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Article: February 2013 Japan Litigation Update

February 01, 2013
Business Litigation Reports

Japanese Court’s Ruling Limits Scope of Contributory Infringement in Pharmaceutical Patents.
The Osaka District Court recently addressed the application of the Japanese counterpart to “contributory infringement” in the pharmaceutical context. Specifically, in Takeda Pharmaceutical Company Limited v. Sawai Pharmaceutical Co., Ltd., et al, the court assessed whether infringement of a pharmaceutical patent could be found where the alleged infringer sells only a non-patented medicine that can then be combined with another product to infringe the patent.

Takeda, which produces a product named ACTOS that treats Type 2 Diabetes, owns patents covering a product that combines the ACTOS treatment with other medicine(s). The defendant companies manufacture and sell generic products akin to ACTOS that may be used with other oral anti-diabetic products. Takeda sought a provisional injunction and damages against the defendants under Article 101, Item 2 of the Patent Act. Analogous to contributory infringement in the United States under 35 USC § 271(c), Article 101 covers infringement where the accused infringer makes a product that is knowingly used with another component or product that together fall within the scope of the patent claims, and where the accused infringer’s contribution is indispensable to the resolution of the problem of the invention.

The Osaka District Court rejected the contributory infringement theories on numerous grounds. The court first held that the defendants’ generic products are independent medical products themselves and are not intended to be used with other products or medicines, even if they ultimately are used as such. The court specifically rejected Takeda’s argument that the doctor’s prescriptions, which prescribed that the generic be used with other medicines, constituted producing a product to be used with another. The court further found that giving a patient those medicines together, such as when they are given in the same bag under a common prescription, cannot constitute production of an infringing product. The court similarly found that a patient’s active ingestion of the defendants’ medicines with other medicines did not constitute production of an infringing product. Accordingly, the court held that the generic medicines could not be liable for infringement pursuant to Article 101, item 2 even when their medication was combined with other medication so as to fall within the scope of the claims.

Takeda appealed the decision by the Osaka District Court to the Intellectual Property High Court.

Criminalization of Illegal Music and Video Downloads. The Revised Japanese Copyright Act that criminalizes illegal downloads of music and video files came into effect on October 1, 2012. The revised act now imposes penalties of up to two years in prison and fines of up to two million yen (around $25,000) on those who illegally download infringing files. To institute criminal prosecution, the copyright title holder must file a complaint.

Before the amendment, although prohibited, downloading files that infringed copyrights was not criminalized—only uploading infringing files was considered a crime. As a result, before the amendment, the only recourse for a copyright title holder against an infringing downloader was a civil suit seeking damages. Time will tell how this criminal penalty will be enforced in practice.