Understanding Indirect Patent Infringement in Japan: Key Differences from U.S. Law?

Patent law typically addresses direct infringement, where an entity makes, uses, sells, or imports a patented invention without authorization. However, modern commerce often involves complex supply chains and multiple actors. Recognizing this, many legal systems, including those of Japan and the United States, have established provisions for "indirect infringement." These provisions hold liable those who, while not directly performing the patented invention, contribute to or induce direct infringement by others.

While the U.S. framework for indirect infringement, encompassing induced and contributory infringement, is familiar to many U.S. practitioners, Japan's approach under Article 101 of its Patent Act has its own distinct characteristics and nuances. For businesses involved in cross-border trade, particularly those supplying components, software, or materials that might be used in conjunction with patented technologies in Japan, a clear understanding of these rules is paramount to mitigate risk and ensure compliance. This article delves into the Japanese legal framework for indirect patent infringement, exploring its core requirements, specific types, and key areas of interpretation, drawing comparisons where relevant to highlight differences from U.S. law.

The Statutory Foundation: Article 101 of the Japanese Patent Act

In Japan, acts that contribute to or facilitate direct patent infringement are primarily governed by Article 101 of the Patent Act. This article deems certain preparatory or auxiliary acts as infringing a patent right or an exclusive license. The overarching purpose of Article 101 is twofold: to provide patentees with effective means to suppress infringement, especially when direct infringers are numerous or difficult to target (such as end-users), and to allow for injunctive relief against such preparatory acts, which might not be readily available under general tort law principles alone. It also aims to deter acts that are clearly geared towards enabling the unauthorized exploitation of a patented invention.

The Prerequisite: An Underlying Act of Direct "Working"

A fundamental principle of indirect infringement in Japan is that it presupposes an act of direct "working" (実施 - jisshi) of the patented invention by someone, typically a third party other than the alleged indirect infringer, within Japan. This direct working must fall within the technical scope of the patent, which can include situations of equivalent infringement.

However, a critical distinction lies in what types of direct "working" can serve as the predicate for indirect infringement under Article 101:

1. For Product Patents: Indirect infringement provisions primarily target acts that contribute to the "production" (生産 - seisan) of the patented product. Supplying components or materials that are used exclusively or indispensably for the production of a patented item falls under Article 101, items (i) and (ii). Notably, acts that solely contribute to the subsequent use or transfer of an already produced patented product by supplying components for those activities are generally not covered by these specific indirect infringement provisions relating to the supply of those components.
2. For Process Patents: Indirect infringement relates to acts that contribute to the "use" of the patented process. Supplying products or apparatus exclusively or indispensably for the use of a patented method is addressed by Article 101, items (iv) and (v).

The Broad Interpretation of "Production"

It is crucial to recognize that the term "production" (生産 - seisan) as used in Article 101 of the Japanese Patent Act has received a broad interpretation from Japanese courts. It extends beyond the conventional manufacturing of a complete product from raw materials. "Production" can encompass acts undertaken by an end-user, such as assembling components to make a patented device operable or installing software onto a general-purpose computer to configure it as a patented information processing apparatus.

For instance, in a notable case concerning the word processing software "Ichitaro" (Tokyo District Court, February 1, 2005), the act of an end-user installing the software onto their personal computer was deemed to constitute the "production" of a patented "information processing device" as claimed in the patent. This broad interpretation significantly expands the scenarios where the supply of components or software can lead to indirect infringement liability, as it means the predicate act of "production" by an end-user is more readily established.

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

A significant theoretical debate in Japanese indirect infringement law concerns whether the underlying act of direct "working" by the third party must itself be unlawful (i.e., an act of direct infringement not excused by any defense) for indirect infringement to occur. This is often framed as the "dependence theory" (従属説 - jūzoku-setsu), which requires the direct working to be infringing, versus the "independence theory" (独立説 - dokuritsu-setsu), which posits that indirect infringement can arise even if the direct working is lawful (e.g., due to a statutory exception).

Current Japanese jurisprudence and academic commentary often lean towards a more nuanced approach, sometimes termed the "scope of limitation theory" (制限規定等射程説 - seigen kitei-tō shatei-setsu). This approach suggests that instead of a blanket rule, one should analyze the legislative purpose behind each specific statutory limitation on patent rights (e.g., private use, experimental use, patent exhaustion). The question then becomes whether the policy underlying that particular limitation should also extend to shield the alleged indirect infringer.

