Patent Japan

Thursday, August 03, 2006

From Archives - Grand Panel Case of IP High Court, “Ink Cartridge Case” (2)

3.1 Reasons on Issue 1
A patent is not exhausted and a patentee is allowed to enforce it, when
(i) Type I: patented products are reused or recycled after their ordinary life is lapsed with no remaining utility; or
(ii) Type II: the whole or part of the essential components of the patent, which is indispensable to carry out its purpose, is modified or replaced.
3.1.1 Type I
In this case, Type I condition is not met so the patent is exhausted under this condition, because refilling of ink is considered as the replacement of expendables under the ordinary usage, and neither regulations nor socially common perceptions exist to prohibit the replacement.
3.1.2 Type II
However, Type II condition is met and the patent is not exhausted under this condition, because, in this case, the essential components of the patent is washing away the ink clotted in an ink tank and refilling it to the original level, and to which Recycle Assist’s acts correspond.
3.1.3 Therefore, Canon is permitted to enforce the patent based on Type II condition.

3.2 Reasons on Issue 2
Exhaustion of a process patent should be analyzed depending upon two categories, one of which is the use or transfer of the products manufactured by said process, and the other is the use of said process.
3.2.1 Use or transfer of the products manufactured by patented process
The same ruling (Type I/II) is applicable with the one for product patent.
3.2.2 Use of patented process
3.2.2.1 When the inventive concept of said process claim is the same with its product claim, the process claim would be exhausted insofar as the product claim is.
3.2.2.2 When the apparatus used solely for the patented process, which is indispensable to carry out the purpose of the patent and which is not widely distributed, is transferred by the patentee or its licensee, patent is not enforceable against the assignees of said apparatus who use it to manufacture the products.
3.2.3 In this case, Canon is permitted to enforce the patent for both categories.

3.3 Reasons on Issue 3
If a patentee or its licensee of a Japanese patent transfers the patented products outside Japan, he is not allowed to enforce his patent right against direct and subsequent assignees, unless he has agreed with the direct assignee that the products should not be sold in Japan.
However, a patent is not exhausted when
(i) Type I: patented products are reused or recycled after their ordinary life is lapsed with no remaining utility; or
(ii) Type II: a third party has made modification or replacement to the whole or part of the essential components of the patented products.
In this case, Canon is permitted to enforce the patent based on Type II condition.

This decision has been appealed to and is now pending in the Supreme Court.

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