1. Intellectual Property Hight Court Case No.1130 (Wa) 2018, August 31, 2021 (Presiding Judge Tanaka) ～This Judgement～
The decision, which is summarized as follows, took into consideration the royalty rate (5%) proposed by the patentee during pre-litigation negotiations as one factor, and determined that the royalty rate to be determined ex post facto would be twice that rate (10%).
“The following facts are recognized: prior to the filing of this lawsuit, the plaintiff had proposed a 5% license fee rate for the Patent to the 3M Group, including the defendants (Otsu-41), on the other hand, U.S. 3M claimed that the royalty rate for the patent on the retroreflective sheet was 9% in the patent infringement lawsuits it had filed against third parties in the past (Kou-71), U.S. 3M et al. have agreed to a royalty rate of 20% in lawsuits filed against third parties in the past (Kou-72, Otsu-66).”, the minimum value of “chemistry” to which the retroreflective sheet (resin sheet) corresponds is 0.5%, the maximum value is 32.5%, and the average is 4.3% in the ‘Research Report on the Utilization of Patents, etc. Based on the Evaluation of the Value of Intellectual Property: An Understanding of the Actual State of Intellectual Property (Asset) Value and Royalty Rates’ (March 2010), compiled by Teikoku Databank, Ltd. (Kou-73, Otsu-67) and in the patent infringement lawsuit filed against the plaintiff, the defendant 3M Japan et al. claimed a 10% royalty rate.”
2. IP High Court Grand Panel Case No. 2018 (Ne) 10063; June 7, 2019
〈Past Article〉
3. Some Consideration (Trend after IP High Court Grand Panel Case No. 2018 (Ne) 10063)
The following is an overview of cases in which the Intellectual Property High Court (Grand Panel) Case No. (Ne) 10063 of 2008 “Viscous Composition Containing Carbon Dioxide” and subsequent cases have made decisions regarding the license fee rate under Article 102(3) of the Patent Law. Although it is a case-by-case determination of the importance of the patent in the defendant’s product, etc., there have not been many cases in which the thesis that “the rate of fees to be received for enforcement, which should be determined ex post facto for patent infringers, is rather naturally higher than the normal rate of fees” has been applied.
In three out of the five cases since the IP High Court in the Grand Panel decision (June 7, 2020) until the November 18, 2020 decision, the phrase “the rate to be determined after the fact for infringers who infringe the patent right, which should be taken into consideration that the rate to be received for the license will naturally be higher than the normal license fee rate” was used, which is a judgment of the IP High Court in the Grand Panel decision (IP Hight Court Case No.2020 (Ne) 10025 “Luminous Device” (Presiding Judge Mori), IP Hight Court Case No.2018 (Ne) “System Operation Methods” (Presiding Judge Tsuruoka), Osaka District Court Case No. 2016 (Ne) 12296 “Card case for stick hooks” (Presiding Judge Tani)). However, in the seven cases from the Tokyo District Court Decision (December 1, 2020) to the Tokyo District Court Decision (January 27, 2022), the phrase “the fact that the license fee will naturally be higher than the normal license fee rate should be taken into consideration” was not used.
However, in its conclusion, this decision also considered the royalty rate (5%) proposed by the patentee during pre-litigation negotiations as one factor and determined that the royalty rate to be determined after the fact would be twice that rate (10%). There are several court decisions that are consistent with the idea that the “ex post facto determined license fee rate” is approximately twice the normal license fee rate. In any case, the royalty rate proposed by the patentee during pre-litigation negotiations was taken into consideration as one factor, and it is instructive in practice as a court case in which a royalty rate twice that rate was awarded.
For example, in the cases such as Tokyo District Court Case No.2019 (Wa) 20074 “Heating assemblies for aerosol generation systems”; IP High Court Case No.2020 (Ne) 10025 “Luminous Device” (Presiding Judge Mori); Osaka District Court Case No. 2016 (Ne) 12296 “Card case for stick hooks” (Presiding Judge Tani); Osaka District Court Case No.2017 (Wa) 9201 “Foam compositions with high alcohol content containing silicone-based surfactants”, the court found that the royalty rate was approximately twice the average royalty rate in the field of technology of the patented invention.
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