Case No. (O)-364 of 1998

 

JUDGMENT

 

Appellant:

   Texas Instruments Incorporated

   13500 Express Way, North Central, Dallas, Texas, USA

 

Representative of the Appellant:

   Richard J. Agnitch

 

Attorneys-at-Law acting in the above suit:

   Minoru Nakamura

   Sadao Kumakura

   Kouichi Tsujii

   Shinichiro Tanaka

   Tadahito Orita

   Kazuhiko Yoshida

 

Patent Attorneys assisting the above-named Attorneys-at-Law:

   Fumiaki Otsuka

   Hideto Takeuchi

   Koichi Oishi

   Ken Deshimaru

 

Appellee:

   FUJITSU LTD.

   Kami-Odanaka 4-1-1, Nakahara-ku, Kawasaki-shi

Representative of the Appellee:

   Naoyuki Akikusa, Representative Director

 

Attorneys-at-Law acting in this suit:

   Harumi Kojo

   Naoki Mizutani

 

Patent Attorneys assisting the above-named Attorneys-at-Law:

   Sadakazu Igeta

   Tadanori Hayashi

 

   The Appellant appealed against the decision rendered by the Tokyo High Court on September 10, 1997 with respect to the Tokyo High Court Case No. (Ne)-3790 of 1994 between the above-named parties seeking the affirmation of non-existence of liabilities.  

   Thus, the Supreme Court holds as follows.

 

MAIN TEXT

 

   The appeal shall be dismissed.

   Cost for the appeal shall be borne by the Appellant.

 

REASONS

 

   Re:  The first, second, and fourth points of reasons for the appeal by Minoru Nakamura, Sadao Kumakura, Koichi Tsujii, Shinicihro Tanaka, Tadahito Orita and Kazuhiko Yoshida who are acting for the Appellant; and Fumiaki Otsuka, Hideto Takeuchi, Koichi Oishi and Ken Deshimaru who are assisting them in the appeal:

 

I.  The Appellee manufactures and sells semiconductor devices which are described in the accused device lists A and B attached to the Decision of the first instance.  The Appellant insists that the Appellee's such acts constitute infringement of the patent right identified below.  Thus, in this suit, the Appellee sues the Appellant for the affirmation of non-existence of the right to claim compensatory damages for infringement of the same patent.  

   Facts established by the original court are as outlined below.  The finding of facts can be affirmed as valid in the light of the evidence shown in the original decision.  There is not the alleged illegalities in the process.

 

   1.   The Appellant owns the patent right to the invention entitled ga semiconductor deviceh (Patent No. 320275).  (The above patent right is referred to as gthe subject patent righth, hereinafter; and the above invention is referred to as gthe subject inventionh, hereinafter).

 

   2.   A patent application of the subject invention was filed on December 21, 1971 as a divisional application from Patent Application No. 4689/1964 (which is hereinafter referred to as gthe original applicationh, and an invention therein is hereinafter referred to as gthe original inventionh).

   The original application was filed on January 30, 1964 as a divisional application from a patent application which was filed on February 6, 1960 (Patent Application No. 3745/1960).

 

   3.   With respect to the original application, the final decision for rejection became conclusive for the reason that the original invention could have been obvious over the well known inventions.

 

   4.   The subject invention and the original invention are substantially the same.

 

   5.   The Appellee is manufacturing and selling as its business the semiconductor devices described in the accused device lists A and B attached to the decision of the first instance.

 

II. Based on the above-mentioned facts, the original decision holds as follows:

 

   1.   If the subject application were a legitimate divisional application from the original application, the subject application would be deemed to have been filed at the time of filing the original application under Section 9, Paragraph 1 of the old Patent Law (the Law before abolished under the 1959 Law, No. 122).  The subject application, however, is illegitimate as the divisional application.  Hence, the subject patent is very likely to be invalidated because the subject application is a later filed application which is directed to the same invention as that of the original invention so that the subject patent is based on the application that should be rejected under Section 39, Paragraph 1 of the Patent Law.

 

2.   Further, the subject invention is substantially the same as the original invention of the original application for which the final rejection became conclusive on the ground that it could have been obvious over the well known inventions.  Thus, it is inevitable that a reason for invalidation inheres in the subject patent in this respect also.

 

   3.   It should not be permitted, as the abuse of the right, to exercise the right against the third party based on the subject patent right that is very likely to be invalidated as set forth above.

 

III.  The Appellant alleges as follows:

   Each of the original judgments of the original court as stated in II, 1 and 2 above is illegal.  Further, with respect to the judgment stated in II, 3, in the infringement suit of the subject patent right, it should be judged as to whether or not the accused device falls within the technical scope, assuming that the patent right is valid, but the original decision determined the invalidation of the subject patent right substantially.  Thus, the original decision violates the law, being illegal by reason of insufficient examination and deficient reason.

