum quantity and limitation in the minimum quantity.
Generally, limitation in the minimum quantity is regarded as being imposed merely for securing the license fee for theright holder, and its violation is treated not as an issue of patent right infringement, but as an issue of default of an
obligation. A controversial point is whether products produced beyond limitation in the maximum quantity constitutepatent right infringement.

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§9. Patent Right as the Subject of a Transaction

be allowed.6 Geographical limitations and time limitations have physical limits, but the
production quantity resulting from the working of a patented invention has no limits intheory, so, if a limitation in quantity were recognized as the content of an exclusive license,
it would mean that multiple exclusive licenses with the same content can be established. In
other words, as long as the quantity is limited, multiple exclusive licenses would notconflict with each other, and that would go against the purpose of the system of exclusive
licenses. Also, it would be difficult to distinguish between products produced by working
the invention within the quantity limitation and those produced beyond the limitation and,in actuality, products within the limitation are unlikely to be distinguishable from products
beyond the limitation. Therefore, products produced beyond the quantity limitation should
not be processed as an issue of patent right infringement, but as an issue of default of an
obligation. Incidentally, patent infringement and default of an obligation differ in effects
such as imposition of criminal penalties, application of the presumptive provisions on theamount of damages under Article 102, and effectiveness against third parties (e.g.,
application of the principle of exhaustion), but they do not differ in terms of an injunction.
[501]
In actual exclusive license contracts, limitations are often imposed with respect tomatters such as the supplier of raw materials, product specifications, distribution channels,
attachment of marks, and dispatch of executives. However, these are not limitations in thescope of an exclusive license under the Patent Act, but only limitations under the contract
between the parties.7(2) Effects of an Exclusive License
An exclusive licensee has a right equivalent to that of the patentee within the scope
set by the license contract (Article 77, paragraph (2) of the Patent Act). Accordingly, an
exclusive licensee is able to seek an injunction against an infringer (Article 100 of the Patent
Act) and to claim damages in his/her own name. It should be construed that the patentee is
6 Similar views are revealed in Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 304; Sueaki Oda and Yoshio
Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 334 (it mentions the reason that the recognition of such limitation would
allow both the patentee and the exclusive licensee to own the right to work the invention, and would go against the
purpose of Article 68 of the Patent Act). As opposite views, the following literature suggests that violation of limitationin quantity should also be evaluated as patent right infringement if the limitation is evaluated as playing a considerable
role in securing the exclusive use of the patented invention: Naoki Koizumi, “Sūryō Seigen Ihan No Tokkyo Hō Jō No
Hyōka” (Evaluation of Violation of Limitation in Quantity under the Patent Act), Makino Toshiaki Hanji Taikan Kinen,
Chiteki Zaisan Hō To Gendai Shakai (Intellectual Property Law and Modern Society), p. 355; Makiko Takabe, Jitsumu
Shōsetsu Tokkyo Kankei Soshō [2 Han] (Detailed Explanation of Practice of Patent-Related Litigation [2nd Ed.]), p. 373;
and Ryūta Hirashima, “Tokkyo Raisensu Keiyaku Ihan To Tokkyoken Shingai No Chōsei Hōri Ni Kansuru Ichi Kōsatsu”(Study on Legal Principles for Adjustment Between Violations of Patent License Contracts and Patent Right
Infringements), Nakayama Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai(Theories of Intellectual Property Law and Modern Issues), p. 260.
7 In the Osaka High Court Judgment, May 27, 2003, court website (the Seedling Pot case), which is a case on a nonexclusive license, the court stated as follows: “Even if various agreements are made on the raw materials suppliers,
product standards, markets, use of signs, etc., they are not directly related to the act of working the patented invention,
but are merely conditions incidental thereto, so to speak, so a violation of such agreement merely constitutes default ofan obligation under the contract.” The same is considered to apply to an exclusive license.

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§9. Patent Right as the Subject of a Transaction

also able to seek an injunction against an infringer (Article 100 of the Patent Act) and toclaim damages in his/her own name after granting an exclusive license.8 With regard to
the question of whether or not the patentee has the right to seek an injunction after the grantof an exclusive license, see “8.3.1. Right to Seek an Injunction (Article 100 of the Patent
Act).”[502]
Since an exclusive license is a monopolistic right to use the invention, the patentee
cannot grant any further exclusive licenses or non-exclusive licenses with the same content
which overlap. However, because a non-exclusive license was stipulated as being effective
against third parties by operation of law upon the 2011 revision, any non-exclusive licensethat was granted before the registration of an exclusive license is effective against theexclusive license by operation of law (Article 99 of the Patent Act).
The patentee and the exclusive licensee must each gain the consent of the otherregarding matters that would change the content of the right. Specifically, the consent of
the other party is required regarding a waiver of the patent right, a request for a trial forcorrection, the assignment of the exclusive right or establishment of a pledge thereon, anda sublicense agreement (a non-exclusive license agreement). From the viewpoint of the
exclusive licensee, it is a right whose content cannot be changed against the intention of thelicensee.
(3) Obligations under an Exclusive License Contract
Since an exclusive license becomes effective by registration (Article 98, paragraph(1), item (ii) of the Patent Act), the patentee is naturally obligated to register the license.
The registration is either made jointly (Article 18 of the Patent Registration Order) or solely
by the person entitled to make the registration by attaching the written consent of the person
who is obligated to make the registration (Article 19 of said Order). Another obligation of
the patentee is maintenance of the patent right. Specifically, this obligation includes paying
8 The Supreme Court Judgment, June 17, 2005, Minshū, Vol. 59, No. 5, p. 1074/Hanji, No. 1900, p. 139/Hanta, No. 1183,
p. 208 (the Method of Searching Ligand Molecule case). As in the cases of the Yamaguchi District Court Judgment,
February 28, 1963, Kamin, Vol. 14, No. 2, p. 331/Hanta, No. 142, p. 184 (the Synthetic Float case); the Tokyo District
Court Judgment, March 18, 1964, Hanji, No. 377, p. 63/Hanta, No. 160, p. 133 (the Trousers Waist Lining case), many
lower court judgments had allowed the patentee to seek an injunction. In contrast, in the Tokyo District Court Judgment,
April 16, 2002, court website (the Lifting Hook Device for Heavy Objects case), which was a case where both thepatentee and the exclusive licensee filed actions, and the court did not allow the patentee to seek an injunction, the court
dismissed the patentee's claim and upheld the claim of the exclusive licensee. However, this issue has been settled inpractice with the rendering of the above 2005 Supreme Court judgment. With regard to this issue, see Wataru Sueyoshi,“Sen’yō Jisshiken Settei Go No Sashitome Seikyū -- Sai Ni Han 2005.6.17” (Seeking Injunctive Relief after Establishing
Exclusive License -- Decision of the Second Petty Bench of the Supreme Court 2005.6.17) NBL, No. 814 (2005), p. 4;
Yoshihiko Satō, “Sen’yō Jisshiken O Settei Shiteiru Tokkyokensha No Hōteki Chii Ni Tsuite No Oboegaki -- Sashitome
Seikyūken No Umu O Megutte” (Memorandum on Legal Status of Patentees who Establish a Exclusive License -Discussion on Right to Require an Injunction) Mon'ya Nobuo Koki Kinen (Essays in Honor of the Seventieth Birthdayof Professor Nobuo Mon'ya) “Chiteki Zaisanken Hō To Kyōsō Hō No Gendaiteki Tenkai” (Recent Development of the
Academic Disputes on the Intellectual Property Laws and the Competition Law), p. 313; Naoki Okumura, “Sen’yō
Jisshiken Settei Go No Tokkyokensha Ni Yoru Sashitome Seikyūken” (The Right of Injunctive Relief of a Patentee after
Granting an Exclusive License), Patent, Vol. 60, No. 9 (2007), p. 17.

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§9. Patent Right as the Subject of a Transaction

the patent fees, obtaining of the consent of the licensee when waiving the patent right orrequesting a trial for correction, and making the appropriate responses to any trial forinvalidation.
While the content of the license contract can be decided freely, the following can besaid about a case where there is no explicit contract. First, with regard to the liability of thelicensor for defects, because a non-exclusive license granted by an agreement was
stipulated as being effective against third parties by operation of law upon the 2011 revision,
the patentee is likely to be held liable if he/she had granted a non-exclusive license while
keeping the non-exclusive license a secret. Since a statutory license is effective against an
exclusive license without registration (Article 99 of the Patent Act), if the patentee hadconcealed the existence of a statutory license while being aware of it, the patentee would
be liable for the defect. Thus, if such a statutory license exists, the exclusive licensee islikely to be allowed to claim a reduction of the license fee, and when the defect is serious,
the license could be cancelled. As for a pledge which is effective against third parties andis registered, the existence of such a pledge is unlikely to be regarded as a concealed defect.
Meanwhile, it should be considered that the patentee is not liable for defects regarding thevalidity of the patent, in principle, unless there is any special agreement.9 A patent right isalways subject to the risk of being invalidated, and the patentee is often not aware of if andwhen that will happen, so unless the patentee has specifically guaranteed the validity of thepatent right or is considered to have given such a guarantee judging from the various
circumstances, the patentee should generally be considered to be free of liability for thedefect. However, if the patent is invalidated in a trial for invalidation, the exclusive licensee
would no longer be able to work the invention exclusively, so the licensee can announce
the cancellation of the license. Since these are default rules to be applied in the absence ofa contract, it is desirable to provide for these matters in a contract in advance.10[503]
While a license contract often provides for an obligation of technical assistance or an
obligation to provide technical information, these would be obligations under the contract.
The most important obligation of the licensee is the obligation to pay the license fee,but this is also based on a contract, so it is also possible to make the license fee free. The
licensee only has the right to work the invention, and is not obligated to work the invention

9 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 310.
10 In the Tokyo District Court Judgment, November 29, 1982, Hanji, No. 1070, p. 94/Hanta, No. 499, p. 195 (the InstantFood Container case), which was a case where the license contract included an agreement to the effect that the contract
money and license fee which the plaintiff has paid need not be refunded for any reason, the court held that the plaintiff
cannot claim a refund even if the utility model right were ultimately determined to be invalid (an assertion that there wasa mistake in the juristic act was also denied).

571

§9. Patent Right as the Subject of a Transaction

by operation of law.11 The licensee may be construed to have the obligation to work theinvention depending on the mode of payment of the license fee, but it is a matter of contract
in any case.
There is a theoretical dispute over whether or not the licensee has an obligation not
to dispute the validity of the patent (the non-dispute obligation).12 The question is whether
it would or would not be against fair and equitable principles for the licensee to enjoy profitson the assumption that the patent is valid on the one hand and to dispute its validity on theother. Since a licensee concludes an agreement in the belief that the patent right is valid inmost cases, it would be too severe to make him/her continue to pay the license fee on theassumption that the patent is valid even when grounds for invalidation were found at a later
date. Even if the licensee had doubts about the validity of the patent upon the conclusion ofa contract, it is often difficult both in terms of time and money to request a trial forinvalidation without concluding the license contract, and the result of the trial is unknown
until it becomes final and binding. Thus, it is too severe for the licensee always to have torequest a trial for invalidation from the beginning, and the mere conclusion of a license
contract cannot be interpreted as an expression of the licensee's intention of not disputing
the validity of the patent. Therefore, in many cases, the licensee is likely to be considered
eligible to request a trial for invalidation, in principle. 13 However, a contract for not
disputing the validity of a patent should also be considered to be effective, in principle. A
contract can be made freely, so in order to deny its effect, the contract needs to go against
a compulsory law or regulation. The act of providing for a non-dispute obligation under acontract is not considered to contravene public order and morality to an extent that it would
invalidate the contract. However, if there were circumstances such as an act that
11 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 313; Tatsuki Shibuya “Tokkyo Jisshi Keiyaku Ni Okeru
Jisshikensha No Jisshi Gimu To Keiyaku No Hōritsuteki Seishitsu” (The Licensee’s Obligation to Work the Invention
in a Patent Licensing Agreement and the Legal Nature of the Agreement), Hōgaku Kyōkai Zasshi (Journal of theJurisprudence Association), Vol. 85, No. 2 (1968), p. 197; Satoshi Ishimura, “Jisshi Keiyaku” (License Agreement),
Toshiaki Makino and Toshiaki Iimura, eds., Shin Saiban Jitsumu Taikei 4, Chiteki Zaisan Kankei Soshō Hō, p. 364.
12 Theories recognizing the non-dispute obligation include the following: Yoshimitsu Noguchi, “Tokkyo Jisshi Keiyaku”(Patent Licensing Agreements), Hara Masuji Hanji Taikan Kinen, Kōgyō Shoyūken No Kihonteki Kadai Ge (Essays in
Honor of Retirement of Judge Masuji Hara: Basic Issues of Industrial Property Rights Vol. 2), p. 1043; Ken’ichirōŌsumi, “Gijutsu Teikei” (Technological Tie-up), Keiei Hōgaku Zenshū (Collected Treatises on Business Act), Vol. 11(Diamond, 1967), p. 136; Shirō Mitsuishi, Tokkyo Hō Shōsetsu [Shinpan], p. 530. Those that do not recognize theobligation include the following: Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 445; Nobuo Mon'ya,
Chūshaku Tokkyo Hō, p. 273 (written by Kazufumi Dohi); Daijirō Nagata, Gijutsu Enjo Keiyaku (Technical AssistanceAgreements) (Yuhikaku, 1962), p. 210. In the Tokyo High Court Judgment, July 30, 1985, Mutai Saishū, Vol. 17, No.
2, p. 344 (the Faucet Splice Fitting Design case), the court held that it is not against the fair and equitable principle for a
non-exclusive licensee to request a trial for invalidation, unless any special circumstance exists. However, the nondispute obligation is often stipulated in actual contracts.
13 There is hardly any reason to distinguish between an exclusive license and a non-exclusive license regarding this issue.
If some kind of distinction were to be made, an exclusive licensee is often in a closer relationship with the patentee, so
it would be easier to uphold the non-dispute obligation. However, the difference is not considered to be significant. The
following judgments, though they were related to non-exclusive licenses, found the licensee to be eligible to request atrial for invalidation as a general rule: the Tokyo High Court Judgment, January 31, 1963, Gyōshū, Vol. 14, No. 1, p.
95 (the Synthetic Resin Decorative Laminate case; a case under the former Act); the Tokyo High Court Judgment, July
30, 1985, Mutai Saishū, Vol. 17, No. 2, p. 344 (the Faucet Splice Fitting Design case).

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§9. Patent Right as the Subject of a Transaction

contravenes public order and morality or an abuse of a dominant bargaining position in theprocess of concluding the contract, it would be a different matter. Also, a non-disputeobligation may be recognized in such special cases as where the license contract was
concluded following the withdrawal of a request for an invalidation trial based on asettlement, or where the parties were in a special relationship.
[504](4) Changes to the Parties
A. Change of Licensor (Patentee)
The patentee can freely assign the patent right to another person even after
establishing an exclusive license. Since the transfer of an exclusive license only becomes
effective by registration (Article 98, paragraph (1), item (ii) of the Patent Act), the exclusive
licensee is always registered and is able to duly assert against the assignee of the patentright.
The next problem is the content of what can be asserted against the assignee, that is,the consequence of the exclusive license contract concluded between the former patentee
and the exclusive licensee. Since this issue is the same as in the case of a non-exclusive
license, for details, see “9.4.3.4.(5) Changes to the Parties.”[505]
B. Change to the Exclusive Licensee
Since an exclusive license is a property right, there is a question of whether its
transfer should generally be allowed, similarly to the case of a superficies. However, thepatentee has a serious interest in the identity of the exclusive licensee, so certain restrictions
on the transfer of an exclusive license are stipulated under the Patent Act. They have thesame purpose as the restrictions on assignment of one person's share of a jointly owned
patent right (Article 73, paragraph (1) of the Patent Act). The exclusive licensee can transfer
the license only together with the business involved, with the consent of the patentee, or in
the case of a general succession (Article 77, paragraph (3) of the Patent Act).
It is natural that transfers are allowed with the consent of the patentee or in the caseof a general succession, but a problem arises in the case of a transfer together with thebusiness involved without the consent of the patentee. If the exclusive license is nottransferred when the business involved is transferred, the business cannot be continued andthe facilities must be discarded as a result. It would bring an unfavorable result where abusiness cannot be transferred due to the presence of an exclusive license. The concept ofbusiness in this case is not necessarily clear. In other words, if the transfer of an exclusive
license were allowed even for a minute transfer of facilities, it would be equivalent torecognizing a free assignment of an exclusive license as a result. On the other hand, if the573

§9. Patent Right as the Subject of a Transaction

transfer of the business were considered to mean the assignment of the company's business
operations, in many cases it would disable the transfer of facilities or lead to the discardingof facilities. Ultimately, this is an issue of where to achieve the balance between protectionof the exclusive licensee and protection of the patentee. From this viewpoint, the term
“business” should be interpreted as meaning a business sufficient for working the patented
invention. Its specific size should be determined on a case by case basis according to thecontent of the patented invention.
With regard to a general succession, a transfer in the case of inheritance isunavoidable, but an exclusive license would also be transferred in the case where a large
company merges with a small company, which can be inconvenient at times. In practice, amerger, etc. is usually stipulated in advance in the exclusive license contract as grounds forcancellation.
It should be construed that a compulsory execution with regard to an exclusive
license also requires the consent of the patentee, since it results in a transfer of rights. The
consent of the patentee is also required when establishing a pledge on the exclusive licenseor when granting a non-exclusive license to another person (Article 77, paragraph (4) of
the Patent Act).

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§9. Patent Right as the Subject of a Transaction[506]
9.4.3. Non-Exclusive License (Article 78 of the Patent Act)9.4.3.1. Nature of a Non-Exclusive License
A non-exclusive license is stipulated as a right to work a patented invention as abusiness to the extent permitted by the contract granting the license (Article 78, paragraph(2) of the Patent Act). A non-exclusive license contract is a consensual contract underwhich the patentee allows a licensee to work the invention. A non-exclusive license differsfrom an exclusive license in that it has no monopoly and exclusivity, so it can exist in an
overlapped manner. Unless being bound by a contract, the patentee (or an exclusive
licensee) is able to grant non-exclusive licenses with the same content to multiple persons.
In that sense, a non-exclusive license can be regarded as a right to demand inaction fromthe patentee in not exercising his/her right to seek an injunction or his/her right to claim
compensation for damages. Since actual non-exclusive license contacts can have various
different contents, they sometimes include provisions on an obligation to cooperate in
actually working the invention, an obligation to provide know-how, and an obligation toeliminate infringements, among other matters, but these matters do not derive naturally
from the non-exclusive license itself, nor are they obligations that essentially derive from a
non-exclusive license, rather they are dependent on individual contracts.1 Non-exclusive
licenses include licenses of various types. For example, a non-exclusive license may beconcluded where the licensee has complete technology, but cannot work the technology
only because the patent in question is in the way. Also, there is a monopolistic nonexclusive license where the patentee specially agrees not to grant a license to any otherparty, or a non-exclusive license which is similar to a cartel. On the other hand, there is an
implicit non-exclusive license that occurs when silent approval is given to the working of
the invention by another person in a certain situation. In a special mode, there could also
be a case where parties that had been in dispute over the validity of a patent right reconcile
and conclude a non-exclusive license agreement. These various modes of license can all be
categorized as non-exclusive licenses, and their common denominator is being a nonexclusive license under the Patent Act. Thus, a non-exclusive license is an authorization tobe free from a demand for an injunction or a claim for compensation for damages even if
the licensee works the invention as a business; in other words, it is considered as a right to1 In the Tokyo District Court Judgment, August 27, 1998, Hanta, No. 989, p. 258 (the Contact Filter Medium case), thecourt held that "in order to work a patented invention industrially or commercially, other technical information is usuallyrequired, and even where it is difficult for a licensor to work the patented invention industrially or commercially, thelicensor is not liable for defect warranty unless there is a special agreement in the contract."575

§9. Patent Right as the Subject of a Transaction

demand inaction.2 The actual content of a non-exclusive license centers on the right todemand inaction with various other matters added to it according to the contract.
[507]
This is not a mere issue of literal interpretation of the law, but a characteristic
common to intellectual property rights for which the law has a specially recognizedmonopoly over information. The greatest feature of the non-exclusive license is that it
ensures the patentee's inaction of not exercising his/her right against the working of theinvention by the licensee, and therefore multiple licensees can exist concurrently, unlike aleasehold which is intended for delivering a specific product. It merely ensures that thepatentee does not exercise his/her right against the licensees. In other words, a patent rightis an exclusive right in essence, and the patentee can either exercise or not exercise his/her
exclusive right against a third party, and if he/she does not exercise the right, the third party
can work the invention, which is what a non-exclusive license is. The act of not exercising
the exclusive right is either based on an explicit contract or an implicit agreement.
9.4.3.2. Types of Non-Exclusive Licenses
The non-exclusive licenses provided for under the Patent Act are the non-exclusive
license by agreement, the compulsory non-exclusive license, and the statutory nonexclusive license. The latter two will be described in detail in 9.4.4. and 9.4.5. and the nonexclusive license by agreement will be discussed here.
The content of a non-exclusive license by agreement can be freely decided bycontract. For a variety of reasons, a special agreement not to grant the license to another

2 The following Supreme Court judgment holds the same view concerning the nature of a non-exclusive license in relation
to the obligation of registration (such obligation no longer presents an issue since the non-exclusive license system wasabolished upon the 2011 revision): the Supreme Court Judgment, April 20, 1973, Minshū, Vol. 27, No. 3, p. 580 (thePunching Construction Method case). An opposing theory (a theory stating that the licensor naturally bears obligations
including an obligation to cooperate in working the invention) is advocated in the following: Mitsue Toyosaki, Kōgyō
Shoyūken Hō [Shinpan/Zōho], p. 309 (it states that the licensor is liable to explain the patent description and drawings,
as well as teach the process of working and cooperate in necessary registration); Yoshinobu Someno, “Tokkyo Jisshi
Keiyaku” (Patent Licensing Agreements), Keiyaku Hō Taikei (Outline of Contract Act) VI (2) (Yuhikaku, 1963), p. 381;
Kazuo Morioka, Hatsumei (Invention), Vol. 81, No. 10 (1984), p. 98; Tsunekazu Kojima, “Tsūjō Jisshiken No
Fukashinsei” (Inviolability of Non-Exclusive License), Ajia Hōgaku (Asia University Law Review), Vol. 19, No. 1/2(combined issue) (1985), p. 155. These academic theories attempt to recognize the obligation of inaction of the nonexclusive licensor based on the working of Article 78, paragraph (2) of the Patent Act that "a non-exclusive licensee
shall have a right to work the patented invention as a business....," but they confuse the non-exclusive license itself withthe contract. In the Osaka District Court Judgment, December 26, 1964, Kamin, Vol. 15, No. 12, p. 3121 (thePolypropylene case), the court stated as follows in obiter dictum: “It is reasonable to consider that in addition to an
obligation to authorize the non-exclusive licensee to work the patented invention (the obligation of inaction), the licensor
has an obligation to stop illegal patent infringements by third parties in order also to make the working of the invention
complete in the practical sense (a legal duty).” However, there seems to have been a special agreement in this case to
the effect that “the patentee shall file and conduct in good faith lawsuits against any patent infringement, as required, inorder to prevent practical infringements,” and this judgment also mentioned that “as a liability based on the license
contract, the licensor” has an obligation to eliminate infringements. Therefore, this judgment has not stated the generalrule for non-exclusive licenses.

576

§9. Patent Right as the Subject of a Transaction

person is often concluded between the parties (this is called a monopolistic non-exclusive
license).3 Also, it is possible to conclude a special agreement to the effect that the patentee
shall no longer work the invention (this is called a completely monopolistic non-exclusive
license). Since this is a matter of contract, there are no particular provisions applicable
under the Patent Act, but there is no special reason to deny the contractual effect of suchspecial agreement either. If the patentee grants a license to another person in violation of
the contract, the monopolistic non-exclusive licensee can hold the patentee liable for thedefault of an obligation. Incidentally, whether or not a license is monopolistic is only
decided by contract and, under some circumstances, a monopolistic non-exclusive license
can also be established by an implicit agreement.4[508]
9.4.3.3. Establishment and Extinguishment of a Non-exclusive License
In most cases, a non-exclusive license takes effect through a contract. When a patentright is jointly owned, a non-exclusive license cannot be granted without the consent of all
the joint owners (Article 73, paragraph (3) of the Patent Act). This aspect is the same as in
the case of an exclusive license.
Since a non-exclusive license is established based on a patent right, it is extinguishedby operation of law when the patent right is extinguished. Specifically, the non-exclusive
license is also extinguished when the patent right is extinguished due to the expiration of
the duration of the patent, a trial decision of invalidation becoming final and binding, or theabsence of an heir, or due to a waiver of the patent right (however, this requires the consent
of the licensee of the non-exclusive license granted by an agreement; Article 97, paragraph(1) of the Patent Act), or the revocation of the patent right (Article 100 of the AntiMonopoly Act). When the non-exclusive license has been granted by an exclusive licensee,
the non-exclusive license is also extinguished when the exclusive license is extinguished.
The grounds for the extinguishment of the non-exclusive license itself are theextinguishment of the contractual relationship between the parties (e.g. expiration of the3 This is an issue of a contract, and there can be more than one monopolistic non-exclusive licensee with regard to a single
patent right. There can be a contract to grant non-exclusive licenses to only two licensees, and not to grant a license to
any other person. One such example is an exclusive patent pool, although there are some problems with respect toantitrust law. Ōki Suwano, “Dokusenteki Tsūjō Jisshiken Ni Tsuite -- Dokusen No Seishitsu Narabini Sashitome Seikyū
No Kahi/Jōken To Sono Kihanryoku” (A Study on Exclusive License Called in Japan “Dokusen-teki Tsujo-Jisshi-ken”),
Nihon Kōgyō Shoyūken Hō Gakkai Nenpō (Annual of Industrial Property Law of the Japan Association of Industrial
Property Law), No. 31 (2008), p. 27.
4 The Tokyo District Court Judgment, May 7, 1962, Kamin, Vol. 13, No. 5, p. 972 (the Gas Pressure Welding Methodcase); the Osaka District Court Judgment, February 28, 1979, Mutai Saishū, Vol. 11, No. 1, p. 92 (the Artificial Hair
Transplantation Device case). An invention made by the representative of a company similar to a privately-managed
stock company could be acknowledged to be monopolistic in some cases judging from the relationship between theinventor and the company working the invention.

