Kenko.com, Inc. (Genri Goto, CEO)(TOKYO:3325) operates an e-commerce (EC) website selling nutritional supplements, pharmaceutical products, and other products via the Internet. Today (Tokyo, 3/30/10, 14:00pm the Tokyo District Court handed down its decision on the lawsuit our company filed against the Japanese government on May 25, 2009. Our comments on the court decision are presented below.
1. Comments concerning the ruling against Kenko.com
We cannot help but be shocked and angry at this decision which fails to consider not only the assertions of Kenko.com but also the voices of many users with regard to the unreasonable, unfair, and clearly illegal and unconstitutional ministerial ordinance restricting online sales of pharmaceutical products. Furthermore, this is a totally unacceptable bureaucracy-driven ordinance in which government bureaucrats collaborated with a certain industry group to give preferential treatment to the interests of that group for no rational reason. Consequently, we find it truly regrettable that not only the government defendant but also the court would go against our expectations by deeming such an ordinance proper.
Kenko.com is extremely concerned that this case will serve as a bad precedent encouraging not only the government but even the courts to continue to forsake the role that they should be playing in making a diligent effort to rein in the excesses of the bureaucracy. In addition, if the separation of power of the administrative, legislative, and judicial branches of government fails to function properly, as happened in this case, there will be a continuing adverse impact on the birth and development of new industries and new types of business. This, in turn, will encourage new industries to move overseas, thereby hastening the decline of Japan itself.
Kenko.com will move immediately to begin procedures to appeal this decision as we move forward with efforts aimed at quickly restarting online pharmaceutical product sales.
2. Date and court information for this suit and ruling
Tokyo District Court: 2009 (Gu) No. 256, in charge: Civil Affairs Department No. 2
Suit filed: May 25, 2009
Decision: March 30, 2010
3. Content of the suit
(１) Outline of claim
a. We seek to confirm that we have the right (legal standing) to engage in sales of Class 1 and Class 2 pharmaceutical products using methods such as mail order sales.
b. With regard to the ministerial ordinance (Ministerial Ordinance No. 10 of the Ministry of Health, Labour and Welfare) that was enacted on February 6, 2009 and that revised some of the enforcement rules of the Pharmaceutical Affairs Law, we seek to confirm the invalidity of the revision provisions that added the following provisions: Article 15, Part 4, Paragraph 1, No. 1 (prohibition of sales by mail order, etc.); Article 159, Part 14; Article 159, Part 15, Paragraph 1, No. 1; Article 159, Part 16, No. 1; and Article 159, Part 17, No. 1 and No. 2 (the portion requiring so-called "face-to-face sales").
c. We seek revocation of the revision provisions of "b" above.
(２) Decision content
1. "The demands in both Paragraph “b” and Paragraph “c” in the outline of claim of this lawsuit are rejected." (Remainder omitted)
2. The other demands of the plaintiffs (Paragraph “a” in the outline of claim) are rejected.
*Reference: Our May 25, 2009 press release concerning the filing of the lawsuit.
Started in May 2000, Kenko.com is an EC site for health-related products (nutritional supplements, pharmaceutical products, healthcare equipment, etc.). The number of products handled is approximately 120,000 (as of March 2010). Listed on the Tokyo Stock Exchange Mothers section under the stock code 3325 in June 2004.
【Inquiries】 Kenko.com, Inc.／Public Relations Office (Rena Takasuga)