table of contents
January issue [Legal Affairs] Newsletter
New Year Greetings
Happy New Year.
Last year was a year in which we were preoccupied with Russia's invasion of Ukraine, North Korea's entry into the war, Israel's intensified attacks on Palestine and the Gaza Strip, Iran's counterattack, the overthrow of the Syrian government, and many other events, and the smell of the prelude to World War III began to spread.
However, according to the theory that Japan's national fortunes follow a 40-year cycle, 2025 will be a memorable year that marks a turning point when Japan's fortunes will turn from a downward trend to an upward trend. I am looking forward to what will happen to turn Japan's fortunes for the better.
On the other hand, at our firm, despite the fact that last year was a difficult time with the global economy in turmoil, we are proud to say that it was a year in which all of our staff seriously reexamined their work in a harsh economic environment and broke out of their shells in one fell swoop.
This year too, we will continue to express our deep gratitude for the continued support of our customers, and we hope to continue providing the highest quality services by focusing on high expertise, high quality, permanence, stability, international responsiveness, and speed, thereby pursuing the provision of maximum satisfaction and profits to all our customers.
We would like to express our sincere gratitude for your patronage last year and hope to receive your continued support this year.
Chairman: Kenzo Hara
—–
We would like to congratulate you all on the arrival of a bright and prosperous New Year.
Last year felt like a year of particularly strong uncertainty about the future of domestic and international situations. Despite such circumstances, our office was able to remain vibrant throughout the year thanks to all of you, and we would like to take this opportunity to express our sincere gratitude.
This year marks the 80th anniversary of the end of World War II. Wars and conflicts occurring around the world are only getting more serious, but I sincerely hope that this milestone year will be an opportunity for all of us to move towards peace.
This year will be another year in which the outlook is uncertain, but with technological innovations and everything else changing at an even greater pace, I believe there are hidden possibilities for a bright future everywhere. I would like to identify these possibilities and work with our clients to make great strides toward further development.
Thank you for your kind support in the year.
Director Kiyoshi Fukui
Overview of the New Freelance Law and its Impact on Intellectual Property Rights
The Act on the Fairness of Transactions Relating to Specified Contracted Business Operators (commonly known as the New Freelance Act or Freelance Act) came into effect on November 1, 2024.
The purpose of this law is to "improve the fairness of transactions" between freelancers (business operators) who are entrusted with work as individuals and companies and other ordering businesses, and to "improve the working environment" for freelancers.
(1) In order to ensure fair transactions, the government will require ordering businesses to clearly state the terms of transactions when outsourcing work to freelancers, and will prohibit them from reducing or refusing to accept remuneration.
(2) In order to improve the working environment, ordering businesses are required to take into consideration the childcare and nursing care needs of freelancers and to establish a consultation system for dealing with harassment.
There are cases where intellectual property rights arise for works that freelancers produce through contract work. It depends on the work content and the deliverables, but for example, research and development may give rise to patent rights, utility model rights, and design rights, while program production may give rise to copyright, and if a request is made to create a company logo, trademark rights may arise.
Whether the rights belong to the freelancer or the ordering company depends on the content of each individual job, but it is advisable to create a contract and clearly define this at the time of receiving the order. Please note that if the ordering company demands a free transfer or a transfer at an unfair price despite the freelancer having intellectual property rights, this may violate the Antimonopoly Act and the Subcontract Act.
Below is an overview of the new freelance law.
Outsourcing of work from ordering businesses to freelancers (business-to-business transactions)
*Freelance: A business that is a contractor and does not employ any employees
*Ordering business: A business that outsources work to a freelancer and employs employees
* Outsourcing: A business entity commissions another business entity to manufacture goods, create information deliverables, or provide services for the business's purposes.
The obligations that an ordering business has towards freelancers vary depending on the requirements that the ordering business meets.
The mandatory items are as follows (① to ⑦).
Fair trading practices
① Clearly indicating transaction terms in writing, etc.
→ In cases where freelance intellectual property rights arise, when transferring or licensing intellectual property rights beyond the scope of use for the purpose of outsourcing, the scope of the transfer or license must also be clearly stated.
→ If the freelancer transfers or grants permission for the transfer of intellectual property rights, the compensation must be added to the remuneration.
② Setting payment due dates and making payments on time
3) Prohibited acts (refusal to accept or refuse to accept, reduction of remuneration, return, undercutting, forcing purchase or use, unjust requests for economic benefits, unjust changes or redoing of previous content)
Improving the working environment
④Accurate display of recruitment information
→ Content of work: Scope of permission and transfer of intellectual property rights of deliverables, etc.
→ Matters related to remuneration: consideration for the transfer and permission of intellectual property rights of deliverables, etc.
⑤ Consideration for balancing childcare and nursing care with work
⑥Establishment of a system for dealing with harassment
⑦ Advance notice and disclosure of reasons for mid-term termination, etc.
The Fair Trade Commission, the Commissioner of the Small and Medium Enterprise Agency, or the Minister of Health, Labour and Welfare may advise, guide, request reports, conduct on-site inspections, recommend, publicize, or order ordering businesses regarding violations. Violation of orders or refusal to inspect will be punished with a fine of up to 50 yen. There is a provision for corporate double punishment.
[reference]
Cabinet Secretariat: Outline of the Act on the Improvement of Freelance and Business Transactions
https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/freelance/dai1/siryou1.pdf
Cabinet Secretariat Freelance and Business Transaction Fairness Law Pamphlet
https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/freelance/pdf/pamphlet.pdf
Cabinet Secretariat Freelance/Business-to-Business Transactions Improvement Law leaflet
https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/freelance/dai1/siryou3.pdf
Revision of Individual Fees under the Madrid Protocol
Regarding the filing fees and renewal fees for international registrations under the Madrid Protocol, the individual fees for the following Contracting Parties will change between December 2024 and February 2025 (as of the time of writing).
- Laos (December 7, 2024 - )
- San Marino (December 25, 2024 - )
- Brazil (December 21, 2024 - )
- Zambia (December 21, 2024 - )
- Greece (December 28, 2024 - )
- Uzbekistan (from January 1, 2025)
- Colombia (from January 1, 2025)
- Iceland (from February 16, 2025)
- United States (from February 18, 2025)
The costs before and after the change are listed on the Japan Patent Office website:Madrid Protocol Individual Fee Schedule" is updated regularly, and "Madrid System Fee Calculator" You can calculate this by changing the "Date" column.
The individual fees for international applications and renewals are subject to change when a Contracting Party declares a change in their fees (Article 8(7) of the Madrid Protocol) and also when there is a change in the official United Nations exchange rate between the currency of a Contracting Party and the Swiss currency (Rule 35(2)(c)(d) of the Madrid Protocol).
Of the above changes, the changes in Laos, Brazil, Zambia and Greece are due to rate fluctuations.
Please note that individual fees are not set for all Contracting Parties.
The costs of filing and renewing an international registration basically consist of (3) a basic fee, (1) an additional fee for each class when the number of classes exceeds three, and (XNUMX) an additional fee according to the number of designated states. However, contracting parties may declare that they wish to be charged individual fees instead of the additional fees and additional fees.
For example, if you designate France, Germany, Spain, etc., no individual fees will be charged, but you will be required to pay additional fees and supplementary fees. If you designate only those Contracting Parties that receive individual fees, no additional fees and supplementary fees will be charged.
[reference]
"Regulations based on the Protocol relating to the Madrid Agreement Concerning the International Registration of Marks (effective November 1, 2024)" (Japan Patent Office)
https://www.jpo.go.jp/system/trademark/madrid/kisoku/document/index/hyoumado0131.pdf
"Madrid Protocol" (Japan Patent Office)
https://www.jpo.go.jp/system/laws/gaikoku/madrid/mp/chap1.html#law8
"International Application Fees" (Japan Patent Office)
https://www.jpo.go.jp/system/trademark/madrid/tesuryo/madopro_syutugan_fee.html
"Issues to be considered regarding the design system" 16th Design System Subcommittee Meeting
On December 6, 2024, the 16th Design System Subcommittee meeting was held at the Japan Patent Office, and the following topics were discussed.
- The state of the design system for designs in virtual space
- Appropriate responses to the design system in light of developments in generative AI technology
Based on the document "Issues under consideration regarding the design system" distributed at the subcommittee, we will explain the issues being considered by the Japan Patent Office regarding the future of the design system. In particular, we will focus on "the state of the design system regarding designs in virtual space."
"Issues to be considered regarding the design system"
Issue: Virtual objects and design rights
<Current situation>
Virtual objects (e.g. an image of a ballpoint pen placed anywhere in a virtual space) do not qualify as operation images or display images, and therefore cannot be protected by design rights.
Virtual objects that are similar in shape to a registered image design are dissimilar because the uses and functions of the images are different, and design rights cannot be exercised.
<Directions for future consideration>
It is important to determine the necessity and acceptability of reviewing the system. Further consideration is required along the following lines.
"The trend is to expand the types of items that can be registered beyond the current types (items, buildings, and parts of images)."
"The direction of extending the scope of design rights for articles and buildings into virtual space"
"Other Directions"
From the above, we learned that there are plans to expand the scope of protection beyond the current scope of protection, which is "parts of articles, buildings, and images." We also learned that there are plans to extend the scope of design rights for "articles and buildings" to include virtual space.
We will also be keeping a close eye on the future of the design system currently being considered by the Japan Patent Office.
[Source]
"Issues to be considered regarding the design system" (Japan Patent Office)
https://www.jpo.go.jp/resources/shingikai/sangyo-kouzou/shousai/isho_shoi/document/16-shiryou/03.pdf
(Used on December 12, 2024) *Created by our office based on pages 14 and 23
Newsletter translated into English
New Year's greetings
I would like to wish you a very happy New Year.
This past year saw the continuation and outbreak of many conflicts worldwide, including the ongoing Russian invasion of Ukraine, the participation of North Korea in that war, the intensification of the Israeli assault on Palestine/Gaza, the counterattack by Iran, the toppling of the government in Syria and so on. It was a year full of events that felt like they might be preliminary skirmishes in advance of a third World War.
However, according to the theory of the 40-year cycle of Japanese national fortune, 2025 will be a significant year marking a turning point in which the decline in Japan's national fortune will be reversed. I look forward to seeing what the instigating event will be that will lead to this upturn in fortune.
Meanwhile, regardless of the current period of global economic upheaval and the many challenges it presents, at our firm we have redoubled our efforts to strive diligently in the harsh economic environment, and can take pride in a year in which our staff as a whole were able to quickly adapt and overcome previous restrictions.
In the coming year, we will bear in mind daily our deep appreciation and gratitude for our clients, continue to pursue a high degree of specialization, high quality standards, persistence, stability, international response capability, speediness and so on, and strive to provide a superior service and the utmost satisfaction and benefit for our clients.
I would like to express my sincere gratitude for your patronage in 2024, and look forward to continuing to provide you with our services in the coming year. Thank you very much for your ongoing support.
Kenzo Hara
Executive Chairman
—–
I would like to wish you all a very happy New Year.
2024 was a year of particularly strong uncertainty regarding the future state of affairs in Japan and abroad. However, against this backdrop our firm remained highly active throughout the year, thanks to your continued support. I would like to take this opportunity to express my heartfelt gratitude.
This year marks the 80th anniversary of the end of the Second World War. Although we are living in a time when wars and conflicts breaking out around the world are worsening in severity, we must continue to hope that this milestone year will be a turning point toward peace.
This year, it is once again not easy to predict what lies in store, but with all kinds of major changes taking place with seemingly increasing speed, including the introduction of many technological innovations, there is a much hidden potential for a bright future. Focusing on this potential, we will continue to advance together with our clients toward greater development and progress.
I wish you all the best for the coming year, and would like to thank you again for your ongoing support.
Fukui Kiyoshi
CEO
Overview of the New Freelance Act and its Impact on Intellectual Property Rights
The “Act on Ensuring Proper Transactions Involving Specified Entrusted Business Operators” (commonly known as the “New Freelance Act” or “Freelance Act”) came into effect on November 1, 2024.
The purpose of the law is to “ensure proper transactions” between freelancers (business operators) who receive outsourced work as individuals and ordering business operators (of enterprises etc.), and to “improve the working environment” for freelancers.
(1) In order to ensure “proper transactions”, this law obliges ordering business operators to clearly state the terms of the transaction when entrusting work to freelancers and prohibits reduction in remuneration or refusal of receipt, etc.
(2) In order to “improve the working environment” the law obliges ordering business operators to consider the balance between work and childcare, nursing care, etc. for freelancers and to establish a consultation system for dealing with harassment.
There are cases in which intellectual property rights arise in relation to output produced by freelance workers under contract. Although it depends on the nature of the work and the deliverables, as examples, issues may arise regarding patent rights, utility model rights, and design rights in the case of research and development, regarding copyrights in the case of program creation, and regarding trademark rights in the case of a request to create a company logo.
Whether the rights belong to the freelancer or the ordering business operator depends on the nature of the particular work, etc., but it is advisable to draw up a contract at the order stage to clearly determine these matters. In the event that the freelance worker is entitled to intellectual property rights, if the ordering business operator demands free assignment or assignment at an unreasonable price, it may violate the Antimonopoly Law or the Subcontract Law.
Below is an overview of the new Freelance Act.
Business entrustment from ordering business operators to freelancers (business-to-business transactions)
- Freelancer: A business operator who is the other party to a business entrustment and has no employees.
- Ordering business operator: A business operator who entrusts work to freelancers and has employees.
- Business entrustment: The entrustment of the manufacture of goods, the creation of information deliverables, or the provision of services by a first business operator to a second business operator for the purpose of the first business operator's business.
The nature of the obligations to freelancers varies depending on the requirements met by the ordering business operator. The obligatory items are as follows (1) through (7).
Ensuring proper transactions
(1) Clear statement of transaction terms and conditions in writing, etc.
→When intellectual property rights of the freelancer are produced and intellectual property rights are transferred or licensed beyond the scope of use for the purpose of business entrustment, the scope of the transfer or license must also be clearly stated.
→If there is an assignment or license of intellectual property rights of the freelancer, the compensation for the assignment or license must be added to the remuneration.
(2) Establishment of remuneration payment date and payment by the due date
(3) Prohibited acts (refusal of receipt, reduction of remuneration, return of goods, beating down prices, coercion to purchase or use, request for provision of unjust economic benefits, unjustified change or redo of old content)
Improvement of the working environment
(4) Accurate display of recruitment information
→Description of work: Scope of licensing and transfer of intellectual property rights of deliverables, etc.
→Matters related to remuneration: Compensation for assignment or licensing of intellectual property rights of deliverables, etc.
(5) Consideration of balancing work with childcare, nursing care, etc.
(6) Establishment of a system for anti-harassment measures
(7) Prior notice and disclosure of reasons for mid-term termination, etc.
The Fair Trade Commission, the Director-General of the Small and Medium Enterprise Agency, or the Minister of Health, Labor and Welfare may give advice, guidance, collect reports/conduct on-site inspection, and make recommendations, public announcements, or orders to the entrusting business operator regarding the violation.
A fine of up to 500,000 yen shall be imposed for violation of the order and refusal of inspection. There are provisions for both corporate and individual penalties.
[Reference]
Cabinet Secretariat Outline of the Act on Ensuring Proper Transactions between Business Operators, etc.
https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/freelance/dai1/siryou1.pdf
Cabinet Secretariat Pamphlet on the Act on Ensuring Proper Transactions between Business Operators, etc.
https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/freelance/pdf/pamphlet.pdf
Cabinet Secretariat Leaflet on the Act on Ensuring Proper Transactions between Business Operators, etc.
https://www.cas.go.jp/jp/seisaku/atarashii_sihonsyugi/freelance/dai1/siryou3.pdf
Revision of Individual Fees under the Madrid Protocol
With regard to the filing and renewal of applications for international registration under the Madrid Protocol, from December 2024 to February 2025, the individual fees for the following Contracting Parties will change (information is that available at the time of writing)
- Laos (from December 7, 2024)
- San Marino (from December 25, 2024)
- Brazil (from December 21, 2024)
- Zambia (from December 21, 2024)
- Greece (from December 28, 2024)
- Uzbekistan (from January 1, 2025)
- Colombia (from January 1, 2025)
- Iceland (from February 16, 2025)
- United States (from February 18, 2025)
The fees before and after the change can be calculated by changing the “Date” column in the “Madrid System Fee Calculator” on the WIPO website, in addition to the “Madrid Agreement Protocol Individual Fee List” which is updated on the JPO website as necessary.
The fees for application or renewal of an international registration are subject to change upon declaration of a change in the amount by each Contracting State (Article 8(7) of the Madrid Protocol) and also in the event of a change in the official United Nations exchange rate between the currency of a Contracting State and the Swiss currency (Rule 35(2)(c) and (d) of the Madrid Protocol).
Of the above changes, those for Laos, Brazil, Zambia, and Greece are due to rate fluctuations.
Note that individual fees are not set for all Contracting States.
The fees for application or renewal of an international registration are based on (1) a basic fee, (2) an additional fee per class when the number of classes exceeds 3, and (3) a supplementary fee based on the number of designated countries , although a Contracting State may declare its preference for an individual fee in place of the additional and supplementary fees.
For example, if France, Germany, Spain, etc. are designated, no individual fee will be charged, but additional/supplementary fees are to be paid. If only a Contracting State receiving an individual fee is designated, no additional or supplementary fees will be charged.
[Reference]
“Regulations under the Protocol to the Madrid Agreement on the International Registration of Marks (effective November 1, 2024)” (JPO)
https://www.jpo.go.jp/system/trademark/madrid/kisoku/document/index/hyoumado0131.pdf
“Madrid Protocol” (JPO)
https://www.jpo.go.jp/e/system/laws/gaikoku/madrid-mp/chap1.html#art8
“International Application Fees” (JPO)
https://www.jpo.go.jp/system/trademark/madrid/tesuryo/madopro_syutugan_fee.html
'Issues for Consideration Regarding the Design System' – 16th Design System Subcommittee
On December 6, 2024, the 16th meeting of the Design System Subcommittee was held at the Japan Patent Office to discuss the following issues.
- The state of the design system regarding designs in virtual spaces
- Appropriate measures to be taken in the design system in light of the development of generative AI technology
Based on the document “Issues for Consideration Regarding the Design System” distributed at the subcommittee, we will explain the issues being considered by the JPO regarding the future of the design system. In particular, we will focus this time on the state of the design system regarding designs in virtual spaces.
Issues for Consideration Regarding the Design System
Topic: Virtual Objects and Design Rights
Current Status
Virtual objects (eg an image of a ballpoint pen placed anywhere in a virtual space) do not fall under the category of operation or display images, and therefore, design rights cannot be obtained.
A virtual object that is similar in shape to a registered image design is dissimilar because the use and function of the image is different, and the design right cannot be enforced.
Future Consideration of Courses of Action
It is important to determine the necessity and permissibility of a system revision. It is necessary to carry out deeper consideration of a revision in accordance with the following courses of action.
- Course of action whereby types of registrable items are expanded beyond the current types (goods, buildings, and some images)
- Course of action whereby the scope of implementation of design rights for goods and buildings is extended to virtual spaces
- Other courses of action
From the above, it is understood that expansion of types of registrable items beyond the current types (goods, buildings, and some images) and extension of the scope of implementation of design rights for goods and buildings to virtual spaces is under consideration.
Our firm will continue to pay close attention to the future of the design system that is currently being considered by the Patent Office.
[References]
“Issues for Consideration Regarding the Design System” (JPO)
https://www.jpo.go.jp/resources/shingikai/sangyo-kouzou/shousai/isho_shoi/document/16-shiryou/03.pdf
(Retrieved on December 12, 2024) *This article produced by our firm based on pages 14 and 23