SUMMARY OF REVISIONS MADE TO JAPANESE PATENT LAW AND TRADEMARK LAW(1999 - 2000)

Ryuichi KIJIMA
Patent & Trademark Attorney

The following will describe revisions made to the Japanese Patent Law and Trademark Law effected in three consecutive times as follows:

Major Objects of the Revisions

To ensure legal protection of intellectual property rights and prompt imposition thereof.

To level up the economical value of the Japanese intellectual property rights to the international standard.

To prepare for the membership to the international trademark registration system (Madrid Protocol).

INDEX

1. Patent Law

(1) Expansion of Remedies for Infringement on Patent Right

(2) Reconsideration of Patentability of Invention

in Information-oriented Society

(3) Shortening of the Period for Request of Examination

(4) Introduction of Early Publication Practice

(5) Reduction of Annual Fees

2. Trademark Law

(1) Accommodation to the Madrid Protocol

(2) Laying open of application practice

(3) Securing Additional Right

to Demand Financial Compensation before the Registration

(4) Reduction of a Number of Classes

at the Payment of Registration Fees

(5) Utilization of On-line Application Procedure

1. Patent Law

(1) 　 Expansion of Remedies for Infringement

on Patent Right

A. Problems before Revision

An amount of compensation for damages in an infringement case is hard to prove, and in many cases, the amount is judged, at the most, as being equivalent to the licensing fees. Therefore, the patent rights have not been necessarily exercised in all respects, and concerns are being voiced that an incentive to develop original researches is lessened.

(Cf. 1) Of all the patent lawsuits between corporations in the U.S. and Europe versus and corporations in Japan for the past 5 years, only 7% of which were conducted in Japanese courts (152 cases out of a total of 164 cases were conducted in the U.S. and Europe).

(Cf. 2) Average amounts of compensation for damages for the major lawsuits relating to industrial property rights are:

U.S. 92 million US Dollars (1990-1992)

Japan 0.4 million US Dollars (1990-1994)

B. Revisions

1. Reconsideration on Method of Assessing an Amount of Compensation for Damages to Facilitate Establishment of Evidence

In order to realize an adequate compensation for damages (profit loss) caused by the infringement on a patent right, the following equation is adopted. (effective on January 1st, 1999: Article 102):

(Amount of Damages) = (the number of articles sold by an infringing party) ×(profit ratio per article of the patent owner)

Accordingly, the patent owner can assess the amount of damages merely by establishing the proof as to the number of articles sold by the infringing party.

(Before the revision, the Law stipulated that the profit of the infringing party is equivalent to the amount of damages of the patent owner, and had the following problems:

I, it is hard to establish the proof of the profit made by the infringing party; and

II, even if the price of the articles decline due to the entry of the infringing party into the market, the profit loss caused by such decline is not compensated.)

2. Realization of Substantive Compensation for Damages

by the Judge's Acknowledgement

The revised Law stipulates explicitly that a judgment shall be made not only by the fact that convincing proof is established, but also the fact that the Judge acknowledges high probability that an act of the alleged party constitutes an infringement, so as to realize substantive compensation for damages (effective on January 1st, 2000: Article 105(3)).

(Before the revision, the judge was also allowed to convince himself/herself of an act of infringement; however, by stipulating in the Law, significance as "means rarely used except for a very special occasion" is conferred.)

3. Establishment of Financial Expert Witness Practice

In order to analyze a huge volume of technical accounting documents, the financial expert witness practice is established. Thus, the party (parties) involved is (are) obliged to cooperate for the financial expert witness (effective on January 1st, 2000: Article 105 (2)).(An accountant or a tax accountant will be appointed as the financial expert witness.)

4. Enforcement of the Judgment Practice

As to the judgement practice, according to which the Patent Office judges the technical scope of a patented invention at a request from the applicant or a third party, more stringent provisions relating to the proof research are added on one hand, and on the other hand, the courts are allowed to request the Patent Office for the judgment (expert opinion) (effective on January 1st, 2000:Articles 71 and 71(2)).

5. Order to Produce Documents

In addition to the documents necessary for the assessment of damages, the requested party is obliged to produce document necessary for the establishment of proof of an act of infringement (effective on January 1st, 2000:Article 105).

Clauses 1 to 5 apply mutatis mutandis to the Utility Model Law, Design Law, and Trademark Law.

6. Reconsideration of Penalty of Infringement

I, An act of infringement is judged as non-offense subject to prosecution on complaint (effective on January 1st, 1999: Article 196).

