Saturday, December 23, 2017

ID Pharma fishes in troubled waters, while Kyoto University requests Fujifilm Corp for reduction of licensing fee on iPS cell-related patents

It was reported that iPS Academia Japan, which manages iPS cell-related patent portfolio of Kyoto University, lowered the patent royalty rate for regenerative medicine from 2% to 1.5% of sales of related products. iPS Academia Japan has so far signed patent license agreements with more than 170 entities worldwide. It is attempting,  by reduction of patent royalty rate, to increase companies which enter into regenerative medicine market.

It was also reported that Dr. Yamanaka, a Japanese Nobel Prize-winning stem cell researcher and Director of Center for iPS Cells Research and Application at Kyoto University, requested Fujifilm to reduce licensing fee for the key patents for producing transplanted cells which are owned by Cellular Dynamics International (CDI), a Fujifilm’s subsidiary. Dr. Yamanaka argues that the iPS cell business contributes to the public good, thus the cost should not be raised.

Further, Kyoto University reportedly began to consider another production method, as a bargaining chip in negotiations with Fujifilm. Currently, it is adopting a production method using DNA of Escherichia coli, and concerns the risk of patent infringement of CDI. So, it is considering an alternative method using a type of virus which is patented by ID Pharma, I’rom Group Co., Ltd. 

Fujifilm used to conduct a joint research with Kyoto University on Alzheimer's Dementia medication in 2014, but after that, it acquired CDI in May 2015. It is unknown whether Fujifilm has any reasons to accept the request from Kyoto University. Also, it is unknown how ID Pharma sets licensing fee. Its paretent company I’rom Group jumped in stock price, in response to this news story.

[Reference]
The following are possible patents Kyoto University concerns. Please note that Kyoto University does not disclose specific patents.

CDI’s related patents
JP5897002 (PCT/US2011/043218)
JP5968871 (PCT/US2011/032309)
JP6005666 (PCT/US2012/024098)

ID Pharma’s related patents
JP5856949 (PCT/JP2011/059429)
JP5908838 (PCT/JP2011/069588)

Sunday, December 3, 2017

A brief study of Japan patent infringement case decisions in 2017

December - it’s a good time to take a look back over the past year.

The previous article in March introduced the statistics 
of patent infringement case decisions in 2014-2015 which were disclosed by the Supreme Court. Now I just made a brief study of patent infringement case decisions in Tokyo District Court  and Osaka District Court ruled in 2017, using the judicial decision database provided by the court, though it may be too early.

Thirty seven (37) decisions are retrieved from the database. The latest one was ruled on September 28. Around fifty (50) cases may be ruled by the end of December at this pace. The exact number is expected to be published by the court later. Maybe you think this number is very small. But, in Japan, only about 200 patent lawsuits are filed in a year. Then, they often end with a settlement. Judges often encourage settlement in Japan. For your reference, 77 cases ended with a settlement, while 125 cases got court decisions in 2014-2015, according to the statistics provided by the Supreme Court above.

The winning rate of patent holders is 27% (10 cases uphold; 25 cases dismissed; 1  counterclaim uphold; 1 case seeking declaration of non-existence of obligation uphold). This looks still unfavorable to patent holders. However, there is a counter-arguement against such an opinion that it is not unfavorable to patent holders, considering settlement cases. For your reference, 79% cases (61 of 77 cases) of settlements are favorable to patent holders.

Invalidity defense was made in the proceeding of 26 cases. The patent in question was regarded as invalid in 6 cases, and regarded as valid in 5 cases. No decision was made in the remaining 15 cases, where the court determined in front on whether the claim covers the accused device and made a negative judgement. 

The maximum of damages awarded by court is approximately JPY 200 million (USD 1.8 million) the plaintiff - Chugai Pharmaceutical - requested JPY 315 million (USD 2.8 million) based on the jointly held patent with Columbia University (a priority claim based on U.S. provisional application 60/025361).

There are no cases in which a plaintiff seeks huge damages. The maximum of damages claimed is JPY 1 billion (USD 9 million), though it was dismissed by the court. 

The basic concept of damage recovery in Japan is to fix actual damages, not liable for punitive damages. Even so, I’m wondering if the Japanese market is so small, or patent holders just seek damages to the extent allowed by court.

Currently, the government is planning to mark down patent fee to half-price for SMEs.  This is to make patent system more accessible to SMEs which don’t have enough funds. Also, it is planning to expand grace period from 6 months to one year. The government is continuously improving patent system, including speed and quality of examination. 

That’s nice. But just because patent fee is cheap or services are nice, doesn’t mean that companies increase patent filing. Showing the value of holding patents or the risk of doing business without patents in Japan must be rather effective. When they learn the value of patents, they would manage to obtain patents even if they are expensive for them.