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Recently the GAO released a report on patenting in Japan for
American companies. It is an excellent report, with many insights
and lots of advice on patenting strategies. This part 1 of 2.
Greg Aharonian
INTELLECTUAL PROPERTY RIGHTS
U.S. Companies' Patent Experience in Japan
U.S. General Accounting Office
GAO/GGD-93-126
July 1993
CONTENTS
EXECUTIVE SUMMARY
INTRODUCTON
Importance of Patents
US, Japanese and European Patent Systems
Cultural Differences Between the US and Japanese Patent
Systems
Current Concerns About Japan's Patent System
Objectives, Scope and Methodology
US FIRMS' EXPERIENCES IN OBTAINING PATENTS IN JAPAN
Profile of US Firms Responding to GAO Survey
Survey Results: US Companies' Overall Experiences in Obtaining
Patents in Japan
US Firms' Views of the Japanese Patent Office
US Firms of All Types Experienced Patent Problems in Japan
The Impact of Problems in Obtaining Patents in Japan
European Firms' Patent Experience in Japan
CAUSES FOR US COMPANIES' PATENT PROBLEMS IN JAPAN AND RECENT
CHANGES IN THE JAPANESE PATENT SYSTEM
Systematic Differences and Administration of the Japanese
Patent Process Pose Problems
The Narrow Scope of Protection Granted in Japan, and Related
Problems
JPO has Implemented Changes
Japan's Committments Under the Structural Impediments
Initiative
PATENT PRACTICES OF US FIRMS CAN AFFECT THEIR PATENT EXPERIENCE IN
JAPAN
US Firms' Patent Practices in Japan
Some US Firms Have Adopted Strategies That Improved Their
Patent Experience in Japan
US FIRMS' EXPERIENCE IN ENFORCING PATENTS IN JAPAN
Specific Difficulties Encountered
More Infringement Suits in the United States Than Japan
Effect of Enforcement Problems on Companies
PROGRESS IN WORKING TOWARD INTERNATIONAL PATENT HARMONIZATION
GATT Negotiations Seek to Establish a Minimum Level of Patent
Protection Worldwide
WIPO Patent Harmonization Negotiations
Japan Supports Adoption of Some Provisions in GATT Proposal
and Draft WIPO Treaty
US Government Views of Changes in Japanese Patent System Under
Harmonization
US Companies' Views of Changes in Japanese Patent System Under
Harmonization
Changes in the US Patent System Under a Harmonization Treaty
Success of Draft Harmonization Treaty May Hinge on Outcome of
GATT TRIPS Proposal
=================================================================
============
EXECUTIVE SUMMARY
PURPOSE
In recent years, a number of U.S. companies have reported
significant difficulties in obtaining adequate and effective
protection for their patents in Japan. Some of these firms have
asserted that their Japanese competitors use the Japanese patent
system as a weapon against foreign firms to appropriate their
technologies. Since 1989, Japan has been on a U.S. Trade
Representative watch list of countries that have inadequate
protection for intellectual property, partly because of reported
problems with its patent system.
Senators John D. Rockefeller IV and Dennis DeConcini, and
former Senator Lloyd Bentsen, asked that GAO review patent
protection for U.S. products in Japan as compared with that in the
United States and Europe. Specifically, GAO examined (1) U.S.
companies' experiences in obtaining patents in Japan as compared
with those in the United States and Europe; (2) the sources of
U.S. companies' patent problems in Japan and recent changes in the
Japanese patent system; (3) practices that may affect U.S.
companies' patent experiences in Japan; (4) U.S. companies'
experiences in enforcing patents in Japan as compared with those in
the two other jurisdictions; and (5) progress toward greater
international patent harmonization and U.S. firms' views on whether
harmonization would improve their patent experience in Japan.
BACKGROUND
There are significant differences between the u.s. patent
system and those of other countries, including Japan. The United
States, for example, is the only developed country in the world
that awards patents to the first inventor regardless of when the
patent application is filed. Moreover, U.S. patent applications are
kept secret until a patent is granted. Japan, like most developed
countries, awards patents to the first inventor to file an
application and publishes all patent applications 18 months after
they are filed.
GAO surveyed 346 US firms that were top patent holders in
selected sectors regarding their experience in obtaining patents in
Japan as compared with that in the United States and Europe. Over
90 percent of the 300 responding firms had filed patent
applications in Japan in the past 5 years, and two-thirds held 10
or more Japanese patents. The majority of the companies were large,
with almost 60 percent reporting annual sales of over $1 billion.
Ninety percent were U.S. companies or subsidiaries of U.S.
companies, while 10 percent were U.S. subsidiaries of foreign
firms.
RESULTS IN BRIEF
More than three times as many of the companies responding to
the GAO survey were dissatisfied with their overall patent
experience in Japan as compared with that in the United States and
Europe. Further, 65 percent reported at least one major problem in
obtaining patents in Japan, while 25 percent reported at least one
major problem in Europe and 17 percent in the United States. The
problems most frequently cited in obtaining Japanese patents were
the length of time involved, the cost, the scope of the patent
protection granted, and the difficulty in obtaining patents for
pioneering inventions (those involving important new technologies).
Only 6 percent of the companies, however, said that patent problems
in Japan had a serious adverse effect on their company.
Both the administration of the Japanese patent process and
inherent differences in the U.S. and Japanese patent systems are
posing problems for U.S. firms. Many of the difficulties are due to
delays in patent issuance in Japan and the narrower scope of patent
protection granted. The Japanese Patent Office has recently adopted
some measures to improve the patent system, however.
