Precedent

Case Number:

Heisei 10 (O) No. 364, ÅgDemand for Declaratory Judgement (Court Confirmation) on Non-Existence of DebtÅh Decision rendered by the Third Petit Bench on April 11, 2000

Summary:

If it is evident that there exists a reason for invalidation in the alleged patent, a demand for injunction and a claim for compensatory damages based on the patent right are not allowable as far as no specific circumstances are involved, because such enforcement of the right shall corresponds to an abuse of the patent right.

Contents: Indication of Case

Demand for Declaratory Judgement on Non-Existence of Debt (Decision rendered by the Third Petit Bench of the Supreme Court to Case No. Heisei 10 (O) 364, on April 11, 2000, dismissed)

The Original Court: Tokyo High Court

Conclusion

AppellantÅfs appeal against the original decision in the present case is concluded to be dismissed.
Cost involved in the Appeal is to be borne by the Appellant.

Reasons

Concerning a first point, a second point and a fourth point of the reasons for appealing against the original decision raised by Minoru Nakamura, Sadao Kumakura, Koichi Tsujii, Shinichiro Tanaka, Chuji Orita and Kazuhiko Yoshida, Attorneys-at-Law for the Appellant; and Fumiaki Otsuka, Hideto Takeuchi, Koichi Oishi and Takeshi Deshimaru, the Intervenors:

1. In the present case, the Appellee is demanding a declaratory judgement (court confirmation) on non-existence of a right for claiming compensatory damages arising from the patent right against the Appellant, because the Appellant asserts that the AppelleeÅfs acts of manufacturing and selling the semiconductor devices listed in the List of Accused Devices 1 and 2 attached to the decision of first instance constitutes an infringement of the patent right identified later.
   The outline of the findings that were affirmed by the original court is set forth as below. The affirmed facts, in view of the relevant proofs listed in the original decision, shall be duly admittable and there is no illegality in the process thereof as asserted in the argument.
   
   
   1. The Appellant owns a patent right (Patent No. 320275) to an invention entitled ÅgSemiconductor DeviceÅh (hereinafter, the patent right will be referred to as the ÅgPresent Patent RightÅh and the invention thereof will be referred to as the ÅgPresent InventionÅh).
      
      
   2. The application of the Present Invention was a divisional application filed on December 21, 1971 (hereinafter, referred to as the ÅgPresent ApplicationÅh) derived from the Patent Application No. Sho 39-4689 (hereinafter, referred to as the ÅgOriginal Application, and the invention thereof will be referred to as the ÅgOriginal InventionÅh). The Original Application was an divisional application filed on January 30, 1964 from the application of the invention filed on February 6, 1960 (Patent Application No. Sho 35-3745).
      
      
   3. With respect to the Original Application, a final rejection was decided conclusively on the ground that the Original Invention would have been obvious over the known art at the time the Original Application was filed.
      
      
   4. The Present Invention is substantially identical with the Original Invention.
      
      
   5. The Appellee has been commercially manufacturing and selling the semiconductor devices listed in the List of Accused Devices 1 and 2 attached to the decision of the first instance.
      
      
2. The original decision ruled as stated below in view of the above-identified facts.
   
   
   1. If the Present Application were a legitimate divisional application from the Original Application, such application should be deemed to have been filed as of the date when the Original Application was filed under the provisions in Article 9, Paragraph 1 of the Old Japanese Patent Law (the law effective prior to abolishment of the 1959 law, No. 122). However, since the Present Application is illegitimate as the divisional application of the Original Application, the Present Application directed to an invention substantially identical with the Original Invention is deemed to have been filed after the filing date of the Original Application. Therefore, there is an extremely high probability that the Present Patent shall be invalidated for the reason that the Present Patent was filed based upon the application to be rejected under Article 39, Paragraph 1 of the Japanese Patent Law.
      
      
   2. Further, the Present Invention is substantially identical with the Original Invention of the Original Application for which the final decision of rejection became conclusive on the grounds that the Original Invention would have been obvious over the publicly known prior art. Accordingly, the Present Patent shall be considered to include reason for invalidation in this point as well.
      
      
   3. It shall not be allowed because it is an abuse of right to enforce the right against a third party based on the Present Patent Right including an extremely high probability of being invalidated.
      
      
3. It is alleged that an illegality is found in each judgement by the original court as stated in the above II-1 and II-2, and further, as to the judgment stated in the above II-3, there is an illegality in the points of a breach of law, a premature decision, and a defectiveness in reasons because it was ruled by the original court that the Present Patent Right was substantially invalid, although it should have been examined and determined as to whether or not the Accused Devices are encompassed within the technical scope of the patent on the premise that the patent right is deemed as valid in the patent right infringement case. 
   
