The Japanese Patent Law Amendments

On April 24, 1998, the bill for amending the patent law was passed through the Japanese Diet and shall come into force on January 1, 1999. In addition to modifications to the patent law, this bill also contains wide sweeping amendments to the design law.

This report is an explanation of the amendments to the patent law. For a report on the amendments to the design law, the July issue of Copyright World should be referred to.

The most noteworthy part of these patent law amendments concerns modifications to the system for obtaining relief with respect to patent rights infringements, in particular, modifications to the methods for calculation of damage compensation. Other amendments include reduction of patent fees, submission of priority documents not required, prior submission status and so forth.

Infringement Relief
Amendments to Damage Compensation Calculation Methods (Amendment to article 102)
Under the current law, the patentee may receive any profits obtained by the infringer subsequent to infringement of the patentee's patent rights and, damage compensation for the amount of loss borne thereby (current law article 102 section 1). The patentee may furthermore receive from the infringer, the sum of money equal to that which would normally be received as a licence fee for the patent invention and, damage compensation for the amount of loss (current law article 102 section 2).

However in actual cases of patent rights infringement litigation, there has been considerable difficulty in clearly establishing the amount of profit that the infringer has actually received, often resulting in the inability to increase the amount of damage compensation beyond the figure of the licence fee. In other words, after the litigation failed to determine the amount of profit, the patentee had to settle for damage compensation that was about equivalent in value to the licence fee. This has given rise to a situation where there have been insufficient deterrents against patent rights infringement. If the situation is allowed to continue where the patentee cannot receive reasonable compensation for the sustained damage, there is considerable concern that incentives for creative development shall appreciably wane due to inability to raise research and development funding.

Under the amendment, the patentee shall receive as compensation, a figure calculated as follows; the number of infringement articles sold by the infringer, multiplied by the amount of profit per article that could have been realised had licenced articles been sold by the patentee (amendment to article 102 section 1). The industrial property council which was set up upon cabinet order debated an amendment proposal which suggested that the system used in the Unaited States should be adopted whereby in cases of deliberate infringement, the patentee may receive triple compensation. This proposal was however not adopted. Nevertheless, under this amendment, it should be simple to determine the compensation figure and it is expected that the patentee shall receive a more reasonable amount of damages compensation than has been possible up to now. In addition, as a consequence to the amended Code of Civil Procedure which has been in force from January this year, it is anticipated that the costs borne by the patentee in determining the amount of damage shall become less (Code of Civil Procedure articles 220 - 224) and that more protection has been provided to the patentee.

Increased Punishment for Infringement Crime (amended low article 201)
The current law stipulates that a person found guilty of deliberate patent rights infringement may receive a gaol sentence not exceeding five years and a fine not exceeding five million yen (current patent law article 196). In the event of infringement perpetrated by a representative or employee of a company, in addition to punishment being meted out to the individual, the company may also receive a fine not exceeding five million yen (current patent law article 201). Under the amendment, the corporate fine has been increased to 150 million yen (amendment to article 201). Currently, the patentee has to make an accusation against the infringer before the latter can be charged (shinkokuzai : an offence subject to prosecution only on complaint from the victim). The amendment stipulates that the plaintiff is not required to make a formal accusation to render an offence subject to prosecution.

Other Amendments
(1) Reduction of Annual Patent Maintenance Fees (Amendment to article 107)
Pursuant to the current patent law, the annual fees that a patentee is required to pay for maintenance of a patent sharply increases with the number of years that the patent has been maintained (current patent law article 107). The amendment states that in order to reduce these costs, the annual patent maintenance fees shall not increase beyond the tenth year of the patent ownership (amendment to article 107).

This amendment article 107, differs from the other amendments which shall come into effect from January 1, 1999, in that it came into effect on June 1, 1998.

(2) If a specific country is specified as the primary patent application country, submission of priority documents is not required (Amendment to article 43)
The current patent law stipulates that if an applicant claims priority rights, priority documents must be submitted within twenty months from the priority date (current patent law article 43 section 2).

Under the amendment, if an application is submitted in a country that is capable of exchanging priority documents data with the Japan Patent Office, priority documents need not be submitted (amendment to article 43 section 5). Currently, submission of priority documents may be omitted in the case where priority rights are claimed on the basis of an application submitted at a European patent office.

(3) Rejection confirmed applications to be regarded as never having been submitted (Amendment to article 39 section 5)
Currently, if submitted patent applications are withdrawn or rendered invalid, they are regarded as never having been submitted (current patent law article 39 section 5). However those applications that have been abandoned or whose rejection has been confirmed have not been treated in the same manner. Pursuant to this amendment, the applications for abandoned or rejection confirmed applications shall be regarded as never having been submitted (amendment to article 39 section 5).

(c)1998 Hideo Furutani. The author is a patent attorney with the company Furutani Patent Office, Osaka, Japan.


(C)2000 Hideo FURUTANI /