Here’s how this nuanced approach might apply in various contexts:

• Private/Household Use (Article 68): The exception for non-business working of a patent (e.g., by a private individual in their home) generally does not shield a commercial entity that supplies components for such private use. The policy of not intruding into private activities does not justify immunizing commercial-scale preparatory acts. In this scenario, the independence theory effectively prevails for the commercial supplier.
• Experimental or Research Use (Article 69(1)): If a third party's use of a patented invention is for legitimate experimental or research purposes, the policy of promoting technological advancement by allowing such experiments generally does extend to protect those who supply materials or apparatus specifically for such exempted research. If it did not, researchers might be forced to self-manufacture all necessary tools, thereby stifling research. Here, the dependence theory (or the extension of the limitation's scope) tends to be favored.
• Statutory Licenses (e.g., for prior use, employee inventions): When a third party has a statutory license to work the patent (e.g., a prior user right under Article 79 or an employer's right for an employee invention under Article 35), the policy objectives underpinning these licenses (such as protecting prior investments or incentivizing employer R&D) usually extend to allow suppliers to provide necessary components or materials to such licensees without incurring indirect infringement liability.
• Patent Exhaustion Doctrine: If an end-user's act, such as replacing a worn-out, unpatented part of a patented combination, is deemed permissible under the patent exhaustion doctrine, then a third party supplying that replacement part for such permissible repair is typically not liable for indirect infringement. The rationale is that holding the supplier liable would effectively negate the user's exhaustion rights, as users can seldom manufacture such parts themselves.

Types of Indirect Infringement and Their Specific Requirements

Indirect infringement under Article 101 is categorized based on the nature of the supplied product (whether it has only one relevant use or multiple uses) and whether the patent is for a product or a process. The acts of the alleged indirect infringer must themselves be commercial activities, such as manufacturing, assigning (selling), importing, or offering for assignment of things (components, materials, apparatus, etc.) that are used for the direct working of the patent.

A. "Only-Use" Type Indirect Infringement (「にのみ」型 - ni nomi-gata)

This type of indirect infringement occurs when the supplied product is intended exclusively for working the patented invention.

1. For Product Patents (Article 101(i)): Acts of producing, assigning, importing, or offering for assignment, in the course of trade, any product to be used exclusively for the production of the patented product.
2. For Process Patents (Article 101(iv)): Acts of producing, assigning, importing, or offering for assignment, in the course of trade, any product to be used exclusively for the working (use) of the patented process.

The "Exclusively" (にのみ - ni nomi) Requirement:
This is a stringent requirement. It means that the supplied product must have no other realistic, substantial non-infringing commercial use at the time of assessment. The mere theoretical possibility of a non-infringing use is generally insufficient if such use is not practical or commercially viable.

• Time of Assessment: The timing for judging "exclusivity" is critical.
  • For injunctive relief, which is forward-looking, the assessment is typically made as of the conclusion of oral arguments in the fact-finding instance (i.e., the trial court level). If a substantial non-infringing use for the supplied product has been commercialized or becomes apparent by this time, the "exclusively" requirement may fail, and an injunction might not be granted on this basis.
  • For damages, which pertain to past acts, the assessment is made at the time of those past infringing acts. If no substantial non-infringing use existed at that time, the requirement could be met for the purpose of calculating damages for that period.
    The "Sand-making Machine Hammer" case (Osaka District Court, April 24, 1989) is an often-cited example illustrating the application of this requirement.
• "Play" or Unused Features: If a supplied component has multiple features, and one feature is exclusively for the patented invention while others allow for substantial non-infringing uses, the component as a whole might not satisfy the "exclusively" test. Even if the patent-specific feature simply becomes "play" (i.e., unused or non-functional) in the non-infringing applications, the existence of other substantial uses for the component can negate exclusivity. In such scenarios, the analysis often shifts to the "multi-functional" type of indirect infringement.

B. "Multi-functional" Type Indirect Infringement (多機能型 - takinō-gata)

This category applies when the supplied product is not exclusively for the patented invention but still meets other stringent criteria indicating a strong link to the infringement.

1. For Product Patents (Article 101(ii)): Acts of producing, assigning, importing, or offering for assignment, in the course of trade, any product (excluding those widely distributed generally in Japan – i.e., staple articles of commerce) which is used for the production of the patented product and is indispensable for the resolution of the problem by the said patented invention, provided the actor knows that the invention is patented and that the supplied product is used for the working of the invention.
2. For Process Patents (Article 101(v)): Similar requirements for products (not staples) used for working a patented process, being indispensable for its problem-solving aspect, coupled with knowledge.

