INTRODUCTION
This paper provides an introduction to the basic differences between the U.S. and Japanese patent systems and the problems that arise for U.S. medical products companies operating under the Japanese system.
Patent systems are intended to provide protection for newly invented products and technologies and, therefore, provide incentives to invest in the research and development of new products and technologies. For example, a patent protects new medical products, including pharmaceuticals, by granting the patent holder certain exclusive rights in the invention as described in the patent claim.
By the end of 1994, the United States and Japan together had granted the largest number of existing patents in the world. That is still true today. In 1995, the Japan Patent Office (JPO) granted 109,100 patents and in 1996 granted 215,000 patents. During the same period, the U.S. Patent and Trademark Office (PTO) granted 101,419 patents and 109,646, respectively.
There are substantial differences between the U.S. and Japanese patent systems. As a 1993 U.S. General Accounting Office (GAO) report noted, these differences have created problems for U.S. companies operating in Japan. Many U.S. companies seeking to do business in Japan express dissatisfied with the Japanese patent system. Time-consuming procedures, high costs, a tradition of narrowly interpreting patents and “difficulty in obtaining patents for pioneering inventions” often make market entry extremely difficult. 1 Japan and the United States have attempted to narrow the gap between their patent systems. While international patent harmonization talks have progressed, they have primarily focused on procedural rather than substantive issues. There has been virtually no progress in the critical area of patent enforcement.
BRIEF OVERVIEW OF THE JAPANESE PATENT SYSTEM
A. Basic Elements of the Japanese Patent System
Both the U.S. and Japanese patent systems have two basic elements: administration (or processing) and enforcement. Administration covers patent applications, processing, denials or grants. Both the JPO and the PTO receive and examine applications that contain a “written description of the invention and set of claims,” including the technological scope of the inventions. 2 The meaning of critical parts of the application, such as the claim language, is determined through examination of the patent applications and dialogues between examiners and applicants. The JPO and the PTO use similar criteria to determine whether to grant a patent for items that are “new, useful, and non-obvious compared to the previously known technology.” 3
In the United States and Japan, the courts are the primary arbitrator of patent disputes, although the PTO and JPO are also vested with enforcement capabilities. For instance, in Japan, only the JPO has the authority to invalidate issued patents, while in the United States both the PTO and the courts have such authority. The JPO and the PTO can both accept appeals arising from adverse administrative decisions. The JPO uses an administrative appeal system, called “opposition,” by which third parties can file their opposition to a patent with the JPO. Opposition is a low cost procedure for third parties to object to a patent. In the United States, a third party objection to a patent application requires the participation of both the applicant and the third party. While the PTO can proceed on an ex parte basis, it very rarely does so.
B. International Harmonization Efforts
In an effort to more closely match U.S. and international patent standards and to respond to repeated complaints by U.S. businesses, Japan revised some of the JPO’s administrative procedures in the mid-1990s. On December 14, 1994, Japan amended its patent law. The amendments fell into two groups. The first group, effective on July 1, 1995, among other minor changes, increased the life of a patent to 20 years from the filing date, and permitted JPO acceptance of applications written in English provided that a Japanese translation is submitted within two months of the initial filing. The second group of changes, effective January 1, 1996 established a post-grant opposition procedure (instead of the previous pre-grant opposition system) and shortened and accelerated the examination procedure for patent applications. Table 1 below summarizes some of the major differences in the U.S. and Japanese patent procedures.
Table 1: Differences in U.S. and Japanese Patent Procedures
|
UNITED STATES (PTO)
|
JAPAN (JPO)
|
|
| Patent Granting |
First-to-invent
|
First-to-file
|
| Language used in filing |
Any
|
Japanese or English if Japanese translation is provided within 3 months |
| Publication of Patent |
After patent granted
|
After patent granted Application |
| Deferred Patent Examination |
No
|
May be deferred for up to 7 years |
| Opposition System |
No
|
After a patent is granted, other parties can request a re-examination |
| Grace Period for Examination |
No
|
Yes (6 months)
|
Sources: JPO 1996 Annual Report, p. 96; Yanagida, Masashi, “Philosophical Basis of the Japanese Patent System Compared with the U.S. System,” Japanese Patent Practice Prosecution/Licensing/Litigation. Japan Patent Attorneys Association, June 20, 1994, pp. 4 – 6; JPO Homepage: http://www.jpo-miti.go.jp.
DIFFERENCES BETWEEN U.S. AND JAPANESE PATENT ENFORCEMENT
U.S. companies continually express dissatisfaction with Japan’s weak patent protection and enforcement. Both the JPO and the Japanese courts interpret patent claims strictly. However, the JPO focuses on patentability while the courts focus on enforcement.
