16 Panel Data Analysis of Patent Infringement Suits:
Quantitative Analysis of Changes in the Finding of Infringement,
Following the Enforcement of the Act for Establishment of theIntellectual Property High Court（*）
Research Fellow: Takahiro Yuzuki
The patent system operates across almost the entire world, under the respective national law of eachcountry (e.g. in Japan, the Patent Act) and under an international treaty, the Paris Convention for theProtection of Industrial Property. Article 4bis of the Paris Convention sets forth the rule of independence ofpatents in different countries. This rule should be taken into consideration when conducting analysis
because it brings about difference in terms of the conditions for patent lawsuits from country to country,
and in particular, disclosure on the data of litigation costs between Japan and the United States. Lanjouw
and Lerner (2001) and Lanjouw and Schankerman (2001, 2004) are the preceding empirical studies,
focusing on the incentive for filing patent lawsuits in the United States. In these preceding studies, thevariable for costs is set as a factor that is known to the parties to the suit beforehand. This is consistent
with the litigation procedure in the United States, but it cannot be applied to analysis of the situation in
Japan without adjustment. The present study takes note of the fact that the revision to the Patent Act in2004 has drastically changed the form of proceedings in patent infringement suits. It attempts to makequantitative analysis, focusing particularly on the decision-making behavior of judges when rendering final
judgments on patent infringement suits.

Ⅰ Introduction
The patent system in Japan is designed forthe dissemination of research and development
and results thereof and for the promotion of
innovation. This is reflected in Article 1 of the
Patent Act which clearly stipulates, "The purposeof this Act is, through promoting the protection
and the utilization of inventions, to encourage
inventions, and thereby to contribute to thedevelopment of industry." Viewed from a global
perspective, the patent system operates acrossalmost the entire world, under the respective
national law of each country and under aninternational treaty, the Paris Convention for theProtection of Industrial Property. Article 4bis of
the Paris Convention sets forth the rule ofindependence of patents in different countries. In
the context of the present study, this rule hassignificance in that the extent affected by adispute that arises in relation to a patent applied
for and granted in each country is limited withinthat country, and that in economic analysis on
disputes relating to patent registrations,(*)

consideration should be given to the fact thatconditions for patent lawsuits differ from country
to country. In connection with the latter point, forthe purpose of making comparative analysis on
litigation costs between Japan and the UnitedStates, it is necessary to set a cost condition forJapan as similar to that seen in the United States
where, unlike in Japan, the data of the total
litigation costs is disclosed. In the present study,a cost condition is set based on the objective
calculation standards. From a legislative
perspective, the present study focuses on thefollowing legal reforms: the revision to the Patent
Act in 1986 (Sakakibara and Branstetter, 2001),
the revision to the Patent Act in 2004, and theenactment of the Act for Establishment of theIntellectual Property High Court.
Lanjouw and Lerner (2001) and Lanjouw and
Schankerman (2001, 2004) are the notablepreceding studies addressing the incentive
structure for inducing patentees to file suits
under the US patent system. Scotchmer (2003,
ch7, pp203-204) presents an outstanding survey
on the empirical analysis of cross-section data inThis is an English translation of the summary of the report published under the Industrial Property Research
Promotion Project FY2010 entrusted by the Japan Patent Office. IIP is entirely responsible for any errors in
expression or description of the translation. When any ambiguity is found in the English translation, the original
Japanese text shall be prevailing.
●

