Patent Invalidation Defense v. Correction of Claims Counter-Assertion in Patent Infringement Litigation
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1 Patent Invalidation Defense v. of Claims Counter-Assertion in Patent Infringement Litigation January 27, 2009 TMI Associates Yoshi Inaba Current Situation for Patent Infringement Litigation 2 1
2 Latest Data about Patent Infringement Litigation Nearly half of patentees lose in Patent Infringement Litigation due to patent invalidation. IP High Court Decisions January to November 2008 Others (Patentee Lost) Patentee Won Patentee Lost (Non-infringement) Patentee Lost (Patent Invalidation) 3 Appellants lost in all cases. (IP High Court upheld prior instance decisions for most cases.) Current Situation for Patent Invalidation Trials and their Appeals Patents are invalidated in invalidation trials and their appeals. JPO Patent Invalidation Trials - Number of trials and success rates since IP High Court Appeals against JPO Decisions - Decisions from Jan to Aug Approx. 50% of Trials invalidated patents in Invalid Valid 27% Valid Invalid 37% Blue Bar Graph: Number of Invalidation Trials Red Line Plot: Number of Decisions of Invalidation 4 2
3 Is the Inventive Step Hurdle at the IP High Court Higher? Does the IP High Court have a higher Inventive Step hurdle than JPO? Comparison of Inventive Step Determinations between IP High Court and JPO - Cases where the main issue was Inventive Step (2008) - JPO Decision IP High Court Appeals filed against the JPO Decision Upheld JPO Decision Reversed JPO Decision Reversal Ratio Final Decision of Rejection % Decision to Invalidate % Decision to Maintain % 5 Patent Invalidation Defense v. of Claims Counter-Assertion in Patent Infringement Litigation 6 3
4 Procedural Flow and Cross-relationship with Patent Infringement Litigation and Patent Invalidation Trials Plaintiff Plaintiff District Court Patent Infringement Lawsuit Filed Argues Infringement Argues non-infringement and patent invalidity Judgment Judgment becomes final Defendant Plaintiff or Defendant IP High Court Files appeal against the Court Judgment Files appeal against the JPO Decision JPO Patent Invalidation Patent Invalidation Filed Demand for Argues invalidity Plaintiff Argues patent validity Decision Plaintiff or Defendant Decision becomes final Trial for Defendant Defendant 7 Supreme Court Decisions Two Supreme Court Decisions related to Patent Invalidity Defense and of Claims Counter-Assertion: I. Kilby Decision II. related to Patent Invalidity Defense April 2008 Decision related to of Claims Counter- Assertion against Patent Invalidity Defense 8 4
5 Supreme Court Decision related to Patent Invalidity Defense I. Supreme Court Decision on April 11, 2000 (Kilby Decision) 1. A court can determine whether there are clear reasons to invalidate the patent, and if so, the court can hold the patent unenforceable. 2. The above is applicable even if the JPO s Decision to Invalidate the patent has yet to be finalized. 3. The exception to applying the above is when there are special circumstances, such that a Trial for has been requested by the patentee. 9 Supreme Court Decision related to Patent Invalidity Defense Patent Law Amendment in April, 2004 (Codified Kilby Decision in Patent Law) Article 104 ter (1) Where, in litigation concerning the infringement of a patent right or an exclusive license, the said patent is recognized as one that should be invalidated by a trial for patent invalidation, the rights of the patentee or exclusive licensee may not be exercised against the adverse party. (2) Where the court considers that the materials used for an allegation or defense under the preceding paragraph are submitted for the purpose of unreasonably delaying the proceedings, the court may, upon a motion or ex officio, render a ruling to the effect that the allegation or the defense is to be dismissed. 10 5
6 Supreme Court Decision related to Patent Invalidity Defense Teaching of the Kilby Decision and Practice at the Tokyo and Osaka District Courts Make a judgment about the Patent Invalidity Defense without waiting for the determination by the JPO or by the IP High Court for appeals against JPO Decisions. If a discrepancy appears between the district court judgment and the JPO Decision, it needs to be resolved by the IP High Court. 11 Supreme Court Decision related to of Claims Counter-Assertion II. Supreme Court Decision on April 24, 2008 (April 2008 Decision) MAIN ISSUE: Now that the JPO Decision of is finalized, is there a Reason for Retrial against a Court Decision that the patent is invalid? Can be a Reason for Retrial? JPO 1 st Trial for 4 th Trial for 5 th Trial for Decision of Trial become final Court IP High Court: Patent Invalid (before correction) Appeal to Supreme Court Deadline for filing a Statement of Reasons for Appeal No of Claims Counter- Assertion made. 12 6
7 Supreme Court Decision related to of Claims Counter-Assertion Supreme Court Decision on April 24, 2008 We should say that there is room to find a Reason for Retrial. One Judge stated a dissenting opinion. However, even if the Reasons for Retrial may exist, for the reasons shown below, we should say that challenging the determination of the court of the prior instance based on the reasons that the [JPO] Trial Decision for became final, causes an unreasonable delay in solving the dispute between the appellant and the appellees over the infringement of the Patent Right, and such behavior of the appellant is impermissible in light of the provision of Article 104 ter of the Patent Law. 13 Supreme Court Decision related to of Claims Counter-Assertion Supreme Court Decision on April 24, 2008 If the grounds for invalidation could be overcome and the Products could be recognized as falling within the technical scope of the patented invention based on the scope of claims after the, we could uphold the appellant's claims for an injunction and damages. This holding shows that appellant s claims may be upheld even before the JPO s Decision of becomes final. 14 7
8 Supreme Court Decision related to of Claims Counter-Assertion Teaching of the April 2008 Decision and Practice at the Tokyo and Osaka District Courts Make a judgment about the enforceability of patents based on the claims after without waiting for the determination by the JPO or by the IP High Court for appeals against JPO decisions. The of Claims Counter-Assertion must be made before the Court concludes its Oral Hearing proceedings. 15 Supreme Court Decision related to of Claims Counter-Assertion District Court requirements for successful of Claims Counter-Assertion: 1. A proper Trial for or Demand for has been filed before JPO. 2. The Grounds for Invalidation could be overcome by the. 3. The accused products/methods fall within the scope of the claims after. One Judge stated a dissenting opinion. 16 8
9 Conclusion The Courts make their own determinations whether the patent is valid without waiting for the JPO s Decision for an Invalidation Trial. The Courts make their own determinations whether the patent is enforceable with corrected claims without waiting for the JPO s Decision for a Trial for. If there is a high possibility that the defendant s invalidation arguments would be admitted by the Court, the plaintiff should make its of Claims counter-assertion at an early stage. 17 Thank you very much. 18 9
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