577

§9. Patent Right as the Subject of a Transaction

term of agreement, cancellation of the contract), waiver of the non-exclusive license, or
revocation of the non-exclusive license (Article 100 of the Anti-Monopoly Act). When thepatentee and the non-exclusive licensee come to merge, the non-exclusive license isextinguished due to a confusion of rights under Article 179 of the Civil Code.
9.4.3.4. Content of a Non-Exclusive License(1) Scope of a Non-Exclusive License
The scope of a non-exclusive license can be decided by contract as in the case of an
exclusive license.
[509]
There is a theory stating that sublicensing a non-exclusive license cannot berecognized, because unlike in the case of an exclusive license (Article 77, paragraph (4) of
the Patent Act), there is no such provision under the Patent Act.5 However, sublicenses are
actually being granted and the prevalent theory is that they should be recognized. The only
party having an interest in the sublicensing is the patentee, so as long as the patentee gives
his/her consent, there should be no problem in allowing sublicensing. Unless a sublicensing
contract violates any compulsory law or regulation, the Patent Act should not intervene in
the contract between the parties. The only main issue is the theoretical construction of thelicense. It would be possible to consider it both as a grant of a sublicense by the nonexclusive licensee and as a direct grant of a non-exclusive license to the sublicensee by thepatentee based on the consent of the patentee. However, if the licensee has obtained theconsent of the patentee as regards sublicensing, the sublicensee tends to pay the license feeto the sublicensor. Also, various contracts tend to be concluded between the sublicensee
and the sublicensor. Thus, in most cases, it would be more suited to the actual situation to
construct the license as a sublicense than as a direct grant of a non-exclusive license by thepatentee, but there would also be cases where it would be more reasonable to regard thelicense as a license directly granted to the sublicensee by the patentee due to a number ofcircumstances.
(2) Effects of a Non-Exclusive License
The most disputed point regarding the effects of a non-exclusive license is whether
a non-exclusive licensee can claim damages and seek an injunction against an infringement.
Specifically, there is a question of whether or not the working of the invention by a third
party having no authorization to do so can constitute a tort against the non-exclusive
licensee, a question of whether a non-exclusive licensee is recognized as having a specific
5 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 346.

578

§9. Patent Right as the Subject of a Transaction

right to claim damages and a right to seek an injunction, and a question of whether a nonexclusive licensee can seek an injunction in subrogation of the patentee (exclusive licensee).
Theories are greatly diversified regarding this point and are in no way in agreement,6 but,
since it is basically an issue concerning the Civil Code, its details will be left to the booksin that field, and only an overview will be introduced here.
[510]
In theory, the violation of a claim can constitute an act of tort. However it has hardly
ever been recognized by the courts in practice. A non-exclusive license is basically a claim,
and it is merely a right to demand inaction whereby the patentee will not seek an injunction
or claim damages against the licensee. The patentee is free to grant a license to other third
parties or give silent approval (implied agreement) to the working of the invention by athird party. Meanwhile, a non-exclusive licensee may continue to work the invention
without hindrance even if a third party works the invention without authorization. In otherwords, a non-exclusive licensee has only gained the authority to work the invention directly,
and no legally protected interest is violated by a third party's unauthorized working of theinvention. If a non-exclusive licensee were recognized as having a right to claim damages
under such a situation, it would mean depriving the patentee of his/her right. Accordingly,
a non-exclusive licensee may have an economic interest, but no interest that deserves to belegally protected, in the working of an invention by a third party who has no authorization,and most opinions agree on that such working of an invention by a third party does notconstitute an act of tort against the non-exclusive licensee.7
Next, there is the issue of the right to claim damages by a monopolistic non-exclusive
licensee. A monopolistic non-exclusive license is a non-exclusive license with a special
agreement whereby the patentee will only grant a license to that licensee, and it is anauthorization to work the invention monopolistically under an agreement. Although it is a
6 For details of the theories, see the following: Nobuhiro Nakayama, “Tsūjō Jisshiken No Shingai” (Infringement of NonExclusive Licenses), Nakamatsu Junnosuke Sensei Tsuitō Ronbun Shū, Kokusai Kōgyō Shoyūken Hō No Sho Mondai(Essays in Memory of Professor Junnosuke Nakamatsu: Various Problems Relating to International Industrial Property
Laws), p. 483; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 830 [written by Nobuhiro Nakayama];
Kazuo Morioka, “Jisshikensha No Sashitome Seikyūken” (A Licensee’s Right to Demand an Injunction), Tōyō Hōgaku,Vol. 20, No. 1 (1997), p. 79.
7 This is the consistent stance taken by court judgments including the Osaka District Court Judgment, April 26, 1984,
Mutai Saishū, Vol. 16, No. 1, p. 271 (the Super Joiner case). A third party's working of the invention could constitute a
breach of performance with regard to contracts associated with a non-exclusive license, but that is an issue of the ordinary
violation of a claim, and not an issue specific to non-exclusive licenses. As a legislative approach, Toshiya Kaneko,“Tokkyoken No Shingaisha Ni Taisuru Dokusenteki Tsūjō Jisshikensha No Songai Baishō Seikyūken” (Should a
Licensee Have a Right to Recover Damages from a Patent Infringer ?), Intellectual Property Law and Policy Journal,
No. 21 (2008), p. 232 proposes a system whereby a non-exclusive licensee may claim damages if he/she has been granted
a "right to claim specific damages against any infringer of the patent right" through an agreement between the licensee
and the patentee, which is a notable opinion. By the way, only one kind of license was stipulated under the former Patent
Act, and there was no distinction between an exclusive license and a non-exclusive license. However, in practice,accessory registration to the effect that the license was monopolistic had been recognized, so licenses with suchregistration can be considered to be close to the exclusive license under the current Act. Therefore, attention should be
paid to this point when examining court judgments under the former Act.

579

§9. Patent Right as the Subject of a Transaction

status merely recognized under a contract, if a third party works the invention withoutauthorization, the monopoly is formally violated, and it would appear that the interest of
the monopolistic non-exclusive licensee has been harmed. Since the Patent Act provides
for the exclusive license as a monopolistic license, and the exclusive licensee has the rightto seek an injunction and a right to claim damages, some people may insist that there is noneed to recognize a right to claim damages for a claim under the name of a monopolistic
non-exclusive license by interpretation. However, due to a variety of reasons, exclusive
licenses are rarely used in actuality, and monopolistic non-exclusive licenses are mostfrequently used as a system for granting a monopolistic license. Under such circumstances,it would not be appropriate to deny a person the right to seek damages for a monopolistic
non-exclusive license. Court judgments also tend to recognize a specific right to claim
damages for a monopolistic non-exclusive licensee.8 The underlying reason would either
be to consider the violation of the license to be an act of tort violating a claim, or to consider
that the status of a monopolistic non-exclusive licensee deserves to be legally protected andthis corresponds to the “legally protected interest” referred to in Article 709 of the Civil
Code.
[511]
However, there is a conflict of views over whether the existence of a monopolistic
non-exclusive license contract is sufficient for recognizing a right to claim damages, or an
actual monopolistic status is required in addition to such contract. Assumable cases arewhere the patentee has granted a license to another party in violation of the contract, or
where patent infringement is widespread as a result of not taking any measures against it.
In this regard, various theories exist on the positioning of the monopolistic non-exclusive
license, which is not provided under the Patent Act.9 The outcome would differ dependingon whether the working by a third party is processed as an issue of a violation of claim,
whether the status of a monopolistic non-exclusive license is regarded as a legally protected
status similar to a claim-like right to use real property (e.g., the right to use a cemetery) on
the basis that the license has a socially important status under the contract, or whether a

8 The Osaka District Court Judgment, February 28, 1979, Mutai Saishū, Vol. 11, No. 1, p. 92 (the Artificial Hair
Transplantation Device case); the Osaka High Court Judgment, January 30, 1980, Mutai Saishū, Vol. 12, No. 1, p. 33;
the Osaka District Court Judgment, December 20, 1984, Mutai Saishū, Vol. 16, No. 3, p. 803 (the Hair Brush Designcase); the Osaka High Court Judgment, June 20, 1986, Mutai Saishū, Vol. 18, No. 2, p. 210; the Supreme Court Judgment,
January 20,1987, 1986 (O), No. 1127; the Kobe District Court Judgment, March 18, 1987, Hanta, No. 645, p. 234 (thePile Burying Method case); the Kyoto District Court Judgment, December 21, 1987, Tokkyo To Kigyō (Patents andEnterprises), No. 230, p. 79 (the Textile Coloring and Patterning Method case); the Osaka District Court Judgment, May
27, 1991, Chiteki Saishū, Vol. 23, No. 2, p. 320 (the Double Mixer case); the Tokyo District Court Judgment, October
12, 1998, Chiteki Saishū, Vol. 30, No. 4, p. 709/Hanji, No. 1653, p. 54/Hanta, No. 986, p. 144 (the Cimetidine case);
the Tokyo District Court Judgment, May 31, 2005, Hanji, No. 1969, p. 108 (the Inductive Power Distribution case).
9 This issue is discussed in detail in Toshiya Kaneko, “Tokkyoken No Shingaisha Ni Taisuru Dokusenteki Tsūjō
Jisshikensha No Songai Baishō Seikyūken” (Should a Licensee Have a Right to Recover Damages from a Patent
Infringer ?), Intellectual Property Law and Policy Journal, No. 21 (2008), p. 203.

580

§9. Patent Right as the Subject of a Transaction

monopolistic non-exclusive license is regarded as being legally protected by focusing on
the factual status of the monopoly actually enjoyed by the license under the contract. Noneof these cases is decisive. However, considering that, although a monopolistic nonexclusive license merely has a claim-like status based on which the licensee can work theinvention monopolistically under a contract with the patentee, the licensee can enjoy profits
based on the actual monopolistic status, and the existence of a right to claim damages
should be determined based on whether or not the licensee has gained actual monopolistic
profits, rather than be based on the presence or absence of a contract granting a formal rightof monopoly or a contract authorizing a specific right to claim damages.10 Nevertheless, if
importance were to be so placed on the monopolistic status, a question would remain about
the treatment of a case where the license is a non-monopolistic non-exclusive license butwith an actual monopolistic status, or where the patentee has granted a license to anotherparty with the consent of the monopolistic non-exclusive licensee (i.e. where only a specificgroup is monopolizing the working of the invention).
[512]
Supposing that a monopolistic non-exclusive licensee were regarded as having a rightto claim damages, there will be a question of whether negligence would also be presumed
for an infringement of a monopolistic non-exclusive license. Negligence is presumed basedon the fact that the existence and the content of the patented invention are publicly notified.
Although the existence of the monopolistic non-exclusive license itself is not publicly
notified, an analogical application of the provision on the presumption of negligence shouldbe allowed.11 As an infringer is in a position capable of knowing that he/she is infringing
another person's patent by researching patent registrations, there would seem to be no
problem in recognizing the presumption of negligence. Also, in the case of an infringementof a monopolistic non-exclusive license, the application of the presumptive provisions on
the amount of damages (Article 102, paragraphs (1) and (2) of the Patent Act) presents a
problem. Considering that the presumptive provisions are recognized for patents andexclusive licenses as these are rights with the nature of real rights, monopolistic non10 In the Tokyo District Court Judgment, June 27, 2003, Hanji, No. 1840, p. 92/Hanta, No. 1141, p. 245 (the Pollen
Cough Drop case), which is a trademark case, the court basically recognized that a person having a monopolistic rightto use a trademark has a right to seek damages against third parties, but since the trademark owner had granted a nonexclusive license to another party, the court denied the claim for damages on the basis that an actual case of monopolizing
the right to use the trademark could not be found.
11 The Tokyo District Court Judgment, May 29, 1998, Hanji, No. 1663, p. 129/Hanta, No. 990, p. 251 (the Correction
Insoles for Bowlegs case). Courts have recognized the right to claim damages with regard to monopolistic non-exclusive
licensees in many trademark cases. The Osaka District Court Judgment, December 25, 1991, 1989 (Wa), No. 2836/1991(Wa), No. 6052 (the Sweat Shirts case); the Tokyo District Court Judgment, June 27, 2003, Hanji, No. 1840, p. 92/Hanta,
No. 1141, p. 245 (the Pollen Cough Drop case); the Tokyo District Court Judgment, May 31, 2005, Hanji, No. 1969, p.
108 (the Inductive Power Distribution case). There were also cases where the court recognized negligence on a case bycase basis instead of analogically applying Article 103 of the Patent Act. In contrast, cases in which the court did notrecognize the presumption of negligence include the following: the Osaka High Court Judgment, September 16, 1982,
Mutai Saishū, Vol. 14, No. 3, p. 571 (the Stiffening Metal for Saw case).

581

§9. Patent Right as the Subject of a Transaction

exclusive licenses are claims, so an analogical application of the presumptive provisions
cannot be recognized for an infringement thereof, and only damages with a reasonablecausal relationship would be awarded pursuant to the Civil Code. 12 However, thepresumptive provisions on the amount of damages under the Patent Act were speciallyestablished because it is extremely difficult to actually prove the amount of damages
pursuant to the Civil Code due to the peculiarity of patent infringements. Thus, if ananalogical application of the presumptive provisions were not recognized, the amount ofdamages that can be claimed against the infringement of a monopolistic non-exclusive
license would be low. The presumptive provisions on the amount of damages should be
regarded as provisions specific to infringements of information property, rather thanprovisions specific to infringements of patents and exclusive licenses which are rights
having the nature of real rights, and in that case, an analogical application of thepresumptive provisions should also be recognized for monopolistic non-exclusive
licenses. 13 It should be noted, however, that in the case where a monopolistic nonexclusive licensee claims damages, the amount to be paid to the patentee (the license fee)would be deducted from the amount of damages.14[513]
Next comes the question of whether or not a specific right to seek an injunction canbe recognized based on a non-exclusive license. There is no problem with the fact that theright to demand the abatement of a nuisance is not recognized for a non-monopolistic nonexclusive license, but the question arises with regard to a monopolistic non-exclusive
12 In the Tokyo District Court Judgment, June 27, 2003, Hanji, No. 1840, p. 92/Hanta, No. 1141, p. 245 (the Pollen CoughDrop case), which is a trademark case, the court held that claimable damages are limited to those that have a reasonablecausal relation with a third party's act of infringement, even if sales of infringing products had affected the sales of the
products of the monopolistic non-exclusive licensee, and denied the claim for damages on the basis that it was notpossible to determine the portion of damage which had a reasonable causal relation with the use of the "花粉" (pollen)mark.
13 The Osaka District Court Judgment, February 28, 1979, Mutai Saishū, Vol. 11, No. 1, p. 92 (the Artificial Hair
Transplantation Device case); the Osaka High Court Judgment, January 30, 1980, Mutai Saishū, Vol. 12, No. 1, p. 33;
the Osaka District Court Judgment, December 20, 1984, Mutai Saishū, Vol. 16, No. 3, p. 803 (the Hair Brush Designcase); the Osaka High Court Judgment, June 20, 1986, Mutai Saishū, Vol. 18, No. 2, p. 210; the Tokyo District Court
Judgment, May 29, 1998, Hanji, No. 1663, p. 129/Hanta, No. 990, p. 251 (the Correction Insoles for Bowlegs case) ;the Tokyo District Court Judgment, October 12, 1998, Chiteki Saishū, Vol. 30, No. 4, p. 709/Hanji, No. 1653, p.
54/Hanta, No. 986, p. 144 (the Cimetidine case). In the Tokyo District Court Judgment, May 31, 2005, Hanji, No. 1969,
p. 108/Hanta, No. 1257, p. 283 (the Inductive Power Distribution case), the court stated that "while a monopolistic nonexclusive licensee is practically no different from an exclusive licensee in that he/she can monopolistically work thepatent and gain profits from the market, the purpose of said paragraph [Article 102, paragraph (3) of the Patent Act; anote by the author] also applies to a monopolistic non-exclusive licensee, so said provision shall be analogically applied
to damages incurred by a monopolistic non-exclusive licensee from an infringer's act of working the invention." Thesame view is indicated in Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 1115 (written by Reiko
Aoyagi). On the other hand, an analogical application was not recognized in the Tokyo High Court Judgment, March
4, 1981, Mutai Saishū, Vol. 13, No. 1, p. 271 (the Lure Design case), but the analogical application has been recognizedin most cases in recent years.
14 The Osaka District Court Judgment, February 28, 1979, Mutai Saishū, Vol. 11, No. 1, p. 92 (the Artificial Hair
Transplantation Device case); the Tokyo District Court Judgment, April 22, 1988, Hanji, No. 1274, p. 117/Hanta, No.
667, p. 218 (the Windsurfing case); the Osaka District Court Judgment, May 27, 1991, Chiteki Saishū, Vol. 23, No. 2,
p. 320 (the Double Mixer case).

582§9. Patent Right as the Subject of a Transaction

license. A claim-like right to use real property has a long history and there had been social
demands to strengthen this right, so, particularly in cases of leased land or leased houses,
the right to use real property has come to be recognized as having a strength quite similar
to that of a real right. On the other hand, a non-exclusive license is fundamentally different
from the case of real property in that it can be used to overlap with another. In addition, thePatent Act particularly provides for an exclusive license system based on which an
injunction can be sought. If a right to seek an injunction were recognized for non-exclusive
licenses in general, non-exclusive licenses would hardly be different in practice fromexclusive licenses, and because non-exclusive licenses became effective against third
parties by operation of law upon the 2011 revision, exclusive licenses will increasingly lose
their significance. Only a few countries have separate provisions for exclusive licenses andnon-exclusive licenses, and there could be various legislative approaches, but as an
approach for interpreting the current statutes, exclusive licenses cannot be neglected. Under
such circumstances, there is a problem in discussing this issue on the same plane as theclaim-like right to use real property, so it is considered unrealistic to recognize a specificright to seek an injunction based on a monopolistic non-exclusive license as aninterpretation of the current Act, and court judgments have not recognized the specific rightto seek an injunction against an infringement of a monopolistic non-exclusive license
either.15[514]
Another question is whether or not a non-exclusive licensee can seek an injunction
from the infringer in subrogation of the patentee, but subrogation is not recognized for all
claims under the Civil Code. The system of action subrogatoire was not originally a system
for the conservation of specified claims, but it had required the insolvency of the obligor.
Later, court judgments and academic theories began to recognize the application of theprovision of action subrogatoire to the conservation of specified claims with regard to theclaim-like right to use real property. The action subrogatoire must be recognized for real
property, because the overlapping use of real property is physically impossible and thelessor of a real property has an obligation to make the real property available for use by thelessee. In contrast, patents can overlap with each other. The patentee is free to grant alicense to another third party after granting a non-exclusive license, and unless there is any
special agreement, a non-exclusive licensee has no right to demand that the patentee

15 Court judgments in which the court denied a monopolistic non-exclusive licensee's right to seek an injunction include
the following: the Osaka District Court Judgment, December 20, 1984, Mutai Saishū, Vol. 16, No. 3, p. 803 (the Hair
Brush Design case; a case in which subrogation was not recognized either); the Osaka High Court Judgment, June 20,
1986, Mutai Saishū, Vol. 18, No. 2, p. 210. As an opposite view, Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo
Hō Shōkai, p. 343 states that Article 100 of the Patent Act should be analogically applied with regard to the right toseek an injunction.

583

§9. Patent Right as the Subject of a Transaction

eliminate any infringements. If the action subrogatoire were recognized in such a situation,
it would result in unjustly depriving the patentee of his/her freedom, and unfairly expanding
the right of the non-exclusive licensee.
In the case of a monopolistic non-exclusive license, the courts have recognized theaction subrogatoire in some cases under the former Act. 16 In contrast, there are views
indicating that the grant of a monopolistic non-exclusive license is merely a contract to theeffect that the patentee will not grant a license to any other party where licenses overlap, so
subrogation will be recognized only in cases where there is a special agreement on thepatentee's obligation to eliminate infringements.17 Indeed, given that a monopolistic nonexclusive license is a claim, it may not be easy or appropriate to recognize subrogation, but
the status of its use resembles the case of a claim-like right to use real property. Even if
subrogation were to be recognized only in cases where there is a special agreement on thepatentee's obligation to eliminate infringements, such special agreement need not be limited
to an explicit agreement, and the presence or absence of the obligation of elimination should
be determined by comprehensively considering applicable circumstances.18[515](3) Obligations under a Non-Exclusive License
Until the 2011 revision, the most debated issue with regard to obligations relating toa non-exclusive license was whether or not a patentee (a non-exclusive licensor) had an
obligation of registration. Court judgments had consistently denied the obligation ofregistration.19 However, with the 2011 revision, a non-exclusive license became effective
against third parties by operation of law (Article 99 of the Patent Act). As a result, thelicense registry was abolished and the registration system itself was discontinued, so theissue of the obligation of registration is no longer relevant today.

16 In the following judgment, the court held that a monopolistic non-exclusive licensee may exercise the right to seek an
injunction in subrogation of the patentee: the Tokyo District Court Judgment, August 31, 1965, Hanta, No. 185, p. 209(the Device for Double Eccentric Cam case). However, this is a case under the former Act, and is considered to be acase on a license with a special agreement to the effect that the license is monopolistic (the claim was dismissed inconclusion). On the other hand, subrogation was not recognized in the following judgment: the Osaka District Court
Judgment, December 20, 1984, Mutai Saishū, Vol. 16, No. 3, p. 803 (the Hair Brush Design case).
17 Ōki Suwano, “Dokusenteki Tsūjō Jisshiken Ni Tsuite -- Dokusen No Seishitsu Narabini Sashitome Seikyū No
Kahi/Jōken To Sono Kihanryoku” (A Study on Exclusive License Called in Japan “Dokusen-teki Tsujo-Jisshi-ken”),
Nihon Kōgyō Shoyūken Hō Gakkai Nenpō (Annual of Industrial Property Law of the Japan Association of Industrial
Property Law), No. 31 (2008), p. 30. Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 5 Han] (Patent Law from the GroundUp [4th ed.]), p. 197 states that subrogation can be exercised only when the patentee has borne the obligation to demand
an injunction.
18 Ryō Shimanami, Tatsuhiro Ueno, and Hisayoshi Yokoyama, Tokkyo Hō Nyūmon (Introduction to the Patent Act), p.
241.
19 The Supreme Court Judgment, April 20, 1973, Minshū, Vol. 27, No. 3, p. 580 (the Punching Construction Methodcase). Although this Supreme Court judgment was rendered under the former Act, it had value as a precedent until the2011 revision of the Act, and subsequent lower court judgments had followed this Supreme Court judgment. Nobuhiro
Nakayama, “Tsūjō Jisshiken To Tōroku Seikyūken” (Non-exclusive License and the Right to Demand Registration),
Nihon Kōgyō Shoyūken Hō Gakkai Nenpō (Annual of Industrial Property Act of the Japan Association of Industrial
Property Law), No. 2 (1979), p. 24.

584

§9. Patent Right as the Subject of a Transaction

Apart from these issues, the issue of whether or not the patentee has an obligation tomaintain the patent right and its value is also basically a matter of contract. The patentee is
not likely to be obliged to maintain the patent right in the case of an implicit non-exclusive
license. By contrast, when concluding a non-exclusive license for value, it is likely to beconstrued as imposing an obligation to maintain the patent right on the patentee in manycases.
Although the main obligation of a non-exclusive licensee is his/her obligation to pay
the license fee, this is also a matter of contract, and there might even not be a fee. With
regard to the non-dispute obligation, the conditions are the same as for an exclusive license.
(4) Matters to be registered and matters to be disclosed
Before the 2011 revision, the registration of a non-exclusive license was arequirement for the license to be effective against third parties, and most non-exclusive
licenses were not registered. However, with an increase of large-scale bankruptcies,
unregistered non-exclusive licenses, which were not effective against third parties, became
more likely to cause confusion. Thus, following the “specified non-exclusive license
registration system” established upon the 2007 revision of the Act on Special Measures
Concerning Revitalization of Industry and Innovation in Industrial Activities, the mattersto be disclosed were reduced upon the 2008 revision of the Patent Registration Order inorder to make the system for registration of the establishment of non-exclusive licenses
easier to use.20 Furthermore, with the 2011 revision, the non-exclusive license registration
system itself was abolished, and the license registry was also abolished, so the issue of
disclosure concerning non-exclusive licenses was no longer relevant.
[516](5) Changes to the Parties
A patentee (including an exclusive licensee) can assign a patent right after granting
a non-exclusive license. Also, the patent right could be seized and transferred to a third
party by auction, or the patentee could become bankrupt, and the patent right could beplaced under the administration of a bankruptcy trustee. A non-exclusive licensee cannot
raise an objection to such a transfer, etc., but in such case, the outcome of the non-exclusive
license comes into question.
In the past, registration had been required in order for a non-exclusive license to beasserted against third parties (Article 99 of the Patent Act before the 2011 revision), but theactual number of registrations had been small. The factors that had been indicated as the
20 Although the following no longer have significance today due to the abolition of the non-exclusive license registry,see Minoru Takeda, “Shin Tsūjō Jisshiken Tō Tōroku Seido No Gaiyō” (Outline of the New Registration System for
Non-exclusive Licenses, etc.), L&T (Law & Technology), No. 40 (2008), p. 13; Kōtarō Kimura, “Tokkyo Raisensu
Keiyaku O Meguru Shomondai” (Practical Issues in Patent Licensing), Chizai Kanri (Intellectual Property
Management), Vol. 59, No. 6 (2009), p. 615.