Key Requirements for Multi-functional Type:

• Knowledge (主観的要件 - shukanteki yōken): The alleged indirect infringer must know (i) that the invention is a patented invention and (ii) that the supplied product is used for the working of that invention. This knowledge element is crucial. However, in practice, it can often be established once the patentee sends a warning letter or files a lawsuit, particularly for ongoing or future acts relevant to an injunction. Consequently, for injunctive relief, this knowledge requirement sometimes becomes a less formidable hurdle than might be initially perceived (e.g., IP High Court, September 30, 2005, "Ichitaro" 2nd instance case regarding software).
• (Non-)Staple Article (（非）汎用品要件 - (hi-)hanyōhin yōken): The supplied product must not be one that is "widely distributed generally in Japan". This is akin to the "staple article of commerce" doctrine in U.S. law. If a product is a common commodity with substantial non-infringing uses, its supply is less likely to constitute indirect infringement. However, Japanese courts have sometimes found this requirement met if an otherwise general-purpose product incorporates a specific feature or component whose primary utility is for the patented invention, even if the product as a whole has other applications (e.g., "Ichitaro" 2nd instance case).
• Indispensability (不可欠要件 - fukaketsu yōken): The supplied product must be "indispensable for the resolution of the problem by the said patented invention". This is arguably the most complex and debated requirement for multi-functional indirect infringement.
  • The original legislative intent might have aligned "indispensability" with the concept of an "essential part" of the invention, similar to that considered under the doctrine of equivalents.
  • However, a mere "but-for" causation (i.e., the invention cannot be worked without the component) might be too broad if the component is a known, non-inventive part, potentially leading to an unwarranted extension of patent rights or bypassing the stricter conditions of the doctrine of equivalents.
  • To prevent overreach, courts and commentators have explored ways to construe "indispensability" more meaningfully:
    • "Characteristic Technical Means" Theory (特徴的技術手段説 - tokuchōteki gijutsu shudan-setsu): This theory, seen in cases like the Tokyo District Court decision of April 23, 2004 ("Clip for Print Circuit Board Jig" case), suggests that "indispensable" means the component must constitute or embody a characteristic technical means newly disclosed by the patent that is central to solving the problem addressed by the invention, particularly in overcoming prior art deficiencies. A component that is merely a known part, even if necessary for the invention to function, might not meet this heightened standard if it's not part of the novel problem-solving contribution of the patent.
    • Conditional Indispensability Coupled with (Non-)Staple Article Analysis: Another approach interprets "indispensability" more broadly as a conditional relationship (the patented invention cannot be practiced without the component) but then places greater emphasis on the (non-)staple article requirement and the separability of infringing features. If the infringing functionality of a multi-functional component can be easily removed or disabled without destroying its other substantial non-infringing uses, then enjoining the supply of the component (as-is) might be considered appropriate because the supplier could modify it to avoid infringement without ceasing its legitimate non-infringing business.

Advanced Issues and Specific Scenarios

Japanese indirect infringement law also grapples with several complex situations:

1. Products Transforming into Infringing Articles Post-Sale

Liability can arise when a product sold by a defendant is non-infringing at the time of sale but subsequently transforms into an infringing article in the hands of the user, either through normal use or the passage of time.

• Rapid Transformation: If the transformation into an infringing state happens quickly, for instance, during distribution or very shortly after the user acquires it, the seller might be considered a direct infringer, having "produced" the infringing article that ultimately reaches the market (e.g., the "Kabikiller" case, Tokyo District Court, November 4, 1999, where the product's composition changed post-manufacture but before or around the point of use).
• Gradual Transformation During Use: If the product is non-infringing when acquired by the user and only becomes infringing over a period of use (e.g., a component wears down to a dimension falling within a patent claim), direct infringement by the original seller is less likely. Indirect infringement, however, might be considered. The user's act of using the product in a way that leads to its transformation into an infringing state could be viewed as the predicate act of "production" for the purposes of Article 101. The "Doctor Blade 2nd instance" case (Tokyo High Court, July 18, 2003) involved such a scenario, although infringement was ultimately denied on the facts.

