-Strengthening Protection of License Contracts, Protection of the Real Inventor, Improving Fairness of Dispute Resolution-
In this issue we will explain the Japanese patent regulation reforms, which were passed on May 31, 2011 and published on June 7, 2011. The regulations will be enforced one year from the publication date, and are scheduled for April of 2012. The social imperative that these legal revisions addressed were to answer to open innovation, to make dispute resolution faster and fairer, and to improve user convenience. We will discuss dispute resolution and user convenience in a future issue.
Strengthening Protection of License Contracts
Recently, there has been an acceleration of open innovation, where parties implement external technologies and assimilate intellectual property to create a new businesses. Reflecting this trend, license contracts with a third party have also increased, and thus protection is in demand. According to the existing law, if a non-exclusive license holder (the party receiving the license) enters a license with a patent holder to enforce a patent invention, but the patent holder assigns the patent or is bought out by a third party, if injunction is demanded by the new patent right holder, the license holder would be unable to enforce the patent. To counter this, it is possible for the non-exclusive license holder to register with the JPO and oppose the third party in order to continue enforcement of the patent.
However, in reality it is usually difficult for a non-exclusive license holder to register with the JPO, and many times a license contract could not be protected in actuality. This recent revision will make it possible to oppose the third party, even without registering with the JPO. Again, the legal revision not only applies to non-exclusive license holders, but also to provisional non-exclusive license holders for pending patent applications.
In contrast, in both China and Korea the non-exclusive license holder must still register with the Patent Office in order to oppose a third party. Thus, the situation is the same as Japan before the legal revisions.
Strengthening the Protection of the Real Inventor/Patent Right Holder
According to this revision, if an application is filed by an individual who is neither an inventor or has rights to obtain the patent (usurped application), or only a few of the members out of a group of inventors file a patent (breach of joint application) and a patent is obtained, the true holder of rights may apply for return of either the entire patent right or their share of the patent right.
In the existing law, in the event of a usurped application or breach of joint application, the true inventor could request a trial for invalidation, but request for return of the rights was not acceptable in express terms. Although there was a past trial decision that the true right holder could request to transfer the registration of matters he/she submitted (Supreme Court June 12, 2001), there was also a decision that if the true right holder did not file himself/herself, transfer of registration was not possible (Tokyo District Court July 17, 2002). Again, even for usurped applications, it was difficult for the true right holder to request return, which is another reason the new regulations were established.
In China and Korea, it is still not possible for rights to be returned to the true inventor. Thus inventors must be cautious of usurped applications and breaches of joint applications.
Improving Fairness of Dispute Resolution –Rethinking Prohibition Against Double Jeopardy-
Existing law provides that, if the order of a trial for invalidation has been finalized, several people cannot request a trial for invalidation based on the same facts and proof (Patent Law Article 167). This regulation was criticized as possibly violating the guaranteed right to stand trial according to Article 32 of the Constitution of Japan. According to the law revision, prohibition against double jeopardy will only apply towards the party of interest and participants. Any other person may request a trial for invalidation based on the same facts or proof, even if a court decision has already been made, thus making dispute resolution more fair.
However, please note that this is another provision that is still not available in China and Korea.