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Friday, 20 October 2006

JAPANESE SUPREME CT PATENT CASE


The Register reports that Hitachi has lost a patent dispute before the Japanese Supreme Court. Former Hitachi employee Seiji Yonezawa conducted research that is now used on reading optical disks, including CDs and DVDs and has been awarded 163 million yen (£733,000). Hitachi has criticised the decision.

The IPKat is split on this issue. It seems a bit rough to deprive creative employees from the benefit of a job well-done, and it also deprives them on an incentive to do their research above and beyond the call of duty. At the same time though, researchers are employed to do research, so it makes sense that their employees [correction: employers] should be able to benefit from this.

3 comments:

Luke Ueda-Sarson said...

Quoth the IPkat:

"The IPKat is split on this issue. It seems a bit rough to deprive creative employees from the benefit of a job well-done, and it also deprives them on an incentive to do their research above and beyond the call of duty. At the same time though, researchers are employed to do research, so it makes sense that their employees should be able to benefit from this".

Assuming you mean "employers" in the last sentence, as opposed to "employees", they do of course benefit from their researchers' research - by selling the results and making (is some cases truly enormous) profits therefrom.

The Japanese patent law is quite explicit in its Employees' Inventions section (Article 35) that an employee is entitled as a matter of right to remumeration for a patented invention (section 3), and that the remuneration shall be set according to the profits that the employer will make from the invention (An article that was honoured more in the breach than in the observance in the pastm, but times are changing).

The question in the case at hand concerned whether those profits should be construed as purely domestic, or as the inventor argues, with reference to overseas sails as well.

The court ruled that all profits flowing from a patent should be assessed. This is surely right; an employer after all need not market an invention domestically but may opt to market it only overseas, in which case, if Hitachi were right, the employee would be entitled to no remuneration at all.



35. Employees' inventions

(1) An employer, a legal entity or a state or local public entity (hereinafter referred to as the "employer, etc.") shall have a non-exclusive license on the patent right concerned, where an employee, an executive officer of a legal entity or a national or local public official (hereinafter referred to as the "employee, etc.") has obtained a patent for an invention which by reason of its nature falls within the scope of the business of the employer, etc. and an act or acts resulting in the invention were part of the present or past duties of the employee, etc. performed on behalf of the employer, etc. (hereinafter referred to as an "employee's invention") or where a successor in title to the right to obtain a patent for an employee's invention has obtained a patent therefor.

(2) In the case of an employee's invention made by an employee, etc. which is not an employee's invention, any contractual provision, service regulation or other stipulation providing in advance that the right to obtain a patent or the patent right shall pass to the employer, etc. or that he shall have an exclusive license on such invention shall be null and void.

(3) The employee, etc. shall have the right to a reasonable remuneration when he has enabled the right to obtain a patent or the patent right with respect to an employee's invention to pass to the employer, etc. or has given the employer, etc. an exclusive right to such invention in accordance with the contract, service regulations or other stipulations.

(4) The amount of such remuneration shall be decided by reference to the profits that the employer, etc. will make from the invention and to the amount of contribution the employer, etc. made to the making of the invention.



Note that in the Japanese language, there are no definite or indefinite grammatical articles. Imagine what replacing the second "a" with "the" in section 3 above would do for the law's interpretation - Hitachi would then presumably have been right.


Regards,

Luke

Anonymous said...

Can anyone clarify whether these benefits to employees only apply to those employed in Japan? What about, for example, where someone is employed in say Europe and a Japanese patent is obtained?

Luke Ueda-Sarson said...

That's a very good question.

I am told that the case at hand would appear to be applicable to Japanese companies only. However, for example, a European researcher working for say, Hitachi, would almost certainly be covered by the legislation if a Japanese patent was obtained, presumably even if the research itself was done in Europe.

I dare say Japanese companies are unlikely to advertise this widely, or even at all, to their employees overseas, although with the increasing amounts of transnational research being done, it will become increasingly important.

As shown by this case and others (notably the Nakamura blue LED case), the amount of remuneration can be described, relative to what other jurisdictions provide (typically nothing!), as being very generous indeed.

I wonder if this might partly because "inventing" has been seen as something here in Japan that is more than just mere "research"; notice IPkat's initial post about people being paid to "research" as opposed to "invent"; and while one might expect a person to "research" as part of their ordinary employment activities, expecting them to "invent" might be seen as going to far. For example, under Japanese patent law, a patent is ostensibly only granted for "a *highly advanced* creation of technical ideas...", and not just anything (albeit this is never in practice used as a patentability requirement whether in the JPO or the courts).

Anyway, the current legislation and its judicial interpretation certainly reflect the current stance in Japan of helping to ensure that inventors themselves are assisted by the patent system. To hold that only Japanese nationals could so benefit would certainly be discriminatory.

Regards, Luke

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