2. Divided Infringement (複数主体による実施 - fukusū shutai ni yoru jisshi)

This issue is particularly challenging for method patents where different steps are performed by different, uncoordinated entities, and no single entity performs all the claimed steps. In such cases, finding a direct infringer who performs the entire method can be difficult, which in turn complicates establishing indirect infringement against those who perform only some steps.
Japanese courts and academics have considered various theories to address this:

• Joint Working/Control Theory (共同遂行理論 - kyōdō suikō riron): If multiple parties act in concert or if one party directs or controls the others to collectively perform all steps of the method, they may be treated as joint direct infringers.
• "Tool" Theory (道具理論 - dōgu riron): If party Y performs initial steps of a method and supplies an intermediate product to party Z, and this intermediate product has no substantial non-infringing use other than for Z to complete the final steps of the patented method, Y might be deemed to have used Z as a "tool" to perform the entire method. In essence, Y is considered to be the direct infringer of the complete method (e.g., "Method for Forming Electrodeposited Image" case, Tokyo District Court, September 20, 2001). A more refined view is that Y is supplying a dedicated item that inevitably leads to the direct working of the complete method by Z.
• Doctrine of Equivalents: It has been suggested that if a party performs most of a patented method but outsources a non-essential step to another, this might be analyzed under the doctrine of equivalents if such division of labor was easily conceivable by a POSITA.

3. Indirect-of-Indirect Infringement (間接の間接侵害 - kansetsu no kansetsu shingai)

This refers to a situation where a party supplies a component for another component, which itself is then used to work the patented invention. For example, supplying software (Component A) for a general-purpose computer (Component B), where the computer configured with the software (A+B) is then used to perform a patented method.

• If the patent claims a product like "an information processing device (PC) having installed specific program X," then the end-user installing program X on their PC is considered an act of "producing" the patented device. In this case, supplying program X can be a straightforward act of indirect infringement (supplying a component for the "production" of the patented product).
• If the patent claims a method like "an information processing method performed by an information processing device (PC) having installed specific program X," the PC itself (Component B) might be considered the "product used for the working of the method" under Article 101(iv) or (v). Supplying program X (Component A) for this PC could then be characterized as an indirect act contributing to the (primary) indirect infringement related to the PC.
  The IP High Court in the "Ichitaro" 2nd instance case seemed to suggest that supplying an intangible program for a PC (which is the tangible "product" used for the method) does not fall under Article 101(v). This might be due to the intangible nature of the software or how it integrates with the PC. However, this decision is not necessarily seen as a general rejection of the possibility of "indirect-of-indirect" liability for tangible components in other contexts.

Key Distinctions from U.S. Indirect Infringement Law

While both Japan and the U.S. aim to curb activities that facilitate patent infringement, their statutory frameworks and judicial interpretations present notable differences:

• Intent/Knowledge Standards:
  • U.S. induced infringement (35 U.S.C. § 271(b)) requires proof that the defendant knew of the patent and specifically intended to encourage another's direct infringement.
  • U.S. contributory infringement (35 U.S.C. § 271(c)) requires knowledge that the component sold is especially made or adapted for use in an infringement and is not a staple article with substantial non-infringing uses.
  • Japan's "only-use" type does not explicitly require subjective knowledge for the supply itself, focusing on the objective nature of the component. The "multi-functional" type requires knowledge of the patent and the component's use in working it, which, as noted, can often be established by a warning. The intent standard in U.S. inducement is generally considered higher.
• Staple Article Doctrine: Both systems have a concept that exempts the sale of staple articles of commerce suitable for substantial non-infringing uses. Japan's Article 101(ii) and (v) explicitly exclude products "widely distributed generally in Japan."
• Focus of Provisions:
  • Japanese Article 101(i) and (ii) for product patents are specifically tied to supplying components for the "production" of the patented product. U.S. contributory infringement for product patents is not as rigidly tied to "production" components.
  • The structured categories in Article 101 (only-use vs. multi-functional, product vs. process) provide a more codified framework than the broader U.S. doctrines of inducement and contribution.
• Underlying Direct Infringement: While U.S. law generally requires an act of direct infringement as a predicate, Japan's nuanced "independence vs. dependence theory" (or "scope of limitation theory") means that the lawfulness of the direct "working" can have varied impacts on the indirect infringement analysis depending on the specific policy behind the limitation of rights.

Conclusion

Indirect patent infringement in Japan is a complex but critical area of patent law. Article 101 of the Japanese Patent Act provides a detailed, if sometimes challenging, framework for addressing preparatory and contributory acts. The distinction between "only-use" and "multi-functional" types, the specific requirements such as "exclusivity" and "indispensability," the broad interpretation of "production," and the ongoing considerations regarding the necessity of unlawful direct working all contribute to a unique legal landscape. For international businesses, particularly those in supply chains that provide components, software, or materials which could be used in Japan in connection with patented technologies, a proactive understanding of these rules is essential for risk management and strategic decision-making. Careful analysis of a product's potential uses and the nature of its contribution to any patented invention is vital when navigating the Japanese market.