Can Using an Overseas Server Avoid Japanese Patent Infringement?
A concise guide to the Dwango v. FC2 Supreme Court decisions
Cloud services, SaaS, web applications, and video platforms often use servers located outside Japan. However, the mere fact that a server is overseas does not automatically eliminate Japanese patent infringement risk.
Sends files or programs
Runs display or processing
Realized in Japan
May arise in Japan
1. Territoriality in patent law
Patent rights are generally governed by the principle of territoriality. A Japanese patent is effective in Japan, and acts performed abroad are generally outside the scope of Japanese patent rights.
Internet services, however, often involve overseas servers, user devices in Japan, and cross-border transmission of programs and data. This makes it necessary to examine more than just the physical location of the server.
2. What was Dwango v. FC2 about?
The cases concerned patents relating to technology for displaying comments over videos. There were two main Supreme Court decisions: one concerning program delivery from an overseas server to devices in Japan, and another concerning the “production” of a system that included an overseas server and Japanese user devices.
| Case | Main issue |
|---|---|
| First case | Whether cross-border program delivery constituted provision via telecommunications line and assignment, etc. |
| Second case | Whether building a system including overseas servers and Japanese terminals constituted “production” under Japanese patent law |
3. Key message from the Supreme Court
The Court looked beyond the server location. It focused on the fact that programs or files were sent to user devices in Japan and that the patented effect was realized on those devices.
Accordingly, even if a service uses overseas servers, Japanese patent infringement may still be an issue if the service is directed to Japanese users and the patented invention is implemented on devices in Japan.
4. Points for IT and SaaS companies
- Is the service directed to users in Japan?
- Are programs or files sent to devices in Japan?
- Does the Japanese device perform an important function of the invention?
- Is the technical effect obtained in Japan?
- Does the business generate users, revenue, or advertising income from Japan?
- Are the patent claims directed to a system, program, device, or method?
5. Practical takeaway from the case
These decisions are useful examples showing that overseas-server services should not be assessed by server location alone. It is important to review the role of Japanese users, devices in Japan, and where the technical effect of the patented invention is realized.
Actual risk assessment requires a case-by-case review of the patent claims, service architecture, data and program flow, and the actual use of the service in Japan.
Summary
“The server is overseas” does not necessarily mean “Japanese patents are irrelevant.” For cloud and SaaS businesses, the relationship between online service architecture and Japanese patent rights should be reviewed before launch or expansion into Japan.
About this article
This article introduces the Dwango v. FC2 Supreme Court decisions as a practical case study on overseas-server services and Japanese patent rights. MEVRO International Patent Office primarily supports trademark and international filing matters, and can help organize initial IP issues for Japan-related business by coordinating with appropriate specialists where necessary.
References: Supreme Court judgments dated March 3, 2025 (First case PDF / Second case PDF). This article is for general information only and does not constitute legal advice.
← Back to Home