IP Strategy Headquarters of Japan - Treatment in Japan of TPP/IP Dispute Resolution System - AIPLA MWI IP Practice in Japan Committee Pre-Meeting Tuesday, January 26, 2016 Kei IIDA Attorney at Law & Patent Attorney 1

IP Strategy Headquarters & TPP The IP Strategy Headquarters has been established in the Cabinet since 2003 under the IP Basic Act. The Director-General of the Headquarters is the Prime Minister. The Headquarters annually develops, publishes and promotes an IP Strategic Program, and takes charge of other study and deliberation on important IP policies, and promotion and comprehensive adjustment of implementation of the policies. In November, 2015, the Headquarters developed and published the “Policies on TPP in IP Field.” 2

Prime Minister ABE’s Policy Speech In January, 2016, the Prime Minister Shinzo ABE delivered his policy speech before the Diet based on the “Policies on TPP in IP Field” as follows: “ Through innovation, we generate new added value while ensuring sustained growth. We must transition away from “ever cheaper” towards innovation- oriented economic growth that takes on the challenge of making things “ever better.” Cheap products made inappropriately, such as through counterfeits, labor exploitation, or causing environmental damage should be cleared away from the world market. The TPP Agreement is the first step of a great challenge to disseminate economic rules suitable for the 21st century throughout the world. … Under TPP, it is no more permitted to unreasonably request forcible technology transfer. IP shall be protected. TPP is big chance for small or medium sized or local companies having high technologies.” 3

“Policies on TPP in IP Field” General 1.To reform IP system of Japan necessary for implementation of TPP. I.Patent. II.Trademark. III.Copyright. 4

“Policies on TPP in IP Field” General 2.To develop new markets through promotion of use of TPP. I.To support JP companies for promotion of exploitation of IPs and standards in member countries. i.To support small or medium sized local companies challenging overseas markets. ii.To support for international standardization activities. iii.To promote export of agricultural, forest and fishery products through establishment of system for mutual protection of GIs. II.To comprehensively support overseas expansion of JP content. i.To support overseas expansion of broadcast content. ii.To promote integral overseas expansion of content with products or services. III.To support improvement of level of IP protection in member countries. i.To support JP companies for protection of IPs in member countries. ii.To support member countries for improvement of IP system and practice. 5

“Policies on TPP in IP Field” General 3.To promote innovation and industrial vitalization through TPP. I.To strengthen IP and standardization strategies by small or medium sized local JP companies. II.To enhance system of JPO for patent examination to lead member countries. III.To further vitalize IP system of Japan through TPP. i.To smoothen utilization of copyrighted works. ii.To comprehensively study IP dispute resolution system. IV.To promote IP education in Japan for basis for future innovation. 6

“Policies on TPP in IP Field” Reform of Patent System Extension of term for exception to loss of novelty. – Applicants has enjoyed exception to loss of novelty only for 6 months thereafter. – Applicants shall be able to enjoy exception to loss of novelty for 1 year thereafter. Improvement of system to adjust patent term on unreasonable delay which occurred by issuance. – Patent term may be extended under Article 67-2 of the Patent Act. – Patent term shall be extended on unreasonable delay which occurred by issuance exceeding 5 years from application or 3 years from request for examination. 7

“Policies on TPP in IP Field” Reform of Trademark System Introduction of new way to calculate damages. – In trademark infringement cases, mainly right holder’s lost profit or lost (reasonable) royalty has been awarded under Article 709 (tort) of the Civil Code with special provisions under the Trademark Act for the way to calculate such damages. – Statutory damages or additional damages shall be introduced especially in counterfeit cases. 8

“Policies on TPP in IP Field” Reform of Copyright System Introduction of new way to calculate damages. – In copyright infringement cases, mainly right holder’s lost profit or lost (reasonable) royalty has been awarded under Article 709 (tort) of the Civil Code with special provisions under the Copyright Act for the way to calculate such damages. – Statutory damages or additional damages shall be introduced especially in pirate cases. Extension of term of protection of copyright. – Copyright has been protected in general for 50 years after the death of the author. – Copyright shall be protected in general for 70 years after the death of the author. 9

“Policies on TPP in IP Field” Reform of Copyright System Partial severe punishment of criminal copyright infringement. – Criminal copyright infringement has not been prosecuted without right holder’s complaint. – Criminal copyright infringement, to the extent not to give chilling effect to creation of derivative work, shall be able to be prosecuted without right holder’s complaint. Expansion of protection of effective technological measures to control utilization of copyrighted works. – Protection of access control has been limited. – More access control shall be protected with introduction of exceptions not to harm right holders. 10

