Mock Trial• Scene 1
2nd Date for Oral Argument
Explanatory Session• Scene 2
3rd Date for Oral Argument
Rendering of Judgment

1Scene 1
2nd Date for
Oral Argument
September 17, 2023

Explanatory Session
Scene 1: 2nd Date for Oral Argument | Explanatory Session2

Procedures to be
Conducted on this Date
Statement on the Outcomeof Preparatory Procedures

Court procedure to officiallyconfirm the outcome of thepoints at issue and evidence.

Explanatory Session

Final presentation of briefs
and oral arguments of bothparties.

Participation ofTechnical AdvisorsExplanation of specialized
technical matters relating tothe dispute.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Dispute in this Case
Point at Issue (International Exhaustion)
Collie Corporation, which has obtained a license for the Corresponding
Patent Right from Pony Corporation, has exercised the Corresponding
Patent Right by producing and selling the Plaintiff’s Roll Paper withinCountry B. Donkey Corporation is importing the Defendant’s products,
which are produced using the core tubes of the Plaintiff’s Roll Paper,from Country B to Country A, and selling them within Country A.
The issue at hand pertains to whether the exercise of the Patent Right
which was granted in Country A is not entitled due to exhaustion, basedon these circumstances.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Plaintiff’s Arguments (1)Plaintiff’s Arguments (Summary)
1. International exhaustion
International exhaustion is not applicable.
2. Modification / component replacement, etc.
The action of the Defendant is regarded as the novel
production of the patented products, and theexhaustion should be denied.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Plaintiff’s Arguments (2)1. International exhaustion
International exhaustion is not applicable.
In this case, the Patent Right held by the Plaintiff in Country A
and the Corresponding Patent Right in Country B are separaterights.
↓In Country A, if the Plaintiff has exercised the Patent Right for
products related to the Corresponding Patent Right, it cannot be
regarded as profiting twice.
↓The basis (justification) for exhaustion is lacking.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Plaintiff’s Arguments (3)2. Modification / component replacement, etc.
Legal Argument
The limitation on the exercise of a patent right through exhaustion
applies exclusively to the original patented product itself that has been
assigned by a patent holder or its equivalent outside of the country
where the patent was granted.
When modification or replacement of a component was made to apatented product which was assigned outside of the country by a patent
holder or its equivalent, resulting in newly producing a patented productwhich is not identical to the original patented product, the patent holder
is entitled to exercise the patent right for the newly produced patented
product.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Plaintiff’s Arguments (4)2. Modification / component replacement, etc.
Application
The Plaintiff’s Roll Paper is exclusively used for packaging articles.
The packaging sheet portion of the Plaintiff’s Roll Paper is a major part of the
product and also holds the concentrated economic value.
→After the packaging sheet has been used up, the utility of the Plaintiff’sRoll Paper as a product is completely lost. Therefore, it should not be evaluatedthat winding the packaging sheet is replacement of a consumable component.
The core tube part of the Plaintiff’s Roll Paper is designed to be used up entirely
once attached to the Plaintiff’s Device and does not have the structure andstrength suitable for removal. When recycling and reusing the core tube, it isdifficult to ensure the quality of the roll paper.
↓When the packaging sheet of the Plaintiff’s Roll Paper is consumed, its utility asa product is lost.
Winding a new packaging sheet onto the core tube of the Plaintiff’s Roll Paper
results in its loss of identity as a product and newly produces a patented
product that is not identical to the Plaintiff’s Roll Paper.
Scene 1: 2nd Date for Oral Argument | Explanatory Session

8Defendant’s Arguments (1)Defendant’s Arguments (Summary)
1. International exhaustion
International exhaustion is applicable.
2. Modification / component replacement, etc.
The actions of the Defendant do not newly produce a patented
product, and exhaustion should be applicable.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

9Defendant’s Arguments (2)1. International exhaustion
Legal Argument
In a case where a patent holder or its equivalent has assigned
patented products outside of the country where the patent wasgranted, the patent holder shall not be entitled to exercise the patentright over the assigned patented product, unless:(1) The patent holder or its equivalent have agreed with theassignee to exclude the country where the patent was granted
from the areas of sale or use of the patented product.
(2) In case of exercising the patent right against a third party whohas acquired the patented product from the assignee andagainst another third party who has acquired the patented
product subsequently, the agreement (1) has been made and it
has been explicitly indicated on the patented product.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

10Defendant’s Arguments (3)1. International exhaustion
Application
This case involves the previously mentioned issue (2). A third party
who has acquired patented products from the assignee and its
subsequent assignees.
↓There was no indication on the Plaintiff’s Roll Paper (patentedproduct) that Country A was excluded from the areas of sale or useof the patented product.
↓Therefore, the exercise of the Patent Rights in Country A for the said
product is not entitled.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

11Defendant’s Arguments (4)2. Modification / component replacement, etc.
Application
The core tube of the Plaintiff’s Roll Paper is reused without any changes, andthe packaging sheet of the Plaintiff’s Roll Paper is consumed.
→ No modification or component replacement was made with regard to either
item.
The distinctive technical aspect of the Invention lies in the core tube.
→ The core tube of the Plaintiff’s Roll Paper is made of hard plastic and does
not suffer damage or deterioration within the timeframe required to consume theoriginal packaging sheet.
→ Regarding the reuse of the core tube, it cannot be claimed that the patented
product is being reused after its ordinary life as a product has elapsed.
The packaging sheet is a generic product. Winding a packaging sheet onto thecore tube of the Plaintiff’s Roll Paper constitutes no more than the replacementof a consumable part under normal use.
The Defendant’s actions have not altered any component that constitutes theessential part of the Invention. Therefore, they do not diminish the identity of thepatented product, nor do they amount to novel production of a patented product.
Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Q&A
Question 1: Magnets
It appears that highly cost-effective ferrite magnets
are used. What is the reason for using suchmagnets?

