Indirect Patent Infringement in Japan: What Activities Can Get You in Trouble?

While direct patent infringement—the unauthorized making, using, selling, or importing of a patented invention—is relatively straightforward to understand, Japanese patent law, like that of many other countries, also recognizes a concept known as indirect infringement (間接侵害 - kansetsu shingai). This doctrine extends liability to certain acts that, while not constituting direct infringement themselves, are considered to contribute to or prepare for direct infringement by others.

Understanding the scope of indirect infringement under Article 101 of the Japanese Patent Act is crucial for businesses, as it means that even activities seemingly one step removed from the final infringing act can lead to significant legal consequences, including injunctions and damages.

I. The Rationale for Indirect Infringement Provisions

Why does patent law extend liability beyond those who directly work the patented invention? The primary reasons include:

1. Effective Enforcement for Patentees: In many situations, pursuing numerous individual direct infringers (e.g., end-users of a patented product) can be impractical or economically unfeasible for a patentee. Indirect infringement provisions allow the patentee to target an upstream source, such as a manufacturer or supplier of a key component or material that enables the direct infringement. This can be a much more effective way to stop widespread infringement.
2. Addressing Contributory and Preparatory Acts: The law recognizes that parties who knowingly supply essential means for direct infringement, or who engage in acts that are clearly preparatory to direct infringement, are also culpable and contribute to the harm suffered by the patentee.
3. Balancing Patentee Protection with Legitimate Commerce: While aiming to provide robust protection, indirect infringement laws are carefully drafted to define specific culpable acts, thereby avoiding undue interference with legitimate trade in general-purpose articles or innocent activities.

Article 101 of the Japanese Patent Act codifies several distinct types of acts that are deemed to constitute patent infringement. While criminal penalties for indirect infringement (Article 196-2) are generally lighter than those for direct infringement (Article 196), the civil remedies available to the patentee, such as injunctions and damages, are largely the same for both.

II. Categories of Indirect Infringement under Article 101 of the Japanese Patent Act

Article 101 is structured to address different scenarios based on whether the patent is for a product or a process, and the nature of the article being supplied or possessed.

A. Supplying "Dedicated Articles" (専用品 - Sen'yōhin) – Articles for Exclusive Use

These provisions deal with supplying articles that are specifically designed or used exclusively for a patented invention.

1. For Patented Products (Article 101(i)):
   It is deemed an act of infringement to produce, assign, lease, import, or offer for assignment, lease, or import, "as a business," articles that are used exclusively for the production of the patented product.
   • Example: If a patent covers a specific assembled device, manufacturing and selling a custom-made component that has no other practical use than to be incorporated into that patented device could constitute indirect infringement under this provision.
   • Meaning of "Exclusively Used" (にのみ用いる物 - ni nomi mochiiru mono): This is a key term. Japanese courts have generally interpreted "exclusively used" to mean that the article does not have any other economically, commercially, or practically significant alternative use. The mere abstract or theoretical possibility of another use is not enough to escape this category if that other use is not realistic or substantial in practice. The assessment is objective. Relevant cases illustrating this include the Exchange Lens Case (Tokyo District Court, February 25, 1981) and more recent decisions like the Bio-polymer Case (Tokyo High Court, February 27, 2004) and the Food Wrapping Method Case (IP High Court, June 23, 2011).
   • No Subjective Knowledge Required: Importantly, for this category of "dedicated articles," the subjective knowledge or intent of the supplier regarding the patent or the infringing use is generally not a prerequisite for liability. The exclusive nature of the article itself creates a strong presumption of its infringing purpose.
2. For Patented Processes (Article 101(iv)):
   Similarly, it is deemed an act of infringement to produce, assign, etc., "as a business," articles that are used exclusively for the working (use) of the patented process.
   • Example: If a patent covers a unique industrial chemical process, manufacturing and selling a specialized catalyst or piece of equipment that has no other practical application than for carrying out that specific patented process could fall under this provision.
   • The interpretation of "exclusively used" and the lack of a knowledge requirement parallel those for product inventions under Article 101(i).
3. "Indirect Infringement of Indirect Infringement" Generally Not Recognized:
   A notable clarification came from the IP High Court Grand Panel in the Ichitaro Help Icon Case (September 30, 2005), which generally held that the act of supplying components for the manufacture of a "dedicated article" (which is itself an object of indirect infringement) is typically not considered a further act of indirect infringement. The statute targets the supply of articles directly used for the direct infringement.

B. Supplying "Non-Dedicated but Essential Articles" (非専用品 - Hi-sen'yōhin) – With Knowledge

These provisions address situations where the supplied article is not exclusively used for the patented invention but is nonetheless a key component and is supplied with knowledge of the infringing activity. This was a significant addition to Japanese patent law, introduced by amendments in 2002.

