Patent laws in Asian jurisdictions are constantly catching up with pandemic claims, with increased protection, overseas filing and higher compensation being common themes. However, the gaps persist and companies need to identify national barriers to stay ahead.
UIn the face of the economic challenges created by the pandemic, a clear understanding of the values and risks of patents, and their effective use, is more important to protect businesses and profits. The patent situation in Japan has changed rapidly in recent years, and this can have a significant impact on business.
Japanese patent rights have become considerably more powerful in recent years, with obtaining patents and filing patent infringement lawsuits becoming a more attractive option. At the same time, the risks of patent infringement are significantly higher and careful assessment is very important in doing business. This article explains this situation with objective data, which indicates this “pro-patent” trend.
Japan has recently granted much stronger protection to patent rights. For example, the country amended the presumption of damages clauses of the Japanese patent law to make it easier for the patent owner to prove more serious damages, as mentioned in Article 102 of the law. In addition, Article 105-2 provides for a newly introduced inspection system to make it easier for the patent holder to collect evidence under the control of an accused infringer. As a patent attorney, the author believes that judges are friendlier towards the patentee than ever before.
Success rate of patent holders
The earning rate of patent holders has increased rapidly in recent years. Since 2014, the High Court of Intellectual Property has published annually statistics on patent infringement lawsuits.
Extension of the offense
The charts below are based on the differences between two sets of statistics. Chart 1 shows the ratio of judgments or settlements rendered by Tokyo and Osaka district courts from 2014 to 2017, and chart 2 shows the ratio from 2018 to 2020. They clearly show the winning rate of incumbents of patents has increased considerably recently.
The percentage of confirmation of judgments was 16% from 2014 to 2017, but it increased considerably to 30% from 2018 to 2020. In addition, the rate of non-suit was 45% from 2014 to 2017, but it is fell to 39% from 2018 to 2020. Notably, many regulations are favorable to plaintiffs, so the substantial winning rate for patent holders is well over 30%.
This clearly shows the recent pro-patent trend of Japanese judges. Today, it is much easier for a patent holder to win an infringement lawsuit than it used to be, and it is very difficult for an accused infringer to successfully defend himself.
Increase in compensation
The amount of monetary compensation has increased in recent years. Chart 3 shows the ratio of each pecuniary compensation amount awarded under judgments or settlements issued by Tokyo and Osaka district courts from 2014 to 2017, and chart 4 shows the ratio from 2018 to 2020.
Significantly, JPY 100 million ($ 887,900) or more was only awarded in 16% of cases from 2014 to 2017, but this figure rose to 30% from 2018 to 2020. Additionally, JPY 10 million or more more were granted in 53% of cases from 2014 to 2017, but this percentage rose to 65%. The ratio of payments under JPY 10 million increased from 47% to 35%.
These data clearly show that the amounts of monetary compensation awarded in judgments and settlements have increased recently.
The decisions of the High Court of Intellectual Property grand panel in 2019 and 2020 showed its intention to increase the amounts of damages, and Japan amended its patent law to increase the amounts of alleged damages. The above data shows that the amounts of monetary compensation awarded in judgments and settlements have increased.
Influence of the pro-patent trend
The data shows that Japanese patent rights are much stronger now. This change has been rapid and significant, and the value and risks of Japanese patents are different from those of a few years ago. But the change is not yet well recognized.
Japan is now an attractive option for a company that chooses a jurisdiction to bring a patent infringement action. The Japanese court system has special divisions that deal only with intellectual property cases, and judges are specialized and competent in patent litigation. In addition, they have tended to rule recently for patent holders in related cases, as the data shows. Patent infringement lawsuits in Japan are a reasonable choice for companies that actively use their patents for profit.
At the same time, the risks of patent infringement are now greater. Unlike the United States, Japanese courts grant injunctions without additional requirements for patent infringement, which can have a critical impact on business operations in certain circumstances. In addition, the damage amounts tend to be greater. Accordingly, careful risk assessment, such as free-to-exploit research and patent invalidity assessment, is very important when doing business in Japan. In certain circumstances, a reassessment of the risks of patent infringement is recommended, given the recent trend in favor of patents.
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