2018 <Special News Flash>｜News Letters

IPHC Overrules Precedent Established by Tokyo High Court in 1990 and Acknowledges Existence of Interest in Filing Action Broadly Even After Patent Expires

Nippon Chemiphar Co., Ltd.; X (Individual) v. Shionogi & Co., Ltd. (Assisting Intervener: AstraZeneca UK Ltd.), Case No. 2016 (Gyo-Ke) 10182 & 10184 (Decision rendered on April 13, 2018)

The Grand Panel¹⁾ of the IPHC (Chief Judge, Misao SHIMIZU) decided that an existence of an interest in filing an action for seeking a cancellation of the JPO’s decision on an invalidation trial where a demand of invalidation should be dismissed should not be denied even after a patent expires unless the circumstances are exceptional.

The Patentee, Shionogi obtained a patent relating to a pyrimidine derivative effective for hypercholesteremia and the like in 1997. Against the Shionogi’s patent, an Individual, X filed an invalidation trial with the JPO in 2015. During the trial proceedings, AstraZeneca UK (AZ) intervened for assisting Shionogi and Nippon Chemiphar (NC) intervened as a Demandant; and Shionogi demanded a correction of claims. The JPO dismissed the demand of invalidation in 2016. NC and X filed an appeal against the JPO's decision to the IPHC in 2016. During the court proceedings, the patent at issue expired on May 28, 2017.

Regarding an existence of an interest in filing an action for seeking a cancellation of the JPO’s decision on an invalidation trial where a demand of invalidation should be dismissed, Tokyo High Court ruled in 1990 as follows:

Just an existence of formal disbenefit is insufficient for acknowledging an existence of an interest in filing an action as a requirement for action of cancellation of the JPO’s decision; but a substantial legal benefit which can be recovered by the cancellation of the JPO’s decision is required. Accordingly, when a patent expires without a dispute where a validity of the patent is a presupposition issue; a fact that there is a possibility to develop to such a dispute hereafter; and actually or potentially embodying a legal disbenefit caused from the existence of the patent, an existence of an interest in filing an action for seeking a cancellation of the JPO’s decision on an invalidation trial where a demand of invalidation should be dismissed should be denied.

Shionogi argued that the appeals should be dismissed on the grounds of the above precedent.

However, the IPHC overruled the Tokyo High Court’s precedent and ruled as below:

The Patent Law stipulates that an invalidation trial may be filed after the patent expires (Art. 123(3)), and thus it is clear that an existence of an interest in filing an invalidation trial and thus an existence of an interest in filing an action for seeking a cancellation of the JPO’s decision on an invalidation trial where a demand of invalidation should be dismissed are not denied even after the patent expires. Shionogi argued on the basis of the Tokyo High Court’s precedent. However, if the existence of interest is limitedly construed as the Tokyo High Court’s precedent, a court needs to ask a party for arguing that, for example, a dispute whether a specific product made by the party infringes on a specific patent actually happens, or there is a possibility to develop to such a dispute hereafter, which could contain an argument that might be a disadvantage against the party. It is not reasonable for obliging the party to make such an argument.
However, for example, when 20 years lapse after a patent expires, no one will suffer disadvantage caused from the existence of the patent anymore. Under such exceptional circumstances, it should be construed that an existence of an interest in filing an action for seeking a cancellation of the JPO’s decision on an invalidation trial where a demand of invalidation should be dismissed is denied.

Conclusively, the IPHC did not accept the Shionogi’s argument on the existence of an interest in filing an action. Nevertheless, the IPHC upheld the JPO’s decision dismissing a demand of invalidation.

The lost parties, NC and X are entitled to bring the case to the Supreme Court within 14 days after the mailing date of the decision, and thus the decision is NOT final and binding as of April 20, 2018.

1) Grand Panel: Grand Panel is convened to hear cases where it is necessary to virtually unify court decisions, or cases involving important issues, which is somewhat similar to en banc in CAFC of the U.S.A. Since the founding of the IPHC in 2005, 12 cases including the above case have been heard.

K&P’s Comments As shown above, the Grand Panel has relaxed the bar of an existence of an interest in filing an action for seeking a cancellation of the JPO’s decision on an invalidation trial where a demand of invalidation should be dismissed. This decision directly examined an existence of an interest in filing an action regarding an invalidation trial under the old patent law where anyone may file an invalidation trial. Nevertheless, the IPHC added that, even under the current patent law where only an interested party may file an invalidation trial, any exceptional circumstances where no one can objectively suffer disadvantage caused from the existence of the patent anymore are similarly necessary for the denial of an existence of an interest in filing an action.