In this volatile global environment, more and more companies are licensing patents and patent applications outside of the US. To get up to speed on recent amendments to Japan’s Patent Law, our friends at DLA Piper sent along this article outlining the changes that may effect the licensee.
Companies that have licensed or plan to license Japanese patents should be mindful of Japan’s 2009 Amendment to its Patent Law, proffering greater rights to licensees of patents and patent applications.
Before the Amendment
Prior to the Amendment, patent owners were required to register exclusive licenses (senyou-jisshiken) with the Japan Patent Office for the licenses to be effective. For non-exclusive licenses (tsujou-jisshiken), registration was optional. However, if a non-exclusive license was not registered, a licensee could face the loss of considerable rights, such as its ability to assert its license rights against a third party if the licensor sold the patent to another entity. However, registration required extensive disclosures, raising concerns among potential applicants that they might reveal business secrets. These disclosures were the primary reason nonexclusive licenses often were not registered.
Additionally, it was not possible to register exclusive or nonexclusive licenses of pending patent applications. Thus, licensees of pending patent applications also faced the potential loss of rights
Amendment Introduces provisional licenses
To protect licensees while the patent applications are pending, the Amendment introduces provisional licenses for both exclusive (kari-senyou-jisshiken) and non-exclusive licenses (kari-tsujou-jisshiken). Under the provisional licensing system, both types of licensees can file for a provisional license before the underlying patent is granted, thereby protecting their license rights. Once the underlying patent is granted, the Amendment deems the provisional license extinguished, and an ordinary license (exclusive or non-exclusive) established. A provisional license holder is protected even if the underlying patent application is transferred in connection with a business transfer, and a provisional license cannot be terminated by a bankruptcy trustee.
The Japan Patent Office accepts applications for provisional licenses online; approval takes 10 business days; and the cost is ¥15,000 (about US$180) per license application.
Relaxed disclosure requirements
In response to concerns that the previous disclosure requirements risked exposing business secrets, the Amendment has set boundaries on the information that must be disclosed during the process. Under the Amendment, the only required public disclosure is the licensor’s name and the patent number. Other information, such as the license scope and license fees, is not made available to the general public. However, the Patent Office will disclose the name of the licensee and the scope of the license to parties who have an interest in the license (e.g., bankruptcy trustees).
Possible future amendments
The Japan Patent Office expects an increase in licensing of other companies’ patents, especially for core technologies, due to promotion of production modules for invention of new products, patent pools and open innovation. Under these circumstances, patent license protection is crucial.
Currently, registration with the Japan Patent Office is still required for a non-exclusive licensee to assert license rights against third parties. The Japan Patent Office is considering a proposal to implement an automatic perfection system for non-exclusive licenses, similar to the approach now in place in the US and Germany. Under an automatic perfection system, non-exclusive license holders need only certify the existence of a license agreement to assert their license rights against third parties (i.e., no registration is required). This proposal would certainly make it easier for nonexclusive licensees to assert their rights.
Conclusion
Companies that have licensed or are considering licensing Japanese patents or patent applications should be aware of Japanese registration requirements and the possible impact of failing to register their licenses with the Japanese Patent Office, as well as the option of applying for provisional licenses to protect license rights in patent applications.
Tags: "Japan's patent licensing laws", disclosure requirements, exclusive licenses, Japan Patent Office, non-exclusive licenses, patent licensing laws, provisional license holder, provisional licensing system
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