Shogo Matsunaga on SEPs and the Law in Japan

Customary Important Patent (SEP) litigation is world and SEP homeowners typically comply with a method to implement their SEPs in a number of jurisdictions. Past the standard venues in the USA, Europe, or China, SEP circumstances are more and more additionally resolved in much less typical jurisdictions resembling Brazil, Colombia and India. One nation that has been largely ignored in world SEP enforcement methods, nonetheless, is Japan. That is in some ways stunning provided that Japan the  fourth largest financial system on the planet and has over 121 million residents. This big consumers’ market has excessive calls for in costly smartphones or different good units, in addition to one of many largest automotive industries.

For a very long time, Japanese firms have been distinguished patent candidates worldwide. Nonetheless, making an attempt to claim patents in Japan has typically proved futile and dear. Wanting again, the clashes in Japan in the course of the Apple v. Samsung world patent dispute function a transparent instance of this example. Whereas pursuing billion-dollar lawsuits towards Samsung in the USA, Apple lodged a relatively minor declare of $1.3 million towards Samsung in Japan, alleging infringement of seven Apple patents by Samsung’s Galaxy smartphones and tablets. Nonetheless, shortly after a U.S. jury awarded Apple $1 billion for six of those patents, the Tokyo District Courtroom decided that Samsung had not infringed any of Apple’s patents. Across the identical interval, Samsung counter-sued Apple in Japan for violating its SEPs associated to cellular telephone requirements. Regardless of this, Japan’s IP Excessive Courtroom declined to grant an injunction and, on Might 16, 2014, dominated that Samsung couldn’t search damages exceedingly roughly ¥9.96 million ($100,000).These notable patent litigations in Japan have left an enduring impression on world SEP enforcers. The prevailing sentiment was that if even main gamers like Apple and Samsung struggled to safe favorable outcomes in Japanese courts for SEP infringements, then there was little justification for pursuing enforcement there.

Shogo Matsunaga, some of the influential SEP consultants in Japan and Companion at Sonderhoff & Einsel, has labored on a number of SEP circumstances in Japan. Matsunaga supplies a brand new perspective on SEPs in Japan within the newest SEPcouch podcast episode, moderated by Tim Pohlmann. Matsunaga explains that the result of the SEP rulings in Japan is usually misinterpreted. He believes that Japanese courts are too typically perceived as requirements implementer pleasant, which in his opinion shouldn’t be the case.

Matsunaga believes that we are going to certainly quickly see one other SEP case litigated in Japan, possibly even later this yr. Japanese courts have a confirmed observe document of being environment friendly and the Japanese shopper market has rising gross sales numbers for high-end good telephone generations and types. However Matsunaga stresses that there must be extra readability in Japanese courtroom interpretations. Additionally, future rulings would want to align with worldwide case regulation.

Japanese authorities businesses such because the Japan Patent Workplace (JPO) or the Ministry of Economic system, Commerce and Business (METI) have revealed tips for SEP licensing negotiations and honest worth calculations. The federal government businesses total determine three ideas: 1) license to all, 2) top-down method and three) proportionality rule. These tips have been perceived as commonplace implementer pleasant. Although these tips aren’t binding and courts in apply don’t use them fairly often, such authorities communications might scare away SEP-enforcing firms. Matsunaga explains that the primary cause why SEP enforcement shouldn’t be common in Japan is, nonetheless, as a result of the definition of a prepared licensee in Japan is sort of obscure and SEP-enforcing events concern shedding circumstances or solely getting low royalties when litigating in Japanese courts.

World SEP licensing has disrupted worldwide provide chains within the auto business. Suppliers that ship e.g. 4G connectivity bins to OEMs typically indemnify their clients, however SEP holders would solely license to OEMs. SEP royalties had been typically not thought-about within the suppliers pricing and OEMs who then took a license, e.g. from patent platforms resembling Avanci, would request again the royalties from their suppliers. Additionally, in Japan indemnification clauses turned problematic when suppliers couldn’t safe licenses for the SEPs they included of their merchandise. This challenge led to the elimination of many indemnification clauses within the Japanese automotive business. When requested in regards to the state of affairs in Japan, Matsunaga explains that indemnification stays a essential matter, particularly in rising industries like IoT. He emphasizes that the Japanese business should perceive that SEP royalties are important prices and warns towards damaging the provision chain and lacking out on technological competitors by neglecting licensing agreements. However on that matter Matsunaga observes a altering mindset amongst IoT firms in Japan, a few of that are studying from the experiences of automotive firms. General, whereas indemnification stays a difficulty, there’s a shift in direction of better consciousness and understanding of licensing practices in Japan. Most of the Japanese IoT firms are desperate to find out about SEP licensing and fascinating in understanding it early on.

Japan has a really organized solution to focus on SEP points. METI has arrange the “SEP research group,”which consists of over 150 member consultants from varied industries like Telecom, Automotive, Manufacturing, Residence Home equipment and lots of extra. Matsunaga explains that when it’s about SEPs, the completely different factors of view, e.g. between automotive OEMs and the SEP homeowners, are sometimes not brazenly mentioned. Matsunaga would like to see extra contrivers discussions.

In spite of everything, Japan stays an attention-grabbing market and should very quickly grow to be one other vital SEP litigation venue. Matsunaga emphasizes the significance of selling licensing by way of good-faith negotiations and the position of courtroom circumstances in guaranteeing predictability.