585

§9. Patent Right as the Subject of a Transaction

reasons for such small number of registrations included the fact that the registration fee wastoo high, secrecy could not be maintained, and there were licenses for which the licensed
patent right could not be specified in such case as cross licensing.
In recent years, due to a growing number of failures of patent-holding companies, anincreasing number of non-exclusive licensees, whose licenses cannot be asserted against
third parties, have been put into an unstable position. Also, patentees such as venturecompanies were often disadvantaged because when they tried to license out their patentrights, potential licensees would often only offer to purchase those patent rights instead ofreceiving licenses, in fear of the patentee's possible bankruptcy. In addition, in cases wherea large number of companies were connected to each other through cross licensing, 21
particularly comprehensive cross licensing, there was a concern that the bankruptcy of asingle company would cause a chain reaction and damage other companies, if nonexclusive licenses could not be asserted against third parties. Due to such circumstances,
voices insisting that unregistered non-exclusive licenses should also be protected grewstronger. In addition, given that registration was not required for countering third parties inmany foreign countries, there was a strongly held belief that international harmonization
could not be achieved if Japan maintained the registration requirement. Accordingly,
Article 99 was revised in 2011, abolishing the registration system for non-exclusive
licenses and providing that all non-exclusive licenses can be asserted by third parties by
operation of law. Incidentally, non-exclusive licenses that had been granted prior to therevision also became effective against third parties by operation of law due to theapplication of the revising Act (Article 2, item (xi) of the Supplementary Provisions).22
Conventionally, various provisions existed concerning registered non-exclusive
licenses, but since non-exclusive licenses became effective against third parties by
operation of law without registration upon the 2011 revision, the non-exclusive license
registry was abolished, and all provisions related to it were abolished as well. First, Article
99, paragraphs (2) and (3) were deleted, eliminating provisions to the effect that a statutory
non-exclusive license was effective against third parties without registration, andprovisions to the effect that any transfer, modification, extinguishment, or restriction on its
disposal of a non-exclusive license must be registered in order for it to become effective

21 With regard to cross licensing, see Yasufumi Shiroyama, “Tokkyo Kurosu Raisensu Keiyaku” (Patent Cross License
Agreement), Nakayama Nobuhiro Kanreki Kinen Ronbun Shū, Chiteki Zaisan Hō No Riron To Gendaiteki Kadai(Essays in Honor of the Sixtieth Birthday of Professor Nobuhiro Nakayama: Theories of Intellectual Property Law andModern Issues), p. 265.
22 However, non-exclusive licenses are not retroactively effective against a person who has been assigned a patent rightprior to the revision of the Act. Meanwhile, the Trademark Act and the Copyright Act have not been revised, so rights
of non-exclusive use of trademark rights need to be registered in order to be effective against third parties, andcopyright license rights (excluding publication rights) have no requirements to satisfy in order to be effective against
third parties.

586

§9. Patent Right as the Subject of a Transaction

were also eliminated.23 The conventional non-voluntary license due to its use prior to arequest for an invalidation trial had been recognized only for registered non-exclusive
licensees, but after the revision, it is recognized for any non-exclusive licensee (Article 80,
paragraph (1) of the Patent Act). On the registration of an extension of the duration of apatent, the registration of the extension had conventionally been refused where a registered
non-exclusive licensee had failed to receive a disposition, but now it is refused where anon-exclusive licensee, whether registered or not, has failed to receive a disposition (Article
67-3, paragraph (1), item (ii) of the Patent Act). Also, conventionally, a notice of a request
for a trial for invalidation, etc. had been given to registered non-exclusive licensees, but it
was decided that such notice shall not be given due to the abolition of the license registry.
[517]
However, it should be noted that protection for unregistered non-exclusive licenses
against patent right assignees also risks sacrificing third-party acquirers of patent rights andbankruptcy creditors. Particularly in cases of emergency such as bankruptcy, concerns
would remain about possible alteration at the time of contract, and there would be a risk of
obstructing correct due diligence in a merger and acquisition process. Concerns have also
been pointed out that the presence of protection for non-exclusive licenses is often unknown
to third parties, so making them effective against third parties by operation of law could
undermine the value of patents. Nevertheless, in the case of a non-exclusive license, even
if the licensee asserts the effectiveness of the license, the new patentee will not be
obstructed from working the invention himself/herself or obstructed from granting a nonexclusive license to another third party. Thus, its negative impact on the patentee is smaller
than in the case of real property in that respect, but unlike in the case of leasing of real
property, the presence of a non-exclusive license is not easily visible from outside, so its
risk of causing harm to third parties is not low. Prior to the 2011 revision, there had been
no major problem in making statutory non-exclusive licenses effective against third parties
without registration. However, it is doubtful whether non-exclusive licenses established bycontract would likewise remain trouble-free in the same manner. Problems are likely tooccur particularly in such case as where a comprehensive cross license has been concluded
but some of the patent rights covered by the license are assigned to another party.24
The question is what becomes of a non-exclusive license that has been concluded
23 Modification of a non-exclusive license no longer requires to be registered in order to be effective against third
parties, but, returning to the general principle, it requires a notice or acknowledgement made by using an instrument
bearing a fixed date in order to be effective against third parties, as in the case of a general claim (Article 467,
paragraph (2) of the Civil Code).
24 Some comprehensive cross licenses do not specify the patent right numbers. For example, a license may specify all
patent rights concerning televisions. Thus, a problem may arise when some of such patent rights covered areassigned.

587

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between the former patentee and the non-exclusive licensee when the patent right istransferred. The Patent Act only provides that a non-exclusive licensee can be asserted
against (the title of the Article is “Perfection of non-exclusive license,” but the text of theprovision reads “shall be effective against”) the acquirer of the patent right or exclusive
license after the non-exclusive license comes into existence (Article 99 of the Patent Act),and does not provide for whether or not the non-exclusive license contract is succeeded toby the new patentee or whether its content can be asserted against the new patentee without
registration. Therefore, the treatment of the relationship between the new patentee and thenon-exclusive licensee and the former patentee is left to court judgments and academic
theories.
[518]
There is a theory which interprets that the new patentee succeeds to the rights andobligations that arise from the non-exclusive license contract, or, that the contract isbasically succeeded to by the new patentee,25 a theory which interprets that a patent rightcan be freely assigned but that the status of the person who has the right to grant a license
also incorporates obligations, so the patent right cannot be assigned by a unilateral act,26

25 Mitsue Toyosaki, “Tokkyoken No Jōto To Kyodaku Jisshikensha No Chii” (Assignment of a Patent Right and the
Status of the Licensee under Agreement), Ōsumi Ken’ichirō Koki Kinen, Kigyō Hō No Kenkyū (Essays in Honor of
the Seventieth Birthday of Professor Ken’ichirō Ōsumi: Study of Business Law) (Yuhikaku, 1977), p. 570; Sueaki Oda
and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 345; Wataru Sueyoshi, “Tōzen Taikō Seido Dōnyū De Kawaru‘Taikō’ No Imi -- Fudōsan Chintaishaku Seido No Shiten Kara” (Change in the Meaning of "Perfection" throughIntroduction of the System of Perfection by Operation of Law: From the Viewpoint of the System of Lease of
Immovable Property), Business Hōmu, Vol. 11, No. 9 (2011), p. 75; Kaoru Kamata, “Raisensu Keiyaku No Taikō To
Kōji” (Perfection and Public Notice of License Contracts), Institute of Intellectual Property, Chiteki Zaisan Raisensu
Keiyaku No Hogo -- Raisensā No Hasan No Bāi O Chūshin Ni (Protection of Intellectual Property Licensing
Agreement: With a Focus on Issues in the Event of Licensor's Bankruptcy) (Yushodo, 2004), p. 247; Hiroyasu Nakata,“Chiteki Zaisanken No Raisensī No Tachiba” (Position of Licensee of Intellectual Property) NBL, No. 801 p. 19/21;
Minoru Takeda, “Tokkyo Raisensu Keiyaku Tōzen Taikō” (Patent Licensing Contracts and Perfection by Operation ofLaw), Ryū Takabayashi, Ryōichi Mimura, and Toshiko Takenaka ed., Gendai Chiteki Zaisan Hō Kōza (Lecture on
Modern Intellectual Property Law), p. 46.
26 The Supreme Court Judgment, September 29, 1955, Minshū, Vol. 9, No. 10, p. 1472 (the Request for Confirmation ofContract case). Ken’ichirō Ōsumi, “Gijutsu Teikei” (Technological Tie-up), Keiei Hōgaku Zenshū (Collected Treatises
on Business Law), Vol. 11 (Diamond, 1967), p. 152. Takuya Iizuka, “Tōzen Taikō Seido” (Automatic Perfection
System), Jurist, No. 1437 (2012), p. 77; Kei Iida, “Tōzen Taikō Seido” (Introduction of Automatic Perfection ofLicense), Jurist, No. 1436 (2012), p. 56. The idea that the rights of the former patentee may be transferred to the newpatentee through an assignment of claims, but that his/her obligations cannot be transferred to the new patentee by aunilateral act is reasonable. Nevertheless, while the obligations would remain with the former patentee, it would bemeaningless to have the obligations thus remain in many cases. No theory supports the idea of totally allowing
succession, but Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (New Explanatory Notes on
the Patent Act Vol. 1), p. 1376 (written by Izumi Hayashi) states that succession of contractual status should be allowed,
in principle, as long as there is no special agreement, and that the terms to be succeeded to and those that should not be
succeeded to should be determined based on the reasonableness of their succession, in accordance with theinterpretation of the Civil Code.

588

§9. Patent Right as the Subject of a Transaction

and a theory sitting in-between.27
Theoretically, a non-exclusive license contract is a type of contract, and the licensor(patentee) has both rights (claims) and obligations. The licensor's right to collect a license
fee is not transferred to the new patentee together with the patent right by operation of law,
but processing similar to that in the case of the assignment of a nominative claim will be
required. Specifically, the assignment of a nominative claim may not be asserted against
the applicable obligor or any other third party, unless the assignor (the former patentee)
gives notice thereof to the obligor (the non-exclusive licensee) or the obligor has
acknowledged the same (Article 467, paragraph (1) of the Civil Code).28 That notice or
acknowledgement may not be asserted against a third party other than the obligor unlessthe notice or acknowledgement is made using an instrument bearing a fixed date (paragraph(2) of said Article).29 While claims can be processed in this way, obligations cannot be
assigned by the patentee alone, so theoretically, obligations would remain with the former
patentee. However, the main obligation is the maintenance of the patent right (payment of
the patent fees, appropriate response to any trials for invalidation, etc.), so, as long as thepatent right has been assigned, there is no sense in such obligation remaining with theformer patentee. While the new patentee is likely to ensure the maintenance of the patentright in most cases, if obligations under the original license contract fail to be performed,
there would be a problem with the former patentee's default, and the non-exclusive licensee
would be able to cancel the contract. As for the patent fees, the former patentee can also
perform the obligation since the fees can also be paid by an interested party (Article 110,
paragraph (1) of the Patent Act). In such case, the new patentee may request the
reimbursement of the expenses arising therefrom to the extent of the actual benefit obtainedby the new patentee (paragraph (2) of said Article).
[519]
In the case of a lease of immovable property, the contract is basically succeeded toby the assignee, so there is an idea to consider that a non-exclusive license contract for a

27 Shigeki Chaen, “Tsūjō Jisshiken No Taikō Yōken Seido Ni Tsuite” (The Requirement to Duly Assert Against Third
Parties of Non-exclusive License), Tokkyo Kenkyū (Patent Studies), Vol. 51 (2011), p. 6 states that the licensee isconstrued as bearing obligations related to the act of working the invention against the assignee of the patent right andthat the assignee succeeds to the contract with regard to such obligations as a result. In the case of the in-between theory,the portion of the contract to be succeeded to and the portion that will not be succeeded to would be distinguished basedon some kind of standards. Kyo Nakamura, “Tsūjō Jissiken No Tōzen Taikō Seido Ni Okeru Keiyaku Shōkei No Umu”
(Whether or Not a Contract Is Succeeded to under the System of Perfection of Non-Exclusive Licenses by Operationof Law), L&T, No. 63 (2014), p. 8.
28 Naturally, no notice or acknowledgment is necessary in the case of general succession since the assignor and theobligor become one.
29 In accordance with Article 2, paragraph (13) of the Supplementary Provisions, a non-exclusive license which had beeneffective against third parties by registration continues to be effective against third parties without any new notice or
acknowledgment.

589

§9. Patent Right as the Subject of a Transaction

patent right is similarly succeeded to by the assignee through the analogy of such lease.30
It is natural that a question arises as to the significance of ensuring the effectiveness of anon-exclusive license against third parties by operation of law if the contract is not
succeeded to by the assignee. However, a contract between a non-exclusive licensee andthe former patentee is not as simple as in the case of a lease of immovable property, often
involving a broad range of factors including the consideration to be paid, the period of thelicense, the area in which the invention may be worked, quantitative limitations, anobligation to provide know-how, an obligation to provide raw materials, an obligation ofconfidentiality, an obligation to provide improvement inventions, a no-contest obligation,and the dispatch of officers. Thus, unlike in the case of real property, mere succession alone
cannot solve all the issues involved. Even if a the contract were to be succeeded to, not allcontracts under the name of non-exclusive license contract would be succeeded toautomatically, and there is no decisive factor outlining the extent to which contracts would
be succeeded to. For example, if the new patentee is to succeed to the obligation to provide
know-how, there are cases where such provision of know-how is unreasonable or
impossible. Also, the amount of consideration for the license is not decided unequivocally,
but is decided according to a number of circumstances, and may be free in some cases; but
there is a problem of whether it is reasonable to have the new patentee, under different
circumstances, directly succeed to a contract that charges no license fee. In the case of acomprehensive cross license, in particular, the licensed patent rights are often unclear, so
the new patentee may incur an unexpected disadvantage. Such uncertain portion would bebroader for a type of non-contentious agreement comprehensive cross license. Also, while
a comprehensive cross license sometimes includes provisions to license future patent rights
as well,31 there is no way of knowing how significant the succession of such a contract
would be for the parties concerned. It cannot be construed that the new patentee willautomatically succeed to the entire contract with such complex contents, while it is alsodifficult to determine which provisions he/she should succeed to. The situation is more
complicated in the case of a corporate merger. For instance, in the case where Patentee A
concluded a comprehensive cross license contract with B, what would happen to thecontract if A merges with Patentee C which has concluded a different comprehensive cross
30 Since the time of the prewar Supreme Court, lease contracts of immovable property have been succeeded to by
operation of law unless there are special circumstances, unlike in the case of assumption of general obligations (theSupreme Court Judgment, April 23, 1971, Minshū, Vol. 25, No. 3, p. 388 (the Assignment of Land with Land
Leasehold Right case)), which is an approach to apply the idea of Article 605 of the Civil Code concerning leaserights also to Article 99 of the Patent Act. Incidentally, in this Supreme Court judgment, the court stated that“assignment of the status of a lessor under a land lease contract accompanies transfer of the lessor’s obligations, but
the method of fulfillment of the lessor’s obligations does not change by who the lessor is.”31 If only the existing patent rights are covered by the license, it will only solve existing disputes. In the case of a noncontentious agreement not to cause disputes in the future, patent rights to be acquired by both parties in the future
should also be included in the contract; otherwise the contract will have little significance.

590

§9. Patent Right as the Subject of a Transaction

license contract with B? Two cross licenses rarely have the same contents, so the outcome
would be questionable. While the consideration to be paid between A and B is decided by
the values and quantity of the patent rights the two parties hold, such consideration could
become unbalanced as a result of C's patent rights also being subject to the comprehensive
cross license after the merger between A and C, since B has also concluded acomprehensive cross license with C. The existence of a license agreement or its content issometimes a secret, and makes the problem even more complicated. 32 A further
complicated problem occurs when the participant of a patent pool transfers a patent right toa third party. After all, even in the case of adopting an interpretation whereby the contract
is automatically succeeded to by the assignee of the patent right, that alone would not solve
the problem.
[520]
If one takes a stance of not recognizing the succession of the contract, the contract
will not be succeeded to by the assignee of the patent right, but the non-exclusive licensee
will be able to set up against the new patentee. The only content that can be set up against
the new patentee is that the new patentee cannot claim damages or seek an injunction
against the licensee. This would be equivalent to granting a free, statutory non-exclusive
license. In that case, because the contract between the former patentee and the nonexclusive licensee still exists, the non-exclusive licensee will pay a royalty to the former
patentee and the former patentee will perform his/her obligations under the contract, and if
the obligations are not performed in accordance with the original contract, there will be a
problem of default. While the relationship between the new patentee and the former
patentee would depend on the contract, the former patentee often pays the new patentee anamount equivalent to the royalty acquired from the non-exclusive licensee.
[521]
As all of these theories involve some inconvenience, there is also an in-between
theory which tries to recognize the automatic succession of the essential portion of a nonexclusive license or a portion that does not disadvantage the non-exclusive licensee. For
example, a possible theory would be to consider that the consideration for or the period of
a license and geographical limitations will be succeeded to by the new patentee.
In any case, none of the theories are grounded on statutory provisions, the only
solution seems to be to accumulate case law according to the contents of the individual nonexclusive license contracts from the standpoint of an in-between theory, but court
32 In the case of a cross license, some kind of agreement is likely to have been concluded at the time of the crosslicensing contract, with regard to the assignment of patent rights, but a problem occurs when there is no suchagreement. See Hidesato Iida, “Tsūjō Jisshiken No Tōzen Taikō” (Perfection of Non-Exclusive License by Operationof Law), Toshiaki Makino, Toshiaki Iimura, Makiko Takabe, Yōichirō Komatsu, and Tomoki Ihara eds, Chiteki
Zaisan Soshō Jitsumu Taikei II (Outline of Intellectual Property Litigation Practice II), p. 92.

591

§9. Patent Right as the Subject of a Transaction

judgments are unlikely to be accumulated for some time. Considering the complicatedcircumstances involved, when a patent right is transferred or a patentee merges with anotherparty, this issue would likely be solved by a contract between the former patentee, the newpatentee, and the non-exclusive licensee.33 The lack of court judgments and an establishedtheory and such lack of clarity in the interpretation of the law would, in reverse, serve as
incentives for concluding a contract upon patent right transfer. Since there are cases where
three parties cannot establish a contract in reality, there may be calls for a legislative
solution, but it is difficult to stipulate a law by assuming all kinds of cases concerning
extremely diverse forms of license.
This issue did not newly emerge after the 2011 revision, but already existed forregistered non-exclusive licenses and registered exclusive licenses prior to the 2011
revision; it was merely not drawing attention due to the scarce number of cases involving
the issue. Upon the revision, this complicated problem was left to court judgments andacademic theories as before, without providing a solution, so the problem still needed to besolved after the 2011 revision. While very few non-exclusive licenses were registered in
the past, all non-exclusive licenses came to be effective against third parties by operationof law upon the 2011 revision, so there is a possibility that the problem will become more
obvious and there will be more cases involving this problem in the future.
[522]
The 2011 revision could also affect the establishment of an implicit non-exclusive
license. Since all non-exclusive licenses are to be effective against third parties under therevising Act, implicit non-exclusive licenses would also be effective against third parties.
Conventionally, a non-exclusive license had been construed to be a mere right to demand
inaction against the patentee whereby the patentee could not seek an injunction or claim
damages. An implicit non-exclusive license only had a meaning of protecting the conditionof facts, and the grant of the license did not cause major harm, so there was a tendency torecognize implicit non-exclusive licenses easily. 34 However, as implicit non-exclusive
licenses became effective against third parties, the power of implicit non-exclusive licenses
was strengthened beyond the mere effect of protecting the condition of facts, which could

33 With regard to a contract in such case, see Takayuki Kuriyama, “Heisei 23 Nen Tokkyo Hō Kaisei ‘Tōzen Taikō Seido’Dōnyū Ni Yoru Keiyaku Jō No Pointo” (Contractual Gist on ‘Legitimate Asserting System’ Introduced in the 2011
Revision of the Patent Act), Business Hōmu, Vol. 12, No. 2 (2012), p.98; Naoya Isoda, “Tsūjō Jisshiken No Tōzen
Taikō Seido To Raisensu Keiyaku No Tōzen Keishō No Umu” (In the Case that a Non-exclusive License is Granted
on a Patent and then the Patent is Assigned to a Third Party, Should the License Contract be Automatically Assigned
from the Assignor to the Assignee?), Patent, Vol. 65, No. 3 (2012) p. 10.
34 In conventional judicial precedents and prevalent theories, there was little need to interpret grant of a non-exclusive
license and a contract on non-enforcement of a patent right differently, but they may come to take on different
meanings in the future, so attention should be paid to future developments. Some members of the revision council
opined that a document bearing a fixed date should be required in order for a non-exclusive license to be effective
against third parties, but the opinion failed to be adopted.

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also affect a third party to whom the patent right is assigned. Because of this, theestablishment of non-exclusive licenses is expected to be recognized more cautiously than
before. For example, in some cases where implicit non-exclusive licenses were recognizedin the past, there may be cases where the patentee's claim should be regarded as an abuseof rights or violation of the fair and equitable principle, rather than taking the form of alicense. If so, it would no longer be an issue of the effectiveness of an implicit non-exclusive
license against third parties.
The non-exclusive licensee may not assign the non-exclusive license without theconsent of the patentee, in principle. Similarly to the case of an exclusive license, the license
can be transferred exceptionally without the consent of the patentee where the businessinvolving the working of the relevant invention is also transferred, or where it is transferred
as a result of general succession (Article 94, paragraph (1) of the Patent Act). There could
be an exceptional case where a non-exclusive licensee, who had been working the same
invention in two factories, transfers each of the businesses to separate people together with
the non-exclusive license. The problem would be difficult in such a case.
9.4.3.5. Comprehensive Cross License
Besides individual licenses, there are comprehensive cross licenses for licensing
multiple patent rights in a batch. Sometimes, patent rights relating to a target business or
product are licensed in a batch, without specifying the patent numbers of the patent rights
to be licensed. Also, patent rights to be obtained in the future are often covered by thelicense. Under a comprehensive cross license, the two parties license out their patent rights
to each other in such a manner so as to be able to continue their business with a sense ofreassurance. Such cross licensing is frequently observed particularly in the electrical andelectronics industries. A comprehensive cross license not only enables the parties to use
each other's technologies, but also carries weight as a non-contentious agreement whereby
the two parties agree not to file infringement litigation against each other. It is because, inthe case of a product such as a television or computer, which involves a large number ofpatent rights, a meticulous search would very likely reveal that the manufacturer isinfringing another company's patent rights, and if the two companies start to attack eachother, they would enter into an endless dispute and both parties would be seriously damaged.
[523]
Under the conventional non-exclusive license system, there was a need to register a
non-exclusive license for each patent right covered in order to make the license effective
against third parties, but it was unrealistic to register the licenses for a large number of593

§9. Patent Right as the Subject of a Transaction

patents individually considering the workload and the registration fees involved. Under
some types of contract, often the patent rights covered are not strictly specified, and there
are also cases where a party wants to keep the fact of licensing confidential and where acomprehensive cross license includes trade secrets. While a contract may cover patentrights to be obtained in the future, those patent rights cannot be specified at the time of
concluding the contract. In the past, unregistered licenses were not effective against third
parties, and if the licensor went bankrupt, there was a risk that the contract would becancelled by the bankruptcy trustee (Article 53, paragraph (1) and Article 56, paragraph (1)of the Bankruptcy Act). In particular, it has been pointed out that, if a comprehensive crosslicense were concluded within the whole of a specific industry, the bankruptcy of one
company could throw the whole industry into confusion in a chain reaction.
Thus, with the 2007 revision of the Act on Special Measures Concerning
Revitalization of Industry and Innovation in Industrial Activities (Industrial Revitalization
Act),35 the “specific non-exclusive license registration system” was introduced (Article 2,paragraph (20) of the Industrial Revitalization Act; later moved to Article 2, paragraph (27)but was abolished in 2011).36 This system made it possible to make a comprehensive crosslicense effective against third parties by registering it as a specified non-exclusive license,
without having to designate the patent numbers upon registration as in the past. However,
because all non-exclusive licenses, including comprehensive cross licenses, came to beeffective against third parties by operation of law with the 2011 revision, the specified nonexclusive license registration system was abolished after it had only been in existence fortwo years, and the specified non-exclusive license registry was also abolished. Since therelevant provisions revised in 2011 have a retroactive effect, while comprehensive crosslicenses that were registered as specified non-exclusive licenses under the Industrial
Revitalization Act were abolished, they were to remain effective against third parties by
operation of law.
[524]

35 It is an Act enacted in 2000 for enhancing industrial strength, which covers a broad range of matters. A comprehensive
license was also stipulated in the Industrial Revitalization Act as a tool for revitalizing industry. Incidentally, thereduction or exemption of patent fees for universities, etc. (the academic discount system) and the Japanese version of
the Bayh-Dole Act, which permits business operators to own intellectual property arising from the results of researchcommissioned by the national government, are also provided for under the Industrial Revitalization Act. See Seirō
Hatano and Sentarō Ishikawa, “Sangyō Katsuryoku Saisei Tokubetsu Sochi Hō Tō No Ichibu O Kaisei Suru Hōritsu
Ni Okeru Tokutei Tsūjō Jisshiken Tōroku Seido Ni Tsuite -- Raisensī No Jigyō Katsudō O Hogo Suru Aratana Tōroku
Seido No Gaiyō” (Specified Non-exclusive License Registration System Under the Act for Partial Revision of the Act
on Special Measures Concerning Revitalization of Industry and Innovation in Industrial Activities -- Outline of a New
Registration System to Protect Licensee’s Business Activities), NBL, No. 860 (2007), p. 18.
36 With regard to the progress of discussions, see Institute of Intellectual Property, Chiteki Zaisan Raisensu Keiyaku No
Hogo -- Raisensā No Hasan No Bāi O Chūshin Ni (Protection of Intellectual Property License Contracts: With a Focus
on Issues in the Event of Licensor's Bankruptcy) (Yushodo, 2004). With regard to the details of the specific nonexclusive license registration system, which has been abolished, see the first edition of Tokkyo Hō (Patent Act), p. 441.