1. For Patented Products (Article 101(ii)):
   It is deemed an act of infringement to produce, assign, etc., "as a business," articles that:
   • are used for the production of the patented product;
   • are indispensable for solving the problem addressed by the patented invention (不可欠物 - fukaketsu-butsu); AND
   • are not "general-purpose commodities widely distributed in Japan" (汎用品 - han'yōhin, staple articles);
   • Subjective Requirement (Knowledge): This act constitutes indirect infringement only if done by a person knowing (知りながら - shirinagara) BOTH that the invention for which the product is intended is a patented invention AND that the supplied articles are to be used for the working (production) of that patented invention.
2. For Patented Processes (Article 101(v)):
   A parallel provision exists for articles used for the working (use) of a patented process, subject to the same conditions of being indispensable, not a general-purpose commodity, and supplied with the requisite knowledge.
3. Key Elements for Non-Dedicated Articles:
   • "Indispensable for Solving the Problem Addressed by the Patented Invention": This is a crucial and often debated element. It does not simply mean any part that is necessary for the patented product or process to function. Rather, the article must be a key component that is directly related to the inventive concept and the technical solution offered by the patent. It must be integral to achieving the core inventive contribution.
     • For example, standard screws or casings, while necessary for a patented machine, might not be "indispensable for solving the problem addressed by the patented invention" if the invention lies in a novel internal mechanism.
     • The Clip Case (Tokyo District Court, April 23, 2004) and the Pioglitazone Combination Drug Case (Tokyo District Court, February 28, 2013) provide examples where certain supplied components were found not to be "indispensable" in this specific sense, as they did not directly embody the core inventive feature of the patent in question. Conversely, the Granular Material Mixing Method Case (IP High Court, March 27, 2014) suggested that an item could be indispensable even if not explicitly part of the claims, if it's essential to achieve the patented solution.
   • Exclusion of "General-Purpose Commodities Widely Distributed in Japan" (汎用品 - Han'yōhin o Nozoku):
     Even if an article is indispensable and supplied with knowledge, it will not give rise to indirect infringement under these clauses if it is a standard, off-the-shelf item with broad, unrelated commercial uses (e.g., common chemicals, standard electronic components, generic fasteners). This exclusion prevents patent law from unduly interfering with legitimate trade in staple articles of commerce that have substantial non-infringing uses.
   • The "Knowledge" Requirement (Subjective Element):
     This is a critical safeguard. For liability under Article 101(ii) or (v), the supplier must have actual knowledge of two things:
     1. That the end product or process for which their article is intended is protected by a Japanese patent.
     2. That their specific article is being used (or will be used) for working that patented invention.
        Mere negligence or "should have known" is generally not sufficient; actual knowledge must be proven. Proving such knowledge can be challenging for patentees. However, circumstances such as continuing supply after receiving a clear warning letter from the patentee detailing the patent and the infringing use, or supplying components according to specifications that directly map onto patent claims, may be used as evidence to infer knowledge.

C. Possession for Assignment or Export (譲渡等目的所持 - Jōto tō Mokuteki Shoji)

These provisions target acts of possessing infringing items with the intent to further distribute them.

1. For Patented Products (Article 101(iii)):
   It is deemed an act of infringement to possess the patented product "as a business" for the purpose of assigning it (selling, transferring), leasing it, or exporting it.
2. For Products Made by a Patented Process (Article 101(vi)):
   Similarly, it is deemed an act of infringement to possess products manufactured by the patented process "as a business" for the purpose of assigning, leasing, or exporting them.

• Rationale: These provisions, introduced by amendments in 2006, allow patentees to take action against infringing goods at an earlier stage, before they are widely disseminated into the market through sale or export, thus making enforcement more effective.
• "Purpose" as a Key Element: The specific intent to assign, lease, or export must be proven. Mere possession of an infringing item for other reasons (e.g., for internal use, for storage not linked to imminent commercial transfer, or for destruction) would not, by itself, fall under these particular clauses of indirect infringement, though such possession might be linked to other acts of direct or indirect infringement.

III. The Relationship Between Indirect and Direct Infringement

A complex legal question is whether indirect infringement can exist if no act of direct infringement by an end-user has actually occurred or if the end-user's act is somehow lawful.

A. Does Direct Infringement Need to Have Occurred or Be Imminent?

Generally, for indirect infringement to be established, it is not strictly necessary that an act of direct infringement by an end-user has already taken place. The provisions on supplying articles (especially dedicated articles or essential articles with knowledge) are often triggered because there is a high probability or objective likelihood that the supplied articles will be used to commit direct infringement. The aim is often to stop the supply before widespread direct infringement occurs.

