K&P's Intellectual Property High Court Decision Report in February, 2013

Sangenic International Ltd. v. Aprica Children's Products Inc., Case No. 2012 (Ne) 10015 (Decision rendered on February 1, 2013)

The Patentee, Sangenic, filed an infringement suit against Aprica on the basis of a patent relating to a waste storage device before the Tokyo District Court in 2009, and the Court admitted the infringement and ordered Aprica to cease the importation and the sales of the accused products and compensate Sangenic for damages equivalent to a reasonable royalty. Against this decision, both parties appealed to the IPHC in 2012.

The main issue in this case was how the damages should be calculated when the Patentee did not work the patented invention in Japan. The IPHC heard the case in the Grand Panel* and it answered to this issue as follows.
* Grand Panel is an ad hoc special division of the IPHC which is organized to hear and decide cases involving complex and controversial legal issues and/or having a huge impact on business or society, and it is somewhat similar to en banc of CAFC in the U.S.A.

First, the Grand Panel found (i) that Sangenic exported the patented products manufactured in the UK to Company A located in Japan, but Sangenic itself did not work the patent in Japan, and (ii) that the Japanese Patent Law provides in Art. 102 (2) that "(w)here a patentee or exclusive licensee claims, from a person who has intentionally or negligently infringed the patent right or exclusive license, compensation for damage caused to him by the infringement, the profit gained by the infringer through the infringement shall be presumed to be the amount of damage suffered by the patentee or exclusive licensee".

Then, on the requirements for applying the provision of Art. 102 (2), the Grand Panel ruled that there was no rational reason to be overly strict in applying the provision since the provision was intended to lessen the burden to prove the amount of damages, besides the provision was considered to be merely presumptive provision, and therefore the provision of Art. 102 (2) should be interpreted such that the provision would be applicable in the case where the patentee would have gain a profit had it not been for the infringement, and the patentee's working the patented invention in Japan should not be regarded as a requirement for applying the provision of Art. 102 (2).

On the basis of the above ruling, the Grand Panel decided to apply the provision of Art. 102 (2) to calculate the damages in the case since the patented products sold by Company A and the accused products were both sold competitively in the Japanese market and the sales of the patented products were considered to be diminished due to the infringement.

Conclusively, the IPHC upheld Sangenic's appeal and raised the amount of damages by applying the provision of Art. 102 (2).

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

It had been generally acknowledged in Japan for a long time that the provision of Art. 102 (2) was applicable only when the patentee worked the patented invention in Japan. This decision overrides such commonly accepted notion and thus it may be thought of as a landmark decision. Due to this decision, the value of Japanese patent rights will be much more appreciated particularly by foreign patentees.

Akzo Nobel K.K. v. Showa Denko K.K., Case No. 2012 (Gyo-Ke) 10221 (Decision rendered on February 27, 2013)

The Patentee, Showa Denko, obtained a patent relating to a detergent composition in 2007, against which Akzo Nobel filed an invalidation trial before the JPO in 2011. The JPO dismissed Akzo's demand in 2012, followed by Akzo's appeal against the JPO's decision to the IPHC in 2012.

Claim 1 of the patent at issue claims as follows:

"A detergent composition comprising A) an aspartic acid diacetate and/or a glutamic acid diacetate, B) a glycolate and C) an anionic surfactant and/or a nonionic surfactant as the main ingredients, wherein the composition contains 0.01 to 1 part by weight of the aspartic acid diacetate and/or the glutamic acid diacetate relative to 1 part by weight of the anionic surfactant and/or the nonionic surfactant and 0.01 to 0.5 part by weight of the glycolate relative to 1 part by weight of the aspartic acid diacetate and/or the glutamic acid diacetate, and has a pH of 10 to 13".

One of the main issues in this case was whether or not the results of a reproductive experiment in an example disclosed in a prior art reference could be considered for examining inventive step. The IPHC answered to the issue as follows.

