Judicial Reform for Effective Patent

Enforcement-Japan Report-

ATRIP Congress August 6, 2003Nahoko Ono, Assistant Professor

University of Tokyo, RCAST nahoko_ono@ip.rcast.u-tokyo.ac.jp

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Contents

1. On-going Development2. General Overview 3. Issues Concerned

1. Creation of IP High Court2. Technology Expertise

4. Policy Implications

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1. On-going Developments

Effective IP

Litigation

2002.2 Admin. Policy Speech by PM Koizumi“Science, Technology-Creation-based Nation”

2002.11 Enacted Basic Law on IP2003.1 Admin. Policy Speech by PM Koizumi “IP-based Nation”

2001.6 Judicial Reform Committee Report2001.12Created Judicial

Reform Headquarters2002.10 Started IP Litigation

Committee

2002.3 Created Strategic Council on IP2002.7 Published IP

Policy Outline2003.3 Created IP

Policy Headquarters2003.7 Published IP

Strategic Program

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Even in this judicial reform committee report which covers the entire judicial system, IP litigation is specified as an issue

Reform policies include: To reduce by half the litigation period (currently 23.1 mo.s) To concentrate jurisdiction onto Tokyo and Osaka District Cour

ts as substantial “patent courts” To inject more specialized judges and research officials, and t

o possibly introduce professional advisers To confer procedural representative rights for IP (patent etc.) li

tigation to patent agents after intensive training To increase more expertise in regular lawyers To reinforce ADR measures

1. On-going Developments 06/21/01 -Judicial Reform Committee Report-

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Primary objective to become an “IP-based Nation” with ”rapidity and concreteness”

Significant in listing up all the specific action plans, indicating which government entity in charge

Basic view is to better circulate IP creation, protection, and exploitation, along with IP human resource development

1. On-going Developments 06/03/02-IP Policy Outline-

English translation (tentative) is available at www.kantei.go.jp/

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Underlining policy of “RAPID Reform” Objective to promote measures for the

creation, protection and exploitation of IP (Art.1)

Broad definition of “intellectual property” (Art.2):inventions, devices, new varieties of plants, designs, works and other property that is produced through creative activities by human beings (including discovered or solved laws of nature or natural phenomena that are industrially applicable), trademarks, trade names and other marks that are used to indicate goods or services in business activities, and trade secrets and other technical or business information that is useful for business activities

To establish IP Policy Headquarters under the Cabinet (Art.24), which must draft the IP Strategic Program (Art.25(1))

1. On-going Developments 12/04/02 -Basic Law on IP-

English translation (tentative) is available at www.kantei.go.jp/

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Basic views succeeded from IP Policy Outline

8 primary action plans include:1. IP creation, protection, and exploitation at

universities;2. To enact a law concerning rapid patent examination;3. Patent protection re: medical method (activities);4. To create IP High Court;5. Drastic reform to strengthen piracy policy and import

control;6. Patent policy and exploitation at international

standard;7. To promote content-related business; and8. To establish law schools with emphasis on IP laws

1. On-going Developments 07/08/03-IP Strategic Program-

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Separation of Power is guaranteed under the Constitution Legislative Power to the Diet (Con. Art.41) Administrative Power to the Cabinet (Con.

Art.65) Judicial Power to the Courts (Con. Art. 76-I)

However in general, the long-lasting criticism of too-big government triggered the recent structural reform

2. General Overview -Separation of Powers-

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Supreme Court of Japan

High Courts (8) (Tokyo)

District Courts (50)

Family Courts (50)

Constitutional Court is the Supreme Court of Japan only (Con. Art.81), which functions as a final judgment body

Other inferior courts were created by law according to Con. Art.76-I

High and District courts were created based on regional jurisdiction so far

Constitution prohibits any administrative panel existed as a final judgment body (Con. Art.76-II)

Admin. Review e.g. JPO

Summary Courts (438)Source: Supreme Court website (http://courtdomino2.courts.go.jp)

2. General Overview -Current Judicial System-

civil criminal

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2. General Overview -Patent Flow-

Source: JPO Annual Report 2002 (2003)

Supreme Court of Japan

(Tokyo) High Court

(161) (156) (10) (60)

Opposition (3,536)

Patents Issued (121,742) Rejected (82,540)

Invalidity Trial (283)

Appeal (19,270)

Correction Trial (220)