“[T]he scope of patent protection must be decided by reference to the claim.” While both the U.S. and Japanese courts use interpretation aids, such as specifications, drawings, prosecution history, and prior art to determine the scope of a patent, the Japanese and U.S. courts look at and use these interpretation aids in dramatically different ways. 4
Unlike U.S. courts, Japanese courts interpret the scope of patent claims narrowly. The reviewing court will rely heavily on the detailed specifications in the patent and will often find no infringement. The specification in the patent application and subsequent patent, if granted, is the portion that specifically describes the new invention. The specification includes, for example: 1) the type of invention; 2) the purpose of the invention; 3) the invention itself (i.e., what the invention is composed of and how it is made); 4) how the invention works; 5) examples of the invention in order to help explain it; 6) the patent claim; and 7) an abstract of the specification.
In contrast to Japanese courts, U.S. courts generally interpret patents broadly. A reviewing court will generally apply the doctrine of equivalence to determine the scope of a patent claim. The doctrine provides that “an invention of a device or process that is regarded to be equivalent to the invention in the patent in question should be regarded as falling under the scope of the invention in the patent.5 ” This doctrine permits a wide scope of technical claims and results in more findings of infringement than in Japan.
While the equivalence doctrine exists in Japan, Japanese courts most often decline to apply it. In its place, the courts have adopted a more ad hoc process to determine the scope of a patent. Such a practice is consistent with the strong propensity of Japanese courts to limit the scope of technical patent claims. An extremely narrow reading of patent specifications is especially common in cases involving medical products. Some of the most common ways by which Japanese courts limit the scope of claims are:
1) Limiting the scope of the patent to the specific examples in the patent application “embodiments”: Japanese courts usually limit the scope of a patent to the embodiments in the specifications. A court’s interpretation is often based on specific examples in the patent specification. The courts generally assume that the inventor knows everything about the invention and therefore should know and protect against every potential infringement.
2) Engaging in an element-by-element analysis of the invention: Japanese courts limit the scope of claims according to the “particular nuances of the effects of the invention mentioned in one or more examples in the specification.6 ” Thus, where there are variations or modifications in the descriptions in different patent applications and/or patents, the courts usually find no infringement.
3) Referring to ideas expressed in the specification: Japanese courts will often look to the specific principles or ideas utilized by and expressed in a patent specification and limit the scope of the patent to those principles or ideas. 7 Japanese courts often examine each component of the example(s) in the specification. If the reviewing court finds that there are differences between the ideas and principles in the patent and those in the alleged infringing product or procedure, the court will not find patent infringement. In the United States the courts look to the “overall object of the invention … to interpret the disputed limitations.” 8 In short, U.S. courts use a broader and more protective standard for interpreting patents while Japanese courts focus on the narrow, specific language in the patent to interpret patents more narrowly.
4) Referring to dependent claims in the patent application: Patent claims are precise statements that describe the exact characteristics of the invention. There are two basic types of patent claims: independent and dependent claims. Independent claims are statements that describe the invention and can stand alone. A dependent claim must be interpreted in conjunction with other (dependent or independent) claim descriptions. Normally, a patent application has several independent claims that refer to and/or include other, dependent claims. Japanese courts limit “the scope of independent claims by reference to dependent claims.” 9
When a court cannot determine the technological scope of the claim from the independent claims in the specification alone, the court will often refer to dependent claims to assist in the determination. During this process, courts can, and often do, limit the scope of a claim.
5) Narrowly construing broad, fundamental claims: When Japanese courts review broad, fundamental patent claims unsupported by specific examples, the technological scope of a claim will normally be construed narrowly based on the details of the specification. If a patent holder accuses another of infringement, the claimant must have descriptions in the specification that clearly demonstrate that the defendant’s invention is within the scope of the patent. Otherwise, the court will not find infringement.
Finally, although the JPO bears some responsibility for the state of weak patent protection in Japan, the courts, because of their overly narrow interpretations of the scope of patents, bear primary responsibility.
GENENTECH, INC.: A MEDICAL PRODUCT CASE STUDY
Genentech, Inc. is a California-based biotechnology company that functions within the Japanese patent system. In 1983, Genentech developed a heart treatment drug tissue plasmogen activator (TPA), known as “Activase”. TPA is a heart treatment drug that dissolves blood clots that cause heart problems. Genentech pursued a worldwide patent application for TPA, using recombinant-DNA technology. The JPO, however, refused to accept the initial patent application. The JPO required Genentech to revise its application and provide important amino-acid sequences information. In April 1987, four years later, the JPO announced Genentech’s patent filing. Several Japanese companies immediately opposed the application (no pre-filing opposition procedures yet existed). In January 1991, nine years after filing, the JPO finally granted Genentech’s patent.
