How Does the "Invalidity Defense" Work in Japanese Patent Infringement Litigation?

Japanese Attorney at Law - Bengoshi L.L.

• 9 min read

When faced with a patent infringement lawsuit in Japan, one of the most potent defensive strategies available to an accused infringer is to challenge the validity of the patent itself. This is formally recognized as the invalidity defense (無効の抗弁 - mukō no kōben) under Article 104-3 of the Japanese Patent Act. This provision allows a court hearing an infringement case to effectively determine the enforceability of the patent by examining whether grounds exist that would render the patent invalid, even if a separate invalidation trial before the Japan Patent Office (JPO) has not been concluded or, in some cases, even initiated.

The introduction and refinement of this defense reflect a policy aimed at ensuring that only genuinely valid patents are enforced, thereby preventing undue restrictions on commercial activities and promoting a fair competitive environment.

The Statutory Basis and Purpose of the Invalidity Defense

Article 104-3(1) of the Patent Act stipulates that if, in patent infringement litigation, it is recognized that the patent in suit "should be invalidated by a patent invalidation trial" (特許無効審判により無効にされるべきものと認められるとき - tokkyo mukō shinpan ni yori mukō ni sareru beki mono to mitomerareru toki), the patentee cannot assert their rights against the defendant.

Historical Context and Purpose:

The modern invalidity defense has its roots in judicial practice that evolved before its explicit codification. A landmark Supreme Court decision on April 11, 2000 (Minshu Vol. 54, No. 4, p. 1368), often referred to as the "Kilby" case (「半導体装置」事件), held that asserting a patent right that was "clearly" (明らかに - akiraka ni) invalid constituted an abuse of rights. This paved the way for courts to more actively consider validity issues within infringement proceedings.

The 2004 amendments to the Patent Act then formally introduced Article 104-3, establishing the invalidity defense as a standard procedural tool. The primary purposes of this defense are:

  1. Early Resolution of Disputes: It allows for a more consolidated consideration of both infringement and validity issues, potentially leading to a quicker overall resolution of the dispute between the parties.
  2. Protecting Defendants: It safeguards defendants from being subjected to injunctions or damages based on a patent that is fundamentally flawed and likely would not survive a formal invalidation challenge at the JPO.

It is crucial to understand that a finding by an infringement court that a patent "should be invalidated" under Article 104-3 has an effect inter partes – that is, it renders the patent unenforceable between the specific parties involved in that litigation. It does not, by itself, invalidate the patent erga omnes (against the world); only a final and binding decision from a JPO invalidation trial (or a subsequent court judgment upholding such a decision) can achieve that broader effect.

Abolition of the "Clear Invalidity" Threshold:

While the Kilby precedent required the invalidity to be "clear," Article 104-3, as enacted and subsequently interpreted, does not impose such a high evidentiary threshold on the defendant. The infringement court is expected to conduct a full examination of the asserted invalidity grounds if properly raised by the defendant. This was further reinforced by the 2011 amendments to the Patent Act (specifically Article 104-4(1)), which significantly limited the ability to seek a retrial of a concluded infringement judgment based on a subsequent JPO decision invalidating the patent. This limitation implicitly rests on the premise that the infringement court had the opportunity to fully consider and adjudicate validity issues during the initial lawsuit.

Pleading and Proving the Invalidity Defense

Successfully asserting an invalidity defense requires the defendant to meet certain procedural and substantive burdens.

Material Facts (要件事実 - yōken jijitsu):

The defendant must specifically plead the factual basis for each asserted ground of invalidity. This typically involves identifying:

  • The specific invalidity ground(s) (e.g., lack of novelty, lack of inventive step, insufficient written description).
  • The evidence supporting these grounds (e.g., prior art documents for novelty/inventive step challenges, specific deficiencies in the patent specification for disclosure-related grounds).

Burden of Proof (証明責任 - shōmei sekinin):

The allocation of the burden of proof for the underlying facts supporting an invalidity claim is a nuanced issue. While "invalidity defense" implies the defendant carries a burden, it doesn't uniformly apply to all aspects of patentability.

