Sato Foods found in violation of rival’s rice cake patent, hit for ¥800 million

Kyodo

The Intellectual Property High Court ordered Sato Foods Co. on Thursday to pay ¥800 million in damages to Echigo Seika Co. and stop producing five types of “mochi” (rice cake) products that infringe on its patents.

Japan’s biggest maker of packaged mochi was also ordered to dismantle its production equipment. The company said it will appeal the ruling.

Echigo Seika, the nation’s No. 2 mochi maker, based in Niigata Prefecture, received a patent in 2008 for inventing a method of adding slits to each side of packaged mochi so the heat-intolerant food retains its shape when baked.

Sato Foods is marketing five mochi products with crisscross slits on the top and bottom of each cake and slits on each side, prompting Echigo Seika to sue.

Toshiaki Iimura, the presiding judge, determined last September in the court’s interim ruling that the defendant violated Echigo Seika’s patent. The two sides have been negotiating over compensation ever since.

Iimura said aggressive advertising detailing the effects of slits have boosted Sato Foods’ sales “considerably.”

Sato Foods, also based in the city of Niigata, logs about ¥27 billion in sales a year, including ¥10 billion from the five mochi products concerned.

Meanwhile, a lawyer representing Echigo Seika, based in Nagaoka, said that while the high court accepted the major arguments of his client, it is regrettable that an amicable settlement couldn’t be reached.