Infringement Action 　

(Dist. Cts) (153)

Examination Request (253,826)

Patent Application (439,175)

11Source: JPO Annual Report 2002 (2003)

2. General Overview -Patent Application-

0

50,000

100,000

150,000

200,000

250,000

300,000

350,000

400,000

450,000

'92 '93 '94 '95 '96 '97 '98 '99 '00 '01

ApplicationExam. RequestPatent GrantedPatent Issued

'92 '93 '94 '95 '96 '97 '98 '99 '00 '01Application 371,894 366,486 353,301 369,215 376,615 391,572 401,932 405,655 436,865 439,175Exam. Request 152,853 223,546 144,051 167,923 186,415 205,300 208,392 217,389 261,690 253,826Patent Granted 70,361 77,310 81,664 97,677 195,864 122,386 129,443 135,412 116,279 107,581Patent Issued 92,100 88,400 82,400 109,100 215,100 147,686 141,448 150,059 125,880 121,742

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2. General Overview -IP-related Cases at District Ct. level-

0

100

200

300

400

500

600

700

800

'91 '93 '95 '97 '99 '01

FiledTerminated

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02Filed 311 413 470 497 528 590 563 559 642 610 554 611Terminated 386 471 457 402 440 442 549 596 772 740 717 652Note: FY2002 figures are estimates based on its April-July data. Source: Supreme Court of Japan, IP Litigation Committee 5-3 (12/24/02)

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2. General Overview -IP-related Cases at High Ct Level-

Note: FY2002 figures are estimates based on its April-July data. Source: Supreme Court of Japan, IP Litigation Committee 5-3 (12/24/02)

0

100

200

300

400

500

600

'91 '93 '95 '97 '99 '01

Filed (Civil)TerminatedFiled (Admin)Terminated

'91 '92 '93 '94 '95 '96 '97 '98 '99 '00 '01 '02Filed (Civil) 78 76 102 91 97 84 120 143 194 216 180 180Terminated 88 75 82 102 93 88 101 137 166 190 226 165Filed (Admin) 309 234 196 285 280 279 328 393 429 476 575 554Terminated 270 214 234 210 253 302 298 397 435 430 471 499

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2. General Overview -Licensing Balance-

Source: IP Activities Research Report (2002)

Domestic ForeignRevenueTotal Domestic Foreign

Expenditure Total

Balance

Patent 363,861 (80,842)

356,635 (156,926

)

720,496 (237,768

)

387,872 (188,383

)

321,522 (19,745)

709,393 (208,127)

11,103 (29,641)

Utility Model

13,418 (7,722)

1,068 (1,066)

14,486 (8,788)

4,513 (206)

84 (0)

4,597 (206)

9,889 (8,582)

Industrial Design

40,743 (38,577)

1,040 (1,038)

41,783 (39,615)

15,353 (14,784)

127 (29)

15,480 (14,813)

26,303 (24,802)

Trade- mark

237,776 (151,157

)

48,735 (34,075)

286,511 (185,231

)

101,788 (37,110)

71,179 (39,241)

172,967 (76,350)

113,544 (108,881

)

CR 1,061,825

(319,970)

122,659 (10,430)

1,184,484

(330,400)

1,274,446

(160,464)

163,698 (2,106)

1,438,144 (162,570)

-253,660 (167,830

)

(Software)

900,304 (258,721

)

13,039 (746)

913,343 (259,467

)

1,132,114

(140,100)

30,433 (254)

1,162,547 (140,354)

-249,204 (119,113

)

Total 1,717,622

(598,267)

530,137 (203,534

)

2,247,758

(801,802)

1,783,972

(400,946)

556,610 (61,120)

2,340,582 (462,067)

-92,824 (339,735

)

FY2001; Yen (million); ( )Intra-affiliated companies

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3. Issues Concerned

Judicial Reform Committee Report (06/21/01)

IP Policy Outline (06/03/02)

IP Strategic Program (07/08/03)

0. (is discussed in IP Litigation Committee)

Prompt examination procedureFaster exam. for plants variety

More specific action plans for prompt exam. incl. the bill

Prompt appeal/trial system (same)

1. To concentrate jurisdiction to Tokyo and Osaka District Courts substantially functioned as “patent courts”

(same) n/a (the legislation passed)

To concentrate jurisdiction to Tokyo High Court

To create IP High Court

2. More specialized judgesMore research officialsTo introduce professional advisersTo confer proceeding representative rights on patent agentsTo reinforce lawyers’ expertise

More expertise in related parties

Further development of expertise

More business and IP laws at new law schoolsMore technical experts with business acumenTo enhance specialized HR including patent agents with their stronger functions

(same) +further specific plans including:- To increase # and quality of lawyers and patent agents;- More emphasis on IP laws for legal education and others;- To create IP schools, etc.

