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

The IPHC decided that it was necessary to hear opinions from a wide range of experts and industry people well versed in the practice regarding issues involving expertise and being absent of previous decisions. This approach of trying to listen to voices from the business in deciding a judicial case is likely to draw broad attention from the people concerned with intellectual properties.

The issue in the case relates to an act called “FRAND declaration”, which involves manifesting in advance to agree to grant a license on fair, reasonable, and non-discriminatory conditions to another entity when requested by the entity to grant a license to it. Apple contends that, albeit Samsung’s FRAND declaration, Samsung alleges Apple’s patent infringement and seeks an injunction against manufacturing and importing products.

The IPHC decided that they need to consult opinions of experts and others, since there are no previous decisions regarding the declaration and the case involves technical issues on patent law. In the Japanese Civil Procedure Law, there are no rules providing the procedure of inviting opinions from the public, thus the IPHC prompted both Apple and Samsung to agree to request opinions together to the public and the invitation of public comments will be conducted in a form of an agreement of the parties.

Ito & Mitomi (Chiyodaku, Tokyo) representing Apple and Ohno & Partners representing Samsung (ditto) will request written opinions from domestic and foreign experts and others until March 24th, and will submit the provided opinions to the IPHC as documentary evidence supporting each of their contentions. For details, please visit the following
URL: http://www.mofo.jp/topics/2014/01/23/Announcement%20Inviting%20
Public%20Comments%20on%20the%20Grand%20Panel%20Case.pdf
Those in the field of law say such procedure is provided for in the law in the US and other countries.

The IPHC also decided that the case will be heard by a Grand Panel consisting of 5 judges (Chief Judge: Toshiaki Iimura). A Grand Panel is convened to hear cases where it is necessary to virtually unify court decisions, or cases involving important issues. Since the founding of the IPHC in 2005, 8 cases have been heard in the Grand Panel.

In this case, validity of a patent right, presence or absence of a patent infringement, and others, regarding a technology which enables sending images and voices with Apple’s iPhone and others with efficiency by excluding unnecessary data and abridging the data size, are contended.

Tokyo District Court, the court of the first instance, found that “since Samsung provided a FRAND declaration, Samsung is bound in equitable duty to negotiate with Apple in good faith in response to an offer by Apple for a grant of a license”, and that the claims for compensation for damages made by Samsung against Apple “constitute an abuse of rights”, and rendered a decision upholding Apple’s contention. Samsung filed an appeal against the decision.

* FRAND declaration: FRAND stands for fair, reasonable and non-discriminatory terms and conditions. FRAND declaration is a declaration by the owner of a patent to agree to grant a license on “fair, reasonable, and non-discriminatory conditions” to another entity regarding a standard patent widely used in an entire field of a business. When an exorbitant license fee is imposed for a patent, dissemination of the technology per se is likely to be hindered. Therefore, the declaration is established as an international rule to balance the benefit of the owner of the patent with the convenience of the licensee.

Pigeon Vitality AS et al. v. Commissioner of JPO, Case No. 2013 (Gyo-Ke) 10019 (Decision rendered on December 5, 2013)

The co-Applicants, Pigeon, X1 and X2 (two individuals), filed a patent application relating to a food and feed supplement in 2004, but the application was finally rejected on the grounds of lacking inventive step by the Appeal Board of JPO in 2012. Against the JPO's decision, Pigeon et al. filed a cancellation action before the IPHC in 2013.

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

"Food and feed supplement containing vitamins for improving health and performance, comprising at least one C1-8 carboxylic acid selected from ... <snip> and/or its salt as the basic ingredient of the supplement and B6, B9 and B12-vitamins in amounts of 10-50 mg/gram dry weight of the supplement, wherein the amount of vitamins B12 and B9 at least corresponds to what can be consumed during metabolism of the COOH-group of the carboxylic acids, and the amounts of vitamins B6, B9 and B12 are in the range of 0.5-30 mg, 0.1-10 mg and 1-1500μg/gram dry weight of the content of the pure carboxylic acids in the supplement, respectively, and 5-25 mg Fe/gram dry weight of supplement, and 0-1 weight% of an antioxidant, and that the amount of salt and carboxylic acids will give a pH of 2.0-6.0 when the supplement is dissolved in water".

One of the main issues in this case was what kind of document should be shown as a reference for constituting common technical knowledge in examining the inventive step. The IPHC answered to the issue as follows.

