Date of Judgment: July 1, 1997
Issuing Authority: Supreme Court
Level of the Issuing
Authority: Final Instance
Type of Procedure: Judicial (Civil)
Subject Matter: Patent (Inventions)
Main text of the
judgment (decision):
1. The appeal is
dismissed.
2. The cost
of appeal is to be borne by the appellant.
Reasons:
On the
grounds of appeal by the representative of the appellant, Sumio Takeuchi and
the representative of the of the appellant and supplementary participant, Sumio
Takeuchi
1 The present
case is an action of the appellant seeking an injunction against import and
sale of goods which were produced and sold in the Federal Republic of Germany
by the appellant and claiming damages on the basis of a patent right vis-a-vis
the appellee who imported these goods into Japan by parallel import and sold
them. Facts lawfully ascertained by the original instance is as follows:
(1) The
appellant holds a patent 'car wheels' in Japan (Patent application, October 29,
1983 (claim of priority on the basis of patent application to the European
Patent Office on May 27, 1983), public notice of patent application, January
12, 1990, patent registration, December 20, 1991, Patent No. 1629869;
hereinafter, the 'patent in the present case', and the invention, 'patented
invention in the present case').
(2) The
appellant has a patent on the invention which is the same as the patented
invention in the present case (application to the European Patent Office on May
27, 1983 with the Federal Republic of Germany and other countries as designated
countries, application No. 83105259.2, registration April 22, 1987;
hereinafter, the 'corresponding German patent').
(3) The
appellee, P1, at the latest, by August 1992, imported aluminium car wheels
BBS.RS which is in the list of products (a) and Rolinser RSK which is in the
list (b) attached to the judgment of the first instance court and sold them to
the appellee P2. P2 sold these products until the same month. It is likely that
the appellees may continue importing and selling these products (hereinafter,
these products including both the products which have been sold and which are
intended to be sold in the future are to be called, 'products in the present case').
(4) Products
in the present case are within the technical scope of the patented invention in
the present case.
(5) Products
in the present case had been produced and sold in the Federal Republic of
Germany as a product of the patented invention by the appellant after the
corresponding German patent has taken effect.
2 In the
present case, the appellees argue that the patent in the present case on the
product in the present case had lost effect by the lawful sale of those
products in the Federal Republic of Germany, and therefore, the import of these
products into Japan and their sale in Japan do not constitute infringement of
the patent in the present case. This is the argument of the international
exhaustion of patent rights.
The original
instance court, in the present case, found that the appellant had produced and
sold the products in the present case as result of working of the corresponding
German patent which the appellant holds, and that it was evident that the
appellant was guaranteed one opportunity to compensation for making the
patented invention publicly available. There was no proof that there was legal
restriction on the securing of this opportunity at the time of the sale, and
therefore, the patent in the present case was exhausted in relation to the
products in the present case, and the claim of the appellant for an injunction
and payment of damages on the basis of the patent in the present case was
dismissed.
3. The
conclusion of the original instance court that the claim of the appellant
against the appellee for an injunction and payment of damages was groundless is
justifiable. The reasons are as follows:
1) Article
4-2 of the Paris Convention on the Protection of Industrial Property Rights of
March 20, 1883 as amended in Brussels in December 14, 1900, in Washington in
June 2, 1911, the Hague in November 6, 1925, in London in June 2, 1934, in
Lisbon in October 31, 1958, and in Stockholm in July 14, 1967 (hereinafter,
'Paris Convention') provides that ' (1) Patents applied for in the various
countries of the Union by nationals of countries of the Union shall be
independent of patents obtained for the same invention in other countries,
whether members of the Union or not. (2) The foregoing provision is to be
understood in an unrestricted sense, in particular, in the sense that patents
applied for during the period of priority are independent, both as regards the
grounds for nullity and forfeiture, and as regards their normal duration.' The
above provision denies the mutual dependence of patents and provides that
patent of each country is mutually independent in emergence, transfer and
termination, i.e. the validity of the patent is not affected by the invalidity,
termination, or period of subsistence etc. of a patent in another country. However,
whether a patent holder may exercise the patent right when there are special
circumstances is not within the purview of this provision.
This
territorial principle means that as far as a patent is concerned, emergence,
transfer, effect etc. of the patents of each country are governed by their
respective national laws, and the effect of patents is acknowledged only within
the country.
When a patent
holder exercises the right concerning the patent right granted in Japan, the
problem of to what extent the circumstances that the product which is the
object of the exercise of the said right had been assigned by the same patent
holder outside Japan should be taken into account when deciding on the
permissibility of the exercise of the right by the patent holder is a matter of
interpretation of the Patent Law of Japan. This problem has nothing to do with
the Paris Convention or territorial principle, and whatever interpretation is
adopted, it is evident from above that it is not against Article 4-2 of the Paris
Convention or the territorial principle.
2) While the
patent holder has the right to work the patented invention (Art.68, Patent
Law), as far as invention of things is concerned, use, assignment, or rental of
the products of the patented invention is regarded as the 'working' of the
patented invention (Art.2, para.3, subpara.1). If this is the case, acts of a
person who had the product which is the outcome of the patented invention
(hereinafter, 'patented products') assigned from the patent holder using them
by himself, or re-assigning them to a third party as business as well as acts
of a third party who had the products assigned from the first assignee of using
them, or assigning or renting them to another person as business may
technically be regarded as a working of a patent and therefore, are
infringements of the patent. However, if the patent holder or the licensee
assigned the patented products in Japan, the patent right on the products has
achieved its goal and has been exhausted, and the effect of the patent right
does not extend to acts such as the use, assignment and rental of the products.
