Enforcing Your Japanese Patent: Understanding Injunctions and Damages

Japanese Attorney at Law - Bengoshi L.L.

• 10 min read

Obtaining a patent in Japan is a significant achievement, but the true value of that patent often lies in the ability to enforce it against infringers. When a third party, without authorization, works your patented invention "as a business," Japanese patent law provides robust civil remedies to stop the infringing activity and compensate for the harm caused. The primary tools for enforcement are injunctive relief to halt the infringement and monetary damages to recover losses.

This article delves into these key civil remedies, explaining the conditions for obtaining injunctions and the various methods prescribed by the Japanese Patent Act for calculating damages.

I. Halting the Infringement: Injunctive Relief (差止請求 - Sashitome Seikyū) (Article 100, Patent Act)

Perhaps the most powerful remedy for a patentee or an exclusive licensee facing infringement is the right to seek an injunction to stop the infringing acts.

A. The Right to Demand Cessation or Prevention of Infringement (Article 100(1))

Article 100(1) of the Patent Act states: "A patentee or exclusive licensee may demand that a person who infringes or is likely to infringe on their patent right or exclusive license cease or prevent such infringement."

  1. Who Can Seek an Injunction?
    • Patentee: The owner of the patent.
    • Registered Exclusive Licensee (専用実施権者 - Sen'yō Jisshikensha): An exclusive licensee whose rights are registered with the JPO has a status akin to the patentee within the scope of their license and can independently sue for injunctions.
    • Non-Exclusive Licensees: Generally, non-exclusive licensees (tsūjō jisshikensha), even those with contractually "exclusive" non-exclusive licenses, cannot directly sue for injunctions in their own name based on patent infringement. Their primary recourse is often through the patentee.
  2. Grounds for an Injunction:
    • Actual, Ongoing Infringement: If infringement is currently occurring.
    • Likelihood of Future Infringement (Imminent Threat): If infringement has not yet started but there is a clear and present danger that it will occur. This allows for preemptive action.
  3. No Requirement for Infringer's Intent or Negligence:
    Crucially, an injunction is an equitable remedy based on the exclusionary nature of the patent right. The subjective state of mind of the infringer (i.e., whether they acted intentionally or negligently) is irrelevant for obtaining an injunction. If infringement is occurring or is imminent, an injunction can be granted regardless of the infringer's fault.
  4. Scope of Enjoinable Acts:
    The injunction can target any act that constitutes "working" of the patented invention "as a business" without authorization. This includes:
    • Direct Infringement: Making, using, selling, offering for sale, leasing, importing the patented product; or using the patented process.
    • Indirect Infringement: Acts deemed to be infringement under Article 101 of the Patent Act (e.g., supplying essential components exclusively for the patented invention).
  5. Identifying the Infringing Entity in Multi-Party Scenarios:
    Determining who is the proper defendant for an injunction can be complex when multiple parties contribute to the overall infringing activity. Japanese courts have considered various theories to attribute responsibility, such as:
    • Joint Direct Infringement: Where parties act in concert with a common intent to carry out the infringing act. The Osaka District Court in the Schiesser v. Tefron case (May 4, 1961, involving styrofoam bead manufacturing, often referred to as the "Styropor" or スチロピーズ事件 - Suchiropīzu Jiken) discussed scenarios where acts are divided among parties but collectively result in infringement.
    • "Control and Management" Theory: Identifying the party that effectively controls and manages the overall infringing system or activity, even if they do not personally carry out every step. The Tokyo District Court in the HOYA v. Nidek case (December 14, 2007, concerning an eyeglass lens supply system, 眼鏡レンズの供給システム事件 - Gankyō Renzu no Kyōkyū Shisutemu Jiken) and the IP High Court in the Internet Number Case (March 24, 2010, インターネットナンバー事件 - Intānetto Nanbā Jiken) dealt with system claims and identifying the responsible infringing entity.

