The September 2014 issue of AIPPI-Journal of Japanese Group of AIPPI has a short article by Yosuke Kurita of a case titled Iris Ohyama, Inc. v. Y, Tokyo District Court, Judgment of December 19, 2013, Case No. 2011 (Wa) No. 30214. According to the article, the defendant owns a patent on an "energy saving lamp with sensor." The defendant sought an injunction against the plaintiff's importation and sales of a product that the defendant alleged was infringing, and also sent letters to two other firms (retailers of plaintiff's product) making this same allegation against the plaintiff. The plaintiff filed suit for a declaratory judgment of noninfringement and for an injunction against the defendant's alleged unfair competition. The court concluded that the plaintiff's product did not infringe and awarded it the requested declaratory judgment. On the unfair competition claim, the relevant statute states (in this unofficial translation available from the OECD) in article 3(1) that "A person whose business interests have been infringed or are likely to be infringed by unfair competition may seek an injunction suspending or preventing the infringement against the person that infringed or is likely to infringe such business interests," and article 2(1)(xiv) defines "unfair competition" to include, among other things, "acts of making or circulating a false allegation that is injurious to the business reputation of another person in a competitive relationship." The court concluded that a "competitive relationship" between the plaintiff and defendant existed, on the ground that "existence of a likelihood of competition occurring in the market suffices from the perspective of the purpose . . . of the Unfair Competition Prevention Act, that is, ensuring fair competition among business operators, even if there is no competition in the actual market. Sela has also made its way into Japan, and is in a competitive relationship with the plaintiff. In addition, the defendant is the representative of Sela and has the patent right. Therefore, it is recognized that there is a likelihood of competition occurring in the market in relation of the business of selling lamps with a sensor" (p.347).
The article doesn't indicate that the plaintiff sought any damages for the alleged unfair competition, perhaps because no damages would have been available under the damages provisions of the unfair competition law. The relevant portions of those provisions read as follows:
Article 4 (Damages)
A person who intentionally or negligently infringes on the business interests of another person by unfair competition shall be liable for damages resulting therefrom. However, this Article shall not apply to damages resulting from the use of a trade secret after the rights prescribed in Article 15 have extinguished pursuant to the said Article.
Article 5 (Presumption of amount of damages, etc.)
(1) Where a person whose business interests have been infringed by unfair competition listed in items 1 to 9 or item 15 of Article 2(1) . . . (hereinafter referred to as the "infringed person" in this paragraph) claims damages caused by such an infringement from a person who has intentionally or negligently infringed such business interests, and where the infringer has sold or otherwise transferred the articles constituting the act of infringement, the quantity of the articles sold or transferred (hereinafter referred to as the "transferred quantity" in this paragraph) multiplied by the amount of profit per unit of the articles that the infringed person could have sold in the absence of the infringement may be deemed as the amount of damages suffered by the infringed person, provided it does not exceed the amount attainable by the infringed person's capability to sell or conduct other acts concerning said articles. However, where there are any circumstances that would have prevented the infringed person from selling the quantity of articles equivalent to all or part of the transferred quantity, an amount corresponding to the quantity relevant to such circumstances shall be deducted.
(2) Where a person whose business interests have been infringed by unfair competition claims damages caused by a person who intentionally or negligently infringed such business interests and received profits through the act of infringement, the amount of such profits shall be presumed to be the amount of damages suffered by the person whose business interests were infringed. . . .
(4) The provisions of the preceding paragraph shall not preclude a claim for damages exceeding the amount prescribed in the paragraph. In such a case, if the person who infringed such business interests did not do so intentionally or through gross negligence, the court may take this into consideration in determining the amount of damages. . . .
Article 9 (Determination of reasonable damages)
In a lawsuit for the infringement of business interests by unfair competition, where damages were found and it is extremely difficult to prove the facts necessary for proving the amount of damages due to the nature of said facts, the court may determine a reasonable amount of damages based on the overall purport of the oral arguments and the results of the examination of evidence.
Presumably, then, if the defendant hasn't yet sold any products in competition with the plaintiff, which I take it to be the case here based on the court's discussion of "likelihood of competition," the only recourse would have been article 9; and perhaps there were no actual lost sales on which to base a damages award, which would have made an undertaking for damages futile. Interesting nonetheless to see what the statute says about damages for unfair competition, including unfair competition based on wrongful claims of patent infringement, and to compare the above provisions with the (somewhat similar) corresponding provisions on patent damages found in article 102 and 105-3 of the Japanese Patent Act (available in unofficial translation here).
For further discussion of patent damages and declaratory judgments in Japan, see my book pp. 307-331.
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