This is because (1) while the protection of invention under the patent law must
be realised in harmony with the social and public interest, (2) in assignments,
the assignor transfers all the rights to the assignee and the assignee acquires
all the rights which belonged to the assignor, and when the patented products
are placed in the market for circulation, transactions are effected on the
assumption that assignees acquire the right to freely use and reassign the
products as business, independent of the exercise of the rights by the patent
holder on the products. If authorisation of the patent holder is required every
time the products are assigned, free circulation of goods in the market will be
obstructed, smooth circulation of patented goods will be inhibited, and will
result in harming the interest of the patent holder himself, and thus will be
against the goal of the Patent Law, which is to 'promote invention and
contribute to the development of industries by pursuing protection and
utilisation of inventions (Art.1 of the Patent Law)'. (3) On the other hand,
the patent holder has received payment including remuneration for making the
patented invention publicly available by assigning the patented products by
himself and receives a license fee for licensing the use of patents. Therefore,
the opportunity for securing compensation for making the patented invention
available to the public has been granted, and there is no necessity to allow
the patent holder to profit again in the process of circulation of goods in the
market from the patented products which have already been assigned by the
patent holder or the licensee.
3) However,
this does not apply in the same way in cases where a patent holder in Japan
assigned the patented good outside Japan. This is because in the country where
the assignment took place, the patent holder does not necessarily have the
patent on the invention which is the same as the invention which is protected
by the patent in Japan (hereinafter, 'corresponding patent'). Even if the
patent holder has a corresponding patent, in the light of the fact that the
patent in Japan and the patent in the country of the place of assignment are
separate rights, if the patent holder exercised the right based upon the patent
right in Japan in relation to the goods which is protected by a corresponding
patent, it cannot be regarded as profiting twice from the same patent.
4) If one
gives consideration to the balancing of the ensuring of international
circulation of goods and the rights of the patent holder, in the light of the
situation in which international commercial transactions are developing in a
broad scale and in an advanced manner in the modern society, it is required
that when an entrepreneur in Japan imports goods sold in another country and
places them in the market in Japan, freedom of circulation of goods including
import of goods is required to be respected at the maximum. In commercial
transactions outside Japan, generally, it is presupposed that the assignor
transfers all the rights on the object to the assignee and the assignee
acquires all the rights the assignor had. In the light of the situation of
international transactions in modern society as mentioned above, also when the
patent holder assigned the patented product outside Japan, it is naturally
expected that the assignee or a person who had the patented products assigned
by the assignee imports the patented goods into Japan as business, uses them or
assigns them further to others as business.
Taking into
account the above, if a patent holder in Japan or an equivalent person assigns
a patented product outside Japan to another person, the patent holder, unless
there is an agreement with the assignee excluding Japan from the areas of sale
or use of the said product, may not seek an injunction in Japan concerning the
patented product on the basis of the patent right against the person who
acquired the product from the assignee, except in cases where the above
agreement has been made and is explicitly indicated on the product. In other
words, (1) as explained above, in the light of the fact that when the patented
product was assigned outside Japan by the patent holder, it is naturally
expected that the products may be subsequently imported into Japan, if the
patent holder assigned the patented products outside Japan without any
reservation, it should be understood that the patent holder had implicitly
granted the right to control the products to the assignee and the subsequent
assignees without being restricted by the patent which the assignor has in
Japan. (2) On the other hand, if one looks at the right of the patent holder,
the patent holder should be understood to be entitled to reserve the right of
exercising his patent right in Japan at the time of the assignment of the
patented products outside Japan, and if the patent holder, at the time of
assignment, agrees with the assignee to exclude Japan from the area of sale or
use of the patented products and expressly indicated this on the products, the
person who had the products subsequently assigned from the assignee, even if
there were intermediaries in the circulation process of the products, should be
able to recognise that there was such a restraint on the product, and is
capable of making a decision to purchase or not to purchase such products at
his own will. (3) The same shall apply in cases where the patented products
were assigned outside Japan by subsidiaries or affiliated companies which can
be regarded as an equivalent of the patent holder. (4) The necessity of
protecting the reliance of the assignee of the patented products on free
circulation of the products does not depend on whether or not the patent holder
has a corresponding patent in the place where the patented products have been
first assigned.
5) In the
present case, according to the above-mentioned facts ascertained by the
original instance court, products in the present case are those which the
appellant, who is the patent holder, had sold in the Federal Republic of
Germany. In the present case, the appellant has neither asserted nor proved
that the appellant had agreed with the assignee at the time of the sale to
exclude Japan from the area of use or sale, or had expressly indicated this on
the products, and therefore, the appellant is not allowed to seek an injunction
or claim damages based upon the patent right in the present case.
The original
judgment is identical with the above in conclusion, and therefore is
justifiable. The appellants' arguments that the original judgment is against
the law, including the Constitution, are based upon unique views, or criticise
the part of the original judgment which does not affect its conclusion and
cannot be accepted.
Therefore,
the justices unanimously decides in accordance with articles 401,95 and 89 of
the Code of Civil Procedure as the main text.
(Translated by Sir Ernst Satow Chair of
Japanese Law, University College, University of London)