Navigating International Patent Protection in Japan: Territoriality, Treaties, and Parallel Imports

Japanese Attorney at Law - Bengoshi L.L.

31 May 2025 • 8 min read

In an increasingly interconnected global economy, securing and understanding the scope of patent protection across different national borders is a critical concern for businesses. Patent rights are fundamentally territorial, meaning a patent granted in one country generally provides protection only within that country's borders. This principle has significant implications for companies seeking to protect their innovations in multiple markets, including Japan. This article explores the foundational principle of territoriality in Japanese patent law, the role of key international treaties in facilitating cross-border patent protection, and Japan's specific approach to the complex issue of parallel importation of patented goods.

I. The Principle of Territoriality in Japanese Patent Law

The bedrock of international patent law is the principle of territoriality (zokuchi shugi). This means that a patent granted by the Japan Patent Office (JPO) is effective only within the territory of Japan. It does not confer any exclusive rights in other countries, nor does a foreign patent automatically provide protection in Japan. Each country's patent system operates under its own national laws, reflecting its specific industrial policies and legal traditions.

This territorial nature presents several inherent challenges for those seeking international patent protection:

There is no automatic guarantee that foreigners will be granted patent rights in a country, or under what conditions.
Applicants must typically file separate patent applications in each country where protection is desired. This can lead to significant time lags between filings. In first-to-file systems like Japan's, such delays can create a risk of an invention being independently developed and filed by another party in a particular country, potentially preempting the original inventor's rights in that territory.
The process of filing and prosecuting multiple national applications is often complex and can be very costly.

To mitigate these challenges and facilitate a more harmonized and accessible international patent system, a framework of international treaties has been established.

II. Key International Treaties and Their Impact on Patent Protection in Japan

Japan is a signatory to several major international treaties that play a crucial role in streamlining the process of obtaining and enforcing patent rights for both Japanese entities abroad and foreign entities in Japan.

A. The Paris Convention for the Protection of Industrial Property (1883)

The Paris Convention is a foundational international agreement in the field of industrial property, which Japan joined in 1899. It establishes several key principles that are fundamental to international patent protection:

National Treatment (Article 2(1)): This core principle mandates that each member state must grant the same protection and advantages to nationals of other member states as it grants to its own nationals with respect to industrial property rights. This ensures that foreign applicants in Japan are not discriminated against and receive the same treatment under Japanese patent law as Japanese applicants. The obligation also extends to individuals domiciled or having a real and effective industrial or commercial establishment in a member state. While the Paris Convention does not harmonize the substantive patent laws of member states, it guarantees equality of treatment. Member states must also provide at least the minimum rights stipulated within the treaty itself.
Right of Priority (Article 4): Perhaps the most practically significant aspect for international filers is the right of priority. Under this principle, an applicant who has duly filed a patent application in one member state (the "first filing") enjoys a right to claim priority when filing applications for the same invention in other member states within a specific period. For patents, this priority period is 12 months from the date of the first filing. If a subsequent application is filed in Japan within this 12-month period claiming priority from a first filing in another Paris Convention country, the Japanese application will be treated, for prior art purposes (e.g., novelty and inventive step assessment), as if it had been filed on the date of the first foreign filing. This allows applicants time to decide in which countries to seek protection without losing their effective filing date against intervening disclosures or third-party filings.
Independence of Patents (Article 4bis): Patents granted in different member states for the same invention are independent of each other. This means that the grant, refusal, invalidation, or expiration of a patent in one country does not automatically affect the status of corresponding patents for the same invention in other member states. This principle prevents a "domino effect" where issues with a patent in one jurisdiction could jeopardize an entire international patent portfolio.

B. The Patent Cooperation Treaty (PCT) (1970)

Japan has been a member of the PCT since 1970. The PCT, which is a special agreement under Article 19 of the Paris Convention, does not establish a global patent but rather simplifies and rationalizes the process of obtaining patent protection in multiple countries simultaneously.

Unified Filing Procedure: An applicant can file a single "international application" in one language with a designated Receiving Office (often their national patent office). This single filing has the effect of a national filing in all PCT member states designated by the applicant (which can be over 150 countries, including Japan).
International Search and Preliminary Examination: The PCT system includes an international search conducted by an International Searching Authority to identify relevant prior art. Applicants can also opt for an international preliminary examination, which provides a non-binding opinion on the potential patentability of the invention. These reports can help applicants assess the likelihood of obtaining patents and make informed decisions about proceeding with applications in various countries.
National Phase Entry: The PCT system culminates in the "national phase," where the international application enters examination before the national or regional patent offices of the designated states. It is these national/regional offices (like the JPO for Japan) that ultimately decide whether or not to grant a patent based on their respective national laws. Applicants typically have up to 30 or 31 months from the priority date to enter the national phase in Japan by, for example, submitting a Japanese translation of the application.

The TRIPS Agreement, administered by the World Trade Organization (WTO), sets minimum standards for the protection and enforcement of intellectual property rights, including patents, that all WTO members must adhere to. Japan, as a WTO member, complies with TRIPS obligations.

