Why are relatively few non-Japanese applications filed in Japan?
Filed Under General | Posted on March 26, 2008
By: Court Heinle
Last September, the Organization for Economic Cooperation and Development (OECD) published statistics on the share of countries in patent applications at the USPTO and the JPO.i While roughly half of the patent applications to the USPTO list a foreigner as first-named inventor, only 28.1% of applications to the JPO are by foreigners.ii Consequently, Dennis Crouch on www.patentlyo.com raised the question, “Why are relatively few non-Japanese applications filed in Japan?”iii
There are several important legal differences between the U.S. and Japanese patent systems. Most notably, Japanese patent law (like most jurisdictions around the world) is based on the first-to-file principle.iv Under this system, the person who is the first to file a patent application for a particular invention may obtain the patent. By contrast, the U.S. operates under the first-to-invent principle whereby priority is given to the person who is first to conceive of and reduce to practice the invention, regardless as to who files first.v While seemingly more equitable to the inventor, a major disadvantage of a first-to-invent system is the litigation that results from when an inventor who was not first to file claims priority.
Both the USPTO and the JPO publish patent applications within 18 months of filing.vi While this “laying open” of applications enables a competitor to use the technology before a patent issues, both systems grant patentees a provisional right to recover reasonable royalties for that use.vii However, if a competitor is able to improve upon an invention during this period, then it may qualify for its own separate patent on the improvement. In Japan, this outcome could be especially costly, as the competitor could then force the original inventor into a compulsory cross-licensing agreement for the original invention in exchange for the improvement.viii Moreover, firms operating in Japan may have ample time to use published technology, as pendency periods there tend to be relatively long; one study has shown that, on average, pendency periods at the JPO are longer than at the USPTO.ix By contrast, there is no similar compulsory cross-licensing statute in the U.S.
Another key difference between the U.S. and Japanese patent systems may lie in the realm of enforcement. As compared to U.S. courts, Japanese courts tend to narrowly interpret the scope of patent claims.x While a U.S. court will often apply the doctrine of equivalents, Japanese courts frequently decline to do so.xi Instead, courts in Japan will limit their analysis to the specific examples given in the “embodiments” part of the patent application, and even if only slight variations or modifications exist between the examples and the alleged infringing product, the court will find no infringement.xii Also, while courts in the U.S. will look to the “”overall object of the invention” to interpret the ideas expressed in the specification, the courts in Japan prefer a more narrow element-by-element comparison of the patented specification with that of the alleged infringing product, and only slight differences will trigger a finding of no infringement, even if the overall object of the invention is the same.xiii Essentially, U.S. courts interpret patent claims broadly, while Japanese courts focus on specific language in the specification to interpret patents narrowly.
One might argue that all these so-called weaknesses of the Japanese patent system afflict foreign and domestic firms alike, and therefore can not be used to explain why foreign firms file relatively fewer applications as compared to their domestic counterparts. Yet these weaknesses may feed into another consideration that is outside the comparative legal framework of these patent systems: the economic ‘miracle’ of post-war Japan has, to an extent, been marked by economic nationalism.xiv With the exception of raw materials, foreign firms have historically struggled to establish a foothold in the Japanese national, blaming cultural barriers against imports.xv This factor, when considered along with weaker intellectual property protection, may tip the balance against the costly proposition of prosecuting a patent in Japan, except in less the frequent instances of prosecuting a patent which promises to be sufficiently profitable as to wash out these considerations.
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i Compendium of Patent Statistics 2007, ORGANIZATION FOR ECONOMIC COOPERATION AND DEVELOPMENT, available at http://www.oecd.org/dataoecd/5/19/37569377.pdf.
ii Id.
iii Posting of Dennis Crouch to Patently-O Blog, http://www.patentlyo.com/patent/2007/11/mercantilism-an.html.
iv Japanese Patent Law, Article 39.
v 35 U.S.C. § 102.
vi 35 U.S.C. § 122; Japanese Patent Law, Article 64.
vii 35 U.S.C. § 154; Japanese Patent Law, Article 65.
viii Masaaki Kotabe, A Comparative Study of U.S. and Japanese Patent Systems, 23 Journal of International Business Studies 147 (1991).
ix Id.
x Ames Gross, Japanese Patent Law: An Introduction for Medical Companies, Pacific Bridge Medical (1998).
xi Id.
xii Id.
xiii Takenaka, Toshiko, Interpreting Patent Claims: The United States, Germany and Japan, 199-200 (VCH Publishers 1995).
xiv See generally, Y. Miyazaki, Rapid Economic Growth in Postwar Japan, in The Japanese Economy 133 (Routledge Publishers 1998).
xv Id.
3 Responses to “Why are relatively few non-Japanese applications filed in Japan?”
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Two additional reasons for the low numbers of filings in Japan:
1. very high costs, and
2. very low likelihood of success, due to the JPO’s obviousness analysis.
While a perception that Japanese patents are too narrow may persist and dissuade filings there, I don’t know that there is much of an actual difference in claim scope interpretation in Japan vs the US. Japan has embraced the doctrine of equivalents using a test akin to looking at the objective of the invention. Tsubakimoto Seiko Co. v. THK Co. (Sup. Ct. Feb 24. 1998), translated in Toshiko Takenaka, The Supreme Court Affirmed the Presence of the Doctrine of Equivalents under Japanese Patent System, 5 CASRIP NEWSLETTER (Winter 1998)). Meanwhile, the US has been trimming back the doctrine. Festo Corp. v. Shoketsu Kinzoku Kogyo Kabushiki Co., 535 U.S. 722 (2002) (and see following cases). I think the actual differences in patent intepretation between different countries has become sufficiently subtle that it should not be as significant a factor as other considerations. (See also my paper “Foreign Equivalents to the U.S. Doctrine of Equivalents: We’re Playing in the Same Key But It’s Not Quite Harmony,” 6 Chi.-Kent J. Intell. Prop. 177 (2007).)
I have the perception that the claim interpretation in Japan is narrower than the U.S. For example, the permissible scope of doctrine of equivalents (DOE) in Japan is narrower than U.S.
The Supreme Court in Japan made a landmark decision to acknowledge the doctrine of equivalents for the first time in the Supreme Court in Tsubakimoto Seiko Co. v. THK Co. (Sup. Ct. Feb 24. 1998). Moreover, the decision set the five standards for the doctrine of equivalents, which are more or less similar to corresponding case law in the U.S.
However, the summary of this case in the previous paragraph may be misleading to practitioners in the U.S. Please note that the Tokyo High Court in this case found the patent infringement and ordered THK Co to pay damages to Tsubakimoto based on doctrine of equivalents without mentioning clear standards thereof. This decision was appealed to the Supreme Court, and the Supreme Court reversed and remanded the original decision. The Supreme Court found that facts of this case did not meet one of the five standards for the doctrine of equivalents. In other words, the scope of patent protection based on DOE by the Supreme Court is narrower than that by the Tokyo High Court in this particular case.
After the Supreme Court decision, a few cases made a favorable ruling to the patentee by the application of doctrine of equivalents.