At our annual seminar in 2017, we provided a broad introduction to cutting-edge economic analysis and how it can be used in regulatory and litigation responses, primarily in light of recent experiences in Japan. NERA economists based in Japan explained cutting-edge economic analysis in connection with statistical evidence on liability for defects in inter-company transactions; the valuation of companies and stocks related to disputes under the Companies Act and the Financial Instruments and Exchange Act; the amount of damages and the sales contribution rate related to intellectual property infringements; and the regulation of mergers under antitrust laws. 

"Using Statistical Analysis In Lawsuits And Disputes: The Example Of The Suspicions Surrounding Professional Shogi Players”

In recent years, the use of statistical evidence when investigating whether a problem lies with an individual or a company in cases of discrimination at work and pollution trials, etc., has been drawing attention not only in the U.S., but also in Japanese courts. In particular, statistical evidence has the potential to provide a source of evidence when the associated facts and personal evidence are scarce and it is not clear whether or not there has been a defect or an impropriety. At the lecture, an explanation was given on the general points to note in any statistical analysis that underlies statistical evidence. Last year's example of the suspicions surrounding a professional shogi player’s use of personal skill was also used to introduce the statistical concepts and analytical approaches needed if analysis is to be used as evidence, and an explanation was given on the potential for using statistics in legal settings. 

"DISPUTES CONCERNING THE VALUE OF FINANCIAL ASSETS: APPROPRIATE VALUATION METHODS FOR STOCKS AND STOCK ACQUISITION RIGHTS” Tomohiko Yano, NERA

It is not uncommon for stock valuations to be required in a corporate restructuring deals such as mergers, splits and MBOs, when negotiations or lawsuits, etc., involve a contest for management leadership, or a dispute with an investment fund - for example, the case to determine the Jupiter Telecom stock acquisition price, which was decided by the Supreme Court in 2016. In recent years, there has also been a gradual increase in cases in which the valuation of stock acquisition rights and stock options has been a point of contention. Therefore, in the lecture, we used case studies to explain the methods used to evaluate these financial assets and examined how to assess value and use third-party experts. 

"USING EMPIRICAL ANALYSIS IN INTELLECTUAL PROPERTY DISPUTES: ESTIMATING THE AMOUNT OF COMPENSATION FOR DAMAGES BASED ON ECONOMIC ANALYSIS AND QUESTIONNAIRES” Naoya Kaneko, NERA

After Samsung was ordered to pay a huge amount of compensation for infringing an Apple smart phone design patent, the U.S. Supreme Court ruled that the case be recalled and ordered that the huge amount of compensation, which had been based on gross profits, be reviewed. In practice, the issue of whether gross profit should be used as the basis for calculating compensation, or whether only the profit attributable to the intellectual property in question should be considered, is an extremely important one. If gross profit is not used, then the degree to which the intellectual property contributes to sales must be determined, which is an excellent empirical question. In Japan, specialist statutes such as Article 102 of the Patent Act, Article 38 of the Trademark Act, and Article 39 of the Design Act can be used to calculate the amount of compensation for damages, but neglecting to prove the contribution rate to sales may lead to unexpected consequences. This lecture used recent case studies such as the Kirimochi Case to explain how to use empirical analysis that employs economic analysis and questionnaire surveys, and also examined the precautions to note. 

“TRENDS IN CUTTING-EDGE ECONOMIC ANALYSIS IN ANTITRUST MERGER REGULATION AND REVIEWS” Hiroaki Ishigaki, NERA

In 2016, five large-scale mergers were planned in the oil wholesale industry, the steel industry, the regional banking sector, and the can manufacturing industry, and all were examined in a secondary review. This has not been limited to large-scale cases. Indeed, in recent years it has become the norm for reviews themselves to explicitly take economic analysis into account, and for quantitative evidence based on economic analysis to also be required from the companies involved. In addition, the relevant authorities have started to make practical changes - conducting more detailed merger reviews and applying the viewpoints in guidelines in a stricter manner. In this lecture, recent case studies were used to explain the content and usage of the economic analysis performed in merger reviews, and recent trends in merger reviews conducted by JFTC were then examined.