Instructions for Proceedings of the Stage for Examination on Damages
Please note the following instructions regarding the proceedings of the stage for
examination on damages (the occurrence and the amount of damages) inintellectual property litigation.
1. The Flow of Examination on Infringement and Examination on Damages
First, the court focuses on the examination of whether or not infringement has
occurred (the stage for examination on infringement). If the court finds in favorof the Plaintiff (patentee), proceedings of the stage for the examination ondamages will be commenced.
2. Preparation by the Plaintiff
In order to respond appropriately, the plaintiff shall prepare for the examination
on damages by collecting necessary documents in advance, even during theexamination on infringement. When the court commences the examination on
damages, the plaintiff shall immediately amend the original allegation on
damages stated in the complaint as needed, and submit evidence supporting
the amended allegation. In particular, it is required to submit documents proving
the amount of profit per unit from sales of the plaintiff’s products when asserting
the amount of damages based on Article 102 (1) of the Patent Act.
3. Preparation by the Defendant
The defendant shall prepare for the examination on damages by preserving andorganizing documents which are useful for calculating the amount of damage(account books, etc.), in order to respond promptly to the proceedings. Whenthe court commences the examination on damages, the defendant shallpromptly respond to the plaintiff’s allegation and submit a counter-argument
regarding the amount of the damages.
4. Evidence for the Amount of Damages
When the defendant alleges the number of the accused products that havebeen transferred and/or the sales price of those products, it is necessary tosupport the claim by submitting evidence such as the balance sheet, profit andloss statement, sales records and purchase records prepared on a month-bymonth or customer-by-customer basis for the fiscal year(s). In addition, thedefendant may be required by the court to submit purchase orders, delivery
slips, sales slips, etc. regarding individual transactions.

5. Focused Examination on Damages
The court will announce when it commences the examination on damages, andwill focus on the examination on damages thereafter. It is not permitted at thisstage to rehash prior allegations or submitting new allegations and evidence
regarding infringement.
6. Order to Submit Documents
If the defendant does not submit documents necessary for determining thedamage amount on a voluntary basis, the court may issue an order to submit
such documents to the extent deemed necessary at the motion of the plaintiff(Article 105 of the Patent Act, etc.).
In order to smoothly proceed with the examination on damages, it is desirable
that both parties negotiate the scope of documents to be submitted anddisclose original copies to the other party on a voluntary basis, weighing thenecessity of the documents and the protection of the defendant’s trade secrets.
7. Utilization of Expert Opinion in Calculation of the Amount of Damages
Article 105-2 of the Patent Act establishes the expert opinion system forcalculation of the amount of damages. The IP Division maintains a list ofprospective experts that consists of certified public accountants. Pleaseconsider utilizing these experts.