Others

To reinforce ADRs To reinforce ADRsTo develop discovery procedureTo strengthen damage system

(same) + further specific action plans

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3.1. Creation of IP High Court

Judicial Reform Committee ReportChapter II.1.3 06/12/01

IP Policy Outline Chapter 3.2.(2)1) 07/03/02

IP Strategic Program Chapter 2.I.4 07/08/03

For the objective of speeding up IP-related litigation to half of the current period (23.1 months), following measures shall be enforced, as well as measures concerning civil litigation to promote its concreteness and rapidity:Specialized judicial system must be further strengthened for the purpose of letting certain sections of Tokyo and Osaka District Courts be functioned substantially as “Patent Courts”. The alternative measures include:…-To confer exclusive jurisdiction to Tokyo and Osaka District Courts, for cases regarding patent rights and utility models, etc.

i. In order to make specialized departments at the Tokyo and Osaka District Courts substantially function as “patent courts”, the GOJ will grant to both courts exclusive jurisdiction over lawsuits related to intellectual property rights including patent rights and utility model rights. To achieve this, it will submit the necessary bills to the ordinary session of the Diet by FY2003. (JRH, MOJ)

ii. For the purpose of strengthening comprehensive responses to intellectual property-related lawsuits, the GOJ will consider and take necessary actions to strengthen specialized processing systems at high courts, including concentration of jurisdictions of high courts to the Tokyo High Court regarding lawsuits related to intellectual property rights such as patent rights and utility model rights. (JRH, MOJ)

(1) Attempt to create IP High Court

Recent revision of Civil Procedure Law is a notable development, by concentrating jurisdiction for IP-related lawsuits e.g. patent rights onto Tokyo High Court. Yet, from the perspective of significantly important IP protection policy to maintain the Japanese superior competitiveness and to declare our national policy emphasizing IP domestically and internationally, they shall purport to submit a bill necessary to create IP High Court to the Diet within the year of 2004, and examine necessary issues including operation.

Source: IP Policy Outline from www.kantei.go.jp/forign/policy/titeki/kettei/020703taikou_e.html with corrections added.

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3.1. Creation of IP High Court-Patent Litigation Flow-

Suit ag/ (Admin) Appeal

/Trial

Invalidation Trial

Judgment Invalid

Opposition

Infringement Action

Trial for Correctio

n

Appeal Dismissed

Appeal

Judgment Invalid

Supreme Court of Japan

Dist. Ct.

High Ct.

Limited to within 90 days from the date of the Trial Board’s decision (Art. 126-II)

Retrial for Invalidatio

n

The court can remand the case for retrial at JPO when amendment claim has been raised (Art. 181-II)

Source: JPO

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3.1. Creation of IP High Court -Substantially Concentrated Jurisdiction-

Tokyo & Osaka:

Concurrent Jurisdiction

District Courts (50) High Courts (8)

Tokyo Dist. Ct.

Osaka Dist. Ct.

Tokyo High Ct.

Osaka High Ct.

Total

# of judges 3 sections15

1 section5

4 sections16

1 section5 41

# of res. officials 7 3 11 (3) 21

Pre-1998

1998 Revision

Become ExclusiveTokyo High Court:

Exclusive Jurisdiction

2004 Revision

Source: IP Judicial Reform Committee7-2(April 2003); 5-6 (Dec. 2002)

Patent: 85.0%UM: 88.2%IP: 72.6%

Civil: 180Admin: 554

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3.1. Creation of IP High Court -JPO Sits in Tokyo-

FY2002

Examiner 1,304Patent; Utility P 1,105Industrial Design

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Trademark 148

Appeal Examiner 395

Subtotal 1,699

General 771

Grand total 2,470

JPO Employees (FY2002) JPO Budget (FY2002)

Source: JPO Annual Report 2001 (2002)

Revenue 189,981,823,000

Patent Fees etc.

