Abstract: The Grand Panel of IPHC, which handles cases by the collegial body of five judges (including four chief judges of each division of IPHC) in order to establish a trustable rule or to unify the interpretation of laws, has sentenced that it is not necessary for the proprietor to be implementing the patented invention when applying Article 102, paragraph 2 of Japanese Patent Act.
Article 102, paragraph 2 of Japanese Patent Act stipulates:
“Where a patentee or an exclusive licensee claims against an infringer compensation for damage sustained as a result of the intentional or negligent infringement of the patent right or exclusive license, and the infringer earned profits from the act of infringement, the amount of profits earned by the infringer shall be presumed to be the amount of damage sustained by the patentee or exclusive licensee.”
This provision was established to reduce the burden of a patentee to prove the damage caused by infringement. Previously, it had been interpreted that said provision cannot be applied if the patentee does not implement the patented invention since there will be no damage when the patentee does not carry out the patented invention (the decisions of Tokyo High Court dated on 29.08.1991, Osaka district court dated on 18.10.2001, etc.). Therefore, when the patentee does not implement his patented invention, the damage caused by an infringer is compensated only by admitted licence fee (Article 102, paragraph 3 of Japanese Patent Act) which is usually set lower than the real damage.
In the present IPHC case, the patentee alleged that his patent was infringed and the damage should be evaluated based on Article 102, paragraph 2 of Japanese Patent Act. On the other hand, the defendant argued that paragraph 2 of Article 102 can be applied only when the patentee implements the patented invention. Since the Appellant (patentee) of the present case does not carry out the patented invention, the defendant asserted that said provision (Article 102, paragraph 2) should not be applied.
The Grand Panel of the IPHC has judged, in contrast to the previous case laws, that Article 102, paragraph 2 should be applied in the case that the patentee would make a profit unless the infringement existed. This is because, paragraph 2 of Article 102 is established in order to reduce the burden of patentee for proving its damage and thus it should be applied broadly, and because it is a presumptive provision and thus there is no disadvantage for the alleged infringer since he can reverse the amount of damage by proving that there is no or less damage.
As a result of this decision, from now on, the patentee can rely on Article 102, paragraph 2 when asserting the amount of his damage caused by an infringer, even if the patentee does not implement his patented invention by himself.