IIP Bulletin 2011 Vol.20

1 ●connection with the series of studies conductedby those predecessors. Bessen and Meurer(2005) make empirical analysis concerning patent
infringement suits and litigation costs. The major
findings obtained in these preceding studies are
as follows.
1. Looking at the probability of being involved
in infringement suits, patents held by smaller
patentees are more likely to be involved thanthose held by larger patentees. Smaller
patentees have to bear a relatively large
burden of litigation costs as compared tolarger patentees.
2. As for patents involved in infringement suits,the "number of patent claims" and the"number of forward citations" are larger andthe "number of backward citations" is smaller
than the average.
3. By business field, patent infringement suits
increased in pharmaceuticals, biotechnology,
computers, and other electronics. In thesefields, the rate of litigation has always beenhigh and the ratio of the number of patents
involved in infringement suits to the total
number of patents granted has increased.
4. The difference in litigation costs between
business fields mainly arises from thedifference in the rate of litigation. No
significant difference is found in terms of thesettlement rate or the outcome of litigation.
From the viewpoint of industrial organization,patent infringement suits reflect an aspect ofdisputes over market competition. It is often thecase that companies facing competition in
research and product markets, venture capitals,
and individuals engaged in research anddevelopment infringe one another's patent rights,
and they sometimes bring their disputes to court.
Following the procedure under the US Patent Act,for example, they have to make a choice, upon
applying for a preliminary injunction, to venture
to file a plenary suit, spending a huge amount ofmoney, or to reach a settlement with the otherparty while preparing for filing a suit. Empiricalanalysis on their decision-making behavior whenfacing legal disputes — which is affected by thecharacteristics of intellectual property rights asassets, characteristics of holders of such rights,
and industrial structures — gives good implications
as to the mutual strategic relationships between
companies.
In the early stage of the present study, a data
set was compiled as a tool for making a broad
statistical analysis on patent infringement suits inJapan. The data sets compiled by the United●States Patent and Trademark Office (USPTO)
enable us to easily extract a bulk amount of data
related to disputes and lawsuits required for
empirical analysis. In particular, abundant data isavailable with regard to patent disputes in the
United States, because Section 290 of the US
Patent Act requires that the court give notice tothe USTPO, without condition, when a warning isissued or a preliminary injunction is applied foragainst patent infringement. On the other hand,
Japanese courts do not have such a database on
patent disputes that stores sufficient data formaking empirical analysis. To overcome thisobstacle, the present study uses a combination of
the IIP Patent Database, developed by Goto andMotohashi (2007), and the data set of final
judgments in patent infringement cases, madepublic by Japanese courts.
Under the existing laws and operation
thereof, there is a limit to the data on litigation in
Japan available for research purposes. The micro
data on patent infringement cases currently
accessible through Japanese courts is limited todata as of the time when civil suits processed
under the Patent Act come to an end with final
judgments. Meanwhile, in the United States, caserecords on all patent lawsuits are provided fromfederal and state courts to the USPTO pursuant
to Section 290 of the US Patent Act. Among suchdata, Lanjouw and Lerner (2001) and Lanjouw and
Schankerman (2001, 2004) extract data on
applications for preliminary injunctions, used as
warnings against infringements. As Japan does
not have a similar law or procedure, such data has
not been compiled into a uniform data set. This
makes it impossible for us to estimate theprobability of litigation as it has been done in thepreceding studies in the United States. The
present study takes a different approach,supposing a patent dispute as a kind of game, andfocusing on the final phase of the game, that is, afinal court judgment rendered in a patent lawsuit,and on the causes of the patentee's victory or
defeat. In this respect, it applies the distributionfunction, presented by Hylton (2006), withrespect to the process leading up to litigation in
the case where the plaintiff and the defendant areunder informational asymmetry and havedifferent preferences and variances to the winningof the case.
In the process of comparison with Lanjouw
and Schankerman (2001, 2004), an empirical
study on warnings (preliminary injunctions)against patent infringements in the United States,
the present study adopts the data of final and2 ●IIP Bulletin 2011 Vol.20

binding judgments on patent infringement suits,
which is available in Japan, due to the differencein patent statistics between the two countries.
During the observation period, from 1988 to 2010,
the Patent Act of Japan went through two majorrevisions. The present study divides the dataset
into the portions before and after the introductionof the Intellectual Property High Court, with theobjective of finding any impact of the 2004
revision from the data.