II, The upper limit of the fine imposed on corporations is increased to 1.3 million US dollars from 40,000 US dollars (effective on January 1st, 1999: Article 201).

(2) Reconsideration of Patentability of Inventions

in Information-oriented Society

A. Problems before Revisions

Novelty of an invention relies on the following references:

I, known or publically used inventions at home; and

II, inventions already published at home and abroad.

However, in the recent information-oriented society, the novelty can no longer be secured over these references alone.

B. Revisions

The references relied on will be expanded as follows(effective on January 1st, 2000: Article 29):

I, known or publically used inventions at home and abroad; and

II, inventions on publications at home and abroad, or inventions available via electrical communication lines (internet, database, etc.).

(3) Shortening of the Period

for Request of Examination

A. Problems before Revisions

I, Accumulation of applications to which patent rights have not been granted can disencourage corporations to develop new businesses.

II, The international patent market has been established based on the examination results in the U.S. and Europe (hollowization of the Japanese patents).

B. Revisions

A period of request for examination is shortened from 7 year

to 3 years commencing on the application date.

(effective on October 1st, 2001:Article 48 (3))

(4) Introduction of Early Publication Practice

A. Problems before Revisions

the right to demand a compensation against a third party for imitation (the right to demand an amount equivalent to a royalty fee after the patent is granted, provided that a prior warning has been delivered).

However, as a practice, applications are published after 18 months commencing on the application date (priority date), and the patent owner has no right to demand a loss caused by such imitation until the patent is granted.

B. Revisions

At a request from the Applicant, the application may be published within 18 months from the application date (priority date) (effective on January 1st, 2000: Article 64(2)).

The early publication secures the applicant the right to demand a compensation at an earlier stage.

(5) Reduction of Annual Fees

A. Problems before Revision

The annual fees in Japan are relatively high compared with those in the other countries, and among of all, the progressive system imposes a heavy burden on the patent owners in the later years.

B. Revisions

The annual fees after the 10th year are levelled out, and annual fees and fees for request of examination corresponding to an increased number of claims are reduced.

(effective on January 1st, 1999: Article 108, June 1st, 1999: Article 195)

Accordingly, in a typical case, the annual fees and fees for request of examination are reduced by 20% in total.

2. Trademark Law

Now that trademark rights are indispensable for corporations developing their business overseas, the membership to the Madrid Protocol is adopted, so that corporations can secure trademark rights quickly and easily at a low cost. Accordingly, necessary revisions were made to the Trademark Law.

(1) Accommodation to the Madrid Protocol

1. Limiting a Period of Objections

(effective on March 14th,2000: Article 5)

A decision of registration is issued for each and every trademark application, whether national or international, unless no objections are issued within 18 months.

2. Procedures Relating to International Registration Application

(effective on January 1st, 2000:Article 7(2), first and second clauses)

The effective period of the trademark right based on the international registration will be renewed by renewing the effective period of the international registration.

3. Reinstatement after Central Attack

(effective on January 1st, 2000:Article (2), third clause)

An exceptional provisions are provided that, in case of an international registration designating Japan, when the international registration is cancelled, if the owner of the trademark filed an application of the trademark registration with Japanese Patent Office, the application is deemed as had been filed on the day the international registration was filed.

(2) Laying open of application Practice

(effective on January 1st, 2000: Article 12 (2))

Laying open of application (publication) practice will be additionally established to publish the disclosure of the application on the official trademark gazettes.

International trademark applications to Japanese Patent Office will be also published with translations.

(3) Securing Additional Right to Demand

Financial Compensation

Before Registration of Trademark

(effective on January 1st, 2000: Article 13(2),

corresponding to Article 4 of the Madrid Protocol)

In the event that any other person uses the trademark after the application was filed, with the proviso that a prior warning be delivered before the registration of the trademark, the Applicant will be allowed to demand that person an amount equivalent to a commercial loss incurred from the date such a warning is received to the date the trademark is registered or the use thereof by that person is discontinued, whichever is earlier.

(4) Reduction of a Number of Classes

at the Payment of Registration Fees

(effective on January 1st, 2000: Article 68 (40))

The applicant will be allowed to file an amendment to reduce a number of classes at the payment of a registration fee in connection with the trademark registration application.

(5) Utilization of Trademark

On-line Application Procedure

(effective on January 1st, 2000:

Article 2 of the on-line special provisions)

In addition to the patents and utility models, on-line applications using common-use PCs will become possible for designs and trademarks for comprehensive procedures regarding the filing of applications etc.