Tuesday, January 18 2022   \  Published by Sonoda & Kobayashi Intellectual Property Law.

Patent validity: Where and when to fight your patent validity disputes in Japan

Invalidating an opponent’s patent can be a complex matter.

Like in most other jurisdictions, Japan offers various legal options for those engaged in disputes over patent validity. However, where and when to best fight your patent dispute remains a difficult question. This article aims to give the reader a short overview of the legal means available, so as to help you find the optimal course of action.  

Four legal avenues for challenging patent validity In Japan

In Japan, there are 4 principal routes or proceedings you can take to dispute the validity of a patent of another party.  Each one comes with its own set of rules and conditions, and consequently has its own advantages and disadvantages. These are the 4 proceedings where patent validity may be disputed:

  1. Opposition
  2. Nullity action
  3. Infringement lawsuit
  4. Lawsuit for Declaratory Judgment of Non-Infringement                                                                                                                         

A distinction of note between these four is that numbers 1 and 2 (opposition and nullity action) are proceedings carried out before JPO Appeals Boards. This means that the people working on 1 and 2 are patent examiners with the relevant scientific education and background.

On the other hand, numbers 3 and 4 (infringement lawsuits and declaratory judgments) are proceedings carried out before a court. In the first instance, this means that Japanese district courts will be hearing the case. By and large, the judges at the district courts do not have a relevant scientific education or background for most patent cases.

In the next two sections, this article will discuss the proceedings in pairs, based on whether the procedure is done with the JPO or the District court.

Patent validity proceedings with the JPO: Oppositions and Nullity Actions

As mentioned above, proceedings at the JPO are divided into oppositions and nullity actions. For a period of time between 2004 and 2015, only nullity actions existed in Japan. However, oppositions have since been brought back and are now an important tool when trying to invalidate a patent.

Oppositions are the more ‘passive’ of the two in the sense that once the opposition has been filed, there is limited opportunity for the opponent to make further written arguments; a style sometimes likened to the regular patent prosecution process.

Timing is important for opposition proceedings. If you find that a competitor’s recently granted patent infringes upon yours, you can start an opposition procedure within 6 months from the publication of the competitor’s patent.

The procedure has no public, in-person hearings and is purely conducted on paper. In principle, what is required are your arguments why the patent should not have been granted. You are not required to file the opposition in your company’s name and using a ‘strawman’ to hide your identity is allowed.

On average the full procedure is completed within 7 months from start to finish. The main reason for this speed is that there is no back-and-forth exchange between you and your opponent.

The procedure is also relatively inexpensive, with professional fees usually ranging between five hundred thousand and two million Japanese Yen.

Generally, a little over a thousand oppositions are filed in Japan each year. That said, oppositions do fail quite often: in the past years only 10% - 15% of oppositions were (partially) successful.

 

Nullity actions are more adversarial in nature compared to oppositions. In some way, they superficially resemble a court case as there are several rounds of written submissions as well as an oral hearing. Keep in mind that nullity actions are still handled by the JPO, or more specifically by their Boards of Appeal.

Nullity actions can be started at any point during the lifespan of the potential infringer’s patent, and even after that, by an interested party. This is a party that competes in the same business.

Despite the format changes, nullity actions are usually still quite quick: they take some 10 to 11 months on average to complete.

Costs are higher and have a rather wide range. Between two million JPY and ten million Japanese Yen is to be expected in professional attorney fees.

Well over a hundred nullity actions are filed each year, a number that has come down since oppositions were reintroduced in Japan in 2015. Their success rate is somewhat higher, hovering at about 20% or more over the past years.

 

The essence of both the opposition and the nullity action is to invalidate a patent and create room for your company to operate. Relatively speaking, the procedures are fast and not very expensive. You will deal with the JPO and its examiners, who have highly specialized knowledge. Success rates are not very high however, and it is recommended that you provide detailed arguments.

Patent validity proceedings at the district courts: Infringement suits and declaratory judgments

Litigating at a court can be another means to dispute the validity of patents. The procedures can be quite different from those at the JPO, so the remainder of the text will highlight the most important aspects.

An infringement suit against a patent can be started any time after a patent’s grant. In fact, you could even file or be faced with a lawsuit after a patent has already expired, because Japanese law allows you to ask for damages over a period of max. 10 years from the suit. Therefore, theoretically lawsuits can be filed about 10 years after a patent has expired. That said, once a company finds out about infringement it only has 3 years to take action against an infringer. The above 10 year period would then only apply if the company finds out about the infringement well after the patent has expired.

If you happened to make your way to the Japanese district court (the Tokyo district court for cases in East Japan, and the Osaka district court for cases in West Japan), you would need to prove that you do in fact hold a patent or are a licenser of one. Oppositions can be filed by any party, but infringement suits are reserved for rights holders only.

The opportunity to claim the invalidity of a patent comes during the court case as a defendant.  In this position, you may want to consider raising the invalidity of your opponent’s patent to help your case. This so-called invalidity defense happens in about 70% of court cases in Japan. Historical data indicates that for cases in which the invalidity defense is raised, the defense succeeds in slightly less than 50% of the time. While a successful defense on this basis technically does not invalidate the patent, it precludes a plaintiff from enforcing their patent right against the defendant.

The 50% figure may seem high in comparison with nullity actions or oppositions, however it is important to note that about 1/3 of lawsuits in Japan are settled, and these settlements are often in favor of the plaintiff, not the defendant. For this reason, waiting for an infringement suit to make an invalidity defense is not necessarily better than filing a nullity action.

Those going through infringement suits at court should be prepared for a lengthy procedure however, as most courts take 14 months to reach a judgement. The costs are naturally also quite a bit higher and can vary a lot. You may expect to pay between ten million and thirty million Japanese Yen in professional and official fees. About 150 new infringement lawsuits are started each year in Japan.

Finally, there is a fourth, and rather uncommonly used, option that you could use to assert the invalidity of a patent. This is starting a lawsuit for a Declaratory Judgment of Non-Infringement. This is a reaction to having received a warning letter threatening an infringement lawsuit. It involves that you as an alleged infringer, going to court and asking the judge for confirmation that you are not liable for infringement of the patent.

Though it is rarely used in practice, available statistics from 2014 to 2020, show that such declaratory judgments were upheld in 13 cases and dismissed in only 1 case.

Relatively speaking this type of lawsuit is swift and inexpensive. However, there is a possibility that an infringement lawsuit is still filed in tandem.

Summing up

Which is the best way to claim the invalidity of a patent? The short answer is that this will depend on what is important to you. Oppositions are swift and relatively inexpensive, lawsuits are slower and can cost a lot of money and are initiated by the patent holder. Nullity actions in the meantime are somewhere in between. Above all, the strength of your legal arguments is of utmost importance. At Sonoda & Kobayashi, we are happy to help you defend your patent rights in Japan.

Ready to Get Started?

Contact Sales