Ⅱ Outline of Patent Infringement
Suit
In principle, the procedural flow of a patent
infringement suit in Japan is governed by the
Code of Civil Procedure. The parties who
participate in an infringement suit are (i) thepatentee and (ii) the alleged infringer. As an
independent third player, (iii) judges also takepart.
At time point 0, the patentee becomes awarethat his/her patent has been infringed. Against thealleged infringer, the patentee first takes
measures that he/she can take before filing aplenary suit, such as issuing a warning letter orapplying for a provisional disposition. At this point,
the alleged infringer makes a choice to accept orrefuse a settlement offer. If the alleged infringer
chooses settlement, the case is over. If he/she
refuses, the patentee brings the case to court.
At time point 1, the patentee files a suit witha district court, paying a fee for petition in civil
litigation. The judges of the district court make achoice to recommend settlement or render ajudgment. If both the patentee and the alleged
infringer choose settlement and accept the termsof settlement, the case is over. If the judges
choose to render a judgment, the patentee andthe alleged infringer respectively makes a choice
to accept the judgment or appeal to a high court.
At time point 2, either the patentee or the
alleged infringer, who has chosen to appeal, files
an appeal, paying a fee for petition in civil
litigation. The judges of the high court make achoice to recommend settlement or render ajudgment. If both the patentee and the alleged
infringer choose settlement and accept the termsof settlement, the case is over. If the judges
choose to render a judgment, the patentee andthe alleged infringer respectively make a choice
to accept the judgment or appeal to the Supreme
Court.
At time point 3, either the patentee or the
alleged infringer, who has chosen to appeal, files a●

IIP Bulletin 2011 Vol.20

final appeal, paying a fee for petition in civil
litigation. The judges of the Supreme Court makea choice to recommend settlement or render ajudgment. Whichever the judges choose, the caseis over.
The present study excludes proceedings ofcases remanded by high courts or the Supreme
Court, and only assumes a one-way procedural
flow moving from lower courts to higher courts.

Ⅲ Economic Model
Infringement Suitsof

PatentCondition 1: If the participants choose
settlement, the judgment in prior instance isdeemed to have become final and binding.
Condition 2: Judges of all courts have thesame function regarding the finding of
infringement, with an observable factor X, andprivate information possessed by each judge ε,which cannot be observed from outside.
Under these two conditions, and using themodel presented by Hylton (2006), an attempt ismade to build an estimation model on a patent
infringement suit, in which the plaintiff and thedefendant often have asymmetric information. In
a patent infringement suit, in general, theinformation held by the plaintiff, who is thepatentee, and that held by the defendant, who isthe alleged infringer, are asymmetric. The
present study assumes such informational
asymmetry, and the difference between theparties in terms of their preference and variancein relation to the winning of the case.
Following Hylton (2006), a model of litigationis set as follows.
Ωp ,Ωd are random variables indicating
whether the plaintiff (p) or the defendant (d),respectively, prefers to file a suit to obtain a final
judgment. They have two choices, file a suit orreach a settlement.
Prp ,Prd are factors that can be observed byboth the plaintiff and the defendants, whereas
εp ，εd denote their private information thatcannot be observed by the other party. J refers to
the monetary value determined by a judgment,
and Cost refers to the total litigation costs
incurred by the plaintiff and the defendant,
respectively (the fee for petition, mentioned later,
is an amount calculated based on publicly
available information). The conditions underwhich the plaintiff or the defendant prefers
litigation to settlement are as follows.
3 ●( Pr − Pr ) J > Cost

(10)

Prp = E ⎡ Prp Ωp ⎤ + ε p , E ⎡ε p Ωp ⎤ = 0
⎣
⎦
⎣
⎦

(11)

Prd = E ⎡⎣ Prd Ωd ⎤⎦ + ε d , E ⎡⎣ε d Ωd ⎤⎦ = 0

(12)

p

d

Suppose the plaintiff and the defendant havedifferent preferences and asymmetric information.

