Summary of the Judgment
I.

Main text of the judgment (decision)
1. The Defendant must neither import nor sell the products described in the Exhibit.
2. The Court costs shall be borne by the Defendant.

5II.

Outline of the case
1. In the present case, the Plaintiff (Pony Corp.), which holds the present patent right for
an invention titled “Roll Paper” in Country A (hereinafter “the Patent (Right)”), allegesthat the Defendant (Donkey Corp.) infringes the Patent Right by importing the products
described in the Exhibit (hereinafter “the Defendant's Product(s)”) from Country B and10

selling them in Country A, and seeks an injunction against the Defendant's importationand sale of the Defendant's Products based on Article 100, paragraph (1) of the PatentAct.
2. Scope of Claims
Claim 1 of the claims of the Patent is as follows (the invention related to Claim 1 is15

hereinafter referred to as “the Invention”):
A. A roll paper used for an article packaging device,
B. wherein the article packaging device,
comprising:20

B1

a rotatable roll holder to which the roll paper is detachably attached;

B2

a feed roller drawing out a heat-sealable packaging sheet from the rollpaper;

B3

a rotation angle sensor detecting a rotation angle of the roll paper;

B4

a sheet length sensor measuring sheet feed length drawn out from the roll
paper; and25

B5

a brake applying a braking force to the roll holder,

B6 is configured to adjust the braking force applying to the roll holder based on theouter diameter of the roll paper calculated from the detected signals of the rotation
angle sensor and the sheet length sensor, andC

wherein the roll paper,comprising:

5C1

a core tube, having magnets, attachable to the roll holder;

C2

the packaging sheet wound around the core tube; andC3 the magnets are disposed at respective positions detectable by the rotation angle
sensor when the core tube is attached to the roll holder.
3. The Defendant's ProductTurtle Corp., which is a wholly owned subsidiary of the Defendant, manufactures the10

Defendant's Product in Country B by winding a packaging sheet on the used core tubeof the Plaintiff's Roll Paper after its original packaging sheet has been consumed. CollieCorp., which is a wholly owned subsidiary of the Plaintiff, has manufactured and soldthe Plaintiff's Roll Papers in Country B under the license from the Plaintiff, which holds
a corresponding patent right for the Invention in Country B.

15

There is no dispute between the parties that the Defendant's Product is within thescope of Claim 1.
4. Issue
The issue in the present case is whether or not the Patent Right is exhausted and thePlaintiff is not entitled to exercise the Patent Right over the importation and sale of the20

Defendant's Product.
III.

Opinions

1.

Exhaustion(1) Domestic Exhaustion25

In cases where a patent holder or a licensee has assigned patented products in Country
A, the patent right on the products has achieved its goal and has been exhausted, andthe effect of the patent right does not extend to acts such as assignment of those products.
This is because, while it is highly necessary to protect the free circulation of goods inthe market, there is no necessity to allow the patent holder to profit again from thepatented products since the opportunity for securing compensation has been granted.
(2)5International ExhaustionHowever, this does not apply in the same way in cases where a patent holder or its

equivalent has assigned patented products outside of Country A, because a patentright in Country A and the corresponding patent right in the other country are separate
rights. Alternatively, in light of the state of international commercial transactions inmodern society, when a patent holder or its equivalent has assigned patented products

10

outside of Country A, it is reasonably expected that the assignee or its subsequentacquirer will import the patented products into Country A as business, and it isnecessary to protect the free circulation of such products. Therefore, when a patent
holder or its equivalent has assigned patented products outside of Country A, thepatent holder, unless there is an agreement with the assignee excluding Country A

15

from the areas of sale or use of the said products, may not seek an injunction inCountry A concerning the patented product on the basis of the patent right against theperson who acquired the product from the assignee, except in cases where the above
agreement has been made and it is explicitly indicated on the product. In the present
case, the Plaintiff's Roll Paper does not carry a clear indication that Country A is

20

excluded from the areas of sale or use, so the exercise of the Patent Right is notentitled for this reason.
2.

Modification or Replacement of Components(1)25

However, the objects on which the exercise of a patent right is restricted shouldbe the patented products themselves that the patent holder or its equivalent hadassigned. Therefore, if the patented product, assigned by the patent holder or its

equivalent in other country, has been modified or components have been replaced,
and as a result, it can be regarded as a novel production of the patented product which
is not identical to the original patented product, the patent holder is entitled toexercise the patent right over the newly produced patented product. Whether the5modification or replacement can be regarded as a novel production of the patented
product or not should be determined by taking into consideration the characteristicsof the patented product, the content of the patented invention, the manner ofmodification, and the replacement of components as well as the circumstances
involving the transaction in a comprehensive way.

10(2)In the present case, the Plaintiff's Roll Paper is designed to be attached to thePlaintiff's Device, where magnets within the core tube, around which the packaging
sheet is wound, are detected by the rotation angle sensor of the Plaintiff's Device.
This enables the packaging sheet to be pulled out with the appropriate tension. If thepackaging sheet is not properly wound around the core tube, the utility of the15

Plaintiff's Roll Paper might not be fully realized, and thus it is expected to be used
once and then replaced with a new one. Accordingly, the core tube is made of plastic
and is not designed to have enough strength for repeated use. The magnets disposed
therein are cost-effective ferrite magnets. Consequently, it is not expected that users
will remove the core tube of the Plaintiff's Roll Paper and wind it with a new20

packaging sheet by themselves. Instead, users typically return the used core tube tothe Plaintiff for recycling and purchase a new one.
Furthermore, because the Plaintiff's Roll Paper is exclusively intended forpackaging items, once the packaging sheet is completely consumed, its core tube andthe magnets therein, although not likely to immediately wear out or break upon single

25

use, can no longer play the technical role of the Invention, which involves adjusting
the braking force of the packaging device based on the roll paper's outer diameter andits detected rotation angle. Moreover, considering that neither the core tube nor themagnets per se possess versatility, it is unlikely that users would find any utility inthem. Therefore, the economic value of the Plaintiff's Roll Paper is primarily
attributed to the packaging sheet portion.
Taking all these factors into comprehensive consideration, it can be concluded that5

the Plaintiff's Roll Paper loses its utility as a patented product once the packaging
sheet is fully consumed. On the other hand, the Defendant's Product, by using therecycled core tube of the Plaintiff's Roll Paper, restores the state in which the coretube and the position of the magnets within it are used to adjust the braking force ofthe packaging device based on the roll paper's outer diameter, ensuring the10

appropriate tension for pulling out the packaging sheet. This can be regarded as
restoration of the material value of the Invention; thus it should be concluded that theDefendant's Product is regarded as a newly produced patented product which is not
identical to the Plaintiff's Roll Paper.
(3)

15

Therefore, the exercise of the Patent Right over the Defendant's Products is not

restricted, and the Plaintiff, as the patent holder of the Patent Right, is entitled todemand an injunction against the importation and sale of the Defendant's Products.
3Conclusion
For the abovementioned reasons, the claim by the Plaintiff has grounds and shall be20granted. Therefore, the court rules as in the main text of the judgment.