Andreas von Falck and Masahito Imai of Hogan Lovells International discuss a recent, seminal decision of the Grand Panel of the Intellectual Property High Court in Japan.
A “product-by-process claim” is a product claim defined by or including statements on the underlying manufacturing process. This claim format is adopted to describe a product whose structure is unknown at the time of application and which can therefore only be identified by its manufacturing process. Examples of this type of product and claim are particularly often found in the fields of genetic engineering, polymer chemistry and biotechnology.
On 27 January 2012, the Grand Panel of the Intellectual Property High Court in Japan (“IPHC”) handed down a ruling that the scope of a product-by-process extends to a product which is identical with the claimed product, regardless of its manufacturing process, if it has been found that it was impossible or difficult (impractical) to define the invented product directly by its structure or properties at the time of the patent application (this is also in line with German practice, as established by the decision in Tetraploide Kamille [Federal Supreme Court, X ZB 13/90 of 30 March 1994, IIC 1994, 580] and contrary to the UK position as stated in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd ( UKHL 46)).
The decision is remarkable because, firstly, it was given by the Grand Panel, which deals with important legal issues but is rarely called upon; and secondly, the court adopted an approach towards the scope of a product-by-process claim which differs from that adopted previously in many other cases in Japan.
In this article, we will discuss this new decision and other relevant decisions.
There are two main theories for the interpretation of product-by-process claims: under one theory, these claims are interpreted to extend to products identical with the claimed product, regardless of the way in which they were manufactured (“Identity Theory”). Under the other theory, the claim is interpreted as being limited to products which are both identical with the claimed product and are also obtained by the same manufacturing process (“Limitation Theory”).
The “Identity Theory” has been adopted not only in the practice of the Japan Patent Office (“JPO”) but also in many court cases, both in assessing infringement and validity. The guidelines of the JPO provide that the validity of a patent in the form of a product-by-process claim is assessed based on the “Identity Theory” (although this practice is sometimes not complied with). Also, it has been stated in many court cases that the “Identity Theory” should be adopted in the assessment of infringement. However, this does not necessarily mean that a process feature contained in a product-by-process claim has no relevance for claim construction. Japanese courts allow the use of the prosecution history for claim interpretation. Thus, a patent in the form of a product-by-process claim can be interpreted in a limited manner if the prosecution history suggests it should be. In such cases, this narrow interpretation results in the courts reaching the same conclusion as would have been reached by applying the “Limitation Theory”.
Notwithstanding this previous practice of the JPO and courts, the IPHC has now prescribed a new approach for the interpretation of product-by-process claims. Under the new guidance, the IPHC requires that a distinction is made between so-called “genuine” and “non-genuine” (“pseudo”) product-by-process claims. The IPHC’s decision also makes important statements on the burden of proof in patent proceedings.
FACTS RELATING TO THE IPHC DECISION ON 27 JANUARY 2012
The case at issue concerned a product-by-process claim (Japan Patent No. 3737801) to a pravastatin preparation with reduced impurities, namely a preparation with a certain maximum content of undesired pravastatin lactone and epiprava (an undesired epimer of pravastatin):
“Pravastatin sodium which is manufactured by the following process: a) making a concentrated organic solution of pravastatin… and e)… and which mix rate of pravastatin lactone is less than 0.5 per cent by weight and mix rate of epiprava is less than 0.2 per cent by weight”.
As shown above, the product-by-process claim at issue included statements on the product feature (“pravastatin sodium… which mix rate of pravastatin lactone is less than 0.5 per cent… and… epiprava is less than 0.2 per cent”) and on the process feature “pravastatin sodium which is manufactured by… a) making a concentrated organic solution of pravastatin.”
The accused product was pravastatin sodium falling within the product feature of the claim (the mix rates of pravastatin lactone and epiprava). However, the accused product did not have the process feature.
FIRST INSTANCE: TOKYO DISTRICT COURT DECISION ON 31 MARCH 2010 CASE NO.2007 (WA) 35324
With regard to the interpretation of the scope of a product-by-process claim for assessing infringement, the court of first instance ruled that “if there are statements on the manufacturing process of the product in the claim, in principle, these statements must not be ignored just because the claim is to ‘an invention of a product’ and the technical scope of the patented invention shall be limited to a product which is manufactured by the same process as that claimed. Only in an exceptional case, where it is difficult to identify a product by describing its structure and therefore it is necessary to identify the claimed product by its manufacturing process, shall a product which is identical with the claimed product but whose manufacturing process differs from the process stated in the claim fall within the technical scope of the patented invention.”
However, the court did not find that the patented product fell within this exception in this case and thus, taking into account the statements on the process in the claim, the court held that the accused product did not fall within the technical scope of the claim at issue because feature a) of the manufacturing process was not implemented in the manufacture.