⎛
⎞
J
−
v
⎜
⎟
df
C
=ϕ⎜
⎟
2
2
dv
⎜ σ p + σ d − 2ρ ⎟
⎝
⎠

(21)

ψ denotes a probability distribution functionof standard normal distribution. The shape of theprobability distribution function differs between
the plaintiff and the defendant due to the assumed
difference in their preferences and variances.
When they have different variances, they are
more likely to prefer litigation to settlement inpatent disputes (Schankerman and Scotchmer
2001).
Since the distribution function to be
estimated (21) is a normal distribution, amultinomial probit model is selected as an
estimation model (Amemiya 1975).

Ⅳ Estimation and Consideration
1

Data Description

The data applied in the present empiricalanalysis is cited from three data sets: (i) the IIP
Patent Database, developed by Goto andMotohashi (2007); (ii) patent gazettes; and (iii)
final judgments on patent infringement suits,
made public by courts. The observation period isfrom May 22, 1988, to December 31, 2010.
The latter part of this period, which covers
the 2004 revision to the Patent Act, theenactment of the Act for Establishment of theIntellectual Property High Court, and the 2010
revision to the Patent Act, is set as a separate
observation period. It runs from April 21, 2005, toDecember 31, 2010. The data set corresponding
to this recent period includes 277 patent
infringement suits that ended with final
judgments by courts. Among them, 147 suits
were ended with judgments in first instance, 121with judgments in second instance, and 9 with
judgments by the Supreme Court.

●(1) Numbers of forward citations andbackward citations
Patent gazettes contain academic papers,
patents, and other documents cited by the patentoffice in the examination process to determine
the novelty and inventive step of the invention forwhich a patent is sought. Hall et al. (2005) andother empirical studies inquiring into patents andeconomic activities suggest some relevance
between citations and innovation.
There are two indicators of citations.
Backward citation refers to a patent citing earlier
patent gazettes and academic papers. A patentgazette discloses the past patents and academic
papers cited by the patent. The number ofbackward citations of a patent is fixed at the time
when the patent is registered at the patent office.
This is an operable variable because it is thepatent applicant that selects and cites documentsin the patent. Forward citation refers to a patent
being cited in later patent gazettes. The numberof forward citations of a patent is fixed at the time
when the patent expires or when the duration of
the patent is determined by a final and binding
judgment in a patent infringement suit.
In the present study, the number of backward
citations is counted based on patent gazettes, andthe number of forward citations is counted basedon the IIP Patent Database, developed by Gotoand Motohashi (2007).
(2) Patent claims
A patent claim is a statement that describes
the technical scope where a patent is protected.
Since the legal revision in 1988, which introduced
the revised multiple claim system, a number ofpatents have multiple claims. In actual
infringement
suits,
the
court
makes
determination on the relationship between thescope of claim(s) of the patent and the allegedly
infringing product [whether or not the allegedly
infringing product falls within the scope ofclaim(s) of the patent]. Lanjouw (1998) shows theempirical estimates that support the relevance
between the number of patent claims and theeconomic value of the patent, as well as thefinding that the number of patent claims has apositive correlation with the number of forward
citations and a negative correlation with thenumber of backward citations. In the present
study, the data of patent claims is cited frompatent gazettes and the IIP Patent Database.