Under its Japanese patent, Genentech licensed the production and sale of TPA to Mitsubishi Kasei Corporation and Tanabe Seiyaku. During the licensing period, Toyobo, another Japanese company, under a license from Genzyme Company, a U.S. firm, was producing its own version of TPA. In August 1987, Genentech filed suit in Osaka district court, “alleging patent infringement by Toyobo, and demanding a ban on Toyobo’s production, marketing and sales promotion of recombinant TPA as well as on the conduct of clinical trials.” 10 Genentech also filed “for a temporary injunction to halt Toyobo’s clinical trials.” 11
On October 28, 1991, the Osaka district court upheld Genentech’s claims, finding that Toyobo’s TPA version infringed Genentech’s TPA technology in Japan. The court bailiff seized the TPA drug from Toyobo’s plant in Japan. This case was hailed as “Japan’s first major biotechnology patent case” 12 and the decision was well received in the United States.
Genentech also filed suit against Sumitomo Pharmaceutical. Sumitomo’s product used a technology under license from Wellcome Foundation in the United Kingdom. Sumitomo’s product had not yet received approval from Japan’s Ministry of Health and Welfare (MHW). Sumitomo’s TPA was different in only “one position of the amino-acid sequence.” 13 The presiding judge declined to find an infringement. Apparently, he “could find no ‘meaningful’ difference in clinical effect. Nevertheless, he still argued that it could not be said that the immunological characteristics and biological activity of the two forms of TPA are the same.” 14
The following example illustrates the level of detail often required by the JPO. In a patent granted to Genzyme Corporation for Follicle Stimulating Hormone (FSH), the JPO listed the acid sequence in the claims section of the patent application. This is fairly typical of JPO practice. The U.S. PTO patented claims read “From US Patent 4,923,805: A vector comprising a DNA sequence encoding the beta sub-unit of human FSH.” In the same patent granted by the JPO, the claims state that “DNA that codes for the mature beta sub-unit of human FSH as specified by the following amino acid sequence: Asn•••Glu. A vector that contains exogenous DNA that codes for the following amino acid sequence of the mature beta-sub-unit: Asn•••Glu and which codes for the beta sub-unit of human FSH. The vector of claim 2 that can transform mammalian cells.15 ” The JPO’s preference for including the DNA sequences in the claim language, especially in the case of biotechnology patent applications, naturally limits the scope of the patent.
CONCLUSION
Substantial differences remain between the U.S. and Japanese patent systems, especially in highly technical areas such as medical products. These differences are particularly troublesome in the way patent claims are described and in the realm of enforcement. In both situations, Japanese administrative and judicial practices greatly narrow the scope of the patent. These differences cause problems for U.S. medical companies trying to patent their inventions in Japan. However, recent changes in the Japanese system have brought the procedures in each country more in line with one another. In addition, both countries continue to pursue further harmonization talks and make legislative proposals. No quick fix exists for the differences between the two countries. Thus, U.S. firms should be aware of and prepared to deal with them.
SOURCES
1. U.S. General Accounting Office (GAO), GAO/GGD-93-126, “Intellectual Property Rights: U.S. Companies’ Patent Experience in Japan,” 3 (1993).
2. Motsenbocker, Marvin, “Proposed Changes to Japanese and United States Patent Law Enforcement System,” 3 Pacific Rim Law & Policy Journal 391 (1995).
3. Ibid., 392.
4. Takenaka, Toshiko, “Interpreting Patent Claims: The United States, Germany and Japan,” 199 – 200 (VCH Publishers, NY, 1995).
5. Yamasaki, Yukiko, “Interpretation of Patent Claims and Application of the Doctrine of Equivalents,” in American Intellectual Property Law Association, Japanese Patent Practice: Prosecution/Licensing/Litigation 405, published by Japan Patent Attorneys Association (June 20, 1994).
6. Motsenbocker, supra, note 2 at 403.
7. Ibid., 403.
8. Takenaka, supra, note 4 at 205.
9. Motsenbocker, supra, note 2 at 404.
10. Swinbanks, David, “Problems Over TPA Patent for Genentech in Japan,” 333 Nature 587 (1988).
11. Ibid.
12. Chase, Marilyn, “Genentech Wins Ruling on TPA in Japan Court,” Wall Street Journal, October 29, 1991, p. B4.
13. Swinbanks, David, “Single Amino-acid Makes Big Difference in Patent Court,” 372 Nature 123 (1994).
14. Ibid.
15. Motsenbocker, Marvin, “The Problem of Overly Broad and Invalid Patent Claims: Cost and Use of Corrective Measure,” at 73 (Paper prepared for the Institute of Intellectual Property, January 20, 1996).