Japan: An Intellectual Property: Domestic Overview

In 2025, cases with considerable implications for future practices in specific fields included a physician’s actions and patent rights, an alleged infringement act involving a server outside Japan, the scope of extended patent rights, and the granting of a SEP-based injunction and damages based on FRAND royalty rates.

Physician’s Actions and Patent Rights

So-called “Breast Augmentation Composition Case” (Intellectual Property High Court Grand Panel Decision dated 19 March 2025 (2023 (ne) No 10040)

This case concerns whether the actions of a physician (the “defendant”) who mixed multiple substances to create a composition (the “composition”) and administered the composition via syringe to women undergoing breast augmentation infringed the patent directed to the composition (the “patent”). The Intellectual Property High Court found infringement of the patent and upheld the claim for damages against the defendant by the patent owner (the “plaintiff”). The case involves multiple legal issues, but the present discussion focuses on two defences raised by the defendant and the Intellectual Property High Court’s judgment on them.

The first issue is the defendant’s argument that the invention directed to the composition (the “invention”) does not qualify as an “invention with industrial applicability” as stipulated in Article 29, Paragraph 1 of the Patent Act, and, therefore, the patent is invalid. Specifically, the defendant argued that since the composition is created by a physician and administered to women via syringe, the invention covering such “medical acts” does not qualify as an “invention with industrial applicability”.

In response, the Intellectual Property High Court rejected the defendant’s defence, holding that the industrial applicability of the invention of a product is not negated merely because it relates to medical acts.

The second issue is the defendant’s argument that this case falls under the exception to the effect of patent as stipulated in Article 69, Paragraph 3 of the Patent Act, and, therefore, the plaintiff cannot exercise the patent against the defendant. Article 69, Paragraph 3 of the Patent Act stipulates that the effect of patent for inventions related to pharmaceuticals manufactured by mixing “two or more pharmaceuticals (defined as those used for diagnosing, treating, managing, or preventing human diseases...)” does not extend to manufacturing acts by physicians (prescriptions by physicians). The defendant argued that the defendant’s acts in this case constitute such manufacturing acts, and, therefore, the plaintiff cannot exercise the patent against the defendant. In response, the Intellectual Property High Court rejected the defendant’s defence, holding that breast augmentation performed for aesthetic purposes does not fall under “diagnosing, treating, managing, or preventing human diseases” and, therefore, Article 69, Paragraph 3 of the Patent Act does not apply.

First-Ever Supreme Court Decision Relating to Alleged Infringing Act Involving a Server Located Outside Japan

Supreme Court Decision dated 3 March 2025 (2023 (ju) Nos 14, 15 and 2023 (ju) No 2028)

This is the first Supreme Court judgment on patent infringement in several years.

The patented invention in this case relates to a video distribution system. Its technical feature lies in displaying multiple user-posted comments alongside a video without overlapping. The claim elements include a terminal used by the user and a server that receives comments and displays them with the video. In this case, the alleged infringing act involved a video distribution service for Japanese users; while many terminals were located in Japan, the server was located in the United States. Therefore, whether the act constituted “working” the invention in Japan was questioned in relation to the principle of territoriality.

There were two pending cases related to this matter. In both cases, the Tokyo District Court (the court of first instance) denied patent infringement. However, the Intellectual Property High Court ruled that an act can be evaluated as “working” the invention in Japan if the act is substantively and holistically considered to be performed within Japan. Based on this legal standard, the High Court found patent infringement in this case.

The Supreme Court’s current judgment upheld the Intellectual Property High Court’s decision. Regarding the defendant’s service, the Supreme Court maintained the conclusion of patent infringement, stating that the act was substantively performed in Japan because “it allows users to view videos on terminals located in Japan where the video and comment display areas are adjusted” and “there is no particular significance to the server being located outside the territory of Japan”.

A Significant Decision on the Scope of Extended Patent Rights

On 27 May 2025, the Intellectual Property High Court issued a landmark decision in 2021 (ne) No 10037, addressing the scope of extended patent rights (PTEs) in pharmaceutical patent litigation. The case concerned alleged infringement involving Nalfurafine Hydrochloride OD Tablets 2.5 μg, generic equivalents of REMITCH® OD Tablets 2.5 μg, and represents only the second major ruling on this issue since the 2017 Grand Panel decision (2016 (ne) No 10046).

The 2017 Grand Panel decision established that the effect of a PTE extends not only to the approved product defined by its ingredients, dosage, administration, indications and effects, but also to pharmaceutical products that are “substantially identical”.

In the REMITCH case, the branded and generic products shared the same active ingredient, dosage, administration, indications and therapeutic effects, differing only in the composition of excipients. Rejecting the defendants’ argument that independently developed excipients excluded substantial identity, the Intellectual Property High Court held that where differences in “ingredients” other than the active ingredient do not affect the pharmaceutical “indications and effects”, and such differences are found to be minor or merely formal when viewed as a whole, the products are to be regarded as “substantially identical”.

The Intellectual Property High Court awarded the plaintiff approximately JPY21.7 billion in damages, marking the largest damages award in the history of patent litigation in Japan.

District Court Grants SEP-Based Injunction and Determines FRAND Royalty Rates

Tokyo District Court Decision dated 23 June 2025 (2023 (wa) No 70501) (Pantech v Google); Tokyo District Court Decision dated 10 April 2025 (2022 (wa) No 7976) (Pantech v ASUS)

In two landmark 2025 judgments, the Tokyo District Court granted an injunction based on a Standard Essential Patent (SEP) in Pantech v Google and awarded damages based on a FRAND royalty rate in Pantech v ASUS. In both cases, the patentee, Pantech Corporation, asserted infringement of its alleged 4G SEPs against the implementers, the Japanese subsidiaries of Google LLC and ASUSTek Computer Inc, respectively.

In the Google case, Google’s conduct during negotiations before the court led the court to find Google to be an unwilling licensee. Specifically, Google proposed a settlement based on the price of an average smartphone rather than its actual sales revenue and, despite the court’s recommendation, refused to disclose the price and volume of the infringing products. The court determined that these actions eliminated the possibility of meaningful licence negotiations. Consequently, the court granted an injunction prohibiting the sale of the infringing product, the Pixel 7.

In contrast, the court found ASUS to be a willing licensee. ASUS proposed a counter- offer based on its actual sales revenue and the primary dispute between the parties was restricted to a disagreement over the FRAND royalty rate. The court noted that because FRAND calculation methods are not yet firmly established in Japanese practice, a disagreement over the rate does not automatically make a party an unwilling licensee.

To determine the royalty rate, the court referred to the general principle of referencing comparable licence agreements and global market rates. However, it found that the agreements presented by Pantech were not comparable. Instead, the court utilised a “top-down” approach, referencing aggregated royalty rates recognised by courts in other jurisdictions.

These 2025 judgments constitute a significant development in Japan, occurring after almost ten years of limited activity in high-profile SEP litigation following the Intellectual Property High Court Grand Panel’s 2014 decision in Apple v Samsung.