4 ●IIP Bulletin 2011 Vol.20

(3) International Patent Classification (IPC)
dummy
Following Lanjouw and Schankerman (2004)
and Galasso and Schankerman (2010), the patents
included in the data set are divided into thefollowing four technical fields in accordance with
the International Patent Classification (IPC).
・ Chemicals/biotechnology: A01, A21–A24,
A41–A47, A61K, B01–B09, B31, C01–C05,
C07–C14, C12N15, C21–C30, D01–D07, D21
・ Machinery: A61–A63 (excluding A61K),
B21–B23, B24–B30, B32, B41–B44, B60–B68,
C06, E01–E06, E21, F01–F04, F15–F17,
F21–F28, F41–F42
・ Electronics: G01–G08, G21
・ Information: G09–G12, H01–H05, B81–B82
The relevant data is cited from the IIP Patent
Database.
(4) Patentee dummy
Following Lanjouw and Schankerman (2001,
2004), the patentees included in the data set are
divided into three groups: (i) Japanese companies;(ii) non-Japanese companies; and (iii) individuals.
The relevant data is cited from the IIP Patent
Database.
(5) Number of subclasses
Following Lanjouw and Schankerman (2001,
2004), the subclass or subclasses to which eachpatented technology pertains and the number ofsuch subclasses are designated as indicators of
the technical scope of each patent included in thedata set.
The relevant data is cited from patentgazettes.

the case where the patentee claims only an
injunction against infringement, it is regarded as aclaim made under the liability rule and the fee for
petition is fixed at a certain amount. Although theamount of costs is fixed exceptionally in the caseof claiming only an injunction, the fee for petition
can basically serve as a proxy variable
representing the scale of infringement, because it
reflects the amount of damages estimatedbeforehand by the patentee. Where more than one
patent is involved in one suit, the amount of costs
per patent is calculated by equally dividing theamount of the fee for petition in the suit.
The relevant data is cited from the judgment
documents retrievable from the database of theSupreme Court and from the database of Westlaw
Japan.
(7) Final judgments on patent infringement
suits
Since Japan adopts the three-instance system,
under which the parties have chances to be heard
by a court three times, the final judgment on eachcase cannot be treated as a final and binding one
and included in the database until the plaintiff andthe defendant accept a lower court judgment or
the case is finally judged by the Supreme Court.
For this reason, the data set compiled for thepresent study only uses judgments on
infringement suits that have already become final
and binding by the time of its compilation(6) Litigation costs
In the present analysis, the estimated fee for
petition is used as a proxy variable in place of avariable of litigation costs, which are not madepublic under the Japanese court system. The
computational logic is in accordance with theprovisions of Articles 3 and 4 and Appended Table
1 of the Act on Costs of Civil Procedure (Act No.
40 of April 6, 1971). The data used for estimation
is based on the amounts claimed by the patentees,
stated in the judgment documents on patent
infringement suits. Two conditions are set under
the property rule and liability rule, advocated by
Kaplow and Shavell (1996). In the case where thepatentee claims damages in an infringement suit,
it is regarded as a claim under the property ruleand the fee for petition is calculated pursuant to
Article 4, paragraph (1) of said Act, whereas in●

IIP Bulletin 2011 Vol.20

5 ●Variables

Table 1 Basic statistics—variables (2005-2010)
Standard
Maximum
Averagedeviation
value

Minimumvalue

No. of forward citations

4.10

7.80

72

0

No. of backward citations

4.78

4.99

40

0

No. of patent claims

5.89

6.31

44

1

No. of subclasses

2.58

1.80

12

1

Period of patent pendency (years)

14.65

5.47

28.28

2.21

95,504.60

324,837.20

39955920

2413

Fee for petition (yen)Table 2 Basic statistics—dummy variables (2005-2010)
No. ofPatenteeBusiness field
patents
Chemicals/
biotechnology/
Japanese companies
213
pharmaceuticals
Non-Japanese companies
26
Machinery
Individuals
34
Electrics
Information engineering

No. ofpatents
64
110
40
63

Table 3 Basic statistics—final and binding judgments (2005-2010)
No. ofCourts that rendered the final
In favor ofpatents
Against plaintiff
and binding judgments
plaintiff
concerned
District court
147
40(27.2%)
107(72.8%)
High court
121
31(25.6%)90(74.4%)
Supreme Court
93(33.3%)6(66.6%)