 

IV.  Each of the judgements rendered by the original court as stated in II, 1 and 2 can be affirmed.  The final rejection became conclusive in connection with the original application that is a prior application.  Even if the final rejection became conclusive in connection with the patent application as the prior application, the patent application does not lose the status of the prior application (see the 1998 Law, Rule 51, supplementary provision No. 2-4, and Section 39, Paragraph 5 of the Patent Law before Amended by the above law).  Therefore, the subject application should be rejected under Section 39, Paragraph 1 of the Patent Law (see a court decision rendered by the Second Petty Bench at the Supreme Court in connection with Case No. Heisei 3 (Gyo-tsu) 139 on February 24, 1995, Minshu Vol. 49, No. 2, page 460).  Since the subject invention is substantially the same as the original invention of the original application for which the final rejection became conclusive on the ground that the original invention could have been obvious over the well known inventions, the subject patent was granted in violation of Section 29, Paragraph 2 of the Patent Law.  Therefore, it is evident that the reason for invalidation as required in Section 123, Paragraph 1, Item 2 of the Patent Law exists in the subject patent.  It is definitely predicted that the subject patent will be invalidated because there is no special circumstance such that an appeal for correction was filed (the record shows that a trial decision for invalidation of the subject patent was rendered on November 19, 1997 after the original judgment was rendered, and revocation of the trial decision is now at suit).

 

V.  Now, we will study the judgment of the original court stated in the preceding II, 3.

   It is true that the Patent Law provides that adjudgment of a trial examiner of the Patent Office having expertise may be demanded in order to invalidate a patent where there exists a reason for invalidation in the patent (Section 123, Paragraph 1 and Section 178, Paragraph 6 of the Patent Law).  Further, the patent right shall be deemed never to have existed from the beginning when the trial decision for invalidation becomes final and conclusive (Section 125 of the Patent Law).  Therefore, the patent right continues to exist effectively, lawfully, and it is not invalidated in rem, until the trial decision that the patent is to be invalidated has become final and conclusive.

   Where it is evident that there exists a reason for invalidation in a patent, and where it is definitely predicted that such patent will be invalidated when a trial decision that the patent is to be invalidated has become final and conclusive in the case that an invalidation trial is demanded as with the subject patent, to construe that injunction and compensatory damages based on the patent right may be demanded in the above case also is unreasonable in view of the following points:

   (1)  If the demand for the injunction of working of the invention and compensatory damages based on the patent right in such case is to be approved, a patentee will be given an undue profit, and a party working the invention will suffer an unreasonable disadvantage from the substantial point of view.  This contradicts with the doctrine of equity as a result; and further,

   (2) It is desirable to settle a dispute by one procedure in as short a period as possible.  However, in the infringement suit based upon the patent right like the above case, unless a trial decision for invalidation has become final and conclusive in the due course of the invalidation trial of the Patent Office, it is not permitted to resort to the way of preventing against exercise of the patent right by insisting that there exists a reason for invalidation in the patent.  In such case, the party concerned who has no intention to pursue as to invalidation in rem of the patent, will be forced to follow an invalidation procedure.  This is also against the economy of lawsuits; and further,

   (3)  Section 168, Paragraph 2 of the Patent Law cannot be construed as requiring that proceedings of the suit should be suspended, even in the case that it is evident that there exists a reason for invalidation in the patent and thus, it is definitely predicted that the patent will be invalidated as described above.

   Therefore, it should be proper to construe that the court which examines a case of infringement of a patent right may judge whether or not it is evident that there exists a reason for invalidation, before a trial decision for invalidation of the patent becomes final and conclusive.  When it is clear that there exists a reason for invalidation in the patent as a result of examination, it is reasonable to construe that demand for injunction, compensatory damages, etc. based on the patent right should not be permitted by reason of the abuse of rights, unless there is any special circumstance.  This interpretation does not contradict the purpose of the patent system.  The precedents rendered by the Daishinin, including the Daishinin's decisions under Case No. Meiji-36 (Re) No. 2662 on September 15, 1903, recorded in the Criminal Cases Decision Report Vol. 10, page 1679, and of Taisho-5 (O) No. 1033 on April 23, 1917 recorded in the Civil Cases Decision Report Vol. 23, page 654, having views different from the aforementioned view of this court, shall be altered to the extent that interferes with the foregoing.

 

6.  In view of the foregoing, it is possible to affirm the validity of the original court's judgment which holds that the Appellee's demand should be accepted because demand for injunction, compensatory damages, etc. based on the patent right should not be permitted by reason of the abuse of rights on the ground that it is evident that there exists a reason for invalidation in the subject patent, and there is not a special circumstance such that an appeal for correction was filed.

   The above judgment does not interfere with the precedents cited in the Appellant's assertions.  The illegalities alleged in the assertions are not found in the original decision.  The Appellant's assertions cannot be accepted because these assertions merely censure the judgment in selecting proofs or the fact findings which should be within the sole purview of the original court, or merely denounce the original decision from an independent viewpoint.

 

Other reasons for appeal:

   The fact finding and the actions of the original court concerning the points of the Appellant'S assertions can be affirmed in the light of evidence and records as shown in the original decision.  The alleged illegalities are not found in the process.  The assertions cannot be accepted because these assertions merely censure the judgment in selecting proofs and the finding of facts which are within the sole purview of the original court, or merely censure the original decision from an independent point of view, or only denounce unjustness in actions taken in the examination which are within the discretion of the original court.  Thus, the assertions cannot be accepted.

   Thus, this Court holds as stated in the main text as unanimously agreed upon by all the Justices.

 

The Third Petty Bench of the Supreme Court

Presiding Justice         Toshihiro Kanaya

   Justice               Hideo Chigusa

   Justice               Toshifumi Motohara

   Justice               Masamichi Okuda