First, the IPHC found that one of the differences between the claimed invention of the present application and the invention disclosed in prior art reference (p.a.r.) 1 was that the former defined the specific amount of B12-vitamin as "1-1500 μg/gram dry weight of the content of the pure carboxylic acids in the supplement", while the latter did not clearly disclose it. In this regard, the IPHC found that p.a.r. 1 demonstrated a supplement containing 50 mg of B12 and 6.25 g of citric acid in the example, which could be converted to 8000 μg/gram dry weight of the content of the pure carboxylic acids, and thus exceeded the claimed range.

Concerning this difference of the amount of B12, during the court proceedings, the JPO asserted that those skilled in the art could have easily adjusted the amount of B12 on the premise that it was common technical knowledge that the normal administration amount of B12 to a human was about 1-1500 μg per day with reference to two patent publications, P1 and P2. However, the IPHC rejected the JPO's assertion by pointing out (i) that both P1 and P2 stated that B12 was unstable as a conventional art and thus B12 was stabilized by adding α-starch and coating a cellulose polymer (P1) or by adding potassium sodium tartrate (P2) as the claimed inventions therein, and (ii) thus that P1 and P2 only mentioned that the normal administration amount of B12 under the stabilized conditions in a composition was about 1-1500 μg per day, and it was not so much that P1 and P2 showed that it was common technical knowledge that the normal administration amount of B12 to a human was about 1-1500 μg per day, and (iii) therefore that the JPO's assertion was not based on the justifiable premise, and thus was improper.

Conclusively, the IPHC upheld Pigeon'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.

This decision teaches that particular care should be taken if patent publications are used as references for constituting common technical knowledge since patent publications, in particular the description of "the present invention", are to disclose novel and inventive inventions, which should be beyond a common technical knowledge, and thus the disclosure therein may not be considered as common technical knowledge even if the publication is dated a long time ago.

Shin Nihon Pharmaceutical Co., Ltd. v. Bodywork Holdings, Case No. 2013 (Gyo-Ke) 10044 (Decision rendered on December 18, 2013)

(1) Circumstances of the case
The defendant, Bodywork Holdings has a trademark registration for "Raffine Style with its Japanese Katakana" (hereinafter referred to as the "Mark") designating "retail sales of cosmetics and providing information with respect to sales of cosmetics" in Class 35.

The plaintiff, Shin Nihon Pharmaceutical Co., Ltd., a manufacturer of skin care products has trademark registrations for "RAFFINE (standard characters)", "RaffINE (standard characters)" and "RAffINE (stylized)" (herein after referred to as "Citations 1-3") designating cosmetics in Class 3.

The plaintiff filed a request for a trial with the JPO for the revocation of the registration of the Mark on the ground of unfair trademark use by licensee (Article 53, Para. 1), alleging that the defendant's licensee (herein after referred to as the "Licensee") had been using a mark (hereinafter referred to as the "Used Mark") which was similar to Citations 1-3 in their web-pages and caused confusion with the plaintiff's business. The JPO rejected the plaintiff's request, and the plaintiff filed a suit against the decision with the IPHC.



(2) Main Issue
Article 53, Para. 1 of the Trademark Law provides that a trademark registration may be revoked if the requirements below are met:
1) Licensee uses a registered trademark or a mark which is similar to the registered mark.
2) The mark is used in connection with goods/services which are identical with or similar to the designated goods/services of the registered trademark.
3) Use of the mark by Licensee may mislead quality of goods/services or evoke confusion with a third party's business.

The IPHC concluded in this case that the above 1) - 3) requirements were literally met. However, the Mark was a prior registration to Citations 1-3 and the defendant and the Licensee had been using the Mark and its similar marks before Citation's registration, and Licensee had no malicious intents in using the Used Mark. The main issue was whether, even under these circumstances, the Licensee's trademark use should be regarded as a so-called unfair trademark use, and if not, whether the registration for the Mark could be revoked under Article 53, Para. 1.

(3) IPHC’s decision
The IPHC decided that the Licensee's use was not unfair and rejected the plaintiff's request for revocation under Article 53, Para 1.

The aim of Article 53, Para.1 is to punish registrants who do not respect duty of appropriate trademark use and to protect public interests from damages caused by licensees' unfair trademark use which may evoke confusion. However, confusion could be caused not only by unfair use, but also by appropriate use of a registered mark (or its modified similar mark), when a registered mark is inherently similar to a third party's mark. Thus, use of a mark in an appropriate manner should not be regarded as evoking confusion.

In this case, the Licensee's trademark use might have caused confusion in a broad sense, however, its acts were not unfair trademark use which evoked specific confusion with the plaintiff's business. Thus, Article 53, Para. 1. could not be applied. If likelihood of confusion had been an issue, it would have been a question of similarity between the Mark and Citations 1-3 and should have been brought to an invalidation trial.

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