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Q&A
Question 2: Precision
Differences in precision between the Defendant’s
Product and the Plaintiff’s Roll Paper.

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Q&A
Question 3: Collection of the Plaintiff’s
core tube

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Q&A
Question 4: Reuse

Scene 1: 2nd Date for Oral Argument | Explanatory Session

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Procedure after theExplanatory Session
Recommendation ofSettlement

Settlement Date(Web Conference)

Termination of procedure for
Settlement
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Scene 2
3rd Date for
Oral Argument
October 17, 2023

Rendering of Judgment
Scene 2: 3rd Date of Oral Argument | Rendition of Judgment

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Rendering of Judgment
Main Text
1. The Defendant must neither import nor sell the products
described in the Exhibit.
2. The Court costs shall be borne by the Defendant.

Scene 2: 3rd Date of Oral Argument | Rendition of Judgment

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Reason(Domestic Exhaustion)
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 ofthe patent right does not extend to acts such as assignment of
those products.
Reasons(1) To protect the free circulation of goods in the market.
(2) No necessity to allow the patent holder to profit again fromthe patented products since the opportunity for securing
compensation has been granted.

Scene 2: 3rd Date of Oral Argument | Rendition of Judgment

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Reason(Factors Considered in International Exhaustion)
When a patent holder or its equivalent has assigned patented
products outside of Country A, the patent rights in Country A andthe corresponding patent rights in the other country are separaterights. Therefore, it is not possible to argue the international casein the same way with the domestic case where a patent holder orits equivalent assigned the patented products domestically.
Also in light of the state of international commercial transactions
in modern society, when a patent holder or its equivalentassigned patented products outside of Country A, it is reasonably
expected that the assignee or its subsequent acquirer will import
the patented products into Country A as business, and it isnecessary to protect the free circulation of such products.
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Reason(Framework of Judgment)
When a patent holder or its equivalent assigned patented
products outside of Country A, the patent holder, unless there isan agreement with the assignee excluding Country A from theareas of sale or use of the said products, may not seek an
injunction in Country A concerning the patented product on thebasis of the patent right against the person who acquired theproduct from the assignee, except in cases where the above
agreement has been made and it is explicitly indicated on theproduct.
In this case, the Plaintiff’s Roll Paper does not carry a clearindication that Country A is excluded from the areas of sale oruse.
Therefore, according to the aforementioned framework, theexercise of the Patent Right is not entitled for this reason.
Scene 2: 3rd Date of Oral Argument | Rendition of Judgment

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Reason(Produced patented product lacking its identity due tomodification or component replacement, etc.)
The objects on which the exercise of a patent right is restricted shouldbe the patented products themselves that the patent holder or its
equivalent had assigned. Therefore, if the patented product, assignedby the patent holder or its equivalent in other country, has been
modified or components have been replaced, and as a result, it can beregarded 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.
The determination of whether the modification or replacement can beregarded as a novel production of the patented product or not should bedetermined by taking into consideration the characteristics of thepatented product, the content of the patented invention, the manner ofmodification, and the replacement of components as well as thecircumstances involving the transaction in a comprehensive way.
Scene 2: 3rd Date of Oral Argument | Rendition of Judgment

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Reason(Whether a newly produced patented product lacks identity.)
The Plaintiff’s Roll Paper is designed to be attached to thePlaintiff’s Device, where magnets within the core tube, aroundwhich 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 the packaging sheet is not properly wound around the coretube, the utility of the Plaintiff’s Roll Paper might not be fully
realized, and thus it is expected to be used once and thenreplaced with a new one. Accordingly, the core tube is notdesigned to have enough strength for repeated use and themagnets disposed therein are cost-effective ferrite magnets.

Scene 2: 3rd Date of Oral Argument | Rendition of Judgment24

Reason(Whether a newly produced patented product lacks identity.)
The Plaintiff’s Roll Paper does not expect users to remove thecore tube and wind it with a new packaging sheet by themselves.
Instead, users typically return the used core tube to the Plaintiff
for recycling and purchase a new one.
The Plaintiff’s Roll Paper is exclusively intended for packaging
items. Once the packaging sheet is completely consumed, itscore tube and the magnets therein, although not likely to
immediately wear out or break upon single use, can no longer
play the technical role of the Invention. Moreover, consideringthat neither the core tube nor the magnets per se possessversatility, it is unlikely that users would find any utility in them.
→ The economic value of the Plaintiff’s Roll Paper is primarily
attributed to the packaging sheet portion.
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Reason(Whether a newly produced patented product lacks identity.)
The Plaintiff’s Roll Paper loses its utility as a patented product once thepackaging sheet is fully consumed. On the other hand, the Defendant’sProduct, by using the recycled core tube of the Plaintiff’s Roll Paper,
restores the state in which the core tube and the position of the magnets
within it are used to adjust the braking force of the packaging device basedon the roll paper’s outer diameter, ensuring the appropriate tension for
pulling out the packaging sheet. This can be regarded as restoration of thematerial value of the Invention.
Consequently it should be concluded that the Defendant’s Product isregarded as a newly produced patented product which is not identical to thePlaintiff’s Roll Paper.
→ Therefore, the exercise of the Patent Right over the Defendant’s
Products is not restricted.
Scene 2: 3rd Date of Oral Argument | Rendition of Judgment

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Thank you for your attention.

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