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Visitors to Japan this summer will be welcomed in part by noisy cicadas, oppressive humidity, and a relentless parade of beer commercials. The hot weather fuels the already intense competition between major Japanese breweries, and this summer’s battle of the brews is spilling into the courtroom over a lawsuit between Kirin Brewery Co. and Sapporo Breweries Ltd. The beer battle is just one example of the dramatic upsurge in intellectual property litigation in Japan. Patent and trademark cases, like the one between these two breweries, are becoming more common in this traditionally nonlitigious country. The dispute began in January when Sapporo introduced its beer, Fine Lager, onto the market. Kirin’s president, Koichiro Aramaki, sent a protest letter to his Sapporo counterpart, pointing to the similarities in name and in labeling between Sapporo’s brew and Kirin’s Lager Beer. Sapporo President Tatsushi Iwama politely replied that there was little likelihood of confusion between the two beers because of taste and, he added, that the labels are sufficiently different. Kirin tried again with a second, more formal letter, which Sapporo rebuffed. So on March 29, Kirin petitioned for a preliminary injunction before the Tokyo district court. Kirin alleged that Sapporo’s label was free-riding on Kirin’s famous label and was an act of unfair competition. Besides arguing that its label was dissimilar, Sapporo also asserts that the word “lager” has a general meaning. This nondistinctiveness defense is a winning strategy in unfair competition cases in Japan. Kirin isn’t alone in its courtroom aggressiveness. A recent study by Japan’s Administrative Affairs Bureau showed a steady increase in all types of IP cases. The total number of IP cases rose from 386 in 1991 to 740 in 2000. Even the Japanese electronics industry, popularly perceived as nonlitigious, has joined the fray. As of Feb. 28, there were at least 11 separate suits between Nichia Corporation and Toyoda Gosei over patents relating to mobile telephone screens and large displays. Sumitomo Electric Industries sued Furukawa Electric in the Tokyo district court in July 2001 over a patent for an optical communications part. Japanese companies also have initiated suit against subsidiaries of foreign companies in Japan. In April 2002, Toshiba filed 10 lawsuits against South Korea’s Samsung Electronics in Tokyo district court over patents on manufacturing and circuit design of memory chips. In January 2002, Sharp Corp. filed a patent infringement lawsuit against Taiwan’s ChungHwa Picture Tubes Ltd. over LCD technology, liquid crystal control and LSI fixing mechanisms. Companies woke up to the importance of IP in March when Aruze won $63.5 million in its patent infringement suit with Sammy Corp. and Net Inc. Intellectual property has become a matter of strategic national political and economic importance in Japan. On March 20, Prime Minister Koizumi set up the Strategy Council on Intellectual Properties. The political goal today is to transform Japan into an IP powerhouse ushering it into a new era of prosperity based on the strength of the phenomenal number of patents and IP rights that Japanese companies possess.

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