Harmonizing Patent Infringement Damages: A Lesson from Japanese Experiences

35 U.S.C. §284 makes it clear that the goal behind awarding damages is to guarantee patentees adequate compensation for infringement. What constitutes adequate compensation, however, may vary from one industry to another within the same country. The discussion over a proposal to revise the U.S. patent statute to include a provision defining damages highlighted the differing views on adequate compensation held by the pharmaceutical industry and the IT industry. The adequacy of damages for infringement may vary even more significantly from one country to another, particularly between common law countries and civil law countries.

Despite the expected difference in the adequacy of patent infringement damages, the Japanese government was alarmed by a huge gap between damages awarded by U.S. as opposed to Japanese courts. To make Japanese damages more adequate for the purpose of fully compensating patentees, Japanese patent law was revised in 1998 through the adoption of U.S. case law doctrine. Early cases awarding big damages led the Japanese patent community to believe that there had been a significant impact as a result of the 1998 revision, although more recent statistics indicate that the impact was much smaller than expected. These experiences in Japan should be useful for European countries, which are currently undergoing an overhaul of patent systems to harmonize their infringement remedies through EU directives on IP enforcement and the European Patent Litigation Agreement. Thus, this article will review Japanese patent infringement damages from a comparative perspective and evaluate the impact of Japan's 1998 patent law revision on infringement damages.