594

§10. Obligations Pertaining to a Patent Right[525]
9.4.4. Compulsory License
9.4.4.1. Compulsory License Where Invention Is Not Worked (Article 83 of the Patent
Act)
Society is hardly disadvantaged at all in the case of movable property even if acompulsory license is not in use. Basically, other people can create the same item. However,as a patent right is a right to work the invention exclusively, the non-working of the patented
invention does not just mean that the right is dormant, but that it has the active effect of
obstructing acts (business activities) of other people. From that perspective, it is moredesirable to obligate the working of the patented invention for the development of industry.
However, as it is both difficult and unreasonable to force the patentee to work the invention,
the actual measure would be to indirectly force the working of the invention by imposing
an action which would result in a disadvantage, such as the confiscation or rescission of thepatent right, or the establishment of a compulsory license for the patent right.
On the other hand, it is detrimental to obligate the working of all inventions. A
patentee raises the level of technology in society by making an invention public, which
could fundamentally be kept secret, by filing a patent application, and makes a certain
contribution to society even without working the invention himself/herself. If the obligation
to work the invention were imposed for all patented inventions, there is a risk that newtechnology will be kept secret. In that sense, a forcible obligation to work the invention
would not be desirable.
The issue of the obligation of working the invention is disputed not only as an issue
as to what kind of system would be desirable for industrial development in Japan, but also
as an issue causing serious conflict between industrialized countries and developing
countries. On the part of developing countries, a company from an industrialized country
which obtains a patent in a developing country would not contribute to the promotion of
employment in the developing country or to the promotion of the transfer of technology
but, instead, would obstruct the promotion of business in that country if that company did
not manufacture the products there but only used the patent as a monopolistic right toimport the products. Accordingly, developing countries want to protect their interests byconfiscating or rescinding patents or establishing a compulsory license for patents if theinventions are not worked within their own countries. However, on the part of companies
in industrialized countries, it is difficult to work the invention by means of manufacturing
in all of the countries in which they have obtained patents, and they would like to595

§10. Obligations Pertaining to a Patent Right

manufacture the products in the most efficient country and export the products from there
to other countries around the world. This conflict was, for a long time, the major cause of
the inability of the World Intellectual Property Organization (WIPO) to function properly,
and it served as a notable point of dispute in the discussions toward the TRIPs Agreementin the Uruguay Round of GATT (the present WTO).1[526]
Generally, it is common to impose a tough obligation to work the invention when thelevel of technology in a country is low and to gradually relax the obligation along with theprogress of technological development. Thus, in Japan, the Patent Monopoly Act of 1885
had adopted a forfeiture system for patents on non-worked inventions (Article 15, item (i)of the Patent Monopoly Act) and the Patent Act of 1909 had adopted a rescission system
for such patents (Article 47 of the Patent Act). In the Act of 1921, a rescission system anda compulsory licensing system were adopted concurrently (Article 41 of the Patent Act),and upon the revision of 1938 a provision was established to enable (a) the granting of acompulsory license for an invention that had not been sufficiently worked for three years
or more if there were such a need in the public interest, and (b) the rescission of the patent
if the invention had not been worked for another two years or more (Article 41, paragraphs(1) and (2) of the Patent Act). The system has been relaxed even further under the current
Act by the abolition of the rescission system and the adoption of only the compulsory
license system (Article 83 of the Patent Act). This transition is considered to have takenplace along with the development of technology in Japan.
Under the current Act, where an invention is not sufficiently and continuously
worked for three years or longer in Japan, a person intending to work the patented invention
may request the patentee or the exclusive licensee to hold consultations to discuss granting
a non-exclusive license, and if the consultation fails, the person can request the JPO
Commissioner for an award (Article 83 of the Patent Act).2 Even if an invention has notbeen worked for three consecutive years, the above does not apply unless four years haveelapsed from the filing of the patent application for the invention (the proviso to paragraph
1 Article 4 A of the Paris Convention provides that each member country can establish a system for compulsory licenses
to be granted in the case of the non-working of the invention, and only when that is insufficient, can the country further
establish a system for rescinding the patent. Article 31 of the TRIPS Agreement provides for the requirements forinvoking a compulsory license, and Japan’s legislation does not violate those requirements.
2 It is natural that a consultation can be held even without Article 83, but the existence of this provision means that a
failure of the consultation is required in order to request an award. It seems to be based on the idea that an autonomous
settlement between the parties should be given priority. The same applies to the award on a dependent invention under
Article 92. Until the revision of 1971, the Act had provided that a consultation could be sought with the authorization of
the JPO Commissioner, but the provision was revised to that under the current Act by Kyoka Ninka Nado No Seiri Ni
Kansuru Hōritsu (Act concerning Reorganization of Authorizations and Permissions) (Act No. 96 of 1971) to simplify
administrative procedures. Regarding the arbitration system, see Katsujirō Kida, “Tokkyo Hatsumei Tō No Jisshi Ni
Kakawaru Saitei Seido Ni Tsuite” (Regarding the Award System concerning the Working of a Patented Invention),
Jurist, No. 605 (1976), p. 78. At the end of that article, "Saitei Seido No Un'yō Yōryō" (Implementation Outline of theAward System) which had been decided on in December 1975 is appended as a reference material.

596

§10. Obligations Pertaining to a Patent Right(1) of said Article), but as examinations were rarely completed within one year under theconventional examination practice, there has been hardly any invention that has not been
worked for three years and for which the patent application has been filed within the past
four years. If an application becomes subject to the accelerated examination system, theexamination may be completed within one year (Article 48-6 of the Patent Act), and in suchcase, the proviso to Article 83, paragraph (1) of the Patent Act may be applied.
Even if an invention had not been worked for three years or more in the past, if it isworked at present, no request for an award can be made. As the purpose of legislation forthe compulsory licensing system is not to impose a sanction against the patentee, but topromote the working of the invention, there would be no need to recognize an award if theinvention were being worked at present. Accordingly, an award cannot be made if theinvention were sufficiently worked by the time of the rendering of the award.3[527]
One question concerns the meaning of the “sufficient working” of the invention. A
nominal working of the invention, merely for avoiding an award, would not be consideredas the sufficient working of the invention. The implementation outline of the award system
states that “when the working of the invention is found to be on an extremely small scaleand only nominal compared to the size of the demand,” it does not correspond to thesufficient working of the invention. The question is, while Article 2, paragraph (3) of the
Patent Act defines the act of importing as a mode of working, whether a case where thepatentee only imports products without manufacturing them inside Japan can be regarded
as the “sufficient working” of the invention. This question is also connected to the purposeof the Patent Act. If the Patent Act were considered to be a system for protecting andfostering national industry, the act of only importing products has a strong aspect ofexerting pressure on national industry, so a request for an award should be recognized.4
However, the patentee cannot manufacture the products in all of the countries in which
he/she has obtained a patent, and this would make it difficult for a company to plan a global
strategy. For some products, a single factory is enough to cover worldwide demand.
3 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 264; Japan Patent Office, Kōgyō Shoyūken Hō Chikujō
Kaisetsu [Dai 19 Han], p. 264; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 541. Meanwhile, a system torescind trademarks which are not in use is also stipulated in Article 50 of the Trademark Act, but as Article 50, paragraph(2) provides that the trademark will be rescinded unless there is proof that the trademark has been used within “three
years prior to the registration of the request for the trial (for rescission),” the determination is made based on the time of
the registration of the request for the trial in the case of the Trademark Act. Although a provision on the prevention oflast-minute use (Article 50, paragraph (3) of the Trademark Act) was added upon the 1996 revision, the base time fordetermination has not changed. On the other hand, Article 83 of the Patent Act does not provide for a base time fordetermination, so the decision thereon is made by interpretation.
4 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 542; Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho],p. 268; Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 292; Shirō Mitsuishi, Tokkyo Hō Shōsetsu[Shinpan], p. 290. The implementation outline of the award system states that “such cases as where the products are
merely being imported and are not manufactured domestically correspond to it (author’s note: insufficient working of
the invention), in principle.”597

§10. Obligations Pertaining to a Patent Right

Therefore, if the purpose of the Patent Act were to be viewed more broadly as aiding thedevelopment of the international economy, a request for an award should not be granted in
the case where there is a sufficient level of importing. Since technology in Japan is now at
the highest level in the world, the Patent Act should not be interpreted merely from thenarrow perspective of protecting national industry. While the situation in developing
countries must be taken into consideration to some extent, in light of the fact that the patent
system and trade issues are inseparable nowadays, an interpretation should be made in sucha way that the patent system does not serve as a non-tariff barrier, from the viewpoint of
the healthy development of world trade.5[528]
If there are reasonable grounds for failing to work the patented invention properly,
the JPO Commissioner cannot render an award, and the request will be dismissed (Article
85, paragraph (2) of the Patent Act). Reasonable grounds are determined individually foreach case, but some assumptions can be made where the preparation for commercialization
is in progress, where there has been a factory disaster, and where it is difficult to obtain raw
materials.
When the JPO Commissioner renders an award, he/she gives the patentee, theexclusive licensee, or any other person having a registered right pertaining to the patentright (e.g., a pledgee) the opportunity to submit a written answer (Article 84 of the Patent
Act), and he/she must hear the opinions of the councils, etc. prescribed by Cabinet Order(Article 85, paragraph (1) of the Patent Act). Nevertheless, a council is only an advisory
body, so the Commissioner is not bound by its views.6 A non-exclusive license granted byan award is a paid license, and the scope of the license, the amount of any consideration,and the method and time of the payment thereof must be determined in the award (Article
86, paragraph (2) of the Patent Act). When a certified copy of an award has been served on
the parties, an agreement is deemed to have been reached by the parties, and a nonexclusive license is established as prescribed by the award (Article 87, paragraph (2) of the
Patent Act). When a person who has received the grant of a non-exclusive license fails towork the invention properly, the award can be rescinded at the request of an interested
person or ex officio (Article 90, paragraph (1) of the Patent Act). As a result of the
5 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 875 (written by Nobuhiro Nakayama); Kazuhiko
Takeda, Tokkyo No Chishiki [Dai 8 Han], p. 474 (it says that "the idea that patented products need to be manufactured
in every relevant country in order to demonstrate that the invention is being sufficiently worked should be considered asa thing of the past; it is unrealistic to manufacture the products in every country due to the need for reducing costs
through mass production and from the viewpoint of international industrial siting"). Ryū Takabayashi, Hyōjun Tokkyo
Hō [Dai 4 Han] (Patent Law from the Ground Up [5th ed.]), p. 207.
6 Japan Patent Office ed., Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han] (Clause-by-Clause
Explanation of Industrial Property Acts [19th ed.]), p. 266; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han]
(Annotated Patent Act, Vol. 1 [3rd ed.]), p. 791 (written by Yoshio Ishikawa); Shirō Mitsuishi, Tokkyo Hō Shōsetsu[Shinpan] (Detailed Explanation of Patent Law [New ed.]), p. 643.

598

§10. Obligations Pertaining to a Patent Right

rescission, the non-exclusive license lapses (Article 91 of the Patent Act). If dissatisfied
with the award, a person can appeal under the Administrative Appeal Act, and if still
dissatisfied with the decision on the appeal, that person files a suit in accordance with the
Administrative Case Litigation Act. While an award on the amount of compensation isfundamentally an administrative disposition subject to the Administrative Appeal Act, anaction can be instituted directly against such an award under the Patent Act (Article 183,
paragraph (1) of the Patent Act), and no objection can be raised under the Administrative
Appeal Act on the grounds of dissatisfaction with the amount of the consideration (Article
91-2 of the Patent Act). If the person who has received an award is not satisfied with theamount of compensation he/she is awarded, that person may institute an action demanding
an increase or decrease of the amount (Article 183, paragraph (1) of the Patent Act). In sucha case, the defendant will not be the JPO Commissioner, who has rendered the award, but
the nonexclusive licensee, patentee or exclusive licensee, who is a party to the license
contract (Article 184, item (i) of the Patent Act).7 This is because it is more reasonable tohave the parties themselves dispute the matter, since it is not a dispute concerning thedisposition of the award, but a dispute concerning an amount of money.8
A compulsory license can be transferred only where the business involving theworking of the relevant invention is also transferred (Article 94, paragraph (3) of the Patent
Act). Therefore, the license cannot be transferred unless the business is also transferred
even where the consent of the patentee has been obtained or where there is a case of general
succession, such as an inheritance. In other words, the compulsory license is meaningful inthat the invention is worked as a business, and it is meaningless to transfer only thecompulsory license without transferring the business. The same idea is applied to theestablishment of a right of pledge (paragraph (2) of said Article). Meanwhile, Article 5,paragraph (4) of the Paris Convention provides that a compulsory license “shall not betransferable, even in the form of the grant of a sub-license,” implying that the license cannot
be transferred even with the consent of the patentee. As the license cannot be transferred in
the case of an inheritance either, unless the license is transferred together with the relevantbusiness, an heir who intends to work the invention would need to file a request for anaward again.9[529]
When requesting an award, if there is an exclusive license, the exclusive licensee
must first be considered to be the demandee, but as a non-exclusive license cannot be
7 Article 133, paragraph (3) of the Compulsory Purchase of Land Act has been legislated for the same purpose.
8 With regard to the amount of the consideration, see Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo
Hō Ge (New Explanatory Notes on the Patent Act Vol. 2), p. 2482 (written by Toshiya Kaneko).
9 The phrase “the case of an inheritance or any other general succession” was deleted from Article 94, paragraph (3) ofthe Patent Act upon the 1994 revision.

599

§10. Obligations Pertaining to a Patent Rightestablished without the consent of the patentee (Article 77, paragraph (4) of the Patent Act),the patentee should also be considered to be the demandee in order to use a fiction that thepatentee’s consent has been obtained.10
Incidentally, such an award based on the non-working of the invention has neverbeen rendered so far. Since the grant of a license is a business issue and its terms andconditions are determined not only based on the license fee, but also on various otherbusiness management issues, government intervention in such a process can also have anegative effect. However, the existence of this provision can promote success in voluntary
license negotiations and serve as an incentive for working one’s own invention, so it has
significance as a measure of last resort. On the other hand, this provision could also put theright holder at a disadvantage in any negotiations. Though it is not clear how science andtechnology or the economic structure will change in the future, the system of a compulsory
license based on the non-working of an invention seems to have the potential to serve as aregulatory function for influential patents, which are rights to a monopoly, and to contributeto the sound development of industry.11
9.4.4.2. Compulsory License in the Case of a Dependent Invention (Article 92 of the
Patent Act)
The purpose of the patent system is to raise the level of technology in society byhaving inventions published, and thereby promoting new inventions. In other words, oneof the purposes of the patent system is to promote inventions which are improvements. In
reality, basic inventions are often not sufficient to create valuable products, and morevaluable products can only be expected through the existence of a large number of
inventions which are improvements. For example, basic inventions on liquid crystals went
through a history of inventions of improvements until liquid crystal televisions were
produced.
[530]
However, even if one person obtains a patent on an invention that utilizes anotherperson’s patented invention, the working of that dependent invention would infringe thepatent of that other person (Article 72 of the Patent Act). In some cases, this problem would
be solved by concluding a license contract through consultation between the parties, but if
the consultation fails, there would no longer be a way of working the dependent invention,
10 Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 542; Hajime Kaneko and Yoshinobu Someno, Kōgyō
Shoyūken Hō, p. 222; Katsujirō Kida, “Tokkyo Hatsumei Tō No Jisshi Ni Kakawaru Saitei Seido Ni Tsuite” (Regarding
the Arbitration System concerning the Working of a Patented Invention), Jurist, No. 605 (1976), p. 81. An opposite viewis indicated in Nobuo Mon'ya, Chūshaku Tokkyo Hō, p. 221 (written by Hiroya Kawaguchi).
11 For details, see Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 874 (written by Nobuhiro Nakayama).

600§10. Obligations Pertaining to a Patent Right

which would be undesirable for industrial development. Thus, a system was created
whereby the patentee of a dependent invention and an exclusive licensee of such an
invention are able to request that a compulsory license for a patent right, utility model right,
or design right should be utilized. Meanwhile, as a result of three-dimensional trademarks
being recognized upon the 1996 revision, there are also cases where a trademark rightcomes into conflict with a patent right (just as in the case of a design right), and the patented
invention cannot be worked as a result (see Article 72 of the Patent Act). However, as atrademark exists for preventing confusion regarding the source of goods or services and as
it is not suitable for a compulsory license, it is not covered under Article 92 of the Patent
Act.
While the former Act provided that a trial could be demanded (Article 49 of the
Patent Act), a change under the current Act means that a request for an award can be madeto the JPO Commissioner. The former Act had provided that a trial cannot be requested
until three years have passed from the day on which the patent right came into effect, thistime limitation has been abolished under the current Act. The former Act included a
provision on cross licensing, but it had been abolished upon the 1959 revision, and wasrevived upon the 1975 revision with the introduction of the substance patent system. Thisis because, given that most of the dependent inventions of substance patents are process
inventions or selection inventions, the right holder of a substance patent (the patentee of theoriginal patent) would be one-sidedly disadvantaged if such an improved method could
only be worked by the inventor of the dependent invention and not by the right holder ofthe substance patent. Accordingly, as a means of countering a request for an award, thedemandee side (the patentee of the original patent) was permitted to request cross licensing
within the designated time limit for submitting a written answer (Article 92, paragraphs (2)and (4) of the Patent Act). This is a provision for achieving equity between the parties.
In order to request an award, the invention must have the dependency as prescribedin Article 72 of the Patent Act (Article 92, paragraph (1) of the Patent Act). In other words,
the invention must utilize another person’s patented invention, registered utility model orregistered design or a design similar thereto which is based on an application filed prior to
the filing date of the patent application for said invention, or the patent right must conflictwith another person’s design right which is based on an application for the registration ofa design filed prior to the filing date of the patent application.
If the dependent invention were to be unreasonably prejudicial to the interests ofanother person, the JPO Commissioner would not be able to render a favorable award inthis case (Article 92, paragraph (5) of the Patent Act). Although the specific criteria are notclear, as there is not a single actual example, two elements—the technical gap between the601§10. Obligations Pertaining to a Patent Right

two inventions and the economic gap between the parties—should be taken into
consideration. According to the implementation outline for the award system, 12 “thedetermination shall be made by comprehensively considering the contents of the priorpatented invention and the later patented invention, as well as the financial capacity and thebusiness situation of the respective parties; and a case where the demandee’s interests
would be heavily injured, such as when the grant of a non-exclusive license would make it
difficult to continue the demandee’s business, would fundamentally correspond to such acase.” A case where an award is requested for an important basic invention based on atrivial invention on an improvement or where such a request is made for a small company’s
basic invention by a large company that has an incomparably large financial capacity would
also correspond to such a case.13[531]
The effects of the compulsory license in the case of a dependent invention are thesame as those in the case of the non-working of an invention. The award procedures arealso the same as in the case of the non-working of an invention, because provisions under
Article 84 onwards of the Patent Act are applied mutatis mutandis (Article 92, paragraph(7) of the Patent Act). However, there is a difference from the case of the non-working of
an invention in that there is no limit to the period for the request, and the request can bemade any time after the registration of the patent.
The persons who can request an award are the patentee and the exclusive licensee ofthe dependent invention. An award cannot be requested by a non-exclusive licensee, butthere may be room to consider some measures for a non-exclusive licensee to file a request
through a legislative approach.
A non-exclusive license granted by this award will be transferred when the patentright (the patent right on the dependent invention) of the compulsory licensee is transferred
together with the relevant business, but is extinguished when the patent right is transferred
separately from the relevant business or when the patent right on the dependent invention
is extinguished (Article 94, paragraph (4) of the Patent Act). Meanwhile, a compulsory
license in the form of a cross license is transferred together with the patent right of thecompulsory licensee, and is extinguished when said patent right is extinguished (paragraph(5) of said Article). This is because, in the case of a compulsory license relating to adependent invention, if the license of the compulsory licensee and the patent right on thedependent invention become separated, the dependent invention will not be able to be
12 Published in Jurist, No. 605 (1976), p. 84.
13 Sueaki Oda and Yoshio Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 403; Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai13 Han], p. 455; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 898 (written by Nobuhiro Nakayama);
Shōji Matsui, “Riyō Hatsumei Ni Motozuku Saitei Jisshiken Seido No Kōsatsu” (Examination of the Arbitrary License
System Based on a Dependent Invention), Tokkyo Kanri (Patent Management), Vol. 39, No. 12 (1989), p. 1490.

602

§10. Obligations Pertaining to a Patent Right

worked, and it will not make any sense unless the patent right for which the award was
rendered and the patent right on the dependent invention are the same (the dependent natureof a compulsory license relating to a dependent invention). Since the transfer of thiscompulsory license is the same as the transfer of a compulsory license based on the nonworking of the invention, see “9.4.4.1. Compulsory License Where Invention Is Not
Worked (Article 83 of the Patent Act).”[532]
Similarly to the award system in the case of the non-working of an invention, no
award has been rendered under this system in the past. Although the reason is not clear, it
has been pointed out that a request for an award is difficult because its effect is virtuallysimilar to confessing an infringement when such a request is filed during an infringement
lawsuit.
As for the compulsory license in the case of a dependent invention, a supplementary
explanation should be provided regarding the establishment of the WTO’s TRIPS
Agreement14 (which entered into force on January 1, 1995) and the establishment of theJapan-U.S. Agreement (the memorandum of understanding between the Japaneseambassador to the United States and the U.S. Commerce Secretary on August 14, 1994).
The issue of compulsory licensing was subject to a severe North-South conflict
between developed countries and developing countries, so it took a long time to reach an
agreement in WIPO. However, a certain level of agreement was reached in the WTO (Other
Use Without Authorization of the Right Holder, Article 31 of the TRIPS Agreement). As
the minimum standard for granting a compulsory license concerning a dependent invention,
the TRIPS Agreement requires that the dependent invention should involve an important
technical advance of considerable economic significance in relation to the patent right onwhich the award is sought, that the interests of the patentee who developed the basic
technology should be assured, and that the grant should not have an adverse effect on the
incentive for the development of basic technologies to any large degree. As Japan’s
compulsory license system does not conflict with this agreement, there was no need torevise the Japanese Patent Act.
A problem arises with the abovementioned Japan-U.S. Agreement. It provides thatan award shall not be granted in connection with a dependent invention, except for the
purposes of correcting a practice that has been judged to obstruct competition or for the
public and non-commercial working of the invention. Although this agreement setsrequirements that are much more severe than the requirements for an award as prescribed
14 With regard to the TRIPS Agreement, see Akira Ojima, “Chikujō Kaisetsu TRIPs Kyōtei -- WTO Chiteki Zaisanken
Kyōtei No Komentāru” (Detailed Analysis of TRIPS -- Commentary on the WTO Intellectual Property Agreement)(Japan Machinery Center for Trade and Investment, 1999).

603

§10. Obligations Pertaining to a Patent Rightin Article 92 of the Patent Act, the Patent Act has not been revised. The legal nature of thisJapan-U.S. Agreement, which is a memorandum of understanding submitted by theJapanese ambassador to the United States through the U.S. Commerce Secretary, is notnecessarily clear, and it is doubtful that it has a legal effect. However, as it is an international
commitment made by the Japanese government, the JPO Commissioner is expected to
implement practices in accordance with this Japan-U.S. Agreement in the future; so in
actuality, this agreement is expected to serve as future practice guidelines. Of course, theconsequence of a case that developed into litigation is a different issue, but no court
judgment exists with regard to this point because no such award has been rendered yet.
9.4.4.3. Compulsory License Required in the Public Interest (Article 93 of the Patent Act)
Since a patent, a right to the monopolistic use of technology, is a very powerful right,
its existence could sometimes affect the public interest. Accordingly, some measure must
be taken when it is harming the public interest. Measures can be taken through various
approaches. The former Act had provided that “when it is necessary and in the public
interest, the patent can be restricted or expropriated by the government and the patent canbe rescinded or the patented invention can be worked by the government” (Article 40,
paragraph (1) of the Patent Act). However, today it is considered that such measure against
non-use should not function as a sanction, but it should be sufficient to keep the restriction
on private rights to a minimum, and to leave some way for third parties to work theinvention. In addition, the government itself rarely works such an invention. Thus, thesystem was changed to the current system of granting a non-exclusive license by award.
Under the current Act, if the government intends to work the invention, it needs to follow
the procedure according to this provision.
[533]
There is a question about the specific content as regards the public interest, but infact no award has been granted to date, so there are no court judgments on this matter, andits interpretation remains unsettled. “Saitei Seido Nōnyō Yōryō” (Implementation Outlineof the Award System)15 published in 1975 mentions the following: (i) when there is aparticular need in a field directly related to national life, such as the lives of the citizens,preservation of property, and construction of a public facility; and (ii) when the act of not
granting a non-exclusive license on the patented invention obstructs the sound developmentof the industry overall, and as a result, substantial harm is done to national life.
Apart from the above-mentioned examples in the implementation outline, a report by
15 Published in Jurist, No. 605 (1976), p. 84.

604

§10. Obligations Pertaining to a Patent Rightthe expert committee of the Foreign Capital Council16 (March 15, 1968) also mentions acase where any of the following incidents occurs and where it has a serious impact on thenational economy as a result: (i) it causes confusion, such as corporate failures, in theindustry in which the patented invention is expected to be used, and is likely to result inlarge-scale unemployment; (ii) it causes corporate failures in the industry in which thepatented invention is expected to be used, and existing facilities that are worth a vast sum,which could have been used if the patented invention could have been worked, are likely
to be retired as a result; or (iii) it causes confusion, such as corporate failures, in the key
industry, important export industry, or industry in the field of advanced technology, inwhich the patented invention is expected to be used, and is likely to obstruct the soundeconomic or technological development of these industries to a considerable degree.
First of all, most people agree that an award can be rendered in the case where there
is a serious impact on the lives of the citizens, preservation of property, or public works. A
textbook example is a case where an infectious disease spreads and the patentee cannot
meet the demand for the required medicine sufficiently himself/herself. However, it isunrealistic to use the time- and labor-consuming award system in such a case, and the issue
is likely to be settled as a political issue. Therefore, in actuality, Article 93 of the Patent Act
is rarely likely to be used, but the provision is considered to have significance as a lastresort.
[534]
Even if the need for working the invention were related to the public interest, arequest for an award should not be allowed when the need is merely in relation to costs orwhen there is a method that can substitute for the use of the patented invention.
The problem is whether or not an award can be requested for an economic reason. A
patentee clearly has an economic advantage over others, and if the request for an award
were recognized due to that advantage, the significance of the patent system would be lost.
In addition, it is natural that the facilities of those who have infringed another person’s
patent should be retired, and it does not matter whether the facilities are worth a vast sum
or not. Since the report by the expert committee of the Foreign Capital Council was released
at a time when Japan was shifting to an open economy, its tone regarding the protection ofnational industry is excessive. Therefore, it is not reasonable to apply the award as it is atpresent. Theoretically, it may be possible to grant a compulsory license to protect the public

16 Published in Jurist, No. 399 (1968), p. 123.

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§10. Obligations Pertaining to a Patent Right

interest when the patent deals a severe blow to Japanese industry,17 but it is hardly likely
to be applied in reality, and in fact, Article 93 of the Patent Act has never been applied in
the past.
Nevertheless, since our everyday lives are dominated by technology in every corner,
an injunction could not only cause losses to the company subject to the injunction, but could
also cause great confusion in national life. For example, there could be a case where an
injunction causes computers to stop working, and as a result, public transportation stops
and confusion occurs, the online banking system stops and financial transactions become
confused, or medical activities face confusion. Article 93 of the Patent Act is considered tobe applicable in such a situation, but the procedure under Article 93 takes too long. It may
be more realistic to apply the doctrine of the abuse of rights to an infringement case or, asa legislative approach, provide for a statutory procedure in the case of not recognizing theright to seek an injunction.
The provision for the case of the non-working of the invention (Article 93, paragraph(3) of the Patent Act) is applied mutatis mutandis to the award procedure. The effects of alicense are also the same as in the case of the non-working of the invention.
[535]
Although a request for an award could only be made by the government under theformer Act, it can be made by anyone who intends to work the invention, including theState and local public entities, under the current Act. The demandees are the same as in thecase of the non-working of the invention. However, unlike in the case of the non-workingof the invention, a defense based on a legitimate ground is not recognized. This is because
protection of the public interest is necessary for society, irrespective of the individual
circumstances of the right holder. For the same reason, a request can be made at any time
without any restriction on the period as opposed to the case of the non-working of theinvention.
The person who renders the award is the Minister for Economy, Trade and Industry,
as opposed to the case of the non-working of the invention where the JPO Commissioner
renders the award. This is because the content of the award is not merely an issue of the
Patent Act, but a higher level issue which concerns the public interest, as well as because arequest may also be made by other government offices.
17 The report by the expert committee of the Foreign Capital Council also states in its note as follows: “It is considereddifficult to give an interpretation to the effect that a patent goes against the ‘public interest’ merely by reason that it
causes confusion in industry. However, application of this provision could be assumed when a monopoly of the patentright causes corporate failures and confusion in the industry, and has a serious impact on the national economy as aresult.” It is hard to imagine a situation where the mere existence of a patent puts the national economy into a great
confusion and causes social problems such as unemployment. None of the past economic crises is considered to havebeen caused by a patent right. Such great confusion in the economy is likely to be addressed as an issue outside thePatent Act.

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§10. Obligations Pertaining to a Patent Right

9.4.5. Statutory Non-Exclusive License
9.4.5.1. Statutory Non-Exclusive License for an Employee invention (Article 35 of the
Patent Act)
When an employee makes an “employee invention,” the employer obtains a nonexclusive license by operation of law (Article 35, paragraph (1) of the Patent Act). Thisissue is described in detail in “1.1.3. Employee Inventions (Article 35 of the Patent Act),”
so it is omitted here.
9.4.5.2. Statutory Non-Exclusive License based on Prior Use (Prior User’s Right)(Article 79 of the Patent Act)
The person in whose name the patent registration should be recognized is determinedbased on the filing date, but if the first-to-file principle were strictly observed, a person who
had been working or preparing to work the invention when another person had filed a patentapplication for it would not be able to work the invention once the other person had obtained
the patent right. In light of one of the purposes of the patent system being to grant the rightto a monopoly in return for publishing an invention and raising the level of technology insociety, a patentee who published the invention by filing a patent application should deserve
secure protection, but it is not desirable if it results in forcing everybody who has madeinventions to file patent applications without fail. In particular, the determination on which
technology should be patented and which technology should be kept secret as know-how
is an extremely important corporate strategy (open/closed strategy) in the present industrial
world. While there is also the freedom to retain an invention as know-how, strict
observation of the first-to-file principle may lead to treating know-how disadvantageously.
Furthermore, the fact that a person who has actually been working or preparing to work theinvention is no longer able to continue working it only because another person obtained thepatent for it would not be unreasonable. Extending the effect of a patent right to third parties
who have been working or preparing to work the invention prior to the filing of the patentapplication would be equivalent to compulsorily expropriating the third parties’ property(know-how) through the grant of a patent, and the grounds for giving such strong power toa patent right, i.e. denying know-how, are doubtful. Therefore, the Patent Act protects theprior user by granting a non-exclusive license to a person who has been working theinvention or who has been making preparations for it at the time of the filing of a patent607

§10. Obligations Pertaining to a Patent Right

application on the invention by another person (Article 79 of the Patent Act). While various
legislative theories can be considered, a prior user’s right is stipulated as a non-exclusive
license under the current Act, so the prior used invention and the patented invention need
to be the same invention or a part thereof as a premise.1 The prior user’s right had often
been explained from the viewpoint of preventing disposal of existing facilities andprotecting the national economy,2 but recently, the theory of securing equity has been moreprevalent.3 However, we cannot essentially derive a specific effect from the term “equity,”so there is no need to explain the prior user’s right based only on the equity theory. A
reasonable conclusion should be derived from a policy point of view by taking into accountthe national economy with the fundamental focus on equity, and also considering suchfactors as the need for keeping technology secret as know-how. The important point of thepolicy is to what extent the effects of a patent should be recognized, or conversely, to what
extent know-how should be protected.4 In actuality, technology in some fields is often kept
as know-how so as to prevent it from being disclosed (technology leakage) throughpatenting. Whether recognizing or not recognizing the interest of a third party who has beenworking the invention prior to the filing of the application is a question for a moretheoretical study.5 A similar provision had also existed under the old Act (Article 37).

1 Hidesato Iida, “Senshiyōken (1) Hassei Yōken Jijitsu (Prior User’s Right (1) Facts Required for the Right to Take
Effect), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 305. Mitsue Toyosaki, Kōgyō
Shoyūken Hō [Shinpan/Zōho], p. 257 states that working an invention outside the technical scope of a patented invention
is unrestricted, so there is no need to recognize a prior user’s right for such working of an invention. This is true in theory,
but since a claim that working an invention is outside the technical scope of a patented invention and a claim of a prioruser’s right differs in respect of their requirements and effects, and there is no inconvenience in having them coexist,
there seems to be no theoretical contradiction in recognizing both. It is only that, because a prior user’s right is stipulated
as a non-exclusive license under the current Act, the prior user’s right needs to be the same as the scope of the patented
invention or a part thereof as a consequence. If a prior user’s right were legislated as a defense, the only issue would be
the fact that a person had been working or preparing to work the invention prior to the filing of the application, and there
would be no need for the working of the invention to fall within the scope of the protection of the patent right.
2 The Supreme Court Judgment, February 4, 1938, Minshū, Vol. 17, p. 37; the Tokyo District Court Judgment, February
25, 1955, Kamin, Vol. 6, No. 2, p. 342 (the Completely Non-gas Fuse case). Incidentally, despite a third party’s inability
to learn about the invention during the period from the filing of the application to the laying-open of the unexamined
application, the prior user’s right does not take effect even if a person starts working the invention during this period. If
the economic viewpoint alone were to be taken into consideration, a legislative approach could be taken to recognize theprior user’s right as long as the person works or is prepared to work the invention by the time the unexamined applicationis laid open.
3 The Osaka District Court Judgment, June 29, 1966, Kamin, Vol. 17, Nos. 5/6, p. 586 (the Teething Ring case, a caseunder the old Act); the Osaka District Court Judgment, November 21, 1966, Hanji, No. 478, p. 69 (the Dried Kelp case);
the Osaka District Court Judgment, July 10, 1967, Kamin, Vol. 18, Nos. 7/8, p. 784 (the Aerosol Container case); theTokyo High Court Judgment, May 27, 1975, Mutai Saishū, Vol. 7, No. 1, p. 128 (the Synthetic Fiber Heat Treatment
Device case). See Hidesato Iida, “Senshiyōken (1) Hassei Yōken Jijitsu” (Prior User’s Right (1) Facts Required for the
Right to Take Effect), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 299.
4 Incidentally, a prior user’s right is recognized for a person who is working or preparing to work an invention, even if
the person is not the inventor, the right is not directly linked to inventor protection.
5 Tsukasa Asō, “Senshiyōken Seido Ni Okeru Keizaisetsu To Kouheisetsu -- Keizaisetsu To Kouheisetsu No Kubetsu
No Datōsei” (Economic Theory and Equity Theory for the System of Prior User’s Right: Appropriateness ofDistinguishing Between the Economic Theory and Equity Theory), Hōgaku Seijigaku Kenkyū (Journal of Law and
Political Studies) (Keio University, Graduate School of Law), No. 81 (2009), p. 159 makes a historical study of theappropriateness of distinguishing between the two theories. Also see Tsukasa Asō, “Senshiyōken Seido No Shushi”(Gist of the System of the Prior User’s Right), Keiō Hōgaku (Proceedings of Keio University Graduate School of Law,
Studies in Law and Politics), No. 29 (2014), p. 233.

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[536]
[537]
In actual litigation, the prior user’s right is often claimed as a defense by the
defendant’s side in infringement lawsuits, unlike a non-exclusive license by agreement.
While the current Patent Act constructs the prior user’s right as a non-exclusive license, inpractice it functions as a restriction on the effects of the patent, so the legislative approachas in the current Act is somewhat questionable.
Next, there is the issue of the requirements for the prior user’s right to take effect.
Under the former Act, the working of an invention in good faith was the stipulated
requirement (Article 37), but under the current Act, it was revised to read “a person who,
without knowledge of the content of an invention claimed in a patent application, made aninvention identical to the said invention, or a person who, without knowledge of the content
of an invention claimed in a patent application, learned the invention from a person who
made an invention identical to the said invention.” As long as this provision is read at facevalue, it discusses the route for learning about the content of the invention and requires thatthe patented invention and the prior user’s invention are inventions that come from different
routes (double invention), which means that the prior user’s right is not recognized if theinvention comes via the same route.6 However, if such an interpretation is applied, theprior user’s right would not be claimable by an inventor whose invention was filed as amisappropriated application, 7 an inventor who has assigned the right to file the patentapplication but is working the invention8 or a person who is working the invention, but,
not knowing that his/her invention was publicly known technology, assigned his/herinvention after which it was registered as a patent.9 While the dispute would be over whichof the parties is the legitimate right holder, there would be no need to go so far as toeliminate the claim for the prior user’s right.10 In actuality, these cases would often be
resolved by requesting a trial for invalidation or making an invalidity defense (Article 1043 of the Patent Act), changing the name of the applicant or the true right holder seeking
transfer of the patent right (Article 74 of the Patent Act), but that should not obstruct the
6 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 845 [written by Shigetoshi Matsumoto and KatsuhikoMise].
7 Since a person whose invention had been misappropriated was granted the right to seek the transfer of themisappropriated patent right (Article 74) upon the 2011 revision of the Act, there is rarely a need for claiming the prioruser’s right at present.
8 Basically, it is an issue of a contract between the parties concerned, and this is a case where the assignor is entitled towork the invention under the contract. Since, in the case of an implied contract, it may be difficult to prove such
entitlement and it may be easier to claim the prior user’s right, there would be no need to deny the prior user’s right.
9 This kind of situation can be assumed under the current system where the absolute novelty system is adopted. Of course,
it is also possible to make a defense of patent invalidity, the question is which can be more easily proved.
10 Tomoko Takii, “Senshiyōken No Han’i” (Scope of the Prior User’s Right), Kigyō Hō Kenkyū (Study on Business Law),
No. 238 (1975), p. 18 writes that if any error were made in the substantive examination, justice should fundamentallybe recovered by means of a correction, and the system of the prior user’s right itself bears no relationship to such an
objective.

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§10. Obligations Pertaining to a Patent Rightrecognition of a claim for a prior user’s right.
[538]
There is no trace of a detailed examination having been made regarding the changeof requirements when shifting from the former Act to the current Act. Nevertheless, it does
explain that the meaning of “good faith” under the former Act has been clarified.11 Since
there is no practical reason to discriminate between whether or not to recognize the prioruser’s right based on whether the two inventions come via the same route or different routes,
the current Act should be interpreted so as to recognize the prior user’s right for inventions
from the same route as well, focusing on reason rather than literal construction, although
there would remain a slight problem regarding the wording.12
The next requirement concerns the person who has been working the invention or
has been making preparations for it commercially in Japan at the time of the filing of thepatent application. Although it was “a person who owns business facilities” under theformer Act, the provision was revised under the current Act.13 There is not so much of aproblem regarding the working of the invention, but arguments have been made concerning
the preparations for working the invention. In order to be considered as being at the
preparatory phase, the invention cannot be at the experimental or research phase, but theinvention itself must be completed. 14 Many of the earlier lower court judgments hadinterpreted the requirements for “preparations” strictly, and had not recognized theestablishment of the prior user’s right. Nevertheless, they were mainly cases dealing with
11 Kōgyō Shoyūken Seido kaisei Shingi Kai Tōshin Setsumeisho (Explanation on the Council Report on Amendment of
the Industrial Property System), p. 29. However, the descriptive document also mentions in continuation of this topic
that the revision is in accordance with the original purpose of the prior user’s right, because it focuses on the route oflearning about the technology instead of whether or not the person knew of the invention at the time of the filing.
Meanwhile, Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 579 suggests that the current Act should beconsidered as a representative example of the recognition of the prior user’s right.
12 Nobuhiro Nakayama, “Kōkyō No Fukushi No Gendaiteki Kinō” (Modern Functions of Public Welfare), Jurist, No.
447 (1970), p. 579; Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 256. Kōsaku Yoshifuji, Tokkyo HōGaisetsu [Dai 13 Han], p. 577 states that it does not have to be clear who has made the invention, but it is sufficientfor the person to have learned of the invention from the inventor. The following is a case in which the court, though notstating it so explicitly, recognized the prior user’s right regarding an invention learned via the same route: the Sapporo
High Court Judgment, December 26, 1967, Kamin, Vol. 18, Nos. 11/12, p. 1187 (the Concrete Block Design case).
Incidentally, Germany has the requirement “when learned by a fair method” and four Scandinavian countries have therequirement “when it does not abuse the right of the applicant or the former right holder.” Such legislative approachseems superior. An in-between view is revealed in Hidesato Iida, “Senshiyōken (1) Hassei Yōken Jijitsu” (Prior User’s
Right (1) Facts Required for the Right to Take Effect), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken
Soshō Hō, p. 309. An opposite view is indicated in Ryū Takabayashi, Hyōjun Tokkyo Hō [Dai 4 Han] (Patent Law
from the Ground Up [5th ed.]), p. 199. A more in-depth study on the grounds for justifying the system of the prioruser’s right would be required for drawing a conclusion.
13 This is considered to have been intended for relaxing the requirements for the prior user’s right (Japan Patent Officeed., Kōgyō Shoyūken Hō (Sangyō Zaisanken Hō) Chikujō Kaisetsu [Dai 19 Han], p. 255; Sueaki Oda and Yoshio
Ishikawa, Zōtei Shin Tokkyo Hō Shōkai, p. 293). Opposing theories include: Kenichi Tomioka, “Senshiyōken No Yōken
To Shite No Jigyō No Jyunbi Ni Tsuite” (Preparations of Business as a Requirement of the Prior User’s Right), Tokkyo
Kanri (Patent Management), Vol. 36, No. 4 (1986), p. 425; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3Han], p. 848 (written by Shigetoshi Matsumoto and Katsuhiko Mise). They state that the two hardly differ from eachother. If the business facilities under the former Act were interpreted as having included not only physical facilities, butalso elements such as human allocation, it would not be so different from the current Act.
14 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 257.

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§10. Obligations Pertaining to a Patent Rightless complicated apparatuses, so a case on large plant equipment cannot not be discussed
on the same plane.15[539]
Later, there was a Supreme Court judgment (the Walking Beam case).16 This was acase where a company had completed an invention concerning an expensive plant, which
was a walking beam type heating furnace to be used at a steel plant, and submitted estimatedspecifications and drawings in response to an inquiry from a steel plant, but it did not create
the final drawing since no order was placed. Nevertheless, the company had been
continuing to put in tenders for orders. The court gave consideration to the special natureof a large heating furnace in that it takes quite a long time from receiving an inquiry toreceiving an order and finally delivering the product, and that it is not subject to mass
15 Court judgments in which the prior user’s right was not recognized include: the Tokyo District Court Judgment, May
26, 1964, Hanta, No. 162, p. 164 (the 8 mm Video Camera case; the court held that the phase of drafting a design
drawing in which specific wiring has yet to be completed was not sufficient to be considered as preparation for working
the invention); the Tokyo District Court Judgment, May 28, 1973, Torikeshishū, 1973, p. 179 (the Grain Polishing
Machine case; the court held that sale of only one machine cannot be considered as preparation); the Matsuyama District
Court Judgment, November 19, 1996, Hanji, No. 1608, p. 139 (the Cover Sheet Apparatus for Toilet Seat case; thecourt held that, while the device in question was defined as a generic concept, the article for which the prior user’s rightis recognized is defined as a more specific concept, and the prior user’s right does not extend to forms of working theinvention that do not satisfy the requirements for equivalence); the Tokyo District Court Judgment, June 24, 2002,
Hanji, No. 1798, p. 147/Hanta, No. 1105, p. 214 (the Six Roll Calendar case; the court held that no preparation had
been made, on the basis that there were no documents containing specific and detailed descriptions of elements
including the shape, size, operational speed, and peripheral speed ratio of the roll, the type and performance of its drive
motor, composition of the transmission system, method of temperature control, and target material to be processed);
the Tokyo District Court Judgment, February 10, 2005, Hanji, No. 1906, p. 144/Hanta, No. 1196, p. 209 (thePharmaceutical Granular Preparation Containing Amino Acid case; in this case where a contract for entrusting the
manufacture of an investigational drug of the granular preparation had been concluded and preliminary trial production
had been commenced, the court held that it could not be regarded as a preparation, stating that the content of the drug
subject to the bioequivalence test and manufacturing approval by the Ministry of Health, Labour and Welfare needs tohave been unambiguously determined). On the other hand, cases in which the court recognized the right include: theTokyo District Court Judgment, May 30, 1964, Hanta, No. 162, p. 167 (the Block Manufacturing Frame case; the court
held that if there have been facts such as the rendering of the drawings, conversion of the facilities for the manufacturing,purchase of tools, ordering of raw materials, and receipt of orders for the products, these can be considered as
preparations); the Osaka District Court Judgment, March 11, 1977, Mutai Saishū, Vol. 9, No. 1, p. 222 (the Candy
Making Device case; the court held that if a person has purchased one of the facilities specific to the device, concluded
a product supply contract with a third party, ordered the production of the mold and the back metal, and completed thefinal design drawing, these can be considered as preparations); the Chiba District Court Judgment, December 14, 1992,
Chiteki Saishū, Vol. 24, No. 3, p. 894 (the Device for Joining Planar Members case; a case under the Design Act); theOsaka District Court Judgment, May 30, 1995, Chiteki Saishū, Vol. 27, No. 2, p. 386 (the Drawbar for Interconnectioncase); the Tokyo District Court Judgment, April 27, 2000, Hanji, No. 1723, p. 117/Hanta, No. 1040, p. 280 (theDiphenyl Carbonate case; the court held that an intention of immediately working the invention is regarded as having
been expressed in a mode and to an extent which was objectively recognizable at the time when the basic design of theplant and the estimate of the construction expenses were completed, a license contract was concluded with anothercompany, and three million dollars were paid as a consideration therefor); the Tokyo High Court Judgment, March 27,
2002, Hanji, No. 1799, p. 148 (the Heat Exchanger Pipe case); the Osaka District Court Judgment, July 28, 2005, court
website (the Adjustable Wrench case, the court held that it is necessary and sufficient for the technical means to havebeen constituted concretely and objectively enough for enabling a person skilled in the art to achieve the intended effectthrough the repetitive working of the invention); the Tokyo District Court Judgment, March 22, 2006, Hanji, Vol. 1987,
p. 85/Hanta, No. 1249, p. 220 (the Process for Preparing Bioactive Protein case, the court held that the party had theintention of immediately working the invention and that such intention was objectively recognizable); the Tokyo
District Court Judgment, March 23, 2007, Hanta, No. 1294, p. 183 (the Container for Supplying Molten Metal case;the court recognized the prior user’s right for some patent rights and denied the prior user’s right for other patent rights).
16 The Supreme Court Judgment, October 3, 1986, Minshū, Vol. 40, No. 6, p. 1068 (the Walking Beam case). In its first
instance, the Nagoya District Court Judgment, February 27, 1984, Mutai Saishū, Vol. 16, No. 1, p. 91, the court
recognized the prior user’s right, and in its appellate instance, in the Nagoya High Court Judgment, December 24, 1985,
Mutai Saishū, Vol. 17, No. 3, p. 664, the court dismissed the appeal.

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§10. Obligations Pertaining to a Patent Right

production, but is manufactured after receiving individual orders, so the parts are not readily
purchased in advance. In conclusion, the court recognized that “preparations” had been
made although the product manufacturing was still in the phase of submitting the estimatedspecifications. With regard to what circumstances are required for “preparations” being
recognized, a person should have the intention of immediately working the invention andthere should be objective conditions that enable the person to work the invention. The
specific standards are expected to differ by the field of technology and the nature of thattechnology.17[540]
There is also the problem of the scope of the prior user’s right. Although the prioruser’s right is a non-exclusive license, if the prior user has been working only a portion of
the patented invention, the prior user’s right will also be limited to that portion. 18
Specifically, the scope of the right is limited to the extent of the invention worked or
prepared and to the extent of the purpose of the business involving the working of theinvention (Article 79 of the Patent Act). From the viewpoint of equity, there is no need torecognize the expansion of the working of the invention to other types of businesses beyond
the purpose of the business in question. However, the expansion of scale could berecognized within the scope of the same type of business.19
An invention is not necessarily worked in the same mode at all times, and it is morecommon for the mode to change gradually. Thus, there is a question of whether or not it isadmissible for a prior user to work the invention by changing the mode of working. There
was a conflict of opinions regarding this issue, between a theory stating that the admissiblemode of working is limited to the mode in which the invention had been worked or been

17 Later, in the Tokyo District Court Judgment, April 27, 2000, Hanji, Vol. 1723, p. 117/Hanta, No. 1040, p. 280 (theDiphenyl Carbonate case), the court, following the Walking Beam Supreme Court judgment, stated that the party needs
to have the intention of immediately working the invention and such intention needs to have been expressed in a modeand to an extent which is objectively recognizable. On such a basis, the court held that an intention of immediately
working the invention is regarded as having been expressed in a mode and to an extent which is objectively recognizable
at the time when the basic design of the plant and the estimate of the construction expenses were completed, a license
contract was concluded with another company, and three million dollars were paid as a consideration therefor, and thata resolution by the board of directors was not required. In conclusion, the court recognized the prior user’s right. The
same view has been indicated in many other cases.
18 The Matsuyama District Court Judgment, November 19, 1996, Hanji, No. 1608, p. 139 (the Cover Sheet Apparatus
for Toilet Seat case).
19 Mitsue Toyosaki, Kōgyō Shoyūken Hō [Shinpan/Zōho], p. 258.In the Tokyo High Court Judgment, September 29,
1966, Minshū, Vol. 23, No. 10, p. 1796 (the Globe-shaped Transistor Radio Design case), the court held that the prioruser’s right should be construed to enable the prior user to expand or reinforce the business within the scope of thatbusiness. When a large company purchases a small company, the scale of business could become substantiallyexpanded, but that cannot be helped.