B. Measures Necessary for the Prevention of Infringement (Article 100(2))

In addition to demanding the cessation or prevention of the infringing acts themselves, Article 100(2) allows the patentee or exclusive licensee, when seeking an injunction under Article 100(1), to also demand "measures necessary for the prevention of such infringement."

These ancillary measures can include:

  • Disposal of Infringing Products (侵害組成物 - shingai soseibutsu): This refers to products that embody the patented invention and were produced through the infringing act, or, in the case of a patented process for making a product, products made by the infringing use of that process.
  • Removal/Destruction of Equipment Used for Infringement (侵害供用設備 - shingai kyōyō setsubi): This applies to machinery, tools, or other facilities that were used to commit the infringing acts (e.g., molds for making infringing products, specialized equipment for carrying out an infringing process).
  • Other Necessary Measures: Any other actions deemed reasonably necessary by the court to effectively prevent future infringement.

Condition of "Necessity":
These measures under Article 100(2) are not granted automatically. They must be shown to be "necessary for the prevention of infringement." This means they are considered ancillary to the primary injunction against the infringing acts. If there is no ongoing infringement or likelihood of future infringement that would warrant an injunction under Article 100(1), then these ancillary measures generally cannot be sought independently. For example, if infringement has completely ceased and there is no risk of resumption, destroying already existing (but no longer distributed) products might not be deemed "necessary for prevention." The Cimetidine Case (シメチジン製剤及び原末事件 - Shimechijin Seizai oyobi Genmatsu Jiken, Tokyo High Court, January 27, 1994) touched upon the limits of such claims when the patent term had expired.

C. Preliminary Injunctions

While permanent injunctions are sought through full litigation, Japanese law also provides for preliminary injunctions (仮処分 - karishobun) in patent cases. These can be obtained more quickly and are crucial for stopping infringement during the often lengthy period of a main lawsuit. To obtain a preliminary injunction, the patentee typically needs to show a prima facie case of infringement, the validity of the patent, the necessity of the injunction to avoid substantial harm, and often provide security.

II. Recovering Monetary Loss: Damages (損害賠償請求 - Songai Baishō Seikyū)

Beyond stopping the infringement, a patentee or exclusive licensee is entitled to compensation for the financial losses suffered due to the infringement.

A. Foundation in Tort Law (Civil Code Article 709)

The basic right to claim damages for patent infringement arises from Article 709 of the Japanese Civil Code, which is the general provision for tort liability. This article states that a person who intentionally or negligently infringes the rights of another is liable to compensate for the damage caused thereby. Thus, unlike injunctions, a claim for damages requires proof of the infringer's intent (故意 - koi) or negligence (過失 - kashitsu).

B. Presumption of Infringer's Negligence (Article 103, Patent Act)

Proving an infringer's negligence can be challenging. To ease this burden for patentees, Article 103 of the Patent Act establishes a presumption of negligence against anyone who infringes a patent right or exclusive license.

  • Rationale: Patented inventions are published and publicly accessible. A party engaging in commercial or industrial activities ("as a business") is generally expected to exercise due care to avoid infringing existing patents.
  • Effect: The burden shifts to the infringer to prove that they were not negligent (i.e., they had a justifiable reason for not knowing about the patent or for believing their actions were non-infringing, despite exercising due care).
  • Rebutting the Presumption: While possible in theory, rebutting this presumption is very difficult in practice for commercial infringers. Simply being unaware of the patent is usually not enough. Even obtaining an opinion from a patent attorney suggesting non-infringement might not be sufficient to negate negligence if that opinion is later found to be flawed.

C. Statutory Provisions for Calculating/Estimating Damages (Article 102, Patent Act)

One of the most significant challenges in patent litigation is quantifying the monetary damages caused by infringement. The Japanese Patent Act, in Article 102, provides three main (but not exhaustive) methods to assist patentees in calculating or estimating their damages. These provisions are designed to alleviate the patentee's burden of proof.