   
4. However, each judgment of the original court stated in the above II-1 and II-2 can be affirmed. In this case, the final decision of rejection became conclusive in connection with the Original Application, i.e., earlier application. However, even if the final decision of rejection became conclusive for the earlier patent application, such earlier patent application never loses its status as an earlier patent application (see 1998 Law, Rule 51, supplementary provision 2-4, and Article 39, Paragraph 5 of the Japanese Patent Law before Amended by the aforementioned law). Thus, the Present Application should have been rejected under Article 39, Paragraph 1 of the Japanese Patent Law (see a decision rendered by the Second Petit Bench at the Supreme Court in connection with Case No. Heisei 3 (Gyo-tsu) 139 on February 24, 1995; Minshu Vol. 49, No. 2, page 460). Further, since the Present Invention is substantially identical with the Original Invention of the Original Application for which the final decision of rejection became conclusive for the reasons that the Original Invention would have been easily invented based upon the known prior art, the Present Patent was granted in violation of Article 29, Paragraph 2 of the Japanese Patent Law. Thus, it is evident that the Present Patent includes a reason for invalidation as prescribed under Article 123, Paragraph 1, Item 2 of the Japanese Patent Law. Since no specific circumstances, such as a Correction Trial filed, can be found, it is surely predicted that invalidation will be judged (meantime, according to the record, an invalidation was decided in an Invalidation Trial in connection with the Present Patent on November 19, 1997, after the original decision, and an appeal for the invalidation decision was filed and is pending before the Tokyo High Court.)
   
   
5. Next, the judgment by the original court stated in the above II-3 will be reviewed.
   It is true that the Japanese Patent Law provides that where a patent includes a reason for invalidation and in order to invalidate such patent, an invalidation shall be judged by the trial examiners of the Japanese Patent Office having sufficient technical knowledge and experiences (Article 123, Paragraph 1 and Article 178, Paragraph 6 of the Japanese Patent Law), and further provides that when a trial decision for invalidation becomes finally conclusive, then, the patent is deemed as non-existing even at the time of registration (Article 125 of the Japanese Patent Law). Consequently, the patent right will exist lawfully and effectively until the invalidation trial decision becomes finally conclusive, and would not be invalidated in rem.
   Like the Present Patent, however, where it is evident that the patent per se includes reason for invalidation and where a Trial for Invalidation is demanded, even if it is definitely predicted that the patent will be invalidated when a decision for invalidation becomes finally conclusive, it is improper to construe that a demand for injunction and/or a claim for compensatory damages based on the patent right is permitted in view of the following points:
   
   1. Approval of injunction of an act of working of the invention and claim for compensatory damages based on such a patent right gives undue advantage to the patentee and undue disadvantage to the one working on the invention, resulting in contradiction of an idea of equity. 
      
   2. It is desirable that a dispute is settled in the course of a single prosecution within a shorter period. As a protecting method against an enforcement of the patent right on the ground that the patent includes reason for invalidation, if there is no alternative other than a procedure in which a trial decision for invalidation must become finally conclusive upon the trial for invalidation at the Japanese Patent Office in an infringement case in connection with the above-identified patent right, a party who does not intend to claim to the extent of an invalidation of the patent in rem, is compelled into the procedure for the trial for invalidation, thus resulting in contradiction of a litigation economy. 
      
   3. Article 168, Paragraph 2 of the Japanese Patent Law shall not be construed as providing to stay a litigation prosecution to the extent where a patent apparently includes reason for invalidation and where it is definitely predicted that such a patent be invalidated. 
      In the light of the above, it should be construed as follows: even before a trial decision for invalidation of the patent is finally concluded, the court examining a patent right infringement case can judge whether or not the patent includes a reason for invalidation. If it is found as a result of prosecution that the patent evidently includes a reason for invalidation, it is reasonable to construe that a demand for injunction and/or compensatory damages based on the patent right would not be allowed as being an abuse of the patent right unless a specific circumstance is involved. To construe like this would not be considered as contradicting the intent of the Japanese Patent System. The precedents rendered by the Daishinin, corresponding to the Supreme Court including the decision of Daishinin under Case No. Meiji-36 (Re) No. 2662 on September 15, 1903, recorded in the Criminal Cases Decision Report Vol. 10, page 1679, and of Taisho-5 (O) No. 1033 on April 23, 1917 recorded in the Civil Cases Decision Report Vol. 23, page 654, having a view different from the above view of this court, shall be modified so as to conform to the aforementioned views to the extent that interferes with the above-stated decision.
      
      
6. In view of the above, it is apparent that the Present Patent includes the reason for invalidation and that there is no specific circumstances such as a Correction Trial filed. Thus, the following decision of the original instance judgment shall be affirmed duly; that is, it is concluded that the AppelleeÅfs claims shall be approved because the demand for the compensatory damages based on the Present Patent Right shall not be allowed by the reason of the abuse of the right. Since the above-stated judgment does not interfere with the precedents quoted in the allegation by the Appellant, asserted breaches of law in the process cannot be found in the original judgment. The allegation raised herein shall not be acceptable because it merely criticizes a decision in selectively adopting the proofs belonging to the exclusive power of the original instance judgment, or denounces the original decision from its own viewpoint.
   
   

   Regarding the other reasons for the appeal:
   

   Admitting judgment and remedy in the original instance judgment concerning the AppelleeÅfs opinion can be approved in view of the proof relationship and records listed in the original decision, and thus asserted breaches of law in the process cannot be found therein. The allegation merely criticizes the decisions in selectively adopting proofs and findings, which belong to the exclusive power of the original instance judgment, and denounces the original decision from its own viewpoint, or claims injustice of the remedy in the course of the prosecution, and thus it is not acceptable.
   Consequently, the present case is concluded as stated in the main text by unanimous assent by the Judges.
   

   
   

Presiding Judge: Toshihiro Kanaya
                   Judge: Hideo Chikusa
                   Judge: Toshifumi Motohara
                   Judge: Masamichi Okuda