1. Maintenance of patented products Dr. Shoichi Okuyama Vice President, AIPPI Japan January 27-28, 2016 Pre-meeting, AIPLA Mid-Winter Institute

2. Started in 1998 One episode, possibly last, in the long saga of numerous patent infringement and validity cases, started in 1998 Parties: Shinwa Seisakusho, Fulta Denki, and Watanabe Kikai Shinwa obtained a damages award of JPY 420 million (US$ 3.5 million) in 2002 against Fulta Shinwa obtained a damages award of JPY 1.3 billion (US$ 10 million) in 2002 against Watanabe Fulta sued Watanabe in 2008 for injunction and damages, but the court dismissed Fights between the plaintiff and defendants resulted in amendment to the Patent Act

3. Two Cases, Today Technology: Removal of foreign matters from wet, raw lever (seaweed) or nori The same plaintiff-patentee and the same JP patent (No. 3966527) Case 1: Normal patent infringement April 2013, the IP High Court rejected the appeal Plaintiff, Fulta Denki K.K., won an injunction over manufacture, sale, and offer for sale of the infringing products, and the court ordered the disposal of such products An award of damages (JPY 16 million or US$ 133,000) Subsequently, defendant, Shinwa Seisakusho, sold its relevant business to Fulta Case 2: Plaintiff also asked for injunction over maintenance November 12, 2015, the IP High Court defined what kind of injunction can be obtained for maintenance, following the similar findings by the Tokyo District Court

4. Case 1 Fulta Denki K.K. v. K.K. Shinwa Seisakusho Patent relates to a mechanism that prevents small pieces of raw and wet seaweed (nori) from rotating together with a rotating separation plate A very small portion of a large machine, but it is effective

5. Patent Drawings 1

6. Patent Drawings 2

7. Infringement – Case 1 This small plate closes the clearance between the rotating plate and casing

8. Case 1 Tokyo District Court found infringement (Chief Judge Shoji) April 2013, the IP High Court rejected the appeal (Chief Judge Doi) Plaintiff, Fulta Denki K.K., won an injunction over manufacture, sale, and offer for sale of the infringing products, and the court ordered the disposal of such products An award of damages (JPY 16 million or US$ 133,000) Profits the infringer enjoyed (Article 102(2)) 20% of the total value of the entire machine (total sale JPY 40 million) 50% of the value of the rotating plate (total sale JPY 13 million) Plus attorney’s fee (JPY 1.5 million) Subsequently, defendant, Shinwa Seisakusho, sold this part of its business to Fulta

9. Case 2 March 1, 2015, Tokyo District Court (Chief Judge Shoji) rendered a decision Fulta Denki K.K. v. Watanabe Kikai Kogyo K.K. Fulta won an injunction over manufacture, sale, and offer for sale of the infringing products, and the court ordered the disposal of such products Fulta won an injunction over the act of attaching the plate member to the machine An award of damages (JPY 68 million or US$ 550,000) based on reasonable royalty rates (Article 102(3))

10. Case 2 - Infringement Expanded

11. Case 2 – Recent IP High Court Decision November 12, 2015, IP High Court (Chief Judge Takabe) Two points Defendant cannot attach the plate member to the machine, but so far as it is an act of replacing the part Plaintiff asked for injunction over general maintenance (repair, cleaning, etc.) of patented machines as preventive measures against infringement, but the court rejected it Increased damages a little bit JPY 71 million (from JPY 68 million) or US$ 600,000 Infringer’s total sale was JPY 2.0 billion (US$ 16 million) Reasonable royalties Machines 3% Fixed rings 10% Plate members 10% Attorney’s fee of JPY 7 million (TDC found JPY 4 million)

12. Takeaways In certain cases, maintenance can be a subject of injunction Damages calculation has become flexible