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prepared to be worked (the working mode theory20) and a theory stating that the admissiblemode extends to the scope of the invention that had been worked or been prepared to beworked (the inventive concept theory; scope of invention theory21). Considering only thenational economic viewpoint of preventing the retirement of facilities, it would be sufficient
to recognize only the mode of working the invention that had been adopted at the time of
the filing. However, from the equity viewpoint, it would be more reasonable to allow someflexibility in the scope of the extension of the prior user’s right, rather than permittingchanges only within the same scope as that of the invention which was worked or prepared
to be worked at the time of the filing.22 It is usual that the working of an invention graduallychanges in mode, so unless some flexibility is allowed, it would be impractical and too
disadvantageous for the prior user, and the practical significance of the system of a prioruser’s right would be lost. Finally, this idea was adopted in the aforementioned Supreme

20 The Supreme Court Judgment, April 5, 1938, Minshū, Vol. 17, p. 642 (the Break Harrow case). The Tokyo District
Court Judgment, April 8, 1974, Mutai Saishū, Vol. 6, No. 1, p. 83 (the Synthetic Fiber Heat Treatment Device case)took the stance of limiting the mode of working the invention to the extent of the form or mode in which the invention
was being worked at the time of filing the application for registration, and the court held that a non-exclusive license
based on prior use cannot be claimed for the scope of an invention that goes beyond that and, further, for the scope ofa device extracted therefrom. However, in the second instance judgment on the same case, the Tokyo High Court
Judgment, May 27, 1975, Mutai Saishū, Vol. 7, No. 1, p. 128, the court stated that “the scope of the device being
worked is not necessarily limited to the scope of a device with a structure that is actually being worked, but should beconstrued to extend to the scope of a device that is objectively expressed by the structure that has been actually worked,”
and indicated the invention concept theory, but in determining the application of the theory to the specific case, thecourt held that the mode of working the invention was not within the scope of the same device, and dismissed the appeal.
Recently, hardly anyone has argued this theory.
21 The Osaka District Court Judgment, July 10, 1967, Kamin, Vol. 18, Nos. 7/8, p. 784 (the Aerosol Container case); theTokyo High Court Judgment, May 27, 1975, Mutai Saishū, Vol. 7, No. 1, p. 128 (the Synthetic Fiber Heat Treatment
Device case); the Nagoya District Court Judgment, February 27, 1984, Mutai Saishū, Vol. 16, No. 1, p. 91 (the Walking
Beam case). Kōsaku Yoshifuji, Tokkyo Hō Gaisetsu [Dai 13 Han], p. 581; Mitsue Toyosaki, Kōgyō Shoyūken Hō[Shinpan/Zōho], p. 257; Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 853 (written by Shigetoshi
Matsumoto and Katsuhiko Mise); Hidesato Iida, “Senshiyōken (1) Hassei Yōken Jijitsu” (Prior User’s Right (1) Facts
Required for the Right to Take Effect), Toshiaki Makino, ed., Saiban Jitsumu Taikei 9 Kōgyō Shoyūken Soshō Hō, p.
312; Minoru Moribayashi, “Tokkyo Hō Ni Okeru Senshiyōken No Kōryoku” (Effects of the Prior User’s Right under
the Patent Act), Kigyō Hō Kenkyū (Study on Business Law), No. 198 (1971), p. 29; Tomoko Takii, “Senshiyōken No
Han’i” (Scope of the Prior User’s Right), Kigyō Hō Kenkyū (Study on Business Law), No. 238 (1975), p. 21. However,as the invention subject to a prior user’s right does not have a patent claim as in the case of a patented invention, thedetermination of the scope of the invention can be expected to be quite difficult in reality.
22 Tatsuki Shibuya, Chiteki Zaisan Hō Kōgi I [Dai 2 Han], p. 344 states that equivalence is a concept for balancing
interests in determining infringement, and that the working of the invention for an unintended purpose should not beallowed, and insists that the prior user’s right only extends to the identical scope of an invention and not to the equivalentscope thereof. However, such interpretation is considered to be too rigid. It may be reasonable to allow the use of theinvention for another type of business, but given that the invention of the prior user has no patent claims, the conceptof equivalence cannot be discussed in the first place, so a practical solution would be required. It may be possible tosuppose that if a patent application were filed for the prior user’s invention, and to consider that the prior user’s rightwould extend to the scope of equivalents of such hypothetical claims, that would be rather too artificial.

613§10. Obligations Pertaining to a Patent Right

Court judgment,23 and for all practical purposes the issue was settled. At times like thepresent, when technology is advancing at a high speed, a prior user’s right is often
meaningless if its working mode is not allowed to be changed at all. As this could destroy
the meaning of the system of the prior user’s right itself, the Supreme Court judgment is
considered to have been reasonable.
[541]
The prior user’s right extends not only to an act of production, but also to othervarious modes of working the invention, such as use, assignment, and import, and the rightcan be established for each of these modes. However, there is a problem in working an
invention in a mode which differs from the original mode. For example, there is an issue of
whether a person who had only imported a product invention can produce that product.
Article 79 of the Patent Act provides that a license is recognized only to the extent of the
purpose of the business concerned, so the determination should be made based on thisstandard. For instance, it would not likely be permissible for a person who has been using,assigning, and importing a product invention to newly produce that product.24 On the other
hand, a person producing a product invention is more likely to be permitted to newly sellor export that product.25 The determination is likely to differ case by case when a person
who had been producing a product invention and only using it in-house for his/her own
sake starts to sell the product.26[542]Although the prior user’s right is a non-exclusive license, it takes effect by operationof law as long as the statutory requirements have been met, and it is effective against any
person who subsequently acquires the patent or the exclusive license by operation of law(Article 99 of the Patent Act). Since there are no special provisions on the assignment of a
23 In the Supreme Court Judgment, October 3, 1986, Minshū, Vol. 40, No. 6, p. 1068 (the Walking Beam case), the court
clearly stated as follows: “The mode of working the invention should not be limited to the mode in which the prior user
has actually worked the invention or has been making preparations to work the invention in Japan, but should also
cover varied modes of working the invention within the scope of an invention that does not lose its identity with thetechnical idea, or the invention, materialized in that mode of working. Therefore, it is reasonable to construe that theeffect of the prior user’s right extends not only to the mode in which the prior user was actually working or preparing
to work the invention at the time the patent application was filed (the day when the priority claim was made), but also
extends to any mode of working that has been changed within the scope of an invention that does not lose its identitywith the invention materialized therein. When the invention materialized in the mode of working only corresponds toa part of the patented invention, the effects of the prior user’s right naturally extends only to that part of the patented
invention, but if the scope of that invention coincides with the scope of the patented invention, the effects of the prioruser’s right should extend to the entire scope of the patented invention.” The same view is adopted in the subsequent
Osaka District Court Judgment, May 30, 1995, Chiteki Saishū, Vol. 27, No. 2, p. 386 (the Drawbar for Interconnectioncase) and the Tokyo High Court Judgment, March 27, 2002, Hanji, No. 1799, p. 148 (the Heat Exchanger Pipe case).
24 In the Nagoya District Court Judgment, April 28, 2005, Hanji, No. 1917, p. 142 (the Transfer Equipment case), thecourt stated that a person who has purchased a product from a manufacturer holding the prior user’s right and who soldthat product can only claim that the sale of the product does not constitute patent infringement, and cannot directly
manufacture that product or place orders for that product.
25 In the Osaka District Court Judgment, May 30, 1995, Chiteki Saishū, Vol. 27, No. 2, p. 386 (the Drawbar forInterconnection case), the court held that a person having the prior user’s right to manufacture and sell an invention isrecognized as having a non-exclusive license for displaying the product for the purpose of selling the product.
26 It is questionable whether or not a person who had only been producing a product invention for use for his/her own
sake can newly sell or export that product.

614§10. Obligations Pertaining to a Patent Rightprior user’s right, the common rules for a non-exclusive license are applied. In other words,
except in the case of general succession, the license can be assigned with the consent of thepatentee27 or together with the business involving the working of the invention (Article 94of the Patent Act).
Even before the establishment of a patent right, the status of a prior user exists andcan be assigned together with the business involving the working of the invention.28
If a prior user puts a product he/she has manufactured into distribution, the right for
said product will have been exhausted, so the use of said product by its acquirer will notconstitute patent infringement. A prior user’s right may also be claimed in a case where theinvention has been worked by a person whose act can be regarded as the prior user’s act ofworking the invention (the prior user’s “hands and feet”).29[543]
9.4.5.3. Statutory Non-Exclusive License Due to the Working of the Invention Prior to
the Registration of the Request for a Trial for Patent Invalidation (Chūyōken[intervening right]) (Article 80 of the Patent Act)
When a trial decision of invalidation becomes final and binding and patent invalidity
becomes decisive, the invention usually becomes available for use by anybody including
the patentee of the invalidated patent, which causes no problem. However, in the case of adouble patent (registration of multiple patents for the same invention) or in a like case,another patent on the same invention still exists after the invalidation of a patent, so there
may be persons in conflict with that existing patent right. Thus, it is provided that a person
who was working or preparing to work the invention before the registration of a request fora trial for patent invalidation, without knowing the grounds for invalidation, has a nonexclusive license on the patent right or exclusive license in the case where the patent isinvalidated. Otherwise, a person who has been working or preparing to work the invention

27 The Sapporo High Court Judgment, December 26, 1967, Kamin, Vol. 18, Nos. 11/12, p. 1187 (the Concrete Block
Design case).
28 Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], p. 860 [written by Shigetoshi Matsumoto and KatsuhikoMise] states that, when the consent of the patentee has been obtained, the license can be regarded as having been
converted into a license by agreement. The same view is indicated in Hidesato Iida, “Senshiyōken (1) Hassei Yōken
Jijitsu” (Prior User’s Right (1) Facts Required for the Right to Take Effect), Toshiaki Makino, ed., Saiban Jitsumu
Taikei 9 Kōgyō Shoyūken Soshō Hō, p. 312. This is only considered to be a matter of explanation.
29 In the Supreme Court Judgment, October 17, 1969, Minshū, Vol. 23, No. 10, p. 1777 (the Globe-shaped Transistor
Radio Design case; a design case under the former Act), the court held that the prior user’s right can be claimed not
only when the person directly manufactures or sells the product, but also when the person places orders for the productfrom another party having a business facility and has such party manufacture the product pertaining to the design inquestion only for said person, and after receiving the delivery of the product, sells the product to others. The first
instance of this case was the Tokyo High Court Judgment, December 23, 1961, Kamin, Vol. 12, No. 12, p. 3176. Thismatter is not an issue specific to the prior user’s right, but an issue of the extent of the persons who can work theinvention. See “6.2. Joint Ownership (Article 73).”615§10. Obligations Pertaining to a Patent Rightby believing that the patent is valid may have to retire his/her related facilities, which would
be a harsh result. The Patent Act provides for a statutory license (also referred to aschūyōken [intervening right]) as a remedy for such a case (Article 80, paragraph (1) of the
Patent Act). Provisions on the license had also been stipulated for utility model rights, butthey were deleted upon the 1993 revision of the Utility Model Act when the non-substantive
examination system was adopted.
Specifically, an original patentee, an exclusive licensee, or a non-exclusive licensee,
who is doing business working the patented invention or preparing such business before
the registration of a request for a trial for invalidation (announcement of registration; Article
3, item (iv) of the Patent Registration Order) without knowing the cause of theinvalidation,30 has a statutory non-exclusive license. Since this provision is intended forprotecting those who have trusted the JPO’s disposition, those who knew that the invention
had a cause for invalidation do not deserve to be protected (the main clause of Article 80,
paragraph (1) of the Patent Act).
While the prior user’s right is stipulated as a gratuitous license from the viewpoint ofequity, chūyōken is prescribed for an economic purpose to provide a remedy for a person
who trusted the JPO’s disposition and to prevent the scrapping of his/her existing facilities,
although the person is in fact not entitled to work the invention; thus the person must pay areasonable consideration for it (paragraph (2) of said Article). While the prior user’s rightis provided as a remedy for a person who is working or preparing to work the invention
when the patent right has yet to be established, chūyōken is provided as a remedy for a
person who is working or preparing to work the invention after the establishment of thepatent right, trusting in the validity of the patent. Thus, there is a difference in the need forpaying a consideration. Although the standard for the amount of consideration is undefined,
the license fee for a non-monopolistic, non-exclusive license by agreement is likely to serveas the standard.
[544]
Chūyōken takes effect with respect to the following persons:(i) In the case of a double patent the original patentee whose patent was invalidated (Article
80, paragraph (1), item (i) of the Patent Act). This includes a case where the JPO
erroneously granted a patent for the same invention.
(ii) The original patentee in the case where, after a patent has been invalidated, a patent isgranted to the person who is entitled to obtain a patent for the same invention (Article 80,
30 The Nagoya District Court Judgment, October 20, 1989, Hanji, No. 1354, p. 141/Hanta No. 718, p. 201 (the Union
Nut Attaching Method case) was a case in which the court denied the person’s lack of knowledge of the cause ofinvalidation.

616

§10. Obligations Pertaining to a Patent Right

paragraph (1), item (ii) of the Patent Act). This includes a case where two applications werefiled for the same invention, and while the earlier application was still pending with the
JPO, the JPO erroneously granted a patent for the later application, and subsequently, thepatent on the later application was invalidated, and a patent was granted for the earlier
application.
(iii) In the case referred to in items (i) and (ii) above, a person who has a license for thepatent right on the invalidated patent (Article 80, paragraph (1), item (iii) of the Patent Act).
Until the 2011 revision, it had been provided that chūyōken takes effect with regard toregistered non-exclusive licensees, but due to the revision which made all non-exclusive
licenses effective against third parties by operation of law, all non-exclusive licensees
became accessible to chūyōken.
Article 80 of the Patent Act formally seems to take into account all cases of double
patenting in general, but there are two kinds of cases in which double patents are invalidated.
First is the case where the earlier patent is invalidated. This is a typical example where theearlier patentee could work the invention until the trial decision of invalidation became
final and conclusive, but subsequently became unable to work the invention due to theexistence of the later patent, and chūyōken takes effect as a result. In reality, however, theearlier patent is hardly ever invalidated in a double patent case. This case applies when theearlier patent was invalidated due to being a misappropriated application,31 but since a
person filing a misappropriated application is likely to have known the cause of theinvalidation in most cases, chūyōken is expected to rarely take effect.
In the case of double patenting, the later patent is usually invalidated. The later
patentee of a double patent is essentially not entitled to work the invention,32 so it would
be unreasonable if he/she became able to work the invention by obtaining a statutory nonexclusive license once the trial decision of invalidation has become final and conclusive.
Since chūyōken is a system for providing a remedy for those who were working theinvention or making preparations for it by trusting in the patent, chūyōken should not beapplicable for those who are essentially not entitled to work the invention, so it should be

31 Since the owner of a right to obtain a patent came to be able to seek the transfer of the misappropriated patent rightagainst the owner of the misappropriated patent (Article 74, paragraph (1) of the Patent Act) upon the 2011 revision,
trials for invalidation are expected to be requested in fewer cases in the future when misappropriated applications are
involved. There are also provisions for protecting the licensee in the case where the transfer of a patent right is soughtby the true right holder (Article 79-2, paragraph (1) of the Patent Act).
32 An opposite view is indicated in Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Jō (NewExplanatory Notes on the Patent Act Vol. 1), p. 1284 (written by Hiroyuki Morisaki and Norie Matsuyama), statingthat the later patentee of a double patent can continue to work the invention even after the trial decision of invalidation
becomes final and conclusive. However, it is unjust to allow the later patentee to work the invention when the invention
is identical to the earlier invention, while the later patentee cannot work the invention when the invention is dependent
on the earlier invention (Article 72 of the Patent Act). However, there is also a point of a view suggesting that, whereas
a dependent patent is merely a case where a patent has been granted but the working of the invention conflicts with theearlier patent, a double patent is caused by an error of the JPO, so its patentee should be remedied.

617

§10. Obligations Pertaining to a Patent Right

construed to be inapplicable to the later patentee of a double patent.33[545]
Details of chūyōken are similar to those of the prior user’s right, except in respect of
the consideration for the license, so readers are advised to refer to “9.4.5.2. Statutory NonExclusive License based on Prior Use (Prior User’s Right) (Article 79 of the Patent Act).”
9.4.5.4. Statutory Non-Exclusive License After Expiration of Duration of Design Right(Articles 81 and 82 of the Patent Act)
Patent rights and design rights each protect different subject matter, but working a
registered design could constitute patent infringement in reality. The frequently cited
textbook example is the tire tread. The tire tread could be subject to a patent from thetechnical viewpoint of preventing slipping, and could also be subject to a registered designfrom the viewpoint of the tire design. Since they protect different subject matter, namely,
technology and design, no examination is conducted to determine whether the patentapplication or the design application was filed first, and they could both be registered asrights. If the design application were filed on or before the filing date of the patentapplication, the design right holder could work the design without any restrictions by reasonof the patent right (See Article 26 of the Design Act). However, after the expiration of theduration of the design right, the working of the design would conflict with another person’s
patent right which has not yet been extinguished. It would be a severe hardship for thedesign right holder to become unable to work the design after the expiration of the durationof the design right, only because of the sudden emergence of a patent right for which an
application was filed on or after the filing date of the design application. The Patent Act
provides for a statutory non-exclusive license to the original design right holder in such acase (Articles 81 and 82 of the Patent Act).
A statutory non-exclusive license is granted only for a design right for which an
application was filed on or before the filing date of the patent application. If the design
application had been filed later than the patent application, the design right holder would
not have the right to work the design in the first place (Article 26 of the Design Act), so it
would not become an issue.
This statutory non-exclusive license can be granted to the original design right holder
33 Yoshiyuki Tamura, “Chiteki Zaisanken Hō Oboegaki” (Memorandum on Intellectual Property Law), Fifth anniversaryof the Institute of Intellectual Property, Chiteki Zaisan No Chōyū (Trends of Intellectual Property), p. 270 and Ryū
Takabayashi, Hyōjun Tokkyo Hō [Dai 4 Han] (Patent Law from the Ground Up [4th ed.]), p. 20 state that there is noneed to grant chūyōken automatically due to invalidation of the later patent, but in the case of the chūyōken under item(ii), the prior invention had not be patented until the time the later patent was granted, and the later patentee was able
to work the invention until then, so it would be permissible to grant the later patentee chūyōken to enable the patentee
to continue working the invention.

618

§10. Obligations Pertaining to a Patent Right(Article 81 of the Patent Act), the exclusive licensee of the design, and a non-exclusive
licensee (Article 82, paragraph (1) of the Patent Act). The reason for recognizing thisstatutory non-exclusive license is that it is unjust for the original design right holder, who
could work the entire scope of the design, to suddenly be unable to work the design rightwith the expiration of the duration of the design right, only because a patent application had
been filed on or after the filing date of the design application. Therefore, the license comes
into force to the extent to which the original design right holder could work the design inthe first place, that is, the entire extent of the original design right (Article 81 of the Patent
Act), regardless of whether or not the design right holder had been actually working thedesign or to what extent the design was actually being worked. In contrast, when thestatutory non-exclusive licensee is the exclusive licensee or a non-exclusive licensee forthe original design right, there is no need to recognize the statutory license beyond theextent to which the licensee could originally work the design right, and it is sufficient torecognize it to the extent of the original license (Article 82, paragraph (1) of the Patent Act).
Also, in the case where the statutory non-exclusive licensee is the exclusive licensee or a
non-exclusive licensee, he/she must pay a reasonable license fee to the patentee (paragraph(2) of said Article). A reasonable consideration is required to be paid under the Act because
it is usual for a licensee to have been paying license fees for the design in the past. However,some licensees may not have paid any license fee (gratuitous license) or have only paid asmall amount of license fee in the past. In such a case, they would have to pay higher license
fees than in the past after the original design right had been extinguished. Licensees usually
expect to work the design freely and without charge after the expiration of the duration of
the design right, so there may be a need to review the reasonableness of having themcontinue to pay a license fee only because there was a later-filed patent. Such review would
be based on adjustment of interests with the patentee.
[546]This statutory license is a non-exclusive license, and its nature is similar to otherstatutory non-exclusive licenses.
When an exclusive license has been granted for the patent right, this statutory nonexclusive license is established for the exclusive license as well.
This statutory non-exclusive license is only established when the design right is
extinguished due to the expiration of its duration, and not when the design right is
extinguished for reasons including a trial decision of invalidation becoming final andconclusive, a waiver, or a default of payment of the annual fee.
9.4.5.5. Statutory Non-Exclusive License Due to the Working of the Invention Prior to619

§10. Obligations Pertaining to a Patent Right

Registration of Demand for Retrial (Article 176 of the Patent Act)
When a revocation decision or a trial decision in a patent invalidation trial becomes
final and conclusive, people may start to work the invention by trusting in that disposition.
However, if the patent were to be restored through a retrial, the patent would be deemed tohave been valid from the start. If the people who worked the invention by trusting in thetrial decision of invalidation were accused of a patent infringement in such a case, it would
harm the legal stability of patents. Thus, the Patent Act provides for the establishment of astatutory non-exclusive license in such a case (Article 176 of the Patent Act). The statutory
license arises when a revoked patent, a patent right pertaining to an invalidated patent, or apatent right pertaining to the invalidated registration of an extension of the duration thereof
has been restored through a retrial, or when the establishment of a patent right or theextension of the duration of a patent right with respect to a patent application or an
application for the registration of an extension of the duration of a patent right refused by atrial decision has been registered through a retrial.
[547]
The person eligible for the license is a person who has, without knowing that thepatent right will be restored, been doing business while working the invention in Japan or
preparing such business after the trial decision became final and binding but before theregistration of the demand for a retrial. The extent of the license is limited to the extent of
the invention and the purpose of such business worked or prepared. This statutory license
is also a non-exclusive license, and its content resembles the prior user’s right.
Incidentally, Article 175 of the Patent Act provides for the effects of a patent rightthat has been restored through a retrial. With regard to this point, readers are advised torefer to “7.3.1.5. Restriction on the Effects of a Patent Right Restored by a Retrial (Articles
175 and 176 of the Patent Act).”
9.4.5.6. Statutory non-exclusive License Due to the Working of an Invention Prior toRegistration of Transfer of a Patent Right (Article 79-2 of the Patent Act)The Japanese Patent Act had adopted the inventor system; it had no provisions on
the true right holder’s right to claim back the patent from the owner of a misappropriatedpatent. However, upon the 2011 revision, it was provided that the true right holder may
claim back the patent right that has been acquired in violation of an obligation of joint
application or through misappropriation (Article 74, paragraph (1) of the Patent Act). Whenthe transfer of the patent right has been registered, the patent right is deemed to have been620

§10. Obligations Pertaining to a Patent Rightowned by the true right holder from the start (paragraph (2) of said Article). Since theprovision has a retroactive effect, all rights attached to the patent right would be
extinguished unless some measure were taken. If so, a patentee without knowledge (suchas a subsequent acquirer of the patent right) or a person who was working the invention byobtaining a license would not be saved. However, these parties conducted the relevant actsby trusting in the JPO’s disposition, so it is unreasonable to totally deny such interests, andthere would be a need to adjust the rights between the true right holder and the parties whotrusted in the patent. Accordingly, Article 79-2 of the Patent Act (a non-exclusive license
due to the working of the invention prior to the registration of transfer of patent right; also
referred to as chūyōken relating to a misappropriated patent) was stipulated, and therequirements for its application resemble those for chūyōken (Article 80 of the Patent Act).
Both of these provisions are intended for protecting the parties who trusted in the JPO’s
disposition and enabling the right holder to claim a reasonable consideration from them
(Article 79-2, paragraph (2) of the Patent Act), thereby achieving a balance between thetwo.
When a person has changed the name of the owner of another person’s land to his/her
own name without permission, and rented the land to a third party, after which the third
party has built a house on that land, that third party will not be protected. However, the caseof a misappropriated patent cannot be discussed on the same plane. In the case of land, if
the third party is protected, the true right holder will no longer be able to use that land,
whereas in the case of a property which is information, such as a patent right, even if thethird party is protected, the true right holder can still work the patented invention
himself/herself as well as license out the patent to other third parties. In other words, in thecase of a patent right, it is not an all-or-nothing situation, but there is room to makeadjustments between the true right holder and third parties, and there is much flexibility inthe designing of the system.
[548]
In the case where a trial decision of invalidation becomes final and binding on thebasis of a violation of the obligation of a joint application or on the basis of
misappropriation, the patent right will be deemed never to have existed, and neither asubsequent acquirer nor a licensee of the patent right will have any difficulty in continuing
to work the patented invention. However, although Article 74 (Special provisions
pertaining to transfer of patent right) of the Patent Act reads that the transfer of a patentright may be requested, because it has a retroactive effect (Article 74, paragraph (2) of the
Patent Act), it is legally not a transfer, but the true right holder’s original acquisition of theright. Therefore, if a person who has been actually working the invention has not received621

§10. Obligations Pertaining to a Patent Righta license from the true right holder, and has not taken any measure, the person’s various
relationships built based on the misappropriated patent right would collapse. Thus, it wasprovided that, when the transfer of the patent right is registered, a person who owns thepatent right, the exclusive license, or a non-exclusive license and who was working or
preparing to work the invention prior to the registration of transfer, without knowing thatthe patent right was in violation of an obligation of joint application or was misappropriated,
is entitled to a non-exclusive license to the extent of the invention and the purpose of thebusiness working the invention (Article 79-2, paragraph (1) of the Patent Act), and the rightholder who receives the transfer is entitled to receive the reasonable consideration for such
non-exclusive licensees (paragraph (2) of said Article). The person who owns the patentright in this context includes the person who acquired the patent in violation of an obligationof joint application or by misappropriation, as long as that person has no knowledge of suchfact. There may be resistance to the idea that a patentee who acquired the patent by
misappropriation can continue to work the invention, but there can be cases where anapplicant for a misappropriated application is not aware of the misappropriation (e.g., asubsequent acquirer of the patent right).
A person who has received the assignment of the patent right or a license for thepatent right from the owner of a misappropriated patent is not in a position to be challenged
by the true right holder receiving the registration of transfer as prescribed under Articles 98
and 99, but such party acquires a statutory non-exclusive license as a special measure under
Article 79-2 of the Patent Act and will pay a reasonable consideration to the true rightholder. Then there will be a question of legal policy concerning what kind of protection
should be given to the statutory non-exclusive licensees in their relationship with the true
right holder. Article 79-2 of the Patent Act protects a person who is doing a businessworking the invention or a person preparing such business without knowledge byrecognizing a statutory non-exclusive license within the extent of the invention and the
purpose of the business, but there remains a question of whether or not this limitation isreasonable. For instance, there is room for discussion with regard to whether such limitation
would be reasonable if the patent right is subject to a comprehensive cross license or apatent pool. Also, while there can be a case where a non-exclusive licensee was still not
preparing to work the invention in accordance with the non-exclusive license contract at
the time of the registration of the transfer, but was planning to work the invention in thenear future, there is a question of whether such licensee can be left unprotected.
The Patent Act provides that a patentee or licensee who falls under Article 79-2 at
the time of registration of transfer will have a statutory non-exclusive license after theregistration of transfer, but it has no clear provisions on the legal relations before the622§10. Obligations Pertaining to a Patent Rightregistration of transfer. If the statutory non-exclusive license is to occur at the time of theregistration of transfer, the working of the invention before that would be illegal, and if
negligence is found, the party will have to pay damages to the true right holder. Whilenegligence in the commission of infringement would be presumed (Article 103 of the Patent
Act), there is hardly any case where negligence would be denied in reality (for details, see“8.2.3.2. Presumption of Negligence (Article 103 of the Patent Act)”). However, thepresumption of negligence is based on the public notice of the patent right, and in the caseof a request for transfer, the right that has been publicly notified is a misappropriated patentright, so it seems reasonable to deny negligence in some cases if the party had believed
such public notice.34
Also, if Article 79-2 is to be applied or applied by analogy also before the registrationof transfer, the working of the invention before the registration of transfer would be legal,
and the party would need to pay a reasonable value to the true right holder, but there remains
a question of what the relation would be with the license fees which the party has alreadypaid to the owner of the misappropriated patent.
Since there are no remedial provisions for a party who was working the invention
before the registration of transfer but who had stopped working the invention at the time of
the registration of transfer, the working would retroactively become unauthorized working
as a result of the misappropriated patent right retroactively belonging to the true right holder,
and the party may be have damages claimed against them. Such party who has worked theinvention by trusting in the registration would deserve to be saved, so some arrangement
would be worth considering.
Article 79-2 only protects the patentee and licensees without knowledge, and aperson who was working the invention or preparing to work the invention, and it does notprotect a pledgee or a person who seized the patent. The same applies to chūyōken (Article80), Considering such diverse problems, a possible legislative theory may be to transfer theright to the true right holder ex post facto instead of having the right retroactively belong
to the true right holder. With regard to the true right holder’s right to claim back the patent,
see “7.4. True Right Holder's Right to Seek Transfer of a Patent (Article 74 of the Patent
Act).”