2

Variables and Estimation Formula

Following Lanjouw and Schankerman (2004),
the present study uses six variables: the numberof forward citations, the number of backward
citations, the number of patent claims, thelitigation cost, the period of patent pendency, andthe number of subclasses. Among these variables,
those not used in the preceding studies are thelitigation cost and the period of patent pendency.
As for the litigation cost, because the data of thetotal costs is not disclosed in Japan, the fee for
petition, which is an observable factor, is usedinstead. The period of patent pendency is
introduced for the following reasons. After theestablishment of the Intellectual Property High
Court, the period of patent pendency is now
under control of the Intellectual Property High●

Court, the Tokyo District Court, and the Osaka
District Court, and therefore no significant
difference can be seen beforehand. Anotherreason is that, among the data items used in thedata set, only the duration of patent and theperiod of patent pendency are variables by whichtime can be measured by day, and in this respect,
the period of patent pendency is important in
observing the quantitative impact of time.
Among the six variables set for the present
analysis, the number of backward citations, thenumber of patent claims, the period of patentpendency, and the number of subclasses are
exogenous variables, while the number of forward
citations and the litigation cost are endogenous
variables that are determined as of the time of the
final judgment.

6 ●IIP Bulletin 2011 Vol.20

P (finding of infringement | final judgment)＝ number of forward citations ＋ number offorward citations (dummy with not more than fivecitations)＋ number of backward citations ＋ number ofbackward
citations(dummyinchemicals/biotechnology)＋
numberofbackward citations (dummy in machinery)＋ number of backward citations (dummy inelectrics)＋ number of patent claims ＋ number of patentclaims (dummy with not more than six claims）＋ number of subclasses + number of subclasses(dummy in chemicals/biotechnology) ＋ numberof subclasses (dummy in machinery)＋ number of subclasses (dummy in electrics)＋ fee for petition＋ period of patent pendency＋ constant term ＋ error term
The error term is supposed to follow anormal distribution where the average is 0 andthe variance is σ2.
3

Estimation Results

The estimation results can be roughly
categorized into those relating to the "number offorward citations and number of patent claims,""litigation cost and constant term," "number ofbackward citations and number of subclasses,"and "period of patent pendency."
As for the number of forward citations andthe number of patent claims, the estimates show
threshold levels in relation to certain values.
The estimates are significantly negative forpatents with not more than five forward citations
and patents with not more than six claims,
respectively. This is contrary to the estimatesindicated in Lanjouw and Schankerman (2001,
2004), which discussed prior probability oflitigation. While this preceding study estimatesthat a patent that has more forward citations andmore claims is more economically valuable andmore likely to be involved in suits, the estimatesobtained in the present analysis are opposite insign for these two explanatory variables.
A patent with more forward citations meansthat the patented technology is more easily cited.
In reference to Hall, Jaffe and Ziedonis (2005) andother studies regarding citations, it is presumed
that the technology covered by such a patent isitself less innovative than the technology coveredby a highly technically innovative patent. As forthe number of patent claims, in a patent●