  • For typical invalidity grounds like lack of novelty (Article 29(1)) or lack of inventive step (Article 29(2)): The defendant generally bears the burden of presenting the supporting evidence (e.g., prior art references) and persuading the court that these grounds are met.
  • For grounds related to inherent patentability requirements or entitlement to the patent: The situation can be more complex. For instance:
    • Misappropriation of Inventorship (冒認出願 - bōnin shutsugan) or an applicant not being entitled to the patent (Article 29(1) preamble, Article 123(1)(vi)): While the defendant raises this as a defense, the ultimate burden to show proper entitlement may rest with the patentee, as it is a fundamental prerequisite for obtaining a patent. The defendant's role is to sufficiently bring the issue into dispute (this is sometimes referred to as the responsibility for shaping the issue, 争点形成責任 - sōten keisei sekinin).
    • Violations of Written Description Requirements (e.g., enablement under Article 36(4)(i), support under Article 36(6)(i)): Similar to entitlement issues, while the defendant points out the deficiencies, the patentee may ultimately need to demonstrate that their specification is sufficient. The assertion of such a defect by the defendant brings it into contention, but the intrinsic nature of these requirements often means the patentee must justify their disclosure.

This nuanced approach to the burden of proof reflects the idea that the term "defense" in Article 104-3 is a procedural label and does not rigidly dictate the burden for every conceivable invalidity ground, especially those touching upon the patentee's fundamental right to the patent or the adequacy of their disclosure.

The Interplay with Patent Correction/Amendment: The "Re-defense of Correction"

A crucial aspect of invalidity defense litigation is the patentee's ability to respond by arguing that the patent can be, or has been, corrected (amended) (訂正 - teisei) to overcome the alleged invalidity, and that the defendant's activities still infringe the (notionally or actually) corrected claims. This is often termed the "re-defense of correction" (訂正の再抗弁 - teisei no sai-kōben).

Scenario and Requirements:

When a defendant asserts an invalidity ground, the patentee may counter by:

  1. Initiating a formal correction procedure at the JPO (e.g., a Trial for Correction under Article 126, or a Request for Correction within an ongoing JPO invalidity trial under Article 134-2).
  2. Arguing in the infringement litigation that such a correction cures the invalidity and the defendant still infringes the corrected claims.

For this re-defense to be successfully considered by the infringement court, the patentee generally needs to demonstrate:

  • Formal Correction Request (Generally Required): Ordinarily, a formal request for correction must have been filed with the JPO. Without it, the court has no definitive corrected claims to assess.
  • Compliance with Correction Requirements: The proposed correction must adhere to the strict statutory requirements for post-grant amendments. These generally limit corrections to:
    • Narrowing of claims (特許請求の範囲の減縮 - tokkyo seikyū no han'i no genshuku).
    • Correction of errors or mistranslations.
    • Clarification of ambiguous statements.
      Crucially, a correction must not add new matter (新規事項の追加禁止 - shinki jikō no tsuika kinshi) beyond what was disclosed in the specification as originally filed, nor may it substantially enlarge or change the scope of the claims (実質上特許請求の範囲を拡張し、又は変更するものであつてはならない - jisshitsujō tokkyo seikyū no han'i o kakuchōshi, matawa henkō suru mono de atte wa naranai).
  • Curing of Invalidity: The correction must effectively remedy the specific invalidity ground raised by the defendant.
  • Infringement of Corrected Claims: The defendant's accused product or process must still fall within the scope of the claims as corrected. If the correction narrows the claims such that the defendant's activity no longer infringes, the re-defense of correction will not succeed in establishing liability against that defendant for the corrected claims, and the invalidity defense against the original claims may prevail.

Exceptions to Requiring a Pending JPO Correction:

There are situations where a patentee might be procedurally unable to file a JPO correction request at a particular moment (e.g., specific procedural windows in JPO trials or appeals). In such limited circumstances, courts have shown some willingness to consider a "prospective" correction argument in the infringement suit if the patentee clearly articulates the intended correction and explains the procedural bar. The Supreme Court decision of July 10, 2017 (Minshu Vol. 71, No. 6, p. 861, the "Sheet Cutter" case or「シートカッター」事件), while primarily focused on the timeliness of raising such arguments, acknowledged that there could be "exceptional circumstances" (特段の事情 - tokudan no jijō) where a patentee could not have raised the correction re-defense earlier. However, the general expectation is that patentees should act diligently.

Timeliness of the Correction Re-defense:

A patentee cannot indefinitely delay raising a potential correction. If the re-defense of correction is presented too late in the litigation, particularly if it appears intended to unduly prolong the proceedings, the court may reject it. This principle was highlighted by the Supreme Court on April 24, 2008 (Minshu Vol. 62, No. 5, p. 1262, the "Knife Processing Device" case or「ナイフの加工装置」事件), where repeated filings and withdrawals of correction requests were viewed unfavorably. The Sheet Cutter case also emphasized that the correction re-defense should be raised by the conclusion of oral arguments in the fact-finding instance, absent exceptional circumstances.

