Resolving IP disputes in Japan - Counting the cost

• Author: John A. Tessensohn
• Position: Board Member and Shusaku Yamamoto, founder-owner, Shusaku Yamamoto, Japan
• Pages: 16-18

Japan is known to be one of the world’s most ex-

pensive countries, with Osaka and Tokyo regular-

ly topping the rankings as the world’s priciest

cities. This high-cost perception has clouded the

surprisingly refreshing truth that Japan is in fact a

relatively affordable and reliably expeditious IP

dispute resolution venue.

The dispute resolution

framework

Japanese IP dispute resolution currently uses a two-

track system, with the Board of Appeals of the Japan

Patent Office (JPO) hearing invalidation appeal (IA)

challenges and the District Court hearing patent in-

fringement actions. The JPO Board of Appeals panel

consists of experienced appeal examiners and re-

views all relevant invalidation grounds.

Patent infringement proceedings are heard be-

fore the Osaka or Tokyo District Court, which have

exclusive jurisdiction over different geographical

areas. Both district courts have designated IP divi-

sions, whose technical advisors

(saibansho chōsa-

kan)

brief judges on the complex technical mat-

ters often involved in patent infringement cases.1

Under Japan’s patent law, only the JPO has the ju-

risdiction to invalidate a patent, but the infringe-

ment courts can decline to enforce a patent if

there are grounds for invalidation. The Intellectual

Property High Court of Japan (IPHCJ), the coun-

try’s specialist IP appellate court, reviews, on a

de

novo basis,

all JPO invalidation and District Court

infringement decisions.

An appeal mechanism against IPHCJ decisions is

available through the Supreme Court, Japan’s

highest appellate court. The Supreme Court rarely

overturns the IPHCJ’s decisions as appeals are re-

stricted to reviewing the legal reasoning behind

the decision, not the facts of the case. It has the

discretion to accept or decline to review an appeal.

Benrishi

and

bengoshi

The Japanese IP bar consists of

benrishi

(patent at-

torneys) and

bengoshi

(attorneys-at-law). Japanese

patent attorneys, like their American counterparts,

usually have a technical background and a legal

mandate to practice patent and other IP law be-

fore the JPO, IPHCJ and Supreme Courts. They can

also litigate patent infringement matters as co-

counsel with

bengoshi

. Most

bengoshi

, like

Japanese judges, rarely have a science or technol-

ogy background; therefore, the ideal litigation

team for complex high technology patent matters

would consist of

benrishi

and

bengoshi

.

Benrishi

and

bengoshi

routinely charge on an

hourly basis for invalidation and infringement

proceedings – rates vary from US$180 to US$550.

However, fees based on economic value are com-

mon in Japan, and

bengoshi

customarily charge

an initial retainer and a success (contingent) fee

for achieving a favorable settlement.

The initial retainer fee is calculated on the basis of

the economic value sought in the complaint, and

the success fee is based on the amount actually

obtained. As the amount at issue increases, the

rate of fees gradually decreases. As an indication,

attorney’s fees in small patent litigation should be

less than US$300,000, with medium-sized patent

litigation at around US$550,000 and larger or

more complex patent litigation costing upwards

of US$850,000.

Many Japanese attorneys still estimate their fees

according to the Japan Federation of Bar

Associations standard for attorney’s fees that was

RESOLVING IP

DISPUTES IN JAPAN

Counting the Cost

1 Naoki Koizumi and

Toshiko Takenaka, “The

Changing Role of the

Patent Office and the

Courts after Fujitsu/TI”

in Law in Japan: A

Turning Point, 558-559

(Daniel Harrington

Foote, ed. 2008).

FEBRUARY 2010

16

John A. Tessensohn, Board Member and Shusaku Yamamoto, founder-owner, Shusaku Yamamoto, Japan,

are co-authors of this article detailing Japan’s mechanism for the resolution of IP disputes.

Japan’s Dispute Resolution Framework

Invalidation Appeal Infringement Appeal

Board of Appeals of JPO

Osaka Dist. Ct.

Intellectual Property High court of Japan

Supreme Court

Tokyo Dist. Ct.

IP LITIGATION COSTS