IIP Bulletin 2011 Vol.20

infringement suit, it is often the case that not allpatent claims clearly stated in the patent gazettebut only a specific claim or claims are found to be
infringed. Therefore, patents that exceed thethreshold level in terms of the number of forward
citations and the number of patent claims areindicated as those found to be infringed afterward(as a kind of noise).
The estimation result in terms of the numberof patent claims is consistent with the result
presented in Lanjouw and Schankerman (2001,
2004) with regard to a dummy with not more thansix claims. Technology covered by a patent withfewer citations is more like basic technology, and
it is evaluated as the essential part of theinvention in the meaning used in jurisprudence.
On the other hand, the estimation result is not
significant for a dummy with seven claims or
more. This may be because not all patent claims
are taken up in the process of finding
infringement of a patent. Supposedly, the patentee,
when filing a patent application, attempts toinclude many claims so as to broaden the scope
where infringement is to be found. However, in
infringement suits, the judges seem to closely
examine the content of the technology, regarding
patent claims as being independent from oneother and having different qualities.
As for the litigation cost, no significant result
is obtained, nor is there any significant resultwith regard to the constant term.
In relation to the number of backward
citations and the number of subclasses, theestimates differ by business field.
As for the number of backward citations, theestimates show different signs between thebusiness fields of chemicals/biotechnology,
machinery, and electrics, and the business field of
information. The estimates relating to thebusiness fields in the former group are
significantly negative, which is consistent withthe estimates presented in Lanjouw and
Schankerman (2001). On the other hand, theestimate relating to information is significantly
positive. This is contrary to the preceding study
and needs to be closely examined. A positive
estimate in relation to the number of backward
citations signifies that a patent which cites more
documents in its gazette is more apt to be foundto be infringed. A patent gazette containing a
number of cited documents, irrespective ofwhether they are cited by the applicant
him/herself or by the patent examiner, means thatthe patent by itself limits the scope of inventive
step or novelty of the technology covered by the
7 ●patent. That patents whose technical scope
appears to be narrow are more likely to be foundto be infringed is a characteristic of the field of
information technology. In particular, theestimates shown above suggest that information
is a new technical field as compared to othertechnical fields, and therefore its technical scopeis ambiguous and broad in general.
As for the number of subclasses, signs of theestimates are different between the group ofchemicals/biotechnology and information and thegroup of machinery and electrics. The IPC
sub-classification rule is that a new subclass iscreated for a technical matter that can be definedby none of the conventional technicalclassifications, whereas a technical matter that
falls under any of the conventional technical fields
is assigned to the relevant existing subclass. The
estimatesforthefieldsofchemicals/biotechnology and information are
significantly negative in relation to the number ofsubclasses, which suggests that developments inpatented technologies follow as an extension of
the conventional technologies. On the other hand,in the fields of machinery and electrics, where theestimates are significantly positive, technologicalprogress brings along with it the spreading oftechnical fields.
Based on the combination of the two factors,
the business fields can be categorized as follows.
・ Chemicals/biotechnologies: negative for boththe number of backward citations and thenumber of subclasses
・ Machinery and electrics: negative for thenumber of backward citations and positive forthe number of subclasses
・ Information: positive for the number ofbackward citations and negative for thenumber of subclasses
The categorization indicated above is close to
the results of the economic analysis on researchand development. According to the estimates inrelation to the number of backward citations andthe number of subclasses, the business fields canbedividedinto
thecategoryofchemicals/biotechnology where the researchdevelopment follows a horizontal line, thecategory of machinery and electrics where
research results are developed into commercial
products through a combination of multiple
technologies, and the category of information
where new technologies are difficult to define.
In terms of the period of patent pendency, theestimate is significantly negative, with nodifference being detected by business field. As●

factors relating to patent prosecution (e.g.
whether or not the patent has gone through any
amendment or correction to the patent document
or invalidation trial, the date of commencement of
examination) are not included in variables, theestimation result does not clearly show the
relationship between the possibility of finding of
infringement and the patent prosecution process.
However, it can at least be said that the estimate
for the period of patent pendency being highly
significantly negative implies that a patent thathas gone through the patent prosecution process
more smoothly is more likely to be found to be
infringed. This leads to the determination that apatent whose technical scope is clearer is more
likely to win in litigation

8 ●IIP Bulletin 2011 Vol.20

Table 4 Estimation Results (2005-2010)
McFadden's coefficient of determination = 0.1245, log likelihood = -141.91121,
number of observations = 278
Standard
Standard
Explanatory variables Estimate
Prob Explanatory variables EstimateProbdeviation
deviation
No. of forward
citations▲0.00420.0098

No. of forward
citations (dummywith not more than
five citations)▲0.14480.1635

No. of patent claims

0.00510.0163

No. of patent claims(dummy with not▲0.1403more than six claims)*

Period of patentpendency▲0.1156

0.0386***

No. of subclasses▲0.2884

0.1110***No. of subclasses(dummy in chemicals/ ▲0.1260
biotechnology)

