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Infringement and Invalidation


The Timing of Infringement notice

When a patent owner becomes aware of infringement of their Japanese Patent, one might be tempted to blindly issue a notice of infringement. This is an uninformed approach to Japanese Patent enforcement, as there are critical issues that should be considered in the timing of a notification of infringement.

There are two ways of invalidating Japanese patents, namely, opposition for invalidation which must be lodged in the opposition period, and appeal for invalidation which can be undertaken anytime following the opposition period. The opposition period is the first six months after the publication of a patent and significant differences exist between the procedures for invalidation at this time, and that after the six month period has elapsed. Generally speaking, the main differences are that opposition is simpler and cheaper, opposition may be made anonymously, and a strict six month limit exists. This contrasts with an appeal for invalidation which is on the whole more complex and therefore more costly, where appeals must be filed under the parties true name and validity is argued inter parte in the Patent Office. The time at which an infringement notice is issued is important due to the differences in the invalidation procedures of these two periods. The advantages and disadvantages that exist for both parties under the different systems must be carefully assessed when making the timing decision.

Opposition for Invalidation( filed within 6 months of the date of registration)

Disadvantages to the Patent Owner :

1. A significant aspect of filing for invalidation under opposition is that it may be done anonymously, which is highly advantageous for an infringer. Because of anonymity, multiple oppositions may be filed which can further delay the uncertainty period of a patent. It is possible that an infringer may provide multiple and conflicting arguments in multiple oppositions, all under the protection of anonymity. In one opposition, an infringer may argue that the patent claims are broad and therefore include prior art, thus invalidating the patent, whilst in the following law suit the infringer has the freedom to argue that the claims of the patent are narrow and therefore do not include the alleged infringing product/service, thus reducing the effectiveness of the patent. The ease at which opposition can be filed means that the infringer will probably file at least one opposition if informed of infringement within the opposition period, thereby increasing the risk for a patent owner.
2. If an opposition fails, and the infringer proceeds to lodge an appeal for invalidation, there is no obligation for the infringer to maintain the same direction of argument in the appeal for invalidation as was used in the opposition, since the initial opposition was anonymous. This gives the infringer further freedom under the opposition period. However, reuse of prior art in the appeal that was previously tested in the opposition petition weakens the infringers case.
3. It is possible that an infringer may take a compromise position in negotiations with a patent owner whilst simultaneously pursuing invalidation under opposition. Anonymity of the petition makes this possible.

Advantages for the Patent Owner:

1. Notification of infringement of a patent during the opposition period, and subsequent lodgement of an opposition in this period has some advantages for the patent owner. After filing for invalidation under opposition, the infringer cannot participate further in the invalidation process and it becomes a matter for the patent owner and patent office to resolve. This means that any invalidation arguments are fixed, with no further argument from the infringer possible. This contrasts with the appeal for invalidation process where parties challenge each other inter parte, thus allowing flexibility of arguments which creates a potentially more difficult and risky challenge for the patent owner. Given that opposition may be inevitable after issue of a notice of infringement, by informing of infringement in the opposition period and subsequent lodgement of an invalidation petition by the infringer in this period, the risk of the petition is lessened due to the reduced participation of the infringer in the invalidation process.

Appeal for Invalidation
Disadvantages to the Patent Owner :

1. Waiting until the end of the opposition period to send a notice of infringement means that invalidation may be pursued via an appeal for invalidation. This is generally a more complex and therefore more costly approach for all parties. In contrast with opposition for invalidation, the infringer may participate fully in an invalidation procedure undertaken this way, challenging every aspect of the patent and providing arguments to counter the patent owners arguments. This presents a greater risk to the patent owner.
Additionally, the nature of some patents means that by waiting six months until the opposition period has elapsed to inform of infringement may cause irrecoverable damage to the patent owner. This usually applies to high tech patents with rapidly developing technology and rapid obsolescence.

Advantages to the Patent Owner:

1. By informing of infringement after the opposition period, it is possible that the infringer will not appeal for invalidation given the resources required and the necessity of a firm position in the argument rather than a compromise position such as is possible in opposition. This situation may be an opportunity for establishment of a licensing agreement between the parties.
However, if the primary goal of the patent owner is to exclude infringers, there is little point waiting until after the opposition period to send a notice of infringement. The infringer has no option but to appeal for invalidation since licensing is not an option. It may therefore be preferable in this case that the infringer lodges the opposition for invalidation as this presents less risk to the patent owner due to the limited participation of the infringer in the invalidation process at this stage.
If a licensing agreement is possible, an infringer has a vested interest in maintaining the patent by not attempting to invalidate it, as this provides protection against additional infringers and competitors. Licensing may therefore be a viable way of protecting the patent.

Conclusion

There is no straight answer regarding the best time to issue a notice of infringement. There are many factors to consider when deciding whether to send a notice during the opposition period or whether to wait until this period has elapsed. The primary issues to consider are the protection that the opposition period offers an infringer due to anonymity of the opposition, and the different degree of participation of an infringer in the invalidation processes of the different stages. These issues present significant advantages and disadvantages for both parties.


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