Standing to Assert the Invalidity Defense (主張適格 - shuchō tekikaku)

An important distinction exists between standing to request an invalidation trial at the JPO and standing to assert the invalidity defense in infringement litigation:

  • JPO Invalidation Trial (Article 123(2)): For certain invalidity grounds, particularly those relating to entitlement (e.g., the patent was granted to someone other than the true inventor or their successor – a "misappropriated application" or 冒認出願 - bōnin shutsugan), standing to request an invalidation trial at the JPO is restricted to specific interested parties (e.g., the person rightfully entitled to the patent).
  • Invalidity Defense in Infringement Litigation (Article 104-3(3)): In contrast, any defendant accused of patent infringement can raise any ground of invalidity as a defense in court. This means even if the ground is misappropriation, a third-party defendant can argue that the patent is invalid due to improper inventorship and thus unenforceable against them. This broad standing reflects the principle that a defendant should not be held liable for infringing a patent that is fundamentally flawed, regardless of who has standing to challenge it formally at the JPO for erga omnes invalidation.

Relationship with JPO Invalidation Trials and Retrials (再審 - saishin)

Patent infringement lawsuits and JPO invalidation trials often proceed in parallel concerning the same patent – a system sometimes referred to as the "dual track." The interaction between court judgments and JPO decisions, especially regarding finality and retrials, is governed by specific rules.

Impact of a Subsequent JPO Invalidation Decision on a Concluded Infringement Judgment:

  • General Rule (Article 104-4(1)): If an infringement court issues a final judgment (e.g., finding infringement and ordering damages), and the JPO subsequently issues a final and binding decision invalidating that patent, the JPO's invalidation decision cannot generally be used as grounds for a retrial (再審 - saishin) of the infringement judgment. This rule reinforces the finality of the court's decision once the parties have had a full opportunity to litigate validity within the infringement suit itself.
  • Exception for Injunctive Relief: This general preclusion of retrial primarily applies to monetary awards or declarations of infringement. If the infringement judgment included an injunction, and the patent is later definitively invalidated erga omnes by the JPO, the injunction effectively loses its legal basis and becomes unenforceable. This may occur without a formal retrial, as the substantive right underpinning the injunction (the patent right) has ceased to exist.

Impact of a Subsequent JPO Decision Upholding Validity or Allowing Correction:

  • If an infringement court dismisses a claim (e.g., by finding the patent invalid under Article 104-3 or by finding no infringement), and a subsequent JPO decision upholds the patent's validity or allows a correction that might alter the infringement analysis, the ability to seek retrial of the infringement judgment is very limited.
  • A JPO decision merely dismissing an invalidation request (i.e., upholding validity) is generally not considered a "change to an administrative disposition that formed the basis of the judgment" in a way that triggers a retrial under Article 338(1)(viii) of the Code of Civil Procedure, especially if the court made its own independent finding of invalidity.
  • If a patent is corrected by the JPO after a final infringement judgment, Article 104-4(3) of the Patent Act and related Cabinet Orders (such as Article 13-4 of the Supplementary Provisions of the Patent Act Enforcement Order) outline very specific and narrow circumstances under which such a subsequent correction might serve as a ground for retrial. These provisions are complex and depend on factors such as which party prevailed in the original suit and which invalidity or correction issues were previously litigated. The aim is to prevent undue re-litigation while allowing for review in exceptional situations where a party did not have a fair opportunity to address the claims in their corrected form.

Conclusion

The invalidity defense under Article 104-3 of the Japanese Patent Act is a formidable and frequently utilized tool in patent infringement litigation. It provides defendants with a direct avenue within the infringement proceedings to challenge the enforceability of the asserted patent based on its underlying validity. This mechanism empowers the court to make a determination on validity for the purposes of the specific dispute before it, contributing to a more comprehensive and potentially efficient resolution. However, its interplay with the JPO's separate invalidation and correction procedures, particularly concerning the patentee's "re-defense of correction" and the rules on the finality of judgments, adds significant layers of complexity. Navigating these aspects successfully requires a thorough understanding of the substantive grounds for invalidity, the procedural intricacies of raising the defense and responding to it, and the strategic implications of parallel JPO actions.