―(Following Case) Intellectual Property High Court Case No.10046 (Ne) 2022, May 26, 2023 (Presiding Judge Otaka)
A case in which the act of “production” by FC2 in the U.S. of a “(comment distribution) system” that includes servers located outside of Japan was evaluated as an act in Japan. The Patentee prevailed in a reversal.
―(Prior Case) Intellectual Property High Court Case No.10077 (Ne) 2019, July 20, 2022 (Presiding Judge Honda)
A case in which the act of sending a program from a server outside of Japan to a user in Japan was evaluated as an act in Japan. The court reversed the district court’s decision and held that the patent claims are satisfied. The Patentee prevailed in the reversal.
1. This Judgement (Grand Panel Decision of the Intellectual Property High Court) ～ The Court affirmed “production” in Japan (citation of the “abstract”)
In the FLASH version of the Defendant’s Service 1, when the user terminal receives each file, the server and the user terminal are connected via a network using the internet, and the user terminal’s browser can overlay comments on the video. Therefore, when the user terminal receives the above files, it can be said that Defendant’s System 1, which is equipped with functions satisfying all of the above requirements, has been newly created. …
Whether the act of creating a new network system constitutes “production” in Japan or not shall be determined by taking into comprehensive consideration the specific manner of the act, even if the server, which is part of the elements constituting said system, is located outside of Japan, the function and role played in the invention by each element of the system that is located in Japan, where the effects of the invention can be obtained through the use of said system, the impact of such use on the economic interests of the patentee of the invention, etc. Then, if the act can be considered to have been performed in the territory of Japan, it is reasonable to conclude that said act constitutes “production” as provided by Article 2, Paragraph 3, Section 1 of the Patent Act.
In the case of the production in question, each file is sent from a server in the U.S. to a user terminal in Japan, and the domestic user terminal receives and examines the file, and since the sending and receiving are done as one and the Defendant’s System is completed when the domestic user terminal receives each file, it can be considered that the above sending and receiving were done in Japan. Next, the Defendant’s System consists of the server of appellant Y1 located in the U.S. and user terminals located in Japan. Then, the above-mentioned user terminals located in Japan fulfill the judgement function part function in the Claim Component 1F and the display position control part function in the Claim Component 1G, which are necessary to ensure that comments displayed on the video are displayed in positions where they do not overlap, which is the main function of this invention. Furthermore, the Defendant’s System can be used within Japan via user terminals, and the effect of this invention 1 of improving entertainment is communication using comments manifested within Japan, and its use within Japan can affect the economic benefits that the appellant can obtain by using the system pertaining to this invention 1 within Japan. Considering the above circumstances, the production in question can be considered to have taken place in the territory of Japan.
2. Some Consideration
In the context of determining the evaluation of the “production” location of the system for the patented invention, the Court held the following and emphasized the importance of the function and role of the user terminals.
Furthermore, as a holding against the Appellee’s rebuttal, the Court held the following.
In short, the court held that the system pertaining to the patented invention is not completed only by the server but is completed = newly created by “the user terminal receiving the necessary files,” emphasizing the importance of the function and role of the user terminal.
Writer: Hideki TAKAISHI
Supervising editor: Kazuhiko YOSHIDA
Hideki TAKAISHI
Attorney at Law & Patent Attorney
Nakamura & Partners
Room No. 616, Shin-Tokyo Building,
3-3-1 Marunouchi, Chiyoda-ku,
Tokyo 100-8355, JAPAN