Incorporation of Paris Convention Principles: The TRIPS Agreement requires member countries to comply with key provisions of the Paris Convention (e.g., national treatment).
Minimum Standards: It establishes minimum standards for patent protection, such as a minimum patent term of 20 years from the filing date.
Most-Favored-Nation (MFN) Treatment: In addition to national treatment, TRIPS mandates MFN treatment, meaning that any advantage, favor, privilege, or immunity granted by a member country to the nationals of any other country must be accorded immediately and unconditionally to the nationals of all other member countries.
Enforcement: A significant aspect of TRIPS is its detailed provisions on the enforcement of intellectual property rights, requiring members to establish effective civil, administrative, and, in some cases, criminal procedures, as well as border measures to combat infringement.

III. Parallel Importation of Patented Products into Japan

A complex issue arising from the territorial nature of patent rights in a globalized marketplace is "parallel importation." This refers to the importation of genuine (non-counterfeit) patented products into a country, where those products were first placed on the market in another country by the patentee or with their consent, but are imported into the first country through channels other than the patentee's officially authorized distributors.

From a purely formal perspective, since importation is one of the exclusive rights granted by a patent (Article 68, referring to acts defined in Article 2(3)), the unauthorized parallel importation of a product covered by a Japanese patent would appear to constitute patent infringement. However, for policy reasons, such as promoting free trade and preventing artificial price discrimination, many countries permit parallel imports under certain conditions. Japan has developed its own specific approach to this issue, primarily through judicial interpretation rather than explicit statutory provision.

The Japanese Supreme Court's Stance: The "Implied License" Theory (BBS Case)

The leading case on parallel importation of patented goods in Japan is the Supreme Court judgment of July 1, 1997 (often referred to as the "BBS case," involving aluminum car wheels). In this decision, the Supreme Court did not adopt a broad doctrine of "international exhaustion" (which would posit that a patentee's rights are exhausted globally once the patented product is sold anywhere in the world by or with the patentee's consent).

Instead, the Court articulated an "implied license" theory. The Court held that when a Japanese patentee, or an entity that can be economically identified or equated with the Japanese patentee (such as a subsidiary or an exclusive licensee abroad), sells a patented product outside Japan without imposing any explicit restrictions regarding its subsequent importation into and sale in Japan, they are deemed to have implicitly granted the purchaser and subsequent transferees the right to import that specific product into Japan, and to use and sell it in Japan, free from claims under the Japanese patent.

The rationale for this implied license includes:

The highly developed nature of international economic transactions, which makes the subsequent international flow of goods, including into Japan, a foreseeable event for the patentee.
The patentee's opportunity to obtain their reward for the invention through the first sale abroad. If they sell without restriction, they are presumed to accept the consequences of free circulation.

An "entity equated with the Japanese patentee" can include assignees of the corresponding foreign patent rights, licensees under foreign patents, or foreign subsidiaries whose decision-making is controlled by the Japanese patentee.

Preventing Parallel Imports: The Patentee's Option to Impose Restrictions

Crucially, the implied license is not absolute. The Japanese patentee can prevent parallel importation if they effectively negate this implication at the time of the first sale abroad. To do this, the Supreme Court indicated that the patentee must:

Establish a clear contractual agreement with the first purchaser abroad that the products are not to be imported into or sold in Japan (i.e., imposing a territorial restriction).
And, to bind subsequent transferees who may not be party to the initial contract, this territorial restriction must be clearly and legibly marked on the patented products themselves.

If these steps are taken, the basis for an implied license is removed, and the parallel importation of such restricted goods into Japan can constitute an infringement of the Japanese patent. Questions can arise regarding the sufficiency of marking, such as the language used for the notice or the effect if markings are removed by intermediaries.

Scope of the Implied License: Product Identity

The implied license, when it arises, pertains to the specific product units that were legitimately sold abroad by the patentee or with their consent. If these products are subsequently modified, processed, or reconstructed to such a degree that they effectively become "newly manufactured" items and lose their essential identity with the goods originally sold, the implied license might not extend to these altered products. The criteria for determining whether a product has been "newly manufactured" in this context are complex and involve considering the attributes of the product, the nature of the patented invention, the manner and extent of the processing or replacement of parts, and general trade practices (similar to considerations in domestic patent exhaustion cases concerning repair versus reconstruction).

Conclusion

Navigating the international patent landscape requires a clear understanding of fundamental principles like territoriality. While Japanese patent rights are confined to Japan, international treaties such as the Paris Convention and the Patent Cooperation Treaty provide vital mechanisms for foreign entities to seek and obtain patent protection in Japan, and for Japanese entities to do likewise abroad, by streamlining procedures and establishing core rights like national treatment and priority.

Furthermore, Japan's specific approach to parallel importation, based on an "implied license" theory, allows for the free movement of genuine patented goods under certain conditions but also provides avenues for patentees to restrict such imports if they take clear and explicit measures at the point of first sale abroad. For businesses engaged in international trade involving patented products, a thorough understanding of these Japanese rules is essential for both enforcing patent rights and ensuring freedom to operate.