34 See Toshiya Kaneko, “Iten Tōroku Mae No Bōnin Shutsugannin No Jisshi Ni Yoru Tokkyoken Shingai To Shin No
Kenrisha No Songai Baishō Seikyūken” (Patent Right Infringement Due to Working of an Invention by aMisappropriated Applicant Before Registration of Transfer of the Patent and the True Right Holder’s Right to Claim
Compensation for Damage), Tokkyo Kenkyū (Patent Study), No. 58 (2014), p. 38.

623

§10. Obligations Pertaining to a Patent Right[550]§10. Obligations Pertaining to a Patent Right
It is better for a patented invention to be worked rather than to be kept dormant, so
there is the issue of the obligation to work the patented invention. The current Act
encourages the working of the invention by indicating that a compulsory license could beestablished if the patented invention has not been in use (See “9.4.4.1. Compulsory License
Where Invention Is Not Worked (Article 83 of the Patent Act)”).
In order to maintain a patent right, the patentee has an obligation to pay patent fees
(Articles 107 onwards of the Patent Act). However, the JPO Commissioner can grant a
reduction of, or exemption from, the payment of patent fees to a person with insufficient
funds due to poverty, etc. (Article 109 of the Patent Act). Since a patent right will be
extinguished if no payment were to be made (Article 112, paragraph (4) of the Patent Act),an interested person, such as a licensee or a pledgee, may pay the patent fees even against
the will of the patentee (Article 110, paragraph (1) of the Patent Act). In such a case, theinterested person may request the reimbursement of the expenses arising from suchpayment to the extent of the actual benefit obtained from the person who should be paying
the patent fees (paragraph (2) of said Article). Even if the patentee is unable to pay thepatent fees within the prescribed time limit, he/she may have the patent right restored bymaking a late payment within six months from the expiration of that time limit (Article 112of the Patent Act; Article 5bis of the Paris Convention). Unless the late payment is made,the patent right is extinguished retroactively from the day on which the patent rightoriginally should have been extinguished. If the original right holder of the patent which
was extinguished due to the default of the payment of patent fees has just cause for thedefault, he/she may make a late payment (with an extra charge) only within two months
from the day on which such cause ceased to exist and within one year from said time limit(Article 112-2 of the Patent Act).
These patent fees have a considerable effect on the filing trend, so the determinationof the amount of the fees and the balance between the filing fee and the examination fee
are important issues which should be considered based on policy.
If third parties could judge easily whether or not a certain product involves a patentright, it could prevent patent infringements. Thus, the Patent Act has a directive provision
stating that efforts must be made to place a mark of patent (Article 187 of the Patent Act).1
Furthermore, it goes without saying that a patent right is a property right, which must
1 Since Article 5 D of the Paris Convention stipulates that no indication of the patent is required as a condition forrecognizing the right, the Patent Act cannot obligate the indication, but only requires that an endeavor be made to attacha patented mark to a patented product.

624§10. Obligations Pertaining to a Patent Right

be exercised in good faith and in accordance with the principles of trust (Article 1,
paragraph (2) of the Civil Code). Also, as a patent right is a powerful and exclusive right,
it presents problems in relation to the Anti-Monopoly Act. This problem will be left tostudies on the Anti-Monopoly Act, and will not be discussed here.

625§11. Duration and Extinguishment of Patent Rights[551]§11. Duration and Extinguishment of Patent Rights
11.1 Duration of Patent Rights (Article 67, paragraph (1) of the Patent Act)
Unlike ownership, a patent right has a duration during which it remains valid.
Although there are various theories concerning the grounds for setting a time limit for apatent, ultimately the answer should be derived from the question of what would be themost effective duration of protection for the development of technology, or, industrial
development.1 The actual duration of protection is by its very nature determined basedon historical grounds or policy grounds, and it is not something that can be decided
theoretically2.
Under the current Act, a patent right becomes effective upon the registration of its
establishment (Article 66, paragraph (1) of the Patent Act), and its duration is 20 years
from the filing date (Article 67, paragraph (1) of the Patent Act). Under the former Act,the stipulated duration had been 15 years from the date of publication of the examined
application (Article 43, paragraph (1) of the former Act). When the current Act wasenacted, the duration remained at 15 years from the date of publication of the examined
application, but an upper limit was provided that the duration cannot exceed 20 years
from the filing date. Later, as the system for the publication of the examined application
was abolished upon the 1994 revision, and as the TRIPS Agreement did not allow thenational law to stipulate a duration shorter than 20 years from the filing date, the current
stipulation of “20 years from the filing date” was adopted.
Since a patent right becomes effective by registration, the actual duration of thepatent would practically differ depending on the time taken for the substantive
examination conducted before registration. Apart from exceptional cases, such as anintentional delay of an examination by the applicant, it seems unfair to have a delay forthe examination affect the length of the duration of the patent. Nevertheless, considering
the fact that the ultimate purpose of the patent system is to promote the development ofindustry by encouraging invention, it would not be desirable from the viewpoint ofindustrial policy to grant a right to a monopoly for technology after an excessively long
1 In the Supreme Court Judgment, April 16, 1999, Minshū, Vol. 53, No. 4, p. 627/Hanji, No. 1675, p. 37/Hanta, No.
1002, p. 83 (the Antiplasmin Agent case), the court held that “the patent system is intended to encourage invention
by granting to a person who has made his/her invention public a monopolistic right to use that invention for a
specific period, while also giving third parties opportunities to use the invention that has been made public, thereby
contributing to the development of industry.”
2 Under the Act of 1921, the patentee could apply for an extension of the duration for a period between three to ten
years if he/she could not gain reasonable profits during the duration on justifiable grounds and if it were an importantinvention (Article 43, paragraph (5) of the Patent Act; Article 1 of the Patent Enforcement Order). Such a provision
may exist in theory, but it would be extremely difficult to determine whether or not the patentee gained reasonableprofits in actuality.

626§11. Duration and Extinguishment of Patent Rights

time from the filing date, even if it were due to a delayed examination.
[552]
In the case of a divisional application (Article 44, paragraph (2) of the Patent Act)or a converted application (Article 46, paragraph (5) of the Patent Act), the duration is 20
years from the filing date of the original application. Meanwhile, for an application
containing an internal priority claim or an application containing a priority claim under
the Paris Convention, the duration is 20 years from the filing date of the application
containing a priority claim, since the filing date does not retroact for matters other thanstatutory matters. The duration of an international application filed through the PCT route(Article 184-3, paragraph (1) of the Patent Act) is 20 years from the international
application date.
11.2. Extension of Duration3 (Article 67, paragraph (2) of the Patent Act)
(1) Significance of extension of duration
Such inventions as drugs and agricultural chemicals, of which the working(manufacture, sale, etc.) is legally regulated sometimes cannot be worked immediately
after they are patented. In such a case, the duration of the patent is practically shortened
due to the 20-year upper limit on the duration. In extreme cases, an approval (permission
or any other disposition)4 for the manufacture, sale, etc. is given after the expiration of
the duration of the patent right. In order to resolve such a practical detriment, a systemfor extending the duration of the patent right was introduced upon the 1987 revision.
Specifically, the extension of the duration was recognized as a period not exceeding theperiod during which the patented invention could not be worked and not exceeding five
years (Article 67, paragraph (2) of the Patent Act). However, because there are differences
between the contents of the approval for the drug or agricultural chemical and the contentsof the patent right, complicated problems have occurred with regard to the types of cases
in which the duration can be extended and the scope of the effect of the extended patent
3 For details of the extension system, see Hiroaki Niihara, ed., Kaisei Tokkyo Hō Kaisetsu (Commentary on the Revised
Patent Act); Nobuhiro Nakayama, ed., Chūkai Tokkyo Hō Jō [Dai 3 Han], Articles 67, 67-2, 67-2-2, 67-3, 67-4, and68-2 (written by Haruo Gotō and Kōji Hirayama and Toshimichi Moriya), Nobuhiro Nakayama and Naoki Koizumi,
eds., Shin/Chūkai Tokkyo Hō Jō (New Explanatory Notes on the Patent Act Vol. 1), p. 995 (written by Ryōko Iseki),
Ryōko Iseki, “Tokkyoken No Sonzoku Kikan Enchō Tōroku To Yakuji Hō No Seizō Shōnin” (Patent Term
Restoration and Manufacturing Approval on the Pharmaceutical Affairs Law), Dōshisha Hōgaku (The Doshisha Law
Review), Vol. 60, No. 6 (2009), p. 83; Ryōko Iseki, “Iyakuhin No Fukusū No Seizō Shōnin To Tokkyoken No
Sonzoku Kikan Enchō Tōroku -- Pashīfu Kapuseru 30 mg Jiken Saikōsai Hanketsu” (Registration of Patent Term
Extension and Multiple Marketing Approvals under the Pharmaceutical Affairs Law: the Implication of the Supreme
Court Case), AIPPI Journal, Vol. 56, No. 9 (2011), p. 569; Ryūta Hirashima, “Tokkyoken Sonzoku Kikan Enchō
Seido Ni Kakawaru Kitei No Gōriteki Kaishaku” (Rational Interpretation of the Provisions Pertaining to the System
of Extension of the Duration of Patent Rights), L&T (Law & Technology), No. 46 (2010), p. 55.
4 This disposition corresponds to “permission” as an academic concept, where the act of manufacture, sale, etc. is
prohibited both in general and in the abstract, and such act is permitted only through receiving an individual, specificdisposition based on each administrative law or regulation.

627

§11. Duration and Extinguishment of Patent Rights

right.
The extendable period is not the period from the date of patent registration to thedate of the disposition (approval) for manufacture, sale, etc., but the period during which
it was not possible to work the patent invention despite that the patentee had the intention
and capability to do so. This is because, the duration of a patent right can be regarded tohave been practically shortened not if the patentee merely owned the patent right, but only
if the patentee had the intention and capability to work the invention. Specifically, "theperiod during which it was not possible to work the patent invention" is the period
between the date of the beginning of the test which is required for the approval, or thedate of patent registration, whichever is later, and the day before the date when the above
approval took effect by reaching the applicant.5[553]
The effects of a patent right are not suspended even during the period when theapproval, etc. has not been given for the working of the invention, so the patentee is able
to seek an injunction and claim damages against any infringement during that period.
Meanwhile, at the time of the 1987 revision, an extension of the duration of a patent
could only be requested when the period during which the patented invention could not
be worked was two years or more. However, since this requirement was unique to theJapanese system, and there were strong calls for its abolition, the two-year test was
abolished upon the 1999 revision (Article 67 of the Patent Act).
(2) Procedure for extension of the duration
In order to enjoy an extension of the duration, there needs to have been a period
during which the patented invention was unable to be worked because approvals
prescribed by relevant Acts that are intended to ensure the safely, etc. or any otherdisposition designated by Cabinet Order as requiring a considerable amount of time forthe proper execution of the disposition were necessary (Article 67, paragraph (2) of the
Patent Act). The Patent Act does not limit the industrial fields for which the duration ofpatents may be extended, and has a Cabinet Order (Article 2 of the Patent Enforcement
Order) provide for the applicable industrial fields. At present, two dispositions are subject
to the system of extension of the duration: approval under the Act on Securing Quality,
Efficacy and Safety of Products Including Pharmaceuticals and Medical Devices(hereinafter referred to as the “Pharmaceuticals and Medical Devices Act”; the law title
5 The Supreme Court Judgment, October 22, 1999, Minshū, Vol. 53, No. 7, p. 1270/Hanji, No. 1693, p. 133/Hanta,
No. 1018, p. 211 (the New Polypeptide case). Since this was a case before the 1999 revision, whether or not theextension of the duration of the patent right would be recognized depended on whether or not the patented invention
could not be worked for “two years or more.” Meanwhile, “Part IX Extension of Patent Term” of the Examination
Guidelines states that “This period begins on the date on which testing necessary for obtaining the disposition
designated by Cabinet Order commences or on which the relevant patent is registered, whichever comes later; andends on the day before the date on which the approval or registration takes effect by reaching the applicant, i.e., thedate on which the applicant actually learns of the approval or registration or could have learned of it.”628

§11. Duration and Extinguishment of Patent Rights

was changed from conventional “Pharmaceutical Affairs Act” upon the 2014 revision)and approval under the Agricultural Chemicals Control Act. Industry calls for theextension of the duration of patents in relation to other dispositions as well, such as adisposition for a new genetically-engineered animal or plant, but an extension is currently
allowed for the above two dispositions. “Whether or not a considerable amount of time isrequired for the proper execution of the disposition” is not examined as a requirement for
the extension in individual cases, but dispositions under the Pharmaceuticals and Medical
Devices Act and the Agricultural Chemicals Control Act are categorized as those subject
to this system by operation of law.
In principle, an application requesting the registration of an extension of theduration of a patent right shall be filed within three months after the disposition prescribedby Cabinet Order is obtained (Article 67-2, paragraph (3) of the Patent Act). 6
Conventionally, in consideration of the period for preparing for the issuance of the patentgazette, an application for the registration of an extension of the duration could not be
filed after six months before the expiration of the duration of the patent right. Since thepatentee was unable to control the day on which the disposition was made, and the time
limit of six months before the expiration of the duration of the patent right was too severe
for applicants, this time limit (Article 67-2-2 of the Patent Act) was abolished upon the1999 revision, and it was provided that the duration is deemed to have been extended
when the registration of an extension of the duration has been filed (Article 67-2,
paragraph (5) of the Patent Act). There is no problem if the examiner’s decision on aregistration of extension is made before the expiration of the duration of the patent right,
but if it is made after the expiration of the duration, the extension becomes effective at
the time of the filing of the application for the registration of an extension, and if theexaminer makes a decision to refuse the extension, the extension loses its effectretroactively (the proviso to said paragraph). However, if an application for an extensionof the duration is filed immediately before the expiration of the duration, it could cause
unexpected damage to third parties. Thus, when the disposition designated by Cabinet
Order (approval of a drug, etc.) is unlikely to be obtained prior to six months before theexpiration of the duration, the person filing an application for registration of an extension
must submit a document stating his/her name, patent number, etc. to the JPO
Commissioner (Article 67-2-2, paragraph (1) of the Patent Act), and if the person fails to
submit such document, he/she cannot file an application for registration of an extension
after six months before the expiration of the duration (paragraph (2) of said Article). An
application for the registration of an extension filed in violation of this provision is
6 Article 3 of the Patent Enforcement Order provides that the period is to be three months, but if a person filing anapplication for registration of an extension of the duration is unable to file the application due to reasons beyond
said person’s control, said person may file the application within 14 days from the date on which those reasonscease to exist (but not later than nine months from the date of the disposition).

629

§11. Duration and Extinguishment of Patent Rights

dismissed as an unlawful application (Article 18-2 of the Patent Act). The extension is
examined by an examiner (Article 67-4 and Article 47, paragraph (1) of the Patent Act),and the procedure for patent examination is applied mutatis mutandis to the procedure forthe examination of an extension of the duration (Article 67-4 of the Patent Act).
[554](3) Requirements for recognition of extension of the duration
In order for an examiner to refuse an application for registration of extension of theduration, the examiner must prove either of the following: (i) the fact that the disposition
designated by Cabinet Order is not deemed to have been necessary to obtain (the fact thatthe disposition by the government agency was not essential for making the manufacture,etc. possible, that is, that the manufacture, etc. was possible even without the disposition)(Article 67-3, paragraph (1), item (i) of the Patent Act); or (ii) the fact that the act for
which a ban was lifted by obtaining the disposition designated by Cabinet Order (the actof manufacturing, etc.) is not included in acts that constitute the working of the patented
invention (the fact that the drug, etc. for which the application for extension of theduration was filed falls outside the scope the patent right), that is, there is no overlapping
portion between matters that define the invention claimed in the scope of claims for which
an application for registration of an extension of the duration was filed and the productfor which the disposition was obtained (the product for which a prohibition was lifted byobtaining the disposition, i.e., the drug or agricultural chemical which was permitted tobe manufactured and/or sold) (item (ii) of said paragraph).7 These are requirements forrefusing the application and have complicated contents, but looking at it from the otherway around, the extension is registered if the application satisfies the requirements thatthe disposition (approval) was essential for making the manufacture, etc. possible and thatthe act of manufacturing, etc. falls within the scope of patent claims of the application forextension. In short, the law provides that the application is refused for a product that canbe worked even without the disposition and a product for which the subject of thedisposition is not included in the scope of patent claims subject to the extension. However,there is controversy about the interpretation of the requirements (discussed later).
[555]
As long as these requirements are satisfied, it is possible to have the duration of a

7 The Intellectual Property Court Judgment, May 29, 2009, Hanji, No. 2047, p. 11/Hanta, No. 1305, p. 80 (the Pacif
Capsule 30 mg case). The following similar judgments were rendered on the same day: the Intellectual Property Court
Judgment, May 29, 2009, court website (the Long Acting Sustained-Release Microcapsule case); and the Intellectual
Property Court Judgment, May 29, 2009, court website (the Controlled Release Composition case). The same viewis indicated in the Intellectual Property Court Judgment, March 28, 2011, Hanji, No. 2115, p. 90/Hanta, No. 1392, p.
276 (the Anti-HIV Infection Drug case).

630

§11. Duration and Extinguishment of Patent Rights

single patent right extended several times,8 and if a single disposition involves several
patents, the durations of the several corresponding patent rights are extended.
(4) Scope for which extension of the duration is recognizedSince the introduction of the system of extension of the duration in 1987, JPO
practices and court judgments regarded the scope for which an extension of the durationis recognized (Article 67-3, paragraph (1), item (i) of the Patent Act) and the scope of theeffect of a patent right whose duration has been extended (Article 68-2 of the Patent Act)to be consistent, and, in the case of a drug, interpreted the “product which was the subjectof the disposition” referred to in Article 68-2 to be not the specific drug for which thedisposition under the Pharmaceuticals and Medical Devices Act was issued, but the“active ingredient (product) and the effect-efficacy (purpose).” On such basis, if drugs
that have the “same active ingredient and purpose” as the drug in question were alreadyin a state of being able to be manufactured, sold, etc., the JPO and court denied an
extension of the duration for such drugs. In other words, if multiple approvals have been
granted for drugs that have the same active ingredient and purpose, it was construed under
the Patent Act that, after the first drug gains approval, the subsequent drug approvals areunnecessary, and extension of the duration could not be allowed for such subsequently
approved drugs.
Specifically, let us suppose that a sedative with a certain active ingredient (e.g.,morphine hydrochloride) and effect-efficacy (purpose; e.g., pain relief) is patented, andafter approval under the Pharmaceuticals and Medical Devices Act is granted for a
specific sedative of dosage form A which falls under the scope of its patent claims,
registration of an extension of the duration is recognized for it. In this case, if a sedativewith the same active ingredient but with different dosage form B subsequently obtains
approval under the Pharmaceuticals and Medical Devices Act, extension of the duration
could not be recognized for dosage form B with the “same active ingredient and purpose,”
however revolutionary it was. In reality, the subsequent sedative of dosage form B also
cannot be manufactured, etc. without the approval under the Pharmaceuticals and Medical
Devices Act, but it is construed that “the disposition designated by Cabinet Order is notdeemed to have been necessary to obtain” for such sedative; in other words, it is deemed
under the Patent Act that such sedative could be manufactured, etc. This is considered to
be based on the idea that, because the essence of the Pharmaceuticals and Medical
Devices Act is to regulate new active ingredients (chemical substances) in the form of
drugs, the key points of the regulation would be the “active ingredient and the purpose”
8 For instance, where a patent right is granted for a chemical substance that is effective as a hypnotic drug and an
anticancer drug, it is possible to first register an extension of the duration of the patent right as a drug effective against
cancer, and then register an extension of the duration of the patent right as a drug effective as a drug for sleeping
disorders.

631§11. Duration and Extinguishment of Patent Rightsof the drug, among many specific elements.9 The underlying value judgment is assumed
to be that the most important element for a drug is that it is a new chemical substancewith drug efficacy, and that other elements are only minor details and do not deserve thebenefit of an extension of the duration. A separate approval for a drug needs to be obtained
if the dosage form differs, but the difference in dosage form has hardly any meaning under
the Patent Act, so it is likely to have been considered that as long as extension of theduration has been recognized for a drug with a specific chemical substance as a sedative,
no other extension of the duration can be recognized as a sedative, even if it was in adifferent dosage form. In short, this means that the drug of dosage form B cannot be
manufactured, etc. without the approval specified by the Pharmaceuticals and Medical
Devices Act in practice, but as long as the approval has already been granted for dosage
form A with the same chemical substance (active ingredient) and purpose, the drug ofdosage form B is not construed to be an invention for which the disposition designatedby Cabinet Order is necessary to obtain as referred to in Article 67, paragraph (2) of the
Patent Act.10 In recent years, however, not only chemical substances with drug efficacy,
but drug delivery systems (DDS)11 and the like have also become increasingly important,and revolutionary pharmaceutical inventions concerning the dosage form and usage haveemerged; but under the JPO’s conventional practice, as long as their active ingredientsand purposes are the same as those of inventions which had been filed earlier, the durationof the patent rights for the DDS cannot be extended. The JPO’s interpretation makes only
inventions of new drugs subject to an extension of the duration. Under this interpretation,even if there were a revolutionary invention concerning a drug formulation, if adisposition has already been made for a drug with the same active ingredient and purpose,the duration cannot be extended for that dosage form. However, such practicediscriminates against DDS, etc. that occupy an important position among pharmaceuticalinventions today and is considered to be unreasonable, so such interpretation was

9 Hiroaki Niihara, Kaisei Tokkyo Hō Kaisetsu, p. 97 and p. 106. Mr. Niihara was in charge of legislating the thePharmaceuticals and Medical Devices Act.
10 It should be noted, however, that in 1987 when the extension of a duration was legislated, pharmaceutical inventions
were mainly inventions of new chemical substances, the DDS (infra note 11) was underdeveloped, and the doctrineof equivalents had yet to be established in case law, so the JPO’s practices had been reasonable to some extent.
Incidentally, the doctrine of equivalents was established upon the Supreme Court Judgment, February 24, 1998,
Minshū, Vol. 52, No. 1, p. 113/Hanji, No. 1630, p. 32/Hanta, No. 969, p. 105 (the Ball Spline case).
11 The DDS is a system that controls the quantity, location, and time of drug distribution inside the body. For example,
in the case of an injection drug that conventionally needed to be injected every day, a DDS is such a system that
requires the drug to be injected only once a month (e.g., a sustained-release capsule of morphine hydrochloride). In
that case, the drug used in the DDS is the same as the conventionally used drug, having the same active ingredient(morphine hydrochloride) and purpose (pain relief), so extension of the duration would not be recognized for it under
the conventional JPO practice.

