October, 2017｜News Letter

1. Whether Individual Has Standing of Demandant in Invalidation Trial

X (Individual) v. Kao Corporation, Case No. 2016 (Gyo-Ke) 10185 (Decision rendered on October 23, 2017)

The Patentee, Kao obtained a patent relating to a shorts type disposable diaper in 2013. Against the Kao’s patent, an individual, X, filed an invalidation trial with the JPO in 2015. The JPO dismissed the X’s demand on the grounds that X did not correspond to an interested party and thus did not have standing of a demandant in the trial at issue in 2016. X filed an appeal against the JPO's decision to the IPHC in 2016.

The main issue in this case related to whether an individual had standing of a demandant in an invalidation trial. The IPHC answered to the issue as follows:

First, having reviewed all the exhibits submitted by both parties and arguments made thereby, the IPHC found that X filed a patent application relating to an outer sheet for a disposable diaper and a disposable diaper including the outer sheet in 2016, and filed a request for examination for the application. Further, during the court proceedings, the IPHC made an examination of the Plaintiff (X) himself, and X stated as follows:
(1) X was a sole proprietor who supported obtaining patents and developed such patented products by himself as well;
(2) the invention of the above patent application filed by X was made by X himself;
(3) <omitted>
(4) <omitted>
(5) X did not have enough capacity to carry out the invention by himself, and thus considered licensing the patent or entrusting the production to other entities;
(6) X had asked the feasibility of the invention to intermediaries of patented inventions and entities handling unwoven fabric through internet;
(7) X had been concerned that the product based on his patented invention might fall within the scope of the Kao’s patent at issue, and the intermediaries and the makers mentioned that they could not accept X’s orders or even consider it unless the above issue (the possibility of the infringement) was cleared; and
(8) X had considered avoiding the infringement by designing around, but X believed that the product where X’s invention was most effectively utilized fell within the scope of the Kao’s patent at issue, and X obtained an opinion from a patent expert that the Kao’s patent should be made invalid, and thus X decided to eliminate the possibility of the infringement, and filed the invalidation trial.

On the basis of the above findings and the X’s statements, the IPHC decided that X had not filed the invalidation trial haphazardly, and X was making various actions toward the commercialization of the X’s patent, and therefore X had sufficient interest for seeking an invalidation of the Kao’s patent at issue.

In this connection, during the court proceedings, referring to the original JPO’s decision stating that it was necessary (i) that an entity having manufacturing facilities, funds or sales channels needed for the business of paper diapers prepared the business corresponding to the working of the patented invention, and (ii) that X proactively played a role in at least a part of the business, in order to estimate that the demandant of the trial (X) was the person who prepared the business on the patented invention, Kao asserted that the original JPO’s decision was reasonable, while no such circumstances were found in this case, and thus the existence of the interest could not be affirmed. However, the IPHC rejected the Kao's assertion by pointing out as follows:
If such a requirement was imposed, when a negotiating partner hesitated to negotiate with X due to the possibility of infringement, X would not be allowed to directly file an invalidation trial, but first would be forced to prepare production facilities and the like by himself. However, in this scenario, X would not be allowed to file an invalidation trial for avoiding economic risk but X would be allowed to file it only after bearing economic risk, which was unreasonable.

Conclusively, the IPHC upheld the X’s appeal and cancelled the JPO’s decision.

An appeal to the Supreme Court was NOT filed against this decision, and thus the decision is final and binding.

K&P’s Comments When the new opposition system, where no interest is required for standing of an opponent, was introduced in 2014, the invalidation trial system was also revised to require interest for demanding an invalidation trial for standing. This decision specifically shows the basis of the interest, and will be a leading case law for considering standing of a demandant.

(by Katsumasa OSAKI, Patent Attorney)

In October 2017, the IPHC handed down 16 decisions including the above one case on patent, and overturned the previous decisions in 5 cases.

In October 2017, the IPHC handed down 6 decisions on trademark, and overturned the previous decisions in 2 cases.

In October 2017, the IPHC handed down 1 decision on industrial design, which maintained the previous decision.