B. The "Dependence Theory" vs. "Independence Theory" (従属説 vs. 独立説)

The more nuanced issue is whether indirect infringement is legally dependent on the (actual or potential) direct infringement being unlawful.

• "Dependence Theory" (Jūzokusetsu): Argues that if the act of the direct user would be lawful (i.e., not an infringement), then there can be no indirect infringement by a supplier.
• "Independence Theory" (Dokuritsusetsu): Argues that Article 101 defines specific acts by suppliers as infringement in themselves, irrespective of the lawfulness of the end-user's act.

Japanese courts and commentators have often adopted a modified or eclectic approach (折衷説 - setchūsetsu), considering the specific reasons why the direct user's act might be lawful:

1. Direct Working is Lawful due to External Factors (Generally NO Indirect Infringement):
   • Working Exclusively Outside Japan: If components are supplied in Japan for a product that will be assembled and used exclusively outside Japan (where the Japanese patent has no territorial effect), this generally does not constitute indirect infringement of the Japanese patent. The Japanese patent is not being directly infringed.
   • Experimental or Research Use (Article 69(1)): If articles are supplied to a party who will use them for activities falling under the experimental or research use exception (which makes their working non-infringing), the supplier is generally not liable for indirect infringement. To hold otherwise would undermine the purpose of the experimental use exception.
   • Working by a Lawful Licensee: Supplying articles to a party who has a valid license from the patentee to work the invention is not indirect infringement. The end-use is authorized.
2. The Key Exception: Supply for Private/Household (Non-Business) Use:
   A very important scenario involves the supply of articles for an end-use that is not direct infringement simply because the end-user is not acting "as a business" (e.g., purely personal or household use).
   • Direct working of a patented invention by an individual for purely personal or household purposes is not "as a business" and therefore not an act of direct infringement by that individual.
   • However, a party who, "as a business," supplies articles (especially dedicated articles under Art. 101(i)/(iv), or essential components with knowledge under Art. 101(ii)/(v)) to individuals specifically for such private/household use can still be held liable for indirect infringement.
   • Rationale: The supplier's act is a business activity. If such supply were freely permitted, it could facilitate widespread "non-business" uses that, in aggregate, could significantly erode the patentee's commercial market and the value of the patent, even if each individual end-use is not itself an infringement. The law targets the supplier's commercial act of equipping numerous non-infringing (but patent-consuming) end-uses. The Automatic Bread Maker Case (Osaka District Court, October 24, 2000) is an example where selling a machine for home use (where the home use of the patented bread-making method was not direct infringement) was found to be indirect infringement by the seller of the machine.

IV. Strategic Implications for Businesses

• For Patentees: Indirect infringement provisions provide powerful strategic options. Instead of (or in addition to) pursuing potentially numerous and diffuse direct infringers, a patentee can target upstream suppliers of critical components or tools that enable the infringement. This can be a more efficient and impactful enforcement strategy. Identifying whether supplied components are "dedicated" or "essential and non-staple" (and if knowledge can be proven for the latter) is key.
• For Component Suppliers, Manufacturers, and Importers:
  • Awareness of relevant patents covering end-products or processes for which your articles might be used is crucial.
  • For components that could be considered "dedicated articles," the risk of indirect infringement liability is higher, as the supplier's knowledge of the patent or infringing use is not a prerequisite.
  • For "non-dedicated but essential articles," the knowledge element provides a degree of protection. However, receiving a well-drafted cease-and-desist letter from a patentee can establish this knowledge for future supplies. Implementing due diligence procedures, especially when developing or supplying specialized components for known applications in patent-sensitive industries, is advisable.
  • Understand that even supplying for what appears to be private end-use by consumers can carry indirect infringement risks if the supplied articles are key to a patented invention.

Conclusion

Indirect infringement under Article 101 of the Japanese Patent Act significantly expands the range of activities that can be considered patent infringement, moving beyond just the direct working of the patented invention. It targets specific preparatory and contributory acts—such as supplying dedicated or essential components, or possessing infringing goods for commercial distribution—that have a high likelihood of leading to direct infringement or that facilitate widespread use which undermines the patentee's legitimate market.

While these provisions are carefully drafted with specific requirements (like "exclusive use," "indispensability," "knowledge," and exclusion of "general-purpose commodities") to balance robust patent protection with the freedom of legitimate commerce, businesses involved in the supply chain for potentially patented technologies must be acutely aware of these rules. A thorough understanding of what constitutes indirect infringement is essential for both patentees seeking to effectively enforce their rights and for suppliers aiming to operate without inadvertently incurring liability in Japan.