“Foreign SEP holders should not think Japan is a hostile jurisdiction to the SEP holders because of no SEP litigations recently. We do not know how the current judges render the judgments. Japan has reformed its patent litigation and now plaintiff patentee’s winning rate has increased, and the invalidity rate is below 20%. Thus, Japan may be a good jurisdiction for SEP holders to file a lawsuit.”
Takanori is the founder of ABE & PARTNERS a law firm specialized in intellectual property and international business transaction. Takanori is a leading expert on any FRAND/SEP matters in Japan who understand the SEP situation in Japan like no other. He helps international companies to get a better understanding about how SEPs are treated in Japan, especially about recent court judgements and communications of various Japanese ministries.
Japan yet had only a few SEP cases so far: Apple v. Samsung with a judgment rendered in May 16, 2014 as well as Sharp v. Tesla January, February, and March of 2020. In the podcast Takanori explains and elaborates on the court outcome. In the Apple v. Samsung case e.g. it was decided that the royalty under FRAND condition for iPhone 4 and iPad 2 Wi-Fi+3G is approximately ¥9.96 million ($100,000).
Furthermore, Takanori explains the different public communications that were recently published: Government agencies have published following reports: “Manual of ‘Hantei’(advisory opinion) for an essentiality check” (March 2018,Japan Patent Office [JPO]) (manual, Hantei-E), the “Guide to Licensing Negotiations involving Standard Essential Patents”(June 5, 2018, JPO)(the guide), the “Guide to Fair Value Calculation of Standard Essential Patents for Multi-Component Products”(April 21, 2020, the Ministry of Economy, Trade and Industry [METI]) (the basic concept), the “Intellectual Property Promotion Plan 2021”(July 13, 2021, Cabinet Office)(the plan) the “Interim Report” (July 26, 2021, METI) (the report).
JPO the guide aims to enhance transparency and predictability, facilitate negotiations between rights holders and implementers, and help prevent or quickly resolve disputes concerning the licensing of standard essential patents (“SEPs”). METI published the basic concept because risks involving SEP licensing negotiations and disputes have been increasing significantly. Cabinet Office published the plan to show future IP strategies with seven key priorities. METI published the report because of increasing importance of SEPs in recent years, the number of SEP declarations has been increasing.
Takanori is classifying these cases and reports as either pro-SEP holder, neutral, or pro-implementer. The “manual, Hantei-E”, “the guide” and “the plan” may be classified as neutral, while the decision and judgment in Apple v. Samsung, “the basic concept” and “the report” may be classified as pro-implementer. The reason they are either neutral or pro-implementers and not pro-SEP holder may be because most of the Japanese industries are implementers.
Even though it is perceived that the Japan is more licensee friendly in fact Takanori points out that no one knows whether the Japanese courts are more implementer friendly – the number of cases are yet too small. Takanori believes the main reason there is little SEP litigation in Japan may be that the foreign companies still have the impression that Japan is an anti-patent jurisdiction where the patentee winning rate is low and patents will be easily invalidated. However, this is a misunderstanding as everything has reformed. The winning rate became higher and invalidation rate is now under 20%. While the JPO and the Cabinet Office are on the neutral position, METI seems to be on the implementer’s side and trying to influence future court judgments. It is because Japanese industries are afraid to be sued.