104,418,481,000

Transfer from General Account

17,144,000

Miscellaneous 2,395,745,000

Surplus 83,150,453,000

Expenditure 110,860,544,000

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3.1. Creation of IP High Court

“Substantially” concentrated v. IP High Court

Norm v. Reality (Generalist) (Specialist)

Creation of a Court v. Judicial Enforcement(Pro-Patent) (Neutral)

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3.2. More Technology Expertise

Judicial Reform Committee ReportChapter II.1.3 06/12/01

IP Policy Outline 07/03/02

IP Strategic ProgramChapter 3.2.I.4 07/08/03

To inject more specialized judges and research officials who function as technology expertise;To introduce professional advisers;To confer proceeding representative rights for IPR infringement actions to patent agents (in condition that an lawyer act as an agent);To strengthen expertise in regular lawyers

Chapter 3.2.(2)1)In order to enhance and strengthen the functions of courts in intellectual property-related lawsuits, the GOJ will consider specific measures to introduce a new judicial system in which experts other than judges participate in legal actions to support judges in judicial proceedings, such as expansion and clarification of the role of court research officials, taking the characteristics of intellectual property-related lawsuits into account. It will draw a conclusion by the end of 2004. (JRH, MOJ, METI)

(2)To fulfill of technology expertise at IP litigation, the GOJ must streamline the procedure to fulfill technology expertise at IP litigation. For this purpose, the GOJ shall reach a conclusion by the end of FY2003, after scrutinizing following measures:

i) To educate judges with their expertise in technology and IP

ii) To activate professional advisers system which will be introduced

iii) To expand and clarify the role of research officials working for IP litigation (including inquiry opportunity to parties; and involvement of judgment meeting etc.)

(JRH, MOJ, METI)

Source: IP Policy Outline from www.kantei.go.jp/forign/policy/titeki/kettei/020703taikou_e.html with corrections added.

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3.2. More Technology Expertise -Legal Professionals Comparison

US UK Germany France Japan

Legal Expertise 1,038,290 95,124 142,204 38,785 24,258

/100K total population

375.79 179.67 172.87 66.28 19.06

Lawyers 972,722 89,341 116,282 32,036 18,851

/100K total population

352.06 168.75 141.36 54.74 14.80

Judges 31,292 3,647 20,878 5,093 3,094

/100k total population

11.33 6.89 25.38 8.70 2.43

Lawyers/ judges

31.09 24.50 5.57 6.29 6.09

Newly filed cases at 1st instance

20,522,515 1,904,946 2,394,979 1,089,516 461,252

Newly filed cases at 1st instance

14,595,603 (71,022) 855,624 (417,057) 115,956

Source: Supreme Court of Japan (based on 2000-2002 data)

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3.2. More Technology Expertise-Tokyo Congestion-

0

2000

4000

6000

8000

10000

12000

Hokkaido Tohoku Kanto Chubu Hokuriku Kinki Chugoku Shikoku Kyushu Okinawa

LawyersPat.Attys

Hokkaido

Tohoku Kanto Chubu Hokuriku

Kinki Chugoku

Shikoku

Kyushu Okinawa

Total

Lawyers 404 492 10,689 1,362 303 3,615 569 276 1,032 184 18,926

PAs 8 17 3,416 241 19 792 31 12 39 3 4,578

Source: JPO (data for 2001)

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3.2. More Technology Expertise -Career Paths for IP Professionals-

Source: Supreme Court of Japan (FY2002); IP Practitioners’ Committee Report (July 14, 2003)

Bachelor in Law Bachelor in Science +UP

Bar Exam

Judges: 3,094 Lawyer: 18,851 Pat. Attorney: 303

Corporate Legal/IP: 100,000(approx.)

Pat. Attorney: 5,192

JPO Examiner: 1,304 Appeal- Examiner: 395

Researchers:

Patent Bar

Exam

Research Officials 20/21 total temporarily transferred to IP section

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3.2. More Technology Expertise

Patent litigation involves more factual SCIENCE with its fast-moving advancement

Needs to organically integrate legal and science expertise

Employment opportunity open to the public with judge’s discretion

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4. Policy Implications for Effective Patent Enforcement

More technology expertise must be injected into Patent and other IP litigation

IP High Court must be created to formalistically clarify the independence of judicial power

More transparency must be improved in the judicial system especially HR

Separation of Powers must be reconsidered

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THANK YOUA-RI-GA-TO