0.1203***0.0540***No. of subclasses(dummy inmachinery)

0.3606

0.1121******

No. of backward
citations

0.09890.4766***

No. of subclasses(dummy in electrics)

0.41470.1480No. of backward
citations (dummy inchemicals/
biotechnology)▲0.1475

0.4830**Fee for petition▲0.0206

0.0146

No. of backward
citations (dummy inmachinery)▲0.15120.1289*Constant term

0.2476

0. 2839

No. of backward
citations (dummy inelectrics)▲0.1076

0.1597*

Prob: ***: <0.001 significance level, ** <0.05 significance level, *<0.1 significance level.
Truncated at the fourth decimal point

Ⅴ Conclusion
The present study attempts empiricalanalysis on patent infringement suits in Japan,
with the use of a database compiled for thispurpose. Among a limited number of thepreceding empirical studies conducted from the
combined perspective of patent law and economic
science, the study by Lanjouw and Schankerman(2001, 2004), which addressed the probability of
the issue of preliminary injunction against patent
infringement in the United States by applying
discrete choice analysis (DCA), is applied as abenchmark. While this preceding study discussed
the prior probability of filing of patent●

IIP Bulletin 2011 Vol.20

infringement suits, the present analysis targets
final and binding judgments rendered as a resultof patent infringement suits (excluding those on
remanded cases).
Yuzuki (2009), inquiring into the final
judgments on patent infringement suits rendered
before the introduction of the Intellectual
Property High Court, presented estimation
results that were consistent with those of thepreceding studies, whereas the estimations
results in the present study were inconsistent.
More specifically, unlike the estimate by Lanjouw
and Schankerman (2001, 2004), which wassignificant with a dummy variable for the attribute9 ●of the registered patentee, and that by Yuzuki(2009), which was significant with dummy
variables for the attributes of the registeredpatentee and the field of patented technology, thepresent study shows that the estimate issignificant with a dummy variable for the attributeof the field of patented technology. Thus, using
the data after the establishment of theIntellectual Property, the estimate does notdepend on the attribute of the patentee,
suggesting that the subject of discussion in patent
infringement suits is now focused on the patentright itself. The present analysis has provided
various new findings on the relevant explanatory
variables: the consistency with the precedingstudies with regard to the number of backward
citations and the number of subclasses, which
implies a truncation in terms of the number offorward citations and the number of patentclaims; the irrelevance of the finding of
infringement to the size of litigation; a strong
negative correlation between the period of patentpendency and the finding of infringement. Unlike
the estimates shown by Lanjouw and
Schankerman (2001, 2004) and Atkinson, Marcoand Turner (2009), there is no difference in theestimates presented by the present study inrelation to the attribute of the patentee or theattribute of court. A considerable difference
before and after the Act for Establishment of theIntellectual Property High Court is that theestimate for a truncated dummy is significant
after that change.
Meanwhile, there is still room for further
discussion with regard to the inconsistency in theestimation results between the present study andthe preceding studies, as well as prior probability
and posterior probability on outcomes of patent
infringement suits. In particular, as it isunrealistic to estimate prior probability in Japandue to the limited amount of publicly available
information, analysis should be made byconstructing a structural model of the relation
betweeninvalidation
trialsandpatentinfringement suits. The period of litigation may
be used as a variable, as the estimation on thisfactor suggested by Galasso and Schankerman(2010) is also applicable in Japan.
To date, economic analysis on patent rights
has centered on empirical analysis targeting the●results of innovation, and analysis on
infringement suits has not gone beyond thebounds of expansion of a theoretical model
applicable to civil suits. The present study has
successfully shown certain estimation results on
patent infringement suits and identified a slightbut significant difference in estimates dependingon the patent policy.

10 ●IIP Bulletin 2011 Vol.20