Why is patent litigation cheaper in Japan than in the US?

Japan’s limited discovery, judge-only trials and lower damages keep costs modest compared with broad US discovery and jury-driven awards.

Can I challenge patent validity outside court in both countries?

Yes. Japan uses JPO invalidity trials; the US offers USPTO IPR/PGR. Both run parallel to court cases but have different standards and estoppel effects.

Do Japanese courts ever use juries in patent cases?

No. All infringement, validity and damages issues are decided by specialist judges; juries are unique to US patent litigation.

Intellectual Property Law

Patent Litigation Across the Pacific: Key Differences Between the US and Japanese Systems

Japanese Attorney at Law - Bengoshi L.L.

05 May 2025 • 7 min read

TL;DR

Japan’s centralized, judge-only patent courts offer predictability, while the US allows venue choice and jury trials—raising cost and uncertainty.
Limited evidence-production and lower damages in Japan contrast with broad US discovery and potentially treble awards.
Dual-track validity challenges exist in both systems but operate differently (JPO trials vs. USPTO IPR/PGR). Tailor strategy, budget and timeline accordingly.

Table of Contents

Jurisdiction and Venue: Centralized Expertise vs. Strategic Choice

Evidence Gathering: Limited Disclosure vs. Extensive Discovery

Challenging Patent Validity: Dual Tracks vs. Administrative Reviews

Decision-Maker: Specialized Judges vs. Jury Trials

Damages: Reasonable Royalty vs. Potentially Higher Awards

Conclusion

For companies with technological interests spanning both the United States and Japan, understanding the nuances of each country's patent litigation system is crucial. While both nations offer robust patent protection, the procedures for enforcing those rights and defending against infringement claims differ significantly. Navigating these differences effectively is key to managing risk, budgeting appropriately, and developing successful litigation strategies. This post highlights some major distinctions between US and Japanese patent litigation concerning jurisdiction, evidence gathering, validity challenges, decision-makers, and damages.

1. Jurisdiction and Venue: Centralized Expertise vs. Strategic Choice

Japan:
Japan employs a highly specialized and centralized system for patent infringement cases.

First Instance: Regardless of where the parties are located or infringement occurs within Japan, initial jurisdiction lies exclusively with either the Tokyo District Court or the Osaka District Court, depending on the region. Both courts have dedicated divisions staffed with judges experienced in intellectual property matters.
Appeals: All appeals from these district courts concerning patent rights are handled exclusively by the Intellectual Property (IP) High Court (Chizai Kōsai) in Tokyo. This centralization fosters consistency in legal interpretation and builds deep judicial expertise.

United States:
The US system is more decentralized, offering litigants potential strategic choices but also less uniformity.

First Instance: Patent cases fall under federal law and are heard in US District Courts. There are 94 federal judicial districts across the 50 states and territories.
Venue: Determining which district court is appropriate (venue) is governed by specific rules (primarily 28 U.S.C. § 1400(b)). Following the Supreme Court's decision in TC Heartland LLC v. Kraft Foods Group Brands LLC (2017), venue for domestic corporations is generally proper only where the defendant is incorporated or where the defendant has committed acts of infringement and has a regular and established place of business. This narrowed plaintiffs' previous wide latitude in choosing favorable courts.
Foreign Defendants: Notably, for foreign defendants without a permanent establishment in the US, venue may potentially lie in any judicial district (under 28 U.S.C. § 1391(c)), granting plaintiffs significantly more choice in these situations.
Strategic Implications: Because factors like case processing speed, local court rules, judicial experience with patent cases, and jury pool characteristics can vary between districts, the choice of venue in the US can be a significant strategic decision, unlike in Japan's more predictable system.

2. Evidence Gathering: Limited Disclosure vs. Extensive Discovery

This is perhaps the most stark difference between the two systems.

Japan:
Japan operates under a civil law tradition with limited pre-trial evidence gathering mechanisms compelled by the court.

Document Production Orders: Parties can petition the court to order the opposing side to produce specific documents necessary to prove infringement or calculate damages (Patent Act Art. 105(1)). However, the requesting party must reasonably specify the documents, and the opposing party can resist based on legitimate reasons, including the protection of trade secrets. These orders are not typically used for broad exploratory searches.
Inspection System (Sashō Seido): A newer system (Patent Act Arts. 105-2 to 105-10) allows a party to request the court appoint a neutral technical expert (an "inspector") to visit the alleged infringer's premises to inspect machinery, processes, or documents relevant to infringement. The inspector reports findings to the court. This is targeted and not equivalent to wide-ranging discovery.
Emphasis on Voluntary Evidence: Generally, Japanese litigation relies heavily on evidence voluntarily submitted by the parties and evidence elicited through witness examination in court. There is no general obligation to proactively disclose unfavorable information.

United States:
The US employs an extensive pre-trial "discovery" process where parties are obligated to exchange vast amounts of information.

Broad Scope: Discovery allows parties to obtain information regarding any non-privileged matter that is relevant to any party's claim or defense and proportional to the needs of the case.
Key Tools: Common discovery methods include:
- Document Requests: Demanding production of relevant documents and electronically stored information (ESI).
- Interrogatories: Written questions requiring written answers under oath.
- Requests for Admission: Asking the opposing party to admit or deny specific facts.
- Depositions: Oral testimony taken under oath outside of court from fact witnesses, party representatives, and expert witnesses.
Burdens and Obligations: Discovery is often the most time-consuming and expensive phase of US litigation (potentially lasting 1-2 years and costing millions of dollars). Parties have an affirmative duty to preserve potentially relevant evidence (including ESI) once litigation is reasonably anticipated (the litigation hold duty). Failure to preserve evidence can lead to severe sanctions (spoliation), including adverse inferences or even case dismissal. Parties must produce relevant, non-privileged information, even if it is detrimental to their own case.

