• 2023.01.25
  • Dispute Resolution

A case in which an American company filed an arbitration claim against a Japanese company in Japan

Outline of International Dispute Cases

An American company X, which holds a registered patent in Japan, claimed that a product sold by a Japanese company Y infringed a patent held by an American company X, and demanded an injunction against the use of the product and compensation for damages by certified mail. The Japanese company argued that the products of the Japanese company did not use the patented technology owned by the U.S. company X and did not constitute patent infringement, and that the patent applied for by the U.S. company X was similar to publicly known information (patent gazette of other companies) disclosed before the patent application was filed and that the said patent was invalid. The background of the dispute in this case is that an employee of X, an American company, had left X and joined Y, a Japanese company, and there were concerns that X’s technical information might have been leaked to Y through the said employee. Company X requested our firm to represent it because it was necessary to request a Japanese attorney to file a request for arbitration proceedings in Japan.

Dispute Resolution by Kuribayashi Sogo Law Office

Kuribayashi Sogo Law Office represented the U.S. company in the arbitration proceedings in this case, and together with the U.S. attorney, we pursued the arbitration proceedings. Arbitration procedures in Japan include commercial arbitration conducted by the Japan Commercial Arbitration Association (JCAA) under its Commercial Arbitration Rules, as well as arbitration by bar associations, the Alternative Dispute Resolution (ADR) system in the financial sector, and the Construction Dispute Review Board. Although arbitration by the International Commercial Arbitration Association (ICAA) is often used for international commercial disputes, in this case, the arbitration was conducted under the so-called ad hoc arbitration procedure, in which lawyers from a major law firm acted as arbitrators and managed how the proceedings were to be conducted. In the first stage of the arbitration process, the arbitrators presented a schedule and set deadlines for the submission of documents to be submitted by each party. After the submission of the written arguments by the representatives of both parties in accordance with the submission deadline, the arbitrator proposed that the case be submitted to arbitration proceedings, as it was considered appropriate to resolve the matter through discussion. A professor (Canadian) from a well-known private university in Japan was appointed as mediator, and both parties individually expressed their opinions to the mediator. Afterwards, the mediator presented a mediation proposal, and both parties agreed to the mediator’s mediation proposal. Our client agreed to withdraw from the arbitration by accepting a certain amount of settlement money presented by the mediator.

Key Points in International Dispute Resolution

As international transactions increase, disputes often arise between foreign and Japanese companies. Most cases concern payment for goods or compensation for damages for defects in goods. It is best if the foreign company and the Japanese company can settle the dispute through settlement discussions, but if this is not possible, the foreign company will have no choice but to file a lawsuit or arbitrate. Kuribayashi Sogo Law Office represents Japanese and foreign companies in court proceedings and arbitration proceedings in Japan. In international litigation and arbitration, the relevant evidence is often prepared in foreign languages, and the translation work can be very expensive. In addition, unlike court proceedings, arbitration procedures do not involve appeals or final appeals, which may lead to an early and final resolution of disputes. In addition, unlike court proceedings, hearings are closed to the public, which avoids the disclosure of confidential information such as trade secrets to outside parties. On the other hand, arbitration proceedings are not a judgment by a professional judge, so there is uncertainty as to whether the parties will reach a decision that is satisfactory to them. In addition, unlike court proceedings, the parties must pay the fees of arbitrators and mediators. Arbitrators and mediators usually charge a time fee, and the hourly rate is extremely high, around 70,000 yen, so the fees can quickly become more than 10 million yen. If you choose arbitration procedures as a means of resolving international disputes, you should be fully aware of these circumstances before making your choice of procedures.

Services of Kuribayashi Sogo Law Office

Kuribayashi Sogo Law Office represents clients not only in lawsuits in Japan, but also in arbitration procedures as Alternative Dispute Resolution (ADR). We suspect that the number of cases in which arbitration procedures are chosen will increase in the future, as international disputes are likely to increase in the future. If you have an international dispute with a foreign company and choose to pursue arbitration proceedings, please consult with us. The fees for attorneys in connection with international arbitration proceedings will be determined on a case-by-case basis according to either the Rules of the Japan Federation of Bar Associations on Attorneys’ Fees (translation fees will be added) or time charges. In either case, however, client companies are entitled to a 20% discount on the regular attorney’s fee if they have a Legal Advisory Agreement,’Komon-Keiyaku’, with our firm. For more information, please contact us at Kuribayashi Sogo Law Office using our contact form.