Overview of IP High Court Case 2021 (Administrative Litigation) No. 10058
Case Overview
- Case: The invalidity trial cancellation decision lawsuit No. 2019-800083
- Parties Involved:
Plaintiff/Patent Holder: Dwango Co., Ltd., operator of the video-sharing platform “Nico Nico Douga.”
Defendants: FC2, Inc. (U.S.-based service operator) and Homepage System, Inc. (Japanese company).
- Key Issue: Whether Japanese patent rights extend to acts performed via servers located outside Japan, particularly in network-based systems like video streaming with overlaid comments.
Summarization of the case
Tokyo District Court rejected Dwango’s claims based on the territoriality principle. The District Court held that to “produce” a patent invention as in Article 2 of the Japanese Patent Act, all constituent elements must be newly produced within Japan. The FC2′s servers were located abroad, therefore infringement was not recognized.
However, Intellectual Property High Court overturned the District Court’s decision. The High Court reasoned that, a substantive analisys should be done here without just relyin on the fact that some system components (servers in this case) were overseas. The High Court did a substantive analisys, stating 1. the user terminals play important roles in the invention by controling display of comments, 2. the invention’s effect are realized in Japan, 3. the patentee receives economic impact (benefits) in Japan.
Significance of the Case
New Precedent: For the first time, Japanese courts—and ultimately, the Supreme Court—confirmed that patent rights apply even when part of the system operates across international borders.
Practical Implications
Patent holders of network-related inventions now have stronger ability to enforce rights against services that deliver functionality into Japan.
Foreign service providers targeting Japanese users may be subject to Japanese patent enforcement, regardless of server location.
