Background
X held a utility model registration for an invention titled “Telephone Card.” The application was filed in 1999 as a divisional application ultimately derived from an original application filed on September 5, 1984. The utility model right was not registered, however, until April 2, 2010.
X alleged that NTT Corporation’s manufacture and sale of telephone cards between September 5, 1984, and September 5, 1999, infringed the utility model right. X sought ¥2 billion in partial damages at first instance. The Tokyo District Court dismissed the claim because all alleged sales preceded registration of the right. X appealed only as to ¥10 million, plus interest at 3% per year from November 21, 2024.
The Court’s Holding
The Intellectual Property High Court dismissed the appeal and affirmed the district court. Under Article 14(1) of Japan’s Utility Model Act, a utility model right arises upon registration. Because X’s right was registered on April 2, 2010, NTT’s sales from 1984 through 1999 occurred before the right existed and therefore could not constitute infringement.
The court rejected X’s argument that the divisional application rules made the utility model right effective retroactively from the original application date. The statutory rule deeming a divisional application to have been filed on the date of the original application changes the application date; it does not provide that the resulting utility model right itself arises retroactively. The court also rejected X’s related arguments that prospective-only effect would render the registration meaningless and that the existence of a damages claim should be separated from the ability to enforce the right prospectively.
Key Takeaways
- A Japanese utility model right arises upon registration, not on the application date.
- A divisional application may inherit the original application’s filing date, but the resulting right does not arise retroactively.
- Manufacture or sales completed before registration cannot infringe a utility model right later granted on the application.
Why It Matters
The decision distinguishes filing-date priority from the date on which an enforceable intellectual property right comes into existence. Even where a divisional application traces back to a much earlier filing, that legal fiction does not convert pre-registration conduct into infringement or support retrospective damages.