7.6.5 Discovery (limited) and gathering of information
Commentators have noted that the law relating to evidence collection in Japan needs amendment because it favors infringers.253 Attorney–client privilege is rarely an issue in patent infringement suits in Japan as discovery is limited.
The process for evidence collection under the Patent Act includes special provisions that were based on and supplement the Code of Civil Procedure.
7.6.5.1 Order to produce documents
One of the traditional methods for collecting evidence under Article 105 of the Patent Act is an order to submit documents.254 Article 105, which is a special provision that supplements Article 220 of the Code of Civil Procedure, aims to reduce the burden of the plaintiff to prove the act of infringement and the amount of damage. The exceptions to the obligation to submit documents are more limited in the Patent Act compared to the Code of Civil Procedure. Article 105(1) of the Patent Act stipulates the exception as “reasonable grounds,” whereas Article 220 of the Code of Civil Procedure stipulates a list of specific situations in which a person may not refuse to submit a document.
7.6.5.1.1 Requirements
Article 105(1) stipulates that, in litigation concerning the infringement of a patent right or exclusive license, the court may, upon a motion of a party, order the other party to produce documents that are required to prove the act of infringement or to calculate the damage arising from the act of infringement. It also stipulates that this shall not apply where there are reasonable grounds for the person possessing the documents to refuse production of the documents. For example, it may be reasonable grounds to refuse the production of a document if it contains trade secrets. However, the courts have found that reasonable grounds are not found merely because a document contains trade secrets. A confidentiality protective order under Article 105-4 of the Patent Act can reduce the disadvantage to a person possessing such a document and is a relevant factor when denying reasonable grounds.255
7.6.5.1.2 Determination of reasonable grounds
Article 105(2) of the Patent Act stipulates that, if a court finds it necessary to decide whether there are reasonable grounds, the court may cause the person possessing documents to present such documents. In such a case, no person may request the disclosure of the documents.
It is not always easy for the court to decide whether there are reasonable grounds. However, generally speaking:
- when the documents would prove infringement, reasonable grounds will often be denied under the protection of a protective order; and
- when the documents would not prove infringement, reasonable grounds will often be found.
It is not appropriate for a court to decide this issue based solely on the assertion of the person possessing the documents. Therefore, Article 105(3) of the Patent Act provides that a court may disclose the documents to the parties or their attorneys when it is necessary to make a decision concerning the existence of reasonable grounds. In addition, under Article 105(4), a court may disclose the documents to a technical advisor with the consent of the parties when it is necessary to hear an explanation based on technical knowledge or acquire technical advice from the technical advisor.256
The inspection of evidence relating to infringing objects such as manufacturing equipment is indispensable to proving infringement in some patent litigation cases. Therefore, under Article 105(5) of the Patent Act, the same rules outlined above in relation to document production apply mutatis mutandis to the production of an infringing object.
7.6.5.1.3 Effect of a party’s noncompliance with an order to produce a document
According to Article 224 of the Code of Civil Procedure, a court may find an adverse party’s allegations concerning the details of a document to be true if a party:
- does not comply with an order to produce a document; or
- has caused a document to be lost or otherwise unusable for the purpose of preventing the adverse party from using it.
This provision ensures the effectiveness of the system of production of documents.
7.6.5.2 On-site examination by an expert (inspection system)
Article 105-2 of the Patent Act provides for an inspection system, in which a neutral technical expert (inspector) enters the facility of an alleged infringer, conducts an investigation when there is a possibility of patent infringement, and submits a report to a court. The inspection system is thought to be an effective measure for collecting evidence in cases where the production method is unclear or where infringement cannot be determined by physically taking the product apart.
The inspection system can only be used in limited circumstances. The term “in litigation” under Article 105-2(1) of the Patent Act implies that the system can only be used after a patent infringement suit has been filed. Accordingly, a party cannot use the inspection system when filing a preliminary injunction action (see above).
7.6.5.2.1 Requirements to issue an inspection order
According to Article 105-2(1), the court, after hearing the opinions of the parties, may issue the inspection order after considering the following:
- whether the evidence is necessary to prove the infringement;
- the probability that the evidence will prove the infringement. This is required to prevent abuse of the inspection system. The level of the “probability” required is not as high as for the proof of infringement;257
- whether there is no alternative. This requirement will not be satisfied when an alleged infringer’s product can be easily acquired on the open market; and
- whether it is not too burdensome for the party subject to the inspection. A typical example of such a burden is that the party is forced to shut down its factory for a while.
7.6.5.2.2 Inspector
Under Article 105-2(2), the court designates neutral and appropriate experts as inspectors. These inspectors may include lawyers, patent attorneys or university professors. Under Article 105-2-4(2), designated inspectors may enter a defendant’s factories, office or other place and demand the production of documents, inspect equipment or conduct experiments. Depending on the case, two or more experts may be designated as inspectors.
7.6.5.2.3 Disclosure of the inspection report to the plaintiff
Article 105-2-4(1) provides that, after conducting the inspection, inspectors must summarize the results and submit a report to the court. The report will be disclosed to the inspected defendant but not to the plaintiff at this stage. The defendant may petition the court not to disclose the report for the protection of a trade secret.258 The court will then decide whether to disclose the whole or a part of the report to the plaintiff.259 The defendant’s petition will be allowed if reasonable grounds not to disclose the report are found. Otherwise, the report will be disclosed to the plaintiff, and the plaintiff may submit it to the court as evidence.
7.6.5.2.4 Effect of noncompliance with an inspection order
Under Article 105-2-5, if a party does not comply with an inspection order, the court may find the adverse party’s allegations concerning the facts to be proved to be true, as is the case when a party does not comply with a document production order.