On November 24, 2016, the Intellectual Property High Court of Japan (the "IP High Court") held that a patent that involves operation of online shopping malls is invalid due to lack of inventive step (IP High Court Case No. 2016 (ne) 10027).
Background
The Plaintiffs jointly owned a patent entitled "online shopping mall system" (Patent No. 4,598,070) (the "Patent"). The invention claimed in the Patent (the "Patented Invention") covered a device and a method for operating online shopping malls, which enabled online stores to customize categories of products sold as the stores.
The Plaintiffs brought a patent infringement action against the Defendant (Rakuten, Inc.), which is the operator of "Rakuten Market", one of the largest online shopping malls in Japan. The Plaintiff asserted that the Defendant infringed the Patent, and sought payment of damages in the amount of 500 million Japanese Yen.
In the first instance, the Tokyo District Court held that a book distributed before the priority date of the Patent entitled "The Smart Way of Purchasing at and Using Rakuten Market" (the "Prior Art Book") disclosed the Patented Invention, and thus that the Patent was invalid due to lack of novelty. Accordingly, the Tokyo District Court denied the Plaintiffs' damages claim.
The Plaintiffs appealed the Tokyo District Court judgment to the IP High Court.
While the appeal was pending, the Plaintiffs filed with the Japan Patent Office (the "JPO") a correction trial (Case No. 2016-390052) and sought amendment of the relevant claims of the Patent, in an attempt to overcome the lack of novelty issue pointed out by the Tokyo District Court. The JPO allowed the amendment, finding that the Patented Invention as amended does not lack novelty or inventive step.
On appeal, the Plaintiffs asserted that the Defendant infringed the Patent as amended. In response, the Defendant argued that the Patented Invention as amended lacks inventive step.
IP High Court Judgment
The IP High Court dismissed the Plaintiffs' appeal, holding that the Patented Invention as amended lacks inventive step.
The Patented Invention as amended covered a device and a method for operating online shopping malls. The online shopping mall in the Patented Invention has "common categories" of products that apply to all online stores in the mall, and also "store categories" of products that apply to a particular store in the mall. Information regarding the common category and products that belong to the common category is transmitted to a client device (e.g., a user's personal computer). When a user selects a product, information regarding the store category and products that belong to the store category is transmitted to the client device.
The Prior Art Book disclosed a similar online shopping mall that has both the common categories and the store categories. However, the Patented Invention as amended and the online shopping mall disclosed in the Prior Art Book differed in the following respects:
(a) The Patented Invention stores the information regarding the common categories and the store categories in a "product information table", while there was no such disclosure in the Prior Art Book;
(b) The Patented Invention as amended "searches" the product information table when obtaining information regarding the common categories and the store categories, while there was no such disclosure in the Prior Art Book; and
(c) The Patented Invention "creates a web page data" based on the information regarding the common categories and the store categories obtained from the product information table, while there was no such disclosure in the Prior Art Book.
However, the IP High Court held that it is easy for a person skilled in the art to store the information regarding the common categories and the store categories in some form of a table, because use of such table was a well-known art.
Also, the IP High Court held that it was well known in the technical field regarding the Internet that there are following two methods for transmitting a web page data: (i) a static content, under which an existing HTML data is transmitted to the user's browser as is; and (ii) a dynamic content, under which a HTML data is created in response to a query by the user and is then transmitted to the user's browser. The IP High Court held that it is easy for a person skilled in the art to create a web page data instead of transmitting an existing web page data.
As a conclusion, the IP High Court found that the Patent as amended is still invalid due to lack of inventive step, and dismissed the Plaintiffs' appeal.
Comment
The patent in this case involved a device and a method for managing data on the Internet, and may be considered as a kind of a business method patent.
These kinds of patents often seem to cover a broad range, at first glance. However, when it comes to enforcement, such patents are often significantly narrowed down by means of claim construction, or held invalid due to lack of inventive step. As a result, enforcement of such patents turns out to be unsuccessful in many cases. Even in the current case, the IP High Court held that the patent is invalid due to lack of inventive step, despite the JPO's finding to the contrary. This case teaches us that enforcement of such patents is not so easy.
Written by: Mr. Kazuki Ishihara (Attorney at Law)