JAPAN Law and Practice Contributed by: Hirofumi Tada, Ohno & Partners
5.4 Damages Damages are presumed based on: • marginal profit of plaintiff’s product multiplied by quantity of infringing products sold by defendant; • marginal profit of defendant’s product multi - plied by quantity sold by defendant; or • reasonable royalty. The first two listed are available when a plaintiff could have obtained profits but for infringement. Typically, it means that the plaintiff has compet - ing products, but it is not strictly limited to such a situation. A plaintiff may assert more than one of these three options, and the court adopts the highest amount among these. A defendant may rebut the presumption by prov - ing factors such as market difference, existence of other competing products, its marketing effort, or product features other than invention. Special Damages for Pharma Basically, there are no special damages for phar - ma cases. Japan does not allow treble damages for intentional infringement. However, if the drug price dropped because of infringing generic/ biosimilar products, the dropped price can be included in damages. Interest on Damages Interest of 3% per year from each infringing activity is payable. Damages Examination The court first examines infringement and valid - ity. Then, if the court thinks the accused infring - er infringes a valid patent, the court discloses a preliminary conclusion, and then proceeds to the damages examination stage.
There is no term limitation for the effect of the preliminary injunction, but the accused infringer may require a patent owner to file litigation seek - ing a permanent injunction; and, if the patent owner fails to do so, the preliminary injunction will be revoked. To stay the enforcement, the accused infringer must clearly show a change of situation denying the fulfilment of preliminary injunction require - ments, irreparable harm, etc, in opposition or revocation procedure. A bond is required for the stay. Also, if the preliminary injunction order allows payment of a certain amount of deposit to lift the order, such a deposit will be a basis for revoca - tion of the order. 5.2 Final Injunctive Relief Final injunctions are enforceable when they become final. Usually, it is when the final appeal before the Supreme Court is dismissed. Final injunctions are enforced through separate enforcement procedures before the courts, but it is not so common to enforce permanent injunc - tions because many infringers obey the court decisions and voluntarily stop infringement. It will be enforced by imposing a duty to pay a cer - tain amount of money during continuing infringe - ment. Also, the disposition of product stock can be sought and enforced. 5.3 Discretion to Award Injunctive Relief (Final or Preliminary) The court does not have the discretion to award damages in lieu of an injunction. An accused infringer often makes public interest arguments to avoid an injunction, but the Japanese court does not accept such an argument and grants an injunction.
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