First, the IPHC found (i) that the detergent mixture disclosed in Table III of Example 5 of prior art reference (p.a.r.) 1 contained a glutamic acid diacetate, a glycolate and an anionic surfactant and a nonionic surfactant, which corresponded to the claimed composition of the present invention, and the amount of each of the ingredients in Example 5 fell within the claimed range of the present invention, but that (ii) a pH value was not specified in Example 5. In this connection, Akzo had submitted during the trial procedure before the JPO results of the reproductive experiment of Example 5 showing that the pH value was 10.2-10.3.

On the basis of the above, the IPHC took into consideration the results of the reproductive experiment, and decided that the detergent mixture disclosed in p.a.r. 1 had the same composition as those of the claimed composition of the present invention, and that p.a.r. 1 substantially disclosed the pH value which was within or similar to the claimed range of the present invention, and thus that it would be obvious that the detergent mixture disclosed in p.a.r. 1 inherently showed the same or at least similar effects as those of the claimed composition of the present invention.

Conclusively, the IPHC denied the inventive step of the claimed composition, upheld Akzo'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 now final and binding.

In examining and determining inventive step, the Japanese judges as well as examiners tend to place an importance on whether or not any advantageous effect can be brought about. Accordingly, this decision teaches that it is an effective approach to submit results of a reproductive experiment of an example disclosed in a prior art reference showing that the example brings about the same or similar effects as those of the claimed invention for denying the inventive step even if the prior art reference does not clearly refer to the effects of the claimed invention.

Mcneil A.B. v. Commissioner of JPO, Case No. 2012 (Gyo-Ke) 10205 (Decision rendered on February 28, 2013)

The Applicant, Mcneil, filed a patent application relating to a liquid pharmaceutical formulation in 2002, but the application was finally rejected on the ground of lacking inventive step by the Appeal Board of JPO in 2012. Against the JPO's decision, Mcneil filed a cancellation action before the IPHC in 2012.

Claim 1 of the patent application at issue claims as follows:

"A liquid pharmaceutical formulation comprising a free base form of nicotine, characterized in that it is for administration to the oral cavity by spraying and that it is alkalized by buffering and/or pH regulation".

The main issue in this case was what constituted the motivation and the disincentive factor in examining the inventive step. The IPHC answered to the issue as follows.

First, the IPHC found that the claimed invention of the present application and the invention disclosed in prior art reference (p.a.r.) 1 were different in (i) that the latter did not specify that the formulation was alkalized (Difference 1), and (ii) that the former specified that "nicotine" was inhaled through the oral cavity, while the latter stated that "nicotine" might be inhaled through the oral cavity, nasal cavity, lung and the like. The IPHC further found that p.a.r.s 2 and 3 mentioned that the inhalation of nicotine was promoted in the oral cavity under an alkaline environment. On the basis of the above findings, the IPHC decided (i) that the invention disclosed in p.a.r. 1 intended that nicotine was inhaled through not only the oral cavity but also the nasal cavity and respiratory tract, and thus no necessity to particularly promote the inhalation of nicotine through oral cavity was acknowledged, and (ii) that p.a.r. 1 did not disclose or suggest particularly promoting the inhalation of nicotine through the oral cavity at all, and therefore (iii) that there was no motivation to combine the inventions disclosed in p.a.r.s 2 and 3 with the invention disclosed in p.a.r. 1. even though p.a.r.s 2 and 3 stated that the inhalation of nicotine was promoted in the oral cavity under an alkaline environment.

Additionally, the IPHC found on the basis of the disclosures of several literatures that it had been well known (i) that nicotine solution administered through the nasal cavity or lung generally had a pH of 5-6, and (ii) that nicotine solution had an adverse effect physiologically under an alkaline condition.
On the basis of the above findings, the IPHC further decided that such a well known technical knowledge constituted a disincentive factor against alkalizing the formulation disclosed in p.a.r. 1.

Conclusively, the IPHC upheld Mcneil'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 now final and binding.

This decision provides a negative example of a "motivation", and an example of "disincentive factor", which is a positive factor for acknowledging inventive step in Japan. As seen from the above decision, a disincentive factor may be found not only in the cited prior art references, but also in the common technical knowledge.

In February 2013, the IPHC handed down 32 decisions including the above 3 cases on patents, and overturned the previous decisions in 7 cases.
In February 2013, the IPHC handed down 2 decisions on trademarks, and overturned the previous decisions in 2 cases.