Japan's Intellectual Property High Court has ruled that a US-based internet firm has violated a patent owned by a Japanese competitor, overturning a lower court decision.
The court on Friday issued the ruling in favor of Dwango, which operates video-sharing website Niconico.
Dwango sued FC2, accusing the US-based company of infringing its patent on a function to automatically scroll users' comments on the screen of live-streamed videos.
Dwango asked the Tokyo District Court to order FC2 to stop distributing videos and pay damages.
But the court ruled that FC2 was not violating the patent because its servers are located in the United States. Dwango appealed at the Intellectual Property High Court.
Presiding judge Otaka Ichiro said that even if servers are located outside Japan, companies will be subject to the patent law when the roles of system components in Japan and other factors are taken into account.
Otaka concluded that FC2's services are subject to Japanese law. He ordered FC2 to stop distributing videos and pay roughly 80,000 dollars in damages.
The lawsuit was the first in which public opinions were solicited over issues of contention.
The Tokyo High Court says it received 52 opinions from companies and individuals, and 44 of them were submitted as evidence.
The Intellectual Property High Court was established in 2005 as a special branch within the Tokyo High Court.