  1. Method 1: Patentee's Lost Profits Based on Infringer's Sales Volume (Article 102(1))
    This provision allows the patentee to claim their lost profits based on the quantity of infringing products sold by the infringer.
    • Calculation: (Number of units of infringing products assigned/sold by the infringer) × (Patentee's profit per unit of their own patented product that they would have sold but for the infringement).
    • Limitations/Deductions:
      • Patentee's Capacity: The claimed lost profits cannot exceed the amount the patentee could have produced and sold themselves (i.e., it's capped by the patentee's manufacturing and sales capacity).
      • "Circumstances Preventing Sale": The amount can be reduced if there were circumstances showing that the patentee would not have been able to sell some or all of the units sold by the infringer, even if the infringement had not occurred. Such circumstances might include:
        • Competition from other non-infringing products in the market.
        • The infringer's own superior marketing efforts, brand strength, or product features unrelated to the patent that drove their sales.
        • Different market segments being targeted.
    • "Profit per Unit": This is generally interpreted as the patentee's marginal profit per unit (i.e., revenue per unit minus variable costs per unit). Fixed costs are typically not deducted when calculating this specific type of lost profit.
    • Patentee Selling a Competing Product: There's influential opinion that the patentee does not necessarily have to be selling the exact patented product; if they are selling a product that directly competes with and is substitutable for the infringing product, this provision may still be applicable.
  2. Method 2: Infringer's Profits (Article 102(2))
    This provision allows the patentee to claim damages based on the profits the infringer gained from their infringing acts.
    • Presumption: The profits earned by the infringer through the act of infringement are presumed to be the amount of damage suffered by the patentee.
    • Rebuttal by Infringer: The infringer can rebut this presumption by proving, for example, that their profits were attributable to factors other than the patented invention (e.g., their own goodwill, other non-patented features of the infringing product), or that the patentee would not have made such profits themselves (e.g., due to different pricing strategies or market positions).
    • Calculating Infringer's Profits: Typically, this involves calculating the infringer's revenue from the sales of the infringing products and deducting the direct variable costs associated with producing and selling those infringing units (i.e., the infringer's marginal profit from the infringing activity).
    • Contribution Factor (寄与率 - Kiyoritsu): If the patented invention is only one feature of a more complex infringing product, courts will often consider the extent to which the patented feature contributed to the overall sales and profits of the infringing product. The presumed damages may be reduced proportionally based on this "contribution rate." For instance, in the Kirimochi (Cut Rice Cake) Case (IP High Court, March 22, 2012, a damages phase decision), the court applied a 15% contribution rate when calculating damages based on the infringer's profits.
    • The IP High Court Grand Panel in the Dust Storage Equipment Case (ごみ貯蔵機器事件 - Gomi Chozō Kiki Jiken, February 1, 2013) clarified that the patentee does not necessarily have to be working the invention themselves to use this provision, provided they can demonstrate that they would have otherwise gained profit (e.g., through licensing) had the infringement not occurred.
  3. Method 3: Reasonable Royalty (Article 102(3))
    This provision allows the patentee to claim an amount equivalent to the royalty they would have been entitled to receive for granting a license for the working of the patented invention.
    • Often a Minimum or Floor: This is frequently viewed as a baseline measure of damages, available even if proving lost profits (under 102(1)) or the infringer's profits (under 102(2)) is difficult or yields a lower amount.
    • Determining "Reasonable Royalty": Courts are not strictly bound by established industry royalty rates or the patentee's own past licensing practices for the patent in suit (if any). They have discretion to determine a "reasonable" amount considering all circumstances of the case. Factors can include:
      • The technical and commercial value of the patented invention.
      • The nature and extent of the infringement.
      • Established royalty rates in the relevant industry for comparable technologies.
      • The terms of any existing licenses for the patent.
      • What might have been agreed upon in a hypothetical "willing licensor-willing licensee" negotiation before the infringement began.
    • A previous amendment to the Patent Act removed the word "usual" (通常 - tsūjō) from this provision, giving courts more flexibility to set a royalty rate that is appropriate in the context of infringement, which could potentially be higher than a purely voluntary license rate, to ensure adequate compensation and deterrence.

D. Relationship Between Article 102 Provisions and Court Discretion

  • Alternative or Supplementary: These methods are not always mutually exclusive in their entirety. For example, if a patentee's capacity limits the amount recoverable under Article 102(1), they might be able to claim a reasonable royalty under Article 102(3) for the infringer's sales that exceeded that capacity. The patentee can plead these in the alternative.
  • Court's Discretion to Determine Fair Damages (Article 105-3): If, due to the nature of the facts, it is extremely difficult for the patentee to prove the specific facts necessary to precisely calculate damages under the above provisions, Article 105-3 allows the court to determine a "reasonable amount of damages" based on the overall arguments, evidence presented, and the principles of fairness. This gives the court flexibility in situations with significant evidentiary challenges.
  • No Punitive Damages: It is important for those familiar with U.S. patent litigation to note that Japanese law does not provide for punitive or treble damages in patent infringement cases. Damages are strictly compensatory.
  • Attorney's Fees: Full recovery of attorney's fees as part of damages is generally not possible in Japan. Only a relatively small, statutorily determined portion of litigation costs (which may include a fraction of attorney fees) is typically recoverable by the prevailing party.

III. Other Civil Remedies

Beyond injunctions and damages, a few other civil remedies are theoretically available:

A. Measures to Restore Reputation (Article 106)

If the patentee's or exclusive licensee's business reputation has been harmed as a result of the infringement (e.g., by the infringer selling low-quality goods that are confused with the patentee's products), the court may, upon request, order the infringer to take measures necessary to restore that reputation, such as publishing an apology or correction. This remedy is, however, rarely granted in patent cases.

B. Claim for Unjust Enrichment (Civil Code Article 703 et seq.)

As an alternative or supplement to a tort-based damages claim, a patentee might pursue a claim for unjust enrichment. This could be relevant if, for instance, the statute of limitations for a tort claim (typically 3 years from when the patentee becomes aware of the damage and the identity of the infringer) has expired for some of the infringing acts. Unjust enrichment claims generally have a longer 10-year statute of limitations under the Civil Code. The claim would be for the infringer to return the benefits they unjustly gained (e.g., saved royalty payments) at the patentee's expense.

IV. Special Procedural Provisions in Japanese Patent Litigation (Brief Mention)

Japanese law includes several special procedural provisions designed to facilitate patent litigation, recognizing its often technical and complex nature:

  • Centralized Jurisdiction: Patent infringement lawsuits are generally under the exclusive jurisdiction of the Tokyo District Court or the Osaka District Court, with appeals going directly to the Intellectual Property High Court in Tokyo.
  • Obligation to Clarify Specific Embodiment (Article 104-2): An accused infringer who denies infringement must specify the concrete details of their own product or process.
  • Document Production Orders (Article 105): Courts can order parties to produce documents necessary for proving infringement or calculating damages, including an in camera (judges only) inspection procedure for confidential documents.
  • Protective Orders for Trade Secrets (Article 105-4): To protect trade secrets disclosed during litigation.

Conclusion

Japanese patent law provides patentees with a strong set of civil remedies to combat infringement. Injunctive relief under Article 100 offers the power to stop ongoing or imminent infringing activities, including the disposal of infringing goods. Monetary compensation for damages, grounded in general tort law, is significantly aided by the presumptions and calculation methodologies set forth in Article 102 of the Patent Act, which aim to ease the patentee's burden of proving their losses. While the system is compensatory rather than punitive, the tools available, when effectively utilized, allow patentees to defend their exclusive rights and seek redress for the harm caused by infringement. Understanding these enforcement mechanisms is crucial for any entity holding or dealing with Japanese patents.