This ruling can be said to have adopted the “Limitation Theory” which had previously been only rarely applied in court cases.
The plaintiff appealed against this decision and this case was assigned to the Grand Panel of the IPHC.
SECOND INSTANCE: IPHC DECISION ON 27 JANUARY 2012 CASE NO.2010 (NE) 10043
Assessment of Infringement
The court stated that patent claims stated in the form of a product-by-process claim fall in two categories: (i) a “genuine” product-by-process claim where the claimed invention is impossible or difficult to define by its structure or properties at the time of the application and (ii) a “pseudo” product-by-process claim which includes statements on the manufacturing process of the claimed product in the absence of circumstances where the invented product is impossible or difficult to define directly by its structure or properties at the time of its application. The court held that the scope of protection of a “genuine” product-by-process claim shall be construed to cover a product identical with the claimed product regardless of its manufacturing process. Where, however, the claim is to a “pseudo” product-by-process claim, its scope shall be confined to a product which is manufactured by the specific process stated in that claim.
As for the burden of proof, the court clarified that a party asserting that the product-by-process claim is a “genuine” one must establish that the relevant invented product was impossible or difficult to define directly by its structure or properties; otherwise, the product-by-process claim shall be treated as a “pseudo” one.
In this case, it was held that the product feature “pravastatin sodium with mix rates of pravastatin lactone and epiprava” simply limited the amount of pravastatin lactone and epiprava contained in publicly known pravastatin sodium, and thus the product feature could be objectively and clearly defined by its structure. Therefore, the court found that there existed no circumstance where the product was impossible or difficult to define other than by its manufacturing process, and the claim at issue was therefore a “pseudo” product-by-process claim. Consequently, the court concluded that the accused product did not infringe the patent for the same reason as given at the first instance.
Assessment of Validity
Moreover, although it was not necessary to examine the validity of the patent because the finding of non-infringement sufficed to reject the plaintiff’s appeal, the court also stated that this approach to the interpretation of a product-by-process claim can also be applied by courts when assessing validity of a patent in infringement proceedings. That is, when examining under Article 104ter of the Patent Act of Japan the gist of a patented invention for the purposes of assessing an invalidity attack on a product-by-process claim, the gist of the patented invention shall be interpreted to extend to a product identical with the claimed product, however it is manufactured, only if it was impossible or difficult to define the invented product directly by its structure or properties; however, the gist shall be interpreted to be limited to a product which is manufactured by the process stated in the claim where no such circumstances exist.
INVALIDATION PROCEEDING: IPHC DECISION ON 27 JANUARY 2012 CASE NO.2009 (GYO-KE) 10284
Parallel to these infringement proceedings, the patent at issue has also been the subject of invalidation proceedings between the same parties. The patent was found to be valid at first instance (in proceedings before the JPO) and the case was appealed to the IPHC. With regard to assessing validity of a patent in the form of a product-by-process claim in invalidation proceedings, the IPHC adopted the same approach it had adopted in its validity assessment in the infringement proceedings.
The findings in these new IPHC’s decisions are consistent with the original purpose of a product-by-process claim, which is to grant a patent for an invention of a product which is impossible or difficult to define other than by its manufacturing process. In other words, the approach provided in the new decisions allows the scope of a product-by-process claim to extend to a product identical with the claimed product, however it is manufactured, only if the claimed product was impossible or difficult to define other than by its manufacturing process.
However, this distinction does not necessarily appear in the relevant patent specification or documents provided in the prosecution procedure. This means that the scope of a product-by-process claim must be determined based on facts outside the patent specification.
In addition, this decision could also change the approach to product-by-process claims during prosecution before the JPO and in subsequent court proceedings relating to patents containing them. Contrary to the previous practice which adopted the “Identity Theory”, the scope of a product-by-process claim will be considered to cover only a product which is manufactured by the process stated in the claim unless the claimed product satisfies the requirements set down by the court. Therefore, it would be recommended that applicants are prepared to demonstrate that their invented product was impossible or difficult to define other than by its manufacturing process. However, even where the patentee has successfully demonstrated that a product-by-process claim is a “genuine” one and its scope extends to a product identical with the claimed product regardless of its manufacturing process, it remains difficult to prove that an accused product which is manufactured in a different way to the patented process infringes a product-by-process claim without any comparison of the structure of each product (which is usually unknown) to prove that they are identical.
From the standpoint of an alleged infringer in infringement proceedings and a plaintiff in an invalidation action, in order to be on the safe side, it would be necessary to consider preparing two sets of arguments to invalidate the patent due to lack of novelty or inventive step: firstly, an argument assuming that the gist of a patented product invention is the product itself, regardless of manufacturing process (when a product-by-process claim at issue is found to be “genuine”); and secondly, an argument assuming that the gist of the invention is restricted to products manufactured by the claimed process (when the product-by-process claim is found to be “pseudo”).