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Reconsideration of the Employee Inventions

Systemin Japan

Pre-Meeting

AIPLA Mid-Winter Institute

January 27, 2015 OrlandoSumiko Kobayashi

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Reconsideration of the employee inventions

systemin

Opinion on reconsideration of the intellectual property system

for the purpose of promotion of innovation in our country

and the international harmonization in the systemissued by the government on December 2014

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Recommendation

First: Statutory obligation of the employer(1) To give the employee(s) economic benefit

(money and/or other)(2) Adjustment in Incentive Policy

Second: The employer owns the right to obtain a patentThird: Government will prepare Guideline for Incentive Policy

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First: Statutory obligation of the employer

Give the employee(s) economic benefit (money and/or other)

To compensate for achievement (or fruit) of the employee’s invention (“Invention”)

As the incentive for the Invention Based on the provisions in the contract or the

employment regulation (collectively “Regulation”)

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Incentive policy

The employer shall follow the guideline made by the government; and

make adjustment in the incentive policy with the employees.

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Second: The employer owns

the right to obtain a patent The current system shall be revamped to the

following:The right belongs to the employer from the

beginning.

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Expected Advantages

- Conformity to the actual situation - Sense of unity between the employer and

employees - Less difficulties in the intellectual property

management - Free from problems such as “duplicated

assignment”, “instability of the ownership”

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Provided that

no disbenefit is caused by the amended law. For that purpose, the following should be allowed:Some organizations may prefer the current the system,To attract excellent researchers who are liable to work independently

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 Consideration shall be taken not to

cause the following problems:

In companies having no Regulation on Invention The right of the inventors in the companies may be unfairly treated, thereby troubles between the employer and employees might occur

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Primary Requirement

Preparation of Regulation is the primary requirementHowever, it is true thatmiddle or small entities are present, which have difficulties in preparation of Regulation. Consideration of the latter above, thereby Stable ownership of the patent for Invention is secured

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The government should prepare the guideline

For preparation of the incentive policy(i) Less costs and difficulties in the employer in its

preparation of the policy(ii) Elevate legal predictability Guideline of the processes of adjustment Preparation is made in consideration of supporting private sector’s initiative to enhance its creativity

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The government should prepare the guideline

taking the following into account

diverse situations in the research and development in the individual industries,

changes in the social and economic situation.Intended advantages:(i) smoothen the adjustment in the incentive policy (ii) elevate persuasion of the incentive among the

employees, and (iii) reduce the risk of litigations

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Government’s Message

- It is irrational to dispute as to who owns Invention.(i) The ownership is divided into the right to obtain a

patent, and (ii) Inventor’s personal right Sharing the purpose, collaboration -> excellent

Invention- Achievement of Invention is benefit common to employer and employees

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My Point on Incentive

To secure incentive to both:ordinary inventive workgreat invention (such as blue LED)*

To show the criteria for the second probable enough for everybody to have motivationTo secure trustful policy in treatment:

position, research environment, the next R&D subjectEach company having its own history should have or prepare own policy.

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Current System

Purpose of its introductionTo solve the problem of frequent bringing action to the court disputing “reasonable compensation” for Invention in the old systemThe amendment to the old system was enacted in 2004.

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The current system

Premise: the right to obtain a patent for Invention belongs to the employee(s)

Features: The employer can be assigned with the right to obtain a

patent for Invention according to the Regulation established prior [to the Invention].

The employee(s) has a right to receive “reasonable compensation” for patents, etc. for the Invention in the case where the employer was assigned with the patents, etc. according to the Regulation. So called “statutory right to claim compensation”.

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The current system

The compensation determined according to the Regulation is deemed “reasonable” unless it is found unreasonable upon taking the following into account: The contents of the discussion or negotiation, the contents of the

guideline disclosed, and the opinions taken from the employee(s).The “reasonable compensation” is determined taking the following into consideration: amount of benefit which the employer is entitled to receive,

burden that the employer needed to bear, contributions by the parties and treatment of the employee(s), and others.

in case where the Regulation is absent or the payment for the compensation according to the Regulation is found “unreasonable”.

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The current system

ProblemSituation where the Invention is made by teamworkcausesComplexity and difficulties in calculation of the compensation and management of the patents including ownership issue

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ANY QUESTIONS ?

Thank you !