As reported in the previous Japan IP Watch (June 2023), a high-profile lawsuit involving a network-related invention was decided by the IP High Court.

On May 26, 2023, the Grand Panel of IP High Court ruled that FC2 infringed DWANGO's patent because the claimed network system was "made" in Japan. The IP High Court found that even though a part of the claimed elements (i.e. a server) was located outside of Japan, an alleged infringer's act (i.e. making the network system) can be considered to have been performed in the territory of Japan, taking accounts of:

1) A specific manner of the alleged infringer's act,
2) A function and role for the invention performed by another claimed element (i.e. a user terminal) that exists in this country,
3) A place where the benefit of the invention can be obtained, and
4) An effect on the patentee's economic interests.

In an earlier dispute between the same parties in July 2022, the IP High Court found patent infringement with respect to a relevant patent claiming a computer program, on the grounds that even if an alleged infringer's act (i.e. providing the program) may be partially performed outside Japan, it can be comprehensively considered to be performed in Japan. FC2 has since filed an appeal with the Supreme Court.

We expect to see a final decision from the Supreme Court in the near future.