IP Strategy Headquarters & IP Dispute Resolution System In May, 2015, the IP Dispute Resolution Task Force in the IP Strategy Headquarters developed and published its report on IP dispute resolution system of Japan. Thereupon, in June, 2015, the Headquarters developed and published the IP Strategic Program 2015, one of three important issues in which is to vitalize IP dispute resolution system of Japan as follows: – To strengthen functions of IP dispute resolution system, – To promote use of IP dispute resolution system, and – To publish and introduce to foreign countries the information on IP dispute resolutions. 11

IP Strategy Headquarters & IP Dispute Resolution System In November, 2015, the Headquarters further developed and published the “Policies on TPP in IP Field”, one of the policies in which is to comprehensively study IP dispute resolution system of Japan in order to promote innovation and industrial vitalization through TPP. Now, the IP Dispute Resolution System Committee in the Headquarters is studying on vitalization of IP dispute resolution system of Japan according to the IP Strategic Program 2015, the report of which is to be published in March,

IP Dispute Resolution System Committee General 1.To strengthen functions of IP dispute resolution system. I.To improve evidence collection procedures to reduce right holder’s burden of proof. II.To improve stability of right through issuance up to dispute resolution. III.To realize damages reflecting business reality, and IV.To study restriction on injunction. 2.To promote use of IP dispute resolution system. I.To support small or medium sized or local companies for IP cases. II.To strengthen IP consulting services. III.To utilize IT for IP cases. IV.To support local access to IP specialists. 3.To publish and introduce to foreign countries the information on IP dispute resolutions. 13

IP Dispute Resolution System Committee Injunction Whether to categorically restrict injunction in cases of SEPs with FRAND declarations or enforcement by PAEs through amendment of the Patent Act. – So far, if valid patent is infringed, injunction is awarded unless injunction is abuse of right under the Civil Code. Then, the IP High Court in Apple v. Samsung case ruled that injunction under SEPs with FRAND declarations is in general abuse of right. – Inappropriate. 14

IP Dispute Resolution System Committee Stability of Right Whether to put statute of limitations on invalidation grounds or to restrict invalidation grounds. – Inappropriate. Whether to abolish invalidity defense or to restrict invalidation grounds for invalidity defense in an infringement case. – Inappropriate. Whether to introduce the “clearly invalid” requirement for invalidity defense in an infringement case as double standard. – Inappropriate. Whether to introduce the “clearly invalid” requirement for invalidity grounds as assumption of validity after issuance. – Considerable. 15

IP Dispute Resolution System Committee Stability of Right Whether to abolish the requirement (request for correction before JPO) for counter-defense of correction against invalidity defense in an infringement case. – Considerable. Whether to further strengthen infringement court’s technological expertise. – Basically appropriate. Whether to strengthen cooperation between infringement courts and JPO. – Considerable. Whether to expand JPO’s review of (in)validity grounds such as asked opinion in an infringement case or validity confirmation trial. – Considerable. 16

IP Dispute Resolution System Committee Stability of Right Whether to relax other requirements for correction before JPO as counter measures against invalidity defense in an infringement case. – Considerable. Whether to strengthen JPO’s system for examination and quality control thereon. – Appropriate. Whether to relax the requirements for amendment and divisional application. – Considerable. 17

IP Dispute Resolution System Committee Evidence Collection Procedures To strengthen alleged infringer’s obligation to clarify his/her product or method. – Whether to introduce alleged infringer’s obligation to submit evidence to support his/her clarification. To vitalize court’s document production order for a patentee to prove infringement. – Whether to reduce the requirement for the order. To improve court’s secrecy order to protect alleged infringer’s confidential information. – Whether to allow “attorneys eyes only” like US. – Whether to allow disclosure to third party technical advisors like US. Whether to introduce court’s order for technical specialist’ inspection on alleged infringer’s product or method like EU. 18

IP Dispute Resolution System Committee Damages To amend Article 102 of the Patent Act, special provision for the way to calculate patentee’s lost profit or lost (reasonable) royalty under Article 709 (tort) of the Civil Code. – Whether to restrict disclosure of patentee’s profit to infringer. – Whether to restrict to consider contribution rate. – Whether to prepare database or guideline for reasonable royalty. Whether to introduce new way to calculate damages beyond patentee’s lost profit or lost (reasonable) royalty. Whether to introduce the system to let the parties decide the sum of damages after court’s decision for infringement like Germany. Whether to put attorney fee on a loser in an infringement action. 19

THANK YOU! Kei Iida Attorney at Law & Patent Attorney NAKAMURA & PARTNERS Shin-Tokyo Bldg., 6F, 3-1, Marunouchi 3-Chome, Chiyoda-ku, Tokyo Japan Tel: Fax: