W.Herbert Sponsored Doing Business In Japan Presentation

© 2010 William Herbert ([email protected])

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Intellectual Property & Observations about Contracting in Japan

William A. Herbert, Attorney at Law (admitted in Georgia, New York &

Washington)[email protected]

mailto:[email protected]


Japanese Intellectual Property

• Patent Rights• Copyrights• Rights in Registered Trademarks/Service Marks• Trade Secret Rights• Lesser known rights (Registered Utility Models,

Registered Designs, Registered Integrated Semiconductor Chip Layouts, Registered Plant Matter)

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Patent Rights

• Subject Matter (novelty, inventive step, industrial applicability)

• Priority Filing• Ownership• Licenses– Registered under Art. 77 of the Patent Act– Registered under Art. 78 of the Patent Act– Compulsory Licenses

• Infringement• Damages and Remedies


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Patentable Subject Matter• “Highly advanced creations of technical ideas utilizing the laws of nature”• Subject matter must be novel, involve an inventive step, and have industrial

applicability to be patentable. Patentable subject matter includes:– Computer programs that express a sequence of processes or operations in a

time sequence;– So called “business methods”– Products of genetic engineering (microorganisms)

• Subject matter is not patentable if publicly known or used in Japan or abroad before the date the patent application claiming it is filed in Japan (no novelty and thus is not patentable).

• But, inventors who have tested their invention or presented it in a printed publication or at a study meeting held by a scientific organization designated by the JPO may maintain novelty of if they file a patent application within six months after the date of the testing or presentation.


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Priority Filing

• Japan is a “first to file country”– Earliest filer in Japan has priority– Japan is Paris Convention Member– Japan is member of the PCT


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Patent Ownership• If patentable subject matter is jointly owned, then any patent application

claiming it must be filed jointly by all owners, or if by only one co-owners, then all other owners must have assigned their interest to applicant to that owner.

• Joint patent owners may work a patented invention without the consent of the other owners, absent agreement otherwise to the contrary (Art. 73(1)); BUT

• Joint owner may not assign, pledge or grant a license (exclusive or non-exclusive) to a patent without the consent of all of the other owners. (Patent Act, Art. 73 (1)(3))

• Compare with U.S. patent law:– Absent agreement to the contrary, each of the joint inventors of a patent may

make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners.


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Licenses

• Registered under Art. 77 of the Patent Act (“sennyo jisshiken”)

• Registered under Art. 78 of the Patent Act (“tsujyo jisshiken”)


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Compulsory Licenses• The JPO may award compulsory non-exclusive licenses to a party

who would like such a license if, at least four years after the patent has issued, the patented invention has not been “sufficiently and continuously” worked for three or more years in Japan.

• If four or more years have passed since the patent was issued, and if the patented invention has not “sufficiently and continuously” worked for three or more years in Japan, then a party may ask the patentee to grant the party a non-exclusive license to the patent. If the parties are unable to agree on the granting of a non-exclusive license, then then party wishing to receive a non-exclusive license may petition the JPO to award it a non-exclusive license.

• The JPO may award the petitioner a royalty bearing non-exclusive license. (Patent Act, Art. 83, 84 and 85)


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Infringement/Damages & Remedies• Patent infringement includes, with respect to a product claimed in a patent.

–Producing;–Using;–assigning to a third party; –offering to assign (“assigning” refers to transferring or leasing); –importing, or possessing for the purpose of assigning or exporting; or–employing a process that is claimed in a patent and producing, assigning to a third party, offering to assign, importing or exporting, a product to be used in a process claimed in a Japanese patent.

• Infringement of a patent right creates a presumption of negligence when committing the infringing act. Actual knowledge of patent not required. Patent owners need not send a warning letter to alleged infringers before bringing a claim.

• Damages and Remedies–The patent right holder’s choice of:

•the profit per unit of product that would have been sold by the holder of the patent right had there been no infringement, multiplied by the number of infringing products sold by the infringer;• the profits earned by the infringer; or• the consideration that the holder of the patent right would have been entitled to receive for

granting the infringer the right to work the patent. Patent owners and licensees who register their licenses under Article 77 may seek injunctions to stop ongoing infringement or to prevent threatened infringement, and demand disposal of infringing products and products produced by processes claimed in the patent.


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Copyright

• Copyrightable Subject Matter• Authorship• Author’s Rights• Registration• Term• Infringement• Damages and Remedies


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Copyrightable Subject Matter

• “Productions in which thoughts or sentiments are expressed in a creative way and which fall within the literary, scientific, artistic or musical domain” are copyrightable. This includes:– novels, plays, scripts, musical works, choreographic works and

pantomimes, paintings, engraving and sculptures, architectural works, cinematographic and photographic works, and computer programs.

• A work created by translating, arranging musically, transforming, dramatizing, cinematizing, or otherwise adapting a pre-existing copyrightable work is a derivative work, and thus is copyrightable. However, copyright of a derivative work does not affect authorship rights in the original work.


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Authorship

• Authorship is attributed to the person who creates the work, except in cases in which an employee, in the course of employment duties, makes a work on the initiative of a corporation or other legal person. Then, unless stipulated in the employment contract, the work is attributed to the corporate entity.

• Authorship of cinematographic works is attributed to those who have creatively contributed to the creation of the work as a whole by taking charge of producing, directing, filming, and/or artistically directing it.


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Author’s Rights• Exclusive right to reproduce their work, to perform it publicly, make it public by screen

presentation, publicly transmit it, and offer it to the public by transferring ownership of the original work or reproductions of it. Authors of literary works have the exclusive right to recite their works publicly, while authors of artistic works and unpublished photographic works have the exclusive right to exhibit them publicly. Japanese law also recognizes so called “moral rights” of authors and the “neighboring rights” of performers and broadcasters

• Right to publish their work, to determine whether or not authorship of the work is attributed to them, to maintain the integrity of the work and to prevent distortion, mutilation, or other modification of the work.

• Performers have the exclusive right to make sound or visual recordings of their performance, and to broadcast and to wire broadcast their performance. Broadcasting organizations which have obtained authorization from a person who has the right to broadcast a performance may make a sound or visual recording of the performance. Performers have the right to receive fees for the broadcast and the secondary use of commercial phonogram incorporating the sound recording of the performance. Absent agreement to the contrary, once a performer authorizes the broadcast of a performance, the performance may be broadcast in the future, with the broadcaster obligated to pay the performer a reasonable royalty.


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Registration• Copyright arises concurrently with the creation of the work. There is

no examination or registration with a governmental agency necessary for rights to vest.

• But:– copyright holder may register the date of first publication of the work; – authors may have their name registered with respect to the work; and – authors of copyrightable computer programs may have the date of the

creation of the program registered with Japan’s Agency for Cultural Affairs.

• The transfer or limitation on the disposal of a copyright and the establishment or modification of a pledge on a copyright may not be enforced against third parties unless the transfer, limitation or pledge is registered with the Agency for Cultural Affairs.


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Copyright Term• For works authored by a natural person, copyright expires fifty years after the death of the author, or fifty years after the death of the last surviving author for a co-authored work.

• For anonymous or pseudonymous works, copyright expires fifty years after the making of the work, unless the fifty-year period after the death of the author lapses before fifty years following the date the work was made public, in which case the copyright expires fifty years after the death of the author, if known.

•In the case of works whose authorship is attributed to a corporate body or other legal person, copyright expires fifty years after work was made public.

•Copyright of cinematographic works expires seventy years after the work has been made public, or if the work is not made public, seventy years after creation of the work.


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Infringement

• Infringement includes: – importing into Japan, for purposes of distribution, objects made by

conduct that would have infringed the copyright if the conduct had occurred in Japan;

– distributing, or possessing for purposes of distributing, an object made by an infringing act;

– using on a computer program reproduced by an infringing act; – intentionally adding, removing, or modifying information which

identifies the work, or the owner of the rights, or information regarding the manner of the authorized exploitation of the work; and

– exploiting a work prejudicial to the honor or reputation of the author. Importing, distributing, possessing for the purpose of distributing, or using or reproducing on a computer objects that are copyrighted also amounts to infringement.


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Damages and Remedies• Infringers are liable for damages calculated at the copyright holder’s choice of:–the number of objects sold or reproduced multiplied by the per unit profit that the copyright holder could have sold had there been no infringement; or

–the sum that would have been received by the copyright holder through the exercise of the rights. The profits, if any, received by the infringer as a result of the infringement are presumed to be the damages suffered by the copyright holder.

• Copyright holders may seek injunctions to stop infringement or to prevent threatened infringement, and also may demand destruction of infringing articles or equipment used exclusively for infringement.


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Trademarks and Service Marks

• Marks and Registration• Cooperative Associations• Term• Infringement• Damages and Remedies


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Marks and Registration• Trademarks and service marks, are “characters, figures, signs, or three dimensional shapes, any

combination of them, or any combination of them with colors.” • An applicant may register a mark used in connection with goods or services for business purposes,

unless the mark lacks distinctiveness. • The application to register a mark must specify the goods or services for which the mark is intended. • The application is examined by the JPO, and if no grounds for refusing the registration are found,

then the registration is published in the official bulletin. • At any time within two months from the date of publication in the bulletin, anyone may file an

opposition to the registration. Common grounds for opposition to registration include: the opponent’s belief that the mark lacks distinctiveness; the opponent’s belief that the mark does not fulfill the requirements for registration; or that registration of the mark is otherwise prohibited under Japanese law.

• Once a mark is registered, it may be invalidated if the JPO erroneously granted the registration, if the registration violated a treaty to which Japan is a party, if the applicant did not have rights in the mark when it was registered, if the mark is identical or similar to a trademark that is already well known among consumers in Japan or abroad as indicating goods or services pertaining to a business of a person different from the registrant, if the mark is likely to cause confusion in connection with the goods of services pertaining to a business of another person, or if the mark as registered is used by the registrant for unfair purposes.


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Cooperative Associations

• Cooperative associations may obtain a regionally based collective trademark to be used exclusively by their members in accordance with the policies of the association. Cooperative associations or foreign associations equivalent to cooperative associations in countries other than Japan may also register their marks in Japan.

• As of February 18, 2010, there were 447 registered regionally based collective marks. Only two of them were for foreign products – one was for ham produced by members of the Parma Ham Consortium, and one was for pork produced by members of Canada Pork International.


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Term

• Mark registration is valid for ten years from the registration date.

• Registrations may be renewed.


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Infringement• Infringement includes:

– using a mark similar to the registered mark in connection with goods or services designated for the registered mark; – using the registered mark or a mark similar to it in connection with goods or services similar to goods or services designated for

the registered mark; – possessing, for the purpose of assignment, transfer, or export, goods designated for the registered mark or goods similar to the

designated goods or services, that bear the registered mark or a mark similar to the registered mark; – possessing or importing articles that bear the registered mark or a mark similar to it that are used to provide designated services

or services similar to the designated services for the purpose of providing the designated services through use of the articles; – assigning, delivering, possessing or importing for the purpose of assigning or delivering articles that bear a registered mark or a

mark similar to it, for the purpose of causing the provision of designated or similar services through use of the products; – possessing products indicating the registered mark or a similar mark for the purpose of using the registered mark or the mark

similar to it in connection with the designated goods or designated services, or similar goods or services; – assigning, delivering, or possessing for the purpose of assigning or delivering articles bearing the registered mark or a mark

similar to it for the purpose of causing the registered mark or a mark similar to it to be used in connection with the designated goods or designated services, or similar goods or services;

– manufacturing or importing products indicating the registered mark or a mark similar to it, for the purpose of using or causing to be used the registered trademark or a trademark similar to it in connection with the designated goods or designated services or similar goods or services; and

– manufacturing, assigning, delivering or importing products to be used exclusively for manufacturing products bearing the registered mark or a mark similar to it.

• Those who infringe a the rights of a holder of rights in a registered mark are presumed to be negligent when they commit the infringing act, even if they had no actual knowledge of the existence of the registered mark that they infringe .


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Damages and Remedies• Infringers are liable for damages calculated at the claimant’s choice of:

– the profit per unit of goods that would have been sold by the holder of rights to the registered mark had there been no infringement, multiplied by the number of infringing goods sold by the infringer;

– the profits earned by the infringer; or – the consideration that the holder of rights to the registered mark would

have been entitled to receive for the use of the mark. Holders of rights in registered marks may demand injunctions to stop or prevent infringement by anyone who infringes or threatens to infringe the right in the mark.

• Trademark licensees who register their exclusive right to use a mark under Article 33 of the Trademark Act enjoy rights that are similar to patent licensees who register their licenses under Article 77 of the Patent Act, including the right to demand damages and injunctions.


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Trade Secret

• Definition• Maintenance of Trade Secret Protection• Misappropriation• Remedies for Misappropriation


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Definition

• Trade secrets, defined as “technical or business information useful for commercial activities, such as manufacturing or marketing methods, that is kept secret and that is not publicly known” are intellectual property proprietary to their owner.


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Maintenance of Trade Secret Protection

• To establish that information is a trade secret, the holder of the information must implement and maintain procedures to preserve the secrecy of the information.

• Administrative agency regulations describe standards and procedures which, if taken by the owner of information purported to be a trade secret, increase the likelihood that the information will be deemed to have been maintaining as secret. These include:– Marking the information as “Confidential” – Placing limits on who may access the information.– Informing in writing those who do access the information that they have an obligation

not to disclose or use the information, and binding them to obligations of confidentiality. – Additional actions that the corporate owner of a purported trade secret should

implement include • appointing a particular person within the organization to act as the manager of confidential

information; • training employees on the importance of maintaining trade secrets as confidential; and• drafting specific in-house rules on the maintenance of secrecy.


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Misappropriation of Trade Secret

• Legally impermissible unfair competition includes: – acquiring trade secrets through theft, fraud, duress, or other wrongful means;– using or disclosing trade secrets acquired through such wrongful means; – acquiring trade secrets with knowledge that they had been acquired through wrongful

means, or lacking knowledge of the wrongful acquisition only through gross negligence;

– using or disclosing trade secrets after becoming aware that they had been wrongfully acquired, or lacking awareness of the wrongful acquisition only through gross negligence;

– using or disclosing trade secrets for purposes of unfair business competition, illicit gain, or causing injury to their owner;

– acquiring a trade secret with the knowledge that it was acquired through improper disclosure, or lacking such knowledge only through gross negligence, or using or disclosing a trade secrete so acquired;

– using or disclosing an acquired trade secret after becoming aware that the trade secret had been improperly disclosed or if not becoming aware of the improper disclosure, lacking such awareness due to gross negligence.


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Remedies for Misappropriation

• Those whose business interests have been infringed or are likely to be infringed as a result of a third party misappropriating their trade secret may seek:– injunction stopping or preventing infringement; and – the destruction of any articles that constitute infringement.

• A person who has intentionally or negligently injured the business reputation of another person by misappropriation of trade secret is liable to the owner of the trade secret for compensation for damages, in cases in which the infringer sold or transferred infringing articles, presumed to be the number of articles sold or transferred multiplied by the amount of profit per unit of the articles that the claimant could have sold but for the infringement.

• The claimant may also choose to claim damages for trade secret infringement calculated as the profits received by the infringing party through the act of infringement, or the consideration that reasonably should have been received for the infringer’s use of the trade secret. Finally, anyone who infringes a trade secret may also be ordered to restore the business reputation of the owner of the secret in lieu of or in addition to compensating the owner for damages.


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Japanese Attitudes toward Contracting

• Contracts are less detailed and physically shorter in length

• Contracts are often seen as beginning of relationship, rather than final promise on matter

• Contracts seen as one of many other agreements that have been made and will be made


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Clause for Ownership of Research Collaboration IP

If any results of the collaborative research is a new invention, device, design copyrightable work, intellectual property rights (rights to receive rights in patent rights, utility model rights, design rights, trademark rights, and if registered rights arising after their registration, and also an copyrights), then the parties shall negotiate in good faith and agree separately regarding their ownership and share of rights regarding the results.


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Indemnification Clause

If either party to this agreement should incur some damage due to the failure of the other party to perform under this agreement, then the party so damaged may demand that the party failing to perform indemnify it.


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Dispute Resolution Clause

Should any doubt arise regarding a matter not dealt with in this Agreement, performance under this Agreement or the interpretation of this Agreement, then the Parties will negotiate with each other to deal with the matter in accordance with principles of good faith.


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Thank you for your attention．

ご静聴ありがとうございました。

William A. HerbertAttorney at Law

(Admitted in Washington, New York and Georgia)ワシントン、ニューヨークー州、ジョージア州弁護士

E-mail: [email protected]（日本語可）

mailto:[email protected]

W.Herbert Sponsored Doing Business In Japan Presentation

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