632

§11. Duration and Extinguishment of Patent Rights

overturned by a Supreme Court judgment.12 This Supreme Court judgment was rendered
for a case in which the drug subject to the earlier disposition (a sedative containing
morphine hydrochloride as its active ingredient) and the patent right for which an
application for extension of the duration was filed (an invention on controlled release
composition) did not overlap, but their active ingredient (morphine hydrochloride) andpurpose (pain relief) were the same. The Supreme Court held that, if the pharmaceuticalproduct covered by the earlier approval is not included in the technical scope of the patent
for the pharmaceutical product covered by a later approval, it is unreasonable to refuse anapplication for registration of extension of that patent on the grounds of the existence ofthe earlier approval. As a result, the JPO revised the Examination Guidelines in 2011.13[558]
Later, a judgment by the Grand Panel of the Intellectual Property High Court (the12 In the Supreme Court Judgment, April 28, 2011, Minshū, Vol. 65, No. 3, p. 1654/Hanji, No. 2115, p. 32/Hanta, No.
1348, p. 102 (the Pacif Capsule 30 mg case), the court held that, even in the case where, prior to the approval for
manufacturing and sale under Article 14, paragraph (1) of the Pharmaceutical Affairs Act because of which an
application for registration of extension of the duration of a patent right has been filed, another approval for
manufacturing and sale under said paragraph had been issued with regard to a pharmaceutical product which has thesame active ingredient as well as efficacy and effect as those of the pharmaceutical product covered by the approval,
if the pharmaceutical product covered by the earlier approval is not included in the technical scope of the patented
invention specified by any of the claims for the patent right pertaining to the application for registration of extension,
it is unreasonable to deny that it was necessary to obtain the approval for the working of the patented invention basedon said patent right, on the grounds of the existence of the earlier approval. In this case, a person obtained a patent
for a drug relating to chemical substance having drug efficacy (morphine hydrochloride with analgesic effect) andobtained an approval for its manufacture, etc., and later, the appellant obtained a patent for a drug that had put saidchemical substance into a sustained-release capsule, and sought an extension of the duration of that patent right. The
patent right for which an extension was sought related to a sustained-release capsule of morphine hydrochloride,
which did not overlap with the scope of patent claims of the drug for which an extension of the duration wasrecognized earlier. The chemical substance (morphine hydrochloride with analgesic effect) and the sustained-releasecapsule are different patented inventions, and it is possible to obtain a patent for the capsule dosage form and obtaina drug approval for it. However, under the conventional JPO practices, the duration of the patent for the capsule could
not be extended because the chemical substance contained in the capsule and the purpose (drug efficacy) of thecapsule were the same as those of the invention of the chemical substance (morphine hydrochloride with analgesic
effect). See Eiji Saegusa, “Shin Zaikei Iyakuhin No Tokkyoken Sonzoku Kikan Enchō Tōroku Shutsugan -- Kōkō
Shobun Wo Riyū To Suru Shin Zaikei Iyakuhin No Enchō Tōroku Wo Mitometa Jirei” (Application for Extensionof the Duration of a Patent Right for a Drug of a New Dosage Form: Example of a Case in Which Registration ofExtension Was Recognized for a Drug of a New Dosage Form on the Basis of a Subsequent Disposition), Chizai
Kanri (Intellectual Property Management), Vol. 60, No. 1 (2010), p. 5; Ryōko Iseki, “Iyakuhin No Fukusū No Seizō
Shōnin To Tokkyoken No Sonzoku Kikan Enchō Tōroku -- Pashīfu Kapuseru 30 mg Jiken Saikōsai Hanketsu”(Registration of Patent Term Extension and multiple Marketing Approvals under the Pharmaceutical Affairs Law:
the Implication of the Supreme Court Case), AIPPI Journal, Vol. 56, No. 9 (2011), p. 596.
13 In the new Examination Guidelines for Patent and Utility Model, the statement was revised as follows: “in making
the determination under Article 67-3, paragraph (1), item (i), the phrase ‘to work the patented invention’ should not
be interpreted as an act of manufacturing and marketing or otherwise handling the drug product per se that was the
subject of the disposition, nor should it be interpreted as an act of manufacturing, importing, or otherwise handlingthe agricultural chemical per se that was the subject of the disposition. Instead, it should be interpreted as an act ofmanufacturing and marketing or otherwise handling such drug product or as an act of manufacturing, importing, orotherwise handling such agricultural chemical that is defined by all of the matters falling under the matters to define
the invention of the patented invention among the matters described in the written approval for the drug product or
the registration card for the agricultural chemical that was the subject of the disposition (‘matters falling under thematters to define the invention’).” With regard to this, however, in the judgment by the Grand Panel of the Intellectual
Property High Court, May 30, 2014, Hanji, No. 2232, p. 3/Hanta, No. 1407, p. 199 (the AVASTIN case), the court
pointed out as follows: “The aforementioned revision of the Examination Guidelines by the JPO was made from an
independent standpoint beyond the holding in the aforementioned Supreme Court judgment (the Supreme Court
Judgment, April 28, 2011). ... the revision is apart from the text of the provisions of said item, and is unacceptable.”
The final appeal on this case was dismissed by the Supreme Court Judgment, November 17, 2015, court website.

633§11. Duration and Extinguishment of Patent Rights

AVASTIN case)14 was rendered for a case in which the plaintiff, who was the patentee
for an invention titled “anti-VEGF antibody,” first obtained approval for a drug that is“intravenously infused as bevacizumab at a dose of 5 mg/kg (weight) or 10 mg/kg(weight) at administration intervals of at least two weeks” for “unresectable advanced orrecurrent colorectal cancer,” and then obtained approval for a partial change of adding to“the dosage and administration approved by the prior disposition” a statement that "incombination with other anticancer drugs, adults are ordinarily intravenously infused with
bevacizumab at a dose of 7.5 mg/kg (weight) at administration intervals of at least three
weeks." The plaintiff filed an application for registration of extension of the duration, but
the application was refused, so the plaintiff filed an action to seek rescission of the JPO
decision. The court held that “even if approval of manufacture and sale (prior disposition)
under Article 14, paragraph (1) of the Pharmaceutical Affairs Act has been given for adrug for which the active ingredient and efficacy and effect are the same as those of adrug which was the subject of a subsequent disposition (omitted), when the drug which
was the subject of the prior disposition does not fall under the technical scope of thepatented invention claimed in any claim of the patent right pertaining to the application
for the registration of extension, it cannot be said that the subsequent disposition is notdeemed to have been necessary to obtain for the working of the patented invention
covered by the patent right on the grounds of the existence of the prior disposition.” Inother words, the court made it clear that, if the drug subject to the prior disposition does
not fall under the scope of the patent right for which an application for extension of theduration was filed, the extension is recognized, and that, even if the drugs were based on
the same patent right and had the same active ingredient, the duration can be extended insome cases if the dosage and administration differ. The court ruled that, because the act
for which the ban is lifted by the approval (manufacture, sale, etc.) is the act ofmanufacture, sale, etc. of a drug that is defined by the matters which were the subjects of

14 The Grand Panel of the Intellectual Property High Court, May 30, 2014, Hanji, No. 2232, p. 3/Hanta, No. 1407, p.
199 (the AVASTIN case) was a case in which the plaintiff obtained approval for a drug by making a partial change
to a drug for which a prior approval of manufacture and sale had been obtained with regard to the same patented
invention. The drugs had the same efficacy and effect, but only their dosage and administration were different. See
Ryōko Iseki. “Abasuchin (Bebashizumabu) Jiken” (The AVASTIN (Bevacizumab) Case), Jurist, No. 1475 (2014),
p. 62. Meanwhile, in the Intellectual Property High Court Judgment, September 25, 2014, Hanji, No. 2241, p. 142(the Iressa case), the court stated that the efficacy or effect of the drug in question which was approved by the priordisposition was to treat “inoperable or recurrent non-small cell lung cancer,” and its written approval did not containsuch statement as whether it was for cases that have undergone or have not undergone chemotherapy. The court
pointed out that, in contrast, the efficacy or effect of the drug approved by the disposition in question (the designatedpurpose) was “inoperable or recurrent EGFR mutation-positive non-small cell lung cancer,” which is found to have
limited the scope of the purpose “inoperable or recurrent non-small cell lung cancer” of the drug in question which
was approved by the prior disposition, so the lifting of the ban by the disposition in question is included in the scopeof the lifting of the ban by the prior disposition.

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the approval,15 it is erroneous to deem that the ban was also lifted even for the act ofworking the patented invention on which the ban was not lifted by a disposition
designated by Cabinet Order, and to refuse the application for the registration of extensionof the duration of the patent right based on it.
[559]
Under the Patent Act, a “product” that was the subject of a “disposition designatedby Cabinet Order” would mean a drug defined by the ingredient, quantity, dosage,administration, efficacy, and effect—among the matters examined under the
Pharmaceuticals and Medical Devices Act—of the drug for which the approval was given,and if any of these matters differs, the product could newly become subject to extensionof the duration. 16 Since it is a fact that a subsequently approved drug cannot be
manufactured, etc. due to the existence of a prior approved drug, this determination isconsidered to coincide with the natural interpretation of the provisions of the Patent Act.
The judgment is likely to have taken into consideration the fact that the dosage andadministration could serve as important elements for drugs.
(5) Effect of patent right in the case of duration extension (Article 68-2 of the Patent
Act)
The purpose of the system of the extension of the duration is to recover the period
during which the patentee could not work his/her invention in spite of having the intention
to do so, in the case where the patentee was prohibited from working the invention by an
Act (the Pharmaceuticals and Medical Devices Act or the Agricultural Chemicals ControlAct) although he/she should have been able to freely work the invention in the absenceof such Act, and where the patentee could only engage in the manufacture, sale, etc. of
the product when such prohibition was lifted by obtaining a disposition (approval for
manufacture, sale, etc.). Since the system of an extension of the duration is intended forreclaiming the period during which the patentee could not work the invention in spite of
15 The court further held as follows: Under Article 14, paragraph (1) of the Pharmaceutical Affairs Act (currently the
Pharmaceuticals and Medical Devices Act), it is necessary to obtain approval for each item. In obtaining suchapproval, the "name, ingredient, quantity, structure, dosage, administration, use method, efficacy, effect, performance,side effects and other qualities, and matters relating to effectiveness and safety" of the relevant drug, etc. are to be
examined (paragraph (2), item (iii) of said Article). The “item” under the Pharmaceutical Affairs Act refers to the
product (drug) defined by the elements above, and an approval is granted for each such product. Therefore, the act
for which the ban is lifted by the approval is the act of manufacture, sale, etc. of a drug that is defined by the matterswhich were the subjects of the approval. It is necessary to make a determination substantially in light of the purposeof the Patent Act, which established the system for the registration of extension of the duration, instead of making adetermination by formally applying each of these elements. It is reasonable to understand that the scope of the“working of a patented invention” on which the ban is lifted through obtainment of an approval covers the act ofmanufacturing, selling, etc. a drug that is defined by the aforementioned matters to be examined, excluding “name,”“side effects and other qualities,” and “matters relating to effectiveness and safety” (ingredient, quantity, dosage,administration, efficacy, and effect).
16 In the Intellectual Property High Court Judgment, May 30, 2014, court website (the Rhinocort Powder Nasal Spraycase), the court held that the disposition in question merely approved a drug that partially changed the matters
approved by the prior disposition into a more limited form, so the drug is not subject to extension of the duration.

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having the intention to do so, due to the need for obtaining a disposition, there is no needto make the extended patent right effective with regard to the entire scope of the patentright, and it is provided that such patent right is not effective against any act other than
the working of the patented invention for the product which was the subject of thedisposition (where the specific usage of the product is prescribed by the disposition, theproduct used for that usage), or in other words, the product for which the prohibition was
lifted (that is, the product that could not be worked until the disposition was made)(Article 68-2 of the Patent Act). As a textbook example, if Claim 1 of the patent for achemical substance defines a hypnotic and Claim 2 defines an anticancer drug, and adisposition (approval for manufacture, sale, etc.) is made for the hypnotic drug, theduration of the entire patent right will be extended, but it is basically only effective against
approved hypnotic drugs, and not against anticancer drugs.
[560]
The problem would be the concrete scope of the “product which was the subject ofthe disposition,” Under the conventional JPO practice, extension of the duration wasrecognized for a product defined by the “active ingredient and purpose,” and the extended
patent right was effective against products with the same “active ingredient and purpose,”even if the dosage and administration differed. In other words, the JPO had consistently
interpreted the scope for which extension of the duration is to be recognized under Article
67-3, paragraph (1), item (i) of the Patent Act and the scope in which the patent right ofwhich duration has been extended under Article 68-2 is effective. However, recent court
judgments have interpreted that these two matters are not necessarily directly linked witheach other.17
While the current Cabinet Order limits the subjects of an extension of the durationof patent rights to drugs and agricultural chemicals, the Patent Act does not limit the
subjects to those fields, so there is a potential that the subjects could be expanded to allkinds of industries. Because of this, Article 68-2 of the Patent Act uses a general term
“product (if a specific purpose of said product has been designated by the disposition, theproduct used for such purpose)” to define the subject of the extension of the duration.
However, since there is no formal or substantive reason or appropriateness to change thereading of this “product” to mean the “active ingredient and purpose” only in the case of
a drug, under Article 68-2, like the conventional interpretation by the JPO, the extended
patent right is only effective against the product (drug) which could not be worked until

17 The Supreme Court Judgment, April 28, 2011, Minshū, Vol., 65, No. 3, p. 1654/Hanji, No. 2115, p. 32/Hanta, No.
1348, p. 102 (the Pacif Capsule 30 mg case). In the Grand Panel of the Intellectual Property High Court, May 30,
2014, Hanji, No. 2232, p. 3/Hanta, No. 1407, p. 199 (the AVASTIN case), the court stated that “there is no
unreasonableness in the inconsistency between these scopes as long as the scope for which the patent right whose
duration was extended for the reason of a prior disposition is effective does not directly relate to the question ofwhether a disposition designated by Cabinet Order was necessary to obtain for the working of the patented invention.”636

§11. Duration and Extinguishment of Patent Rights

receiving a disposition under the Pharmaceutical Affairs Act. In the judgment by theGrand Panel of the Intellectual Property High Court (the AVASTIN case), the court statedthat “in the case of a patented invention of an ingredient of a drug, it is reasonable toconclude that the patent right whose duration was extended pursuant to Article 68-2 ofthe Patent Act is effective for the scope of the working of the patented invention that is
identified by ‘ingredient (not limited to the active ingredient)’ as an invention pertaining
to a ‘product’ and is also identified by ‘efficacy and effect’ and ‘dosage andadministration’ as an invention pertaining to a ‘usage.’” In other words, while therequirements for extension of the duration are as mentioned earlier, the extended patentright is effective for the scope of the working of the patented invention defined by the“efficacy and effect” and the “dosage and administration” in the case of a drug, and its
technical scope is determined based on the same interpretation as that for ordinary patentrights. For example, if a chemical substance with drug efficacy has gained approval in theform of a powder drug and the duration of the patent therefor has been extended, thepatent right will be effective against the same drug in the form of a tablet with the same
“ingredient,” “quantity,” “dosage,” and “structure,” within the scope of equivalents, byregarding the tablet to be the same product under the Patent Act. Nevertheless, in thiscourt judgment, the court held that quantity18 does not limit the effect of an extended
patent right.
[561]
The conventional interpretation was to regard that extension of duration is effective
against products with the same active ingredient and purpose, but the recent interpretation
is to recognize registration of an extension of the duration in shorter segments, and toregard that the extended patent right is effective for a narrower scope. As mentioned
above, the scope of the extended patent right is interpreted in the same way as the scopeof an ordinary patent right, and the doctrine of equivalents is also applicable to theextended patent right.19 This is because, otherwise, competitors would be able to easily
evade infringement by adding a slight change to products for which the patent right was
extended, which would be unreasonable.
11.3. Lapse of Patent Rights

18 The court stated as follows: the "quantity" means the quantity of ingredients, etc. included in a unit of a drug, suchas a tablet or a pack; however, it goes against the purpose of the establishment of the extension registration system topermit competing companies to manufacture, sell, etc. a drug with the same dosage and administration, which differs
only in quantity from a drug for which the patentee obtained approval. Today, however, there can be cases where a
new patent is obtained for a drug with a different quantity, so the conclusion of this judgment does not necessarily
apply to the difference in quantity in all cases.
19 In contrast, Ryōko Iseki. “Abasuchin (Bebashizumabu) Jiken” (The AVASTIN (Bevacizumab) Case), Jurist, No.
1475 (2014), p. 66 states that the doctrine of equivalents does not apply due to a difference in nature.

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§11. Duration and Extinguishment of Patent Rights

A patent right lapses upon the following events: expiration of the duration of thepatent (Article 67, paragraph (1) of the Patent Act); default of payment of the patent fees
(Article 112, paragraph (4) of the Patent Act); absence of an heir (Article 76 of the Patent
Act); waiver of the patent right (Article 97, paragraph (1) of the Patent Act); a trial
decision of patent invalidation becoming final and conclusive (Article 125 of the Patent
Act); and annulment of the patent (Article 100 of the Anti-Monopoly Act).
[511]
A lapse due to a waiver must be registered to take effect (Article 98, paragraph (1),item (i) of the Patent Act). If there is an exclusive licensee, a pledgee, a non-exclusive
licensee for an employee invention (Article 35, paragraph (1) of the Patent Act), or a nonexclusive licensee under Article 77, paragraph (4) or Article 78, paragraph (1) of the
Patent Act, the patentee may not waive the patent without the consent of such person(Article 97, paragraph (1) of the Patent Act).
Although general inherited property belongs to the National Treasury when there
is no heir (Article 959 of the Civil Code), a patent right lapses where no one claims theright as an heir within the time limit designated in Article 958 of the Civil Code (Article
76 of the Patent Act). While the Civil Code provides that inherited property may be
granted in whole or in part upon an application from a person who had a special
connection with the decedent, even if no person claims the right as an heir (Article 958-3of the Civil Code), a patent right lapses in such case without being granted to a person
who had a special connection with the decedent. A monopoly of information is recognized
for a patent right so that it would serve as an incentive for an invention or an investment
in an invention, so there is no need to maintain the monopolistic status for a patent rightif there is no heir. Supposing such a patent were to belong to the National Treasury, theonly benefit would be that it would enrich the National Treasury, and the State is unlikely
to be able to use a patent right effectively. Rather, it would be more effective forpromoting the use of the technical information and would better contribute to thedevelopment of industry to put the patented invention into the public domain and make itavailable to everybody. Under this determination, the said provision of the Patent Act wasestablished.
[562]
The former Act had only provided that a patent right “lapses in the absence of anheir,” but the current Act provides that a patent right lapses when no one claims the rightas an heir after searching for an heir pursuant to Article 958 of the Civil Code (Article 76638

§11. Duration and Extinguishment of Patent Rightsof the Patent Act).20

20 Article 62 of the Copyright Act provides that a copyright lapses when a copyright is to belong to the National
Treasury pursuant to Article 959 of the Civil Code, that is, when a copyright remains undisposed after searching foran heir (Article 958 of the Civil Code) and granting the copyright in part to a person who had a special connection
to the decedent (Article 958-3 of the Civil Code). This provision differs slightly from the Patent Act which
stipulates that a patent right lapses when no person claims the right as an heir within the time limit designated in
Article 958 of the Civil Code.

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§12. Criminal Penalties[563]§12. Criminal Penalties
The Patent Act, although part of civil law, also provides for some criminal penalties
for enhancing patent protection and defending the interests of the general public. The coreof criminal penalties is the crime of infringement (Article 196 of the Patent Act), but as thismatter is discussed in “8.6. Penal Provisions (Crime of Infringement),” it shall be omitted
here and other crimes shall be discussed instead.
The criminal penalties under Article 196 onward are special provisions of the Penal
Code, and except as otherwise provided in laws and regulations, the general provisions of
the Penal Code will apply (Article 8 of the Penal Code). Since the Patent Act does not haveprovisions to punish criminal negligence, only intentional crimes are punished (Article 38of the Penal Code). The same applies to attempted crimes. Since the Patent Act does nothave provisions to punish attempted crimes, attempted crimes do not constitute a crime
under the Act (Article 44 of the Penal Code).
(i) Crime of fraud (Article 197 of the Patent Act)
A person who obtains a patent, the registration of an extension of the duration of thepatent, a ruling on an opposition to a granted patent, or a trial decision by means of afraudulent act, such as by submitting false evidence to the examiner is punished by
imprisonment with work for a term not exceeding three years or a fine not exceeding three
million yen, and a juridical person is punished by a fine not exceeding 100 million yen. Itshould be construed that an act taking advantage of the fact that the examiner has made anerror, and merely leaving the situation as it is, does not constitute a fraudulent act. Unlike
general fraud under the Penal Code, patent examinations and trials adopt an ex officio
principle, and examiners and trial examiners are expected to make a precise determination
ex officio. Thus, this crime should only be established when the offender has proactively
deceived an examiner or a trial examiner by, for example, submitting a false document.1(ii) Crime of false marking (Articles 198 and 188 of the Patent Act)
A mark of patent can only be used when the patent has been registered after
undergoing an examination by the JPO. If a person not entitled to the patented invention
places a mark of patent, he/she is punished by imprisonment with work for a term notexceeding three years or a fine not exceeding three million yen, and a juridical person ispunished by a fine not exceeding 100 million yen. While use of a mark of patent contributes
to the prevention of infringement, this provision prevents a mark from being used in such

1 Nobuhiro Nakayama and Naoki Koizumi, eds., Shin/Chūkai Tokkyo Hō Ge (New Explanatory Notes on the Patent Act
Vol. 2), p. 2710 [written by Hiroyuki Morisaki and Makoto Okada].

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§12. Criminal Penalties

a manner that it misleads people into believing that an unpatented product is patented, so
as to maintain the competitive order, prevent a misunderstanding by the general public, andretain the credibility of the patent system.
(iii) Crime of perjury, etc. (Article 199 of the Patent Act)
A witness, an expert witness or an interpreter who has sworn under the Patent Act
and made a false statement or given a false expert opinion or interpretation to the Patent
Office or the court commissioned thereby is punished by imprisonment with work for aterm between three months and ten years. This crime is the same as Article 169 of the Penal
Code, and the reason for providing it under the Patent Act is to reduce the punishment when
the offender makes a voluntary confession under paragraph (2) of said Article.2[564](iv) Crime of divulging secrets (Article 200 of the Patent Act)
While a present or former national government employee has an obligation topreserve secrecy (Article 100 of the National Public Service Act) the violation of which is
subject to imprisonment with work for a term not exceeding one year or a fine not exceeding
500,000 yen (Article 109, item (xii) of the National Public Service Act), a present or former
JPO official who has divulged or appropriated any secret relating to an invention claimed
in a pending patent application that has become known to him/her in the course of
performing his/her duties shall be punished by imprisonment with work for a term notexceeding one year or a fine not exceeding 500,000 yen, in order to protect the rights ofapplicants and to maintain the credibility of the patent system.3(v) Crime of breach of protective order (Article 200-2 of the Patent Act)
A person who fails to comply with a protective order (Article 105-4 of the Patent
Act) is punished by imprisonment with work for a term not exceeding five years or a finenot exceeding five million yen, or a combination thereof. If the offender is a juridical person,
he/she is punished by a fine not exceeding 300 million yen (Article 201, paragraph (1), item(i) of the Patent Act). This crime was introduced in line with the introduction of theprovisions on protective orders (Article 105-4 of the Patent Act) when the Patent Act wasrevised in line with the 2004 revision of the Court Act. This crime is stipulated as a crime
prosecutable upon a complaint, because there is a risk that the trade secret subject to theprotective order would appear in the proceedings concerning the crime of the breach of a2 While Article 170 of the Penal Code also provides for a reduction of the punishment when the offender makes aconfession, Article 199 of the Patent Act is significant in that it clearly stipulates that the punishment may be reduced
when the confession is made “before a certified copy of the judgment on the case has been served or a trial decision has
become final and binding” as opposed to the case of the Penal Code.
3 With the 2007 revision of Article 109 of the National Public Service Act, the maximum punishment against the crimeof divulging secrets became the same as that under the Patent Act, but before the revision, the punishment under the
Patent Act was heavier, and the provision had more meaning. Meanwhile, as the National Public Service Act does nothave provisions on appropriation, the provision of the Patent Act concerning appropriation is meaningful.

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protective order, and the secret would be disclosed. Also, since a secret could be disclosed
overseas in the breach of a protective order, the punishment also applies to a person who
commits the crime outside Japan.
(vi) Dual liability (Article 201 of the Patent Act)
Where the representative of a juridical person or an agent, employee or other worker
of a juridical person or an individual has committed, in the course of performing his/herduties, any of the crimes above, which are provided for in Articles 196, 196-2, 197, 198, or
200-2 of the Patent Act, in addition to the natural person who has committed the act, thejuridical person or the natural person who is the employer is also punished. The dual
liability provision was introduced in the 1959 Act, and when a representative, agent, or
employee of a juridical person or a natural person that is conducting business operations
has committed a crime, not only the natural person who has committed the crime, but also
the juridical person or natural person that is conducting the business operations is punished.
After undergoing the 1994 revision, a provision on heavy penalties for juridical persons
was established upon the 1998 revision.

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