On May 28, 2025, Fuso Pharmaceutical Industries announced a revision to its financial results for the fiscal year ending March 2025, shifting from an initially reported net profit of 2.7 billion yen to a net loss of 3.2 billion yen. The primary cause was a special loss of 8.7 billion yen recorded in response to a ruling issued the previous day by the Intellectual Property High Court in a patent infringement lawsuit.
At the center of the dispute was a generic anti-itch drug sold by Fuso, which was deemed to have infringed upon a use patent held by Toray Industries. The IP High Court ordered Fuso to pay approximately 7.4 billion yen in damages along with delay penalties. In response, Fuso stated it “cannot accept the ruling” and is preparing to appeal to the Supreme Court.
The impact of this lawsuit extends beyond Fuso. Sawai Pharmaceutical, which also marketed a similar generic drug, was ordered to pay approximately 14.2 billion yen in damages. Sawai Group Holdings posted a consolidated net profit of 22.9 billion yen for the fiscal year ending March 2025, but the lawsuit’s repercussions are expected to affect its performance in the upcoming fiscal year.
Reassessing IP Risks and Corporate Strategy
This case starkly underscores the significant impact that patent-related risks can have on pharmaceutical companies. Use patents in particular are often overlooked and present complex challenges for generic drug manufacturers. In this instance, continuing sales ultimately led to a massive compensation order.
Going forward, pharmaceutical companies will need to conduct more thorough patent due diligence and reinforce their legal frameworks. As competition in the generic drug market intensifies, avoiding intellectual property risks—not just cutting costs—will become key to preserving corporate value.
While the Supreme Court’s decision is awaited with keen interest, the case also raises a broader question for the entire pharmaceutical industry: how to strike the right balance between patent protection and market competition.