1. Excerpt from the Judgement (Part of the judgment on “sales” at the phase for examination on damages)
The plaintiff asserts that the scope of damages should not be limited to the registration of friends by the “Furufuru” function and the subsequent interactions with users who have become friends by the above function, but they should include the registrations of friends by other functions such as QR Codes or ID searches and should cover consolidated sales including overseas companies.
(a) However, since the filing of this present case, the plaintiff has consistently insisted that the registration of friends by the “Furufuru” function and the subsequent interactions falls within the technical scope of the inventions…, and the assertion and proof that the registration of friends by other means of friends registration etc. falls within the technical scope of the inventions are not examined at the phase for examination on infringement, and therefore, the object of compensation for damages is limited to the sales within a scope that is causally related to the registration of friends by the “Furufuru” function….
(b) Sales of Account Advertising
In light of the content of each of the sales constituting the account advertisements, all of these sales should be regarded as unrelated to or remotely related to the registration of friends by the said function among ordinary users.
Then, the sales of the account advertisements are not subject to the compensation for damages in this case.
2. Some Consideration
In general, the presumption under Article 102, paragraph 3 of the Patent Act only extends to the presumption of the amount of damages, therefore, the patentee bears the burden of proof of the existence of damages.
Moreover, “the amount … to receive for the working of the patented invention” is calculated by the formula “sales” × “equivalent royalty rate” relating to the working of the patented invention. The court found the scope of the “sales” under paragraph three (3) to be limited to “sales within a causal relation” with the working of the patented invention (the registration of friends by the “Furufuru” function). Based on the above, the court found and determine the scope of the “sales” for each of the defendant’s services.
In this case, there were two main issues, and both were judged in favor of the defendant.
(2-1) First, the plaintiff asserted that the scope of damages should not be limited to the registration of friends by the “Furufuru” function and the subsequent interactions with users who have become friends by the above function, but they should include the registration of friends by other functions such as QR Codes or ID searches, and moreover, should cover consolidated sales including overseas companies.
However, in this judgement, the court found “since the filing of this present case, the plaintiff has consistently insisted that the registration of friends by the ‘Furufuru’ function and the subsequent interactions falls within the technical scope of the inventions”, therefore, “the registration of friends by other means of friends registration etc.” was not considered to be subject to compensation for damages as long as the issue was not examined at the phase for examination on infringement.
(2-2) Second, the court found that sales of “account advertisements” and sales of “LINE Out” communications were not subject to compensation for damages with regard to “a scope of a causal relation with the registration of friends by ‘Furufuru’ function”. (With regard to the sales of Accounts Advertising, the court pointed out that the issue had not been adequately examined at the phase for examination on infringement. Moreover, apart from the above, the court found “unrelated to or remotely related to” in the same way as “LINE Out”).
In the text of this judgement, the expression “unrelated to or remotely related to” was used. It is extremely important in future patent practice to find the boundary line that is regarded as “remotely related to” (or the boundary line that “causal relation” is denied and is not regarded as to be subject to compensation for damages”.
In this respect, we were interested in how the appellate court would judge this case, but it is said that a settlement was reached before a judgment could be rendered by the appellate court.
Writer: Hideki TAKAISHI
Supervising editor: Kazuhiko YOSHIDA
Contact information for inquiries: h_takaishi@nakapat.gr.jp
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