Patent Exhaustion, Repair and Reconstruction

On May 15, 2009, the MIPLC organized a one-day conference on Patent Exhaustion, together with the European Patent Office/ European Patent Academy, Deutsche Gesellschaft für Gewerblichen Rechtsschutz (GRUR) the Japanese Intellectual Property Association.

The conference was dedicated to current issues of patent enforcement in the context of patent laws and practices in three major patent jurisdictions – Germany, Japan, and the US. The MIPLC was proud to have assembled distinguished speakers from all three jurisdictions, who discussed three topics in particular – patent exhaustion, contributory patent infringement and the use of an anti-competition-law based defence in patent infringement litigation.

The first session was devoted to the patent exhaustion doctrine which has recently gained considerable interests in both legal practices and in academia. The speakers discussed in particular how repair and reconstruction and the replacement of parts may be treated under the patent case laws in the US and in Japan. Judge Randall Rader of the U.S. Court of Appeals for the Federal Circuit presented a general policy reason and history of patent exhaustion in US law, contrasting implied license theory that arguably highlight the intent of the parties, and the first-sale rule. He then critically evaluated the recent Supreme Court case Quanta v. LGE from this point. Then-Judge of the Tokyo IP High Court Ryoichi Mimura furthered the discussion on patent exhaustion with the two Supreme Court decisions in Japan, BBS Parallel Import Case and Canon Ink Cartridge Case.

The second session focused on the topic of contributory infringement. Former Presiding Jugde Gisbert Steinacker of the Patent Senate, Düsseldorf Court of Appeals, explained the recent debates on contributory and indirect patent infringement in Germany. Takamitsu Shigetomi, Esq., OH-EBASHI LPC & Partners, Osaka, explained indirect infringement under Japanese patent law, focusing on the interpretation of the Article 101 in Japan. Prof. Margo Bagley, University of Virginia Law School, presented the developments on contributory infringement case laws in the US.

The speakers at the last session discussed whether objections based on anti-competition can be used as a defense to patent infringement. In particular, the discussion revolved around the question of whether licensing principles such as the FRAND/RAND commitment in the context of standardization can be used as a defense. This topic garnered much interests in the audience, as two cases with similar fact pattern over the so-called Orange Book Standard have been brought before the courts in the US (Princo Corp. v ITC and Philips, April 20, 2009) and in Germany (Case KZR39/06 Orange Book Standard, May, 6 2009). Prof. Katsuya Tamai of the University of Tokyo outlined the anti-monopoly law in Japan and how it applies to the assertion of IP rights in Japan in general. Prof. Martin Adelman of the George Washington University Law School, Washington, D.C, followed this discussion on the patent misuse in the US patent law. Prof. Hanns Ullrich, Max Planck Institute for Intellectual Property, Competition and Tax Law, discussed the different paths of open and proprietary standardization and the general problems of enforcing FRAND or RAND commitments.

Two panel discussions followed the individual presentations on the three topics. The first panel, consisting of Prof. Bagley, then-Judge Mimura, Judge Rader, Mr. Shigetomi, Mr. Steinacker, and Prof. Tamai discussed the topic of patent exhaustion and contributory patent infringement. The second panel, consisting of Prof. Adelman, former Judge Mimura, Judge Rader, Mr. Shigetomi, and Prof. Tamai, discussed current developments in patent enforcement. Not only the panel members but also the audience engaged in spirited discussions on the question of whether exhaustion should be formulated more from the point of the private parties or from the point of the boundary of the right that eventually needed to be decided by the court.

The timely conference theme and trilateral composition of the speakers and the panels were met with great enthusiasm and interests from the IP community. More than 140 persons attended the conference, including international IP practitioners, lawyers, academics and students.