3. Challenging Patent Validity: Dual Tracks vs. Administrative Reviews

How the validity of an asserted patent is challenged also differs significantly.

Japan:
Japan utilizes a "dual track" system where validity can be contested both in court and at the Japan Patent Office (JPO).

Court Challenge: An alleged infringer can raise patent invalidity as a defense directly within the infringement lawsuit in district court (Patent Act Art. 104-3). The court can rule on validity for the purpose of the infringement action.
JPO Invalidity Trial (Mukō Shinpan): Any interested party (or sometimes the JPO itself) can initiate a separate inter partes proceeding at the JPO seeking to invalidate the patent claims (Patent Act Art. 123). This can be filed anytime after the patent grants.
JPO Opposition (Igi Mōshitate): Within six months of a patent's grant, any third party can file an opposition at the JPO based on limited grounds (primarily novelty, inventive step, description requirements) (Patent Act Art. 113). This is primarily an ex parte examination process.
Coordination: While the court and JPO proceedings can run in parallel, the court may (but rarely does in practice) stay the infringement case pending the outcome of the JPO invalidity trial (Patent Act Art. 168).

United States:
Patent validity is also presumed in the US (35 U.S.C. § 282), and invalidity must be proven in district court by "clear and convincing evidence." However, the America Invents Act (AIA) of 2011 created powerful administrative procedures at the US Patent and Trademark Office (USPTO) for challenging validity:

Inter Partes Review (IPR): The most frequently used procedure. Can be filed by anyone 9 months after patent grant (or after PGR termination). Grounds are limited to invalidity based on prior art patents or printed publications. The standard of proof is "preponderance of the evidence," which is lower than the district court standard.
Post-Grant Review (PGR): Must be filed within 9 months of patent grant. Allows challenges on broader grounds, including subject matter eligibility (Sec. 101), written description/enablement (Sec. 112), and prior art. The standard is also preponderance of the evidence.
Strategic Use & Estoppel: IPRs and PGRs are often filed parallel to district court litigation. Accused infringers often seek to stay the court case pending the USPTO decision. The lower burden of proof makes the USPTO an attractive forum for challengers. However, parties are generally estopped (kinhan-gen) from later raising in court any invalidity arguments they raised, or reasonably could have raised, during the IPR/PGR (35 U.S.C. § 315(e)).

4. Decision-Maker: Specialized Judges vs. Jury Trials

Japan:
All aspects of patent infringement cases—infringement, validity (when raised as a defense), and damages—are decided by judges within the specialized IP divisions or the IP High Court.

United States:
The US Constitution (Seventh Amendment) guarantees the right to a jury trial in civil cases involving claims for monetary damages (which includes patent infringement damages).

Jury's Role: If either party requests a jury, the jury typically decides factual questions related to infringement, validity (based on the clear and convincing standard), and the amount of damages.
Judge's Role: The judge decides issues of law, including the crucial task of interpreting the meaning and scope of the patent claims (claim construction, often determined after a dedicated "Markman hearing"). The judge also decides equitable relief, such as injunctions.
Implications: Jury trials introduce an element of unpredictability. Success often hinges on presenting complex technical and legal issues clearly and persuasively to lay jurors. Perceptions of potential "home court advantage" or jury bias can also influence strategy.

5. Damages: Reasonable Royalty vs. Potentially Higher Awards

While both systems aim to compensate patentees, the approach and potential scale of damages differ.

Japan:
Damages are calculated based on principles in Patent Act Art. 102, which includes presumptions based on:

Patentee's lost profits per unit multiplied by the number of infringing units sold (up to the patentee's capacity).
Infringer's profits gained from the infringement.
A reasonable royalty rate.
Recent (2019) amendments clarified that lost profits can include a royalty component for sales exceeding the patentee's capacity, and that the royalty rate calculation can reflect the fact that infringement has occurred (potentially justifying a higher rate than a freely negotiated one). While damage awards have trended slightly upwards, they remain, on average, considerably lower than in the US.

United States:
Damages must be "adequate to compensate for the infringement, but in no event less than a reasonable royalty" (35 U.S.C. § 284).

Lost Profits: Requires rigorous proof (often using the multi-factor Panduit test) showing demand for the patented product, absence of acceptable non-infringing substitutes, the patentee's capacity to meet the demand, and the amount of profit the patentee would have made.
Reasonable Royalty: More common. Determined based on a hypothetical negotiation between a willing licensor and licensee just before infringement began. Courts often consider the extensive list of Georgia-Pacific factors.
Higher Potential Awards: US damage awards, particularly reasonable royalties calculated on the entire market value of a complex product (though increasingly scrutinized) or significant lost profits, can reach very high figures.
Enhanced Damages & Fees: US law allows courts to increase damages up to three times the assessed amount in cases of willful or egregious infringement (under the Halo Electronics standard, 35 U.S.C. § 284). Additionally, in "exceptional cases" (e.g., involving litigation misconduct or baseless claims), courts can order the losing party to pay the prevailing party's reasonable attorney fees (35 U.S.C. § 285). These provisions contribute to the higher financial stakes of US patent litigation.

Conclusion

Navigating patent disputes between the US and Japan requires a keen understanding of their distinct legal landscapes. Key differences—from the centralized, judge-led system with limited discovery in Japan to the decentralized US system with potential venue shopping, extensive discovery, jury trials, powerful administrative validity challenges, and the possibility of significantly higher damages and fee awards—demand tailored strategies. Companies involved in trans-Pacific innovation and commerce must appreciate these procedural and substantive distinctions to effectively protect their intellectual property and manage litigation risk on both sides of the ocean.