Another source of U.S. companies' patent problems in Japan may
be their own patent practices. Both U.S. and Japanese patent
attorneys told GAO that some of the problems encountered by U.S.
firms are due to their lack of understanding of the Japanese patent
system, translation difficulties, and poor communication between
U.S. companies and their Japanese patent representatives. Some
companies have adopted strategies for dealing with these problems.
For example, some companies have improved their patent experience
in Japan by tailoring the applications they file to better conform
to the Japanese application style.
Several of the U.S. firms GAO interviewed also reported
problems in enforcing their patents in Japan. Some of these
difficulties stem from differences in U.S. and Japanese substantive
law and civil procedure. For example, the Japanese courts interpret
patent claims more narrowly than those in the United States.
Currently, multilateral efforts are under way to harmonize
international patent procedures through the World Intellectual
Property Organization, an agency of the United Nations. If a
harmonization treaty is enacted, it could lead to significant
changes in both the Japanese and U.S. patent systems. The proposed
changes in the Japanese patent system under harmonization address
many of the concerns raised by U.S. companies regarding patent
protection in Japan. About two-thirds of the companies responding
to the GAO survey also supported changes in the U.S. patent system
that would align the U.S. system more closely with those of other
countries.
PRINCIPAL FINDINGS
U.S. FIRMS ARE MORE DISSATISFIED WITH THE JAPANESE PATENT SYSTEM
Thirty-nine percent of the U.S. companies responding to the GAO
survey that had filed for patents in Japan were dissatisfied with
their overall experience in obtaining patents, while 13 percent
were dissatisfied with their patent experience in the United
States, and 3 percent with that in Europe. These results indicate
that U.S. companies were not necessarily partial to the U.S. Patent
and Trademark Office, since the responding companies were generally
more satisfied with their overall patent experience in Europe than
in the United States.
Forty-four percent of the companies said that it was more
difficult to obtain patents for pioneering inventions in Japan than
in the United States or Europe, while only 3 percent said it was
less difficult in Japan; virtually all of the other companies said
they were "not sure." Twenty-one percent believed that they had
been treated differently than Japanese applicants by the Japanese
Patent Office.
Although many companies said they were dissatisfied with their
overall experience in obtaining patents in Japan, only 6 percent
said that these problems had adversely affected their firm to a
great extent. GAO conducted follow-up interviews with several
companies to ask why they had reported significant patent problems
in Japan but had said that these problems had not caused adverse
impacts. Some corporate officials noted that it is difficult to
isolate the effect of patent problems in Japan from other problems
their films face in trying to penetrate the Japanese market. They
noted that they currently had few or no sales in Japan, and
therefore, patent problems had not yet had any severe consequences.
SOURCES OF U.S. COMPANY PATENT PROBLEMS IN JAPAN
Most of the patent problems that u.s. firms have reported in
Japan relate to the long pendency period in Japan and the limited
scope of protection that their inventions have received. It takes
about 6 to 7 years for a typical patent to be issued in Japan
compared with about 19 months in the United States. The longer
pendency period in Japan is due to several factors, including the
pre-grant opposition system, which allows rival companies to raise
objections to a proposed patent before it is granted. Another
problem leading to delays includes the fact that the Japanese
Patent Office receives twice as many patent applications per year
as its U.S. counterpart, while employing far fewer patent
examiners. Further, several Japanese patent attorneys said that the
scope of patent protection granted by the Japanese Patent Office is
narrower than that granted by the U.S. Patent and Trademark Office.
The Japanese Patent Office has recently introduced accelerated
examination procedures, allowed multiple claims within one
application, and encouraged Japanese companies to reduce the number
of patents they file. Japan has also reduced patent pendency time
by several months and has hired a small number of additional patent
examiners.
U.S. COMPANY PRACTICES MAY AFFECT THEIR PATENT EXPERIENCE IN JAPAN
Other factors also contribute to some U.S. companies' patent
difficulties in Japan. According to both U.S. and Japanese patent
attorneys, some problems are attributable to U.S. firms' patent
practices in Japan as well as poor communication between U.S. firms
and their Japanese patent representatives. For example, some U.S.
companies do not fully understand the Japanese system or make
sufficient efforts to work with and oversee their Japanese patent
representatives. Further, Japanese patent attorneys told GAO that
many of their U.S. clients do not give them sufficient time to
translate their applications accurately into Japanese. On the
other hand, some U.S. companies complained that their Japanese
patent attorneys are not sufficiently aggressive in representing
their interests before the Japanese Patent Office.
Some U.S. companies have improved their patent experience in
Japan by translating their Japanese applications back into English
to ensure their accuracy, by establishing a patent office in Japan,
and by tailoring the applications they file in Japan to better
conform to the Japanese application style.
U.S. FIRMS HAD PROBLEMS WITH PATENT ENFORCEMENT IN JAPAN
According to U.S. and Japanese patent experts, the Japanese
legal system poses difficulties for a plaintiff in a patent
infringement case that do not exist in the United States. There are
many problems in bringing infringement actions in Japan, including
the lack of discovery procedures, the length of court proceedings,
the courts' narrow interpretation of patent claims, and the adverse
Japanese attitude toward litigation. According to U.S. patent
attorneys, these difficulties make it harder for a patent holder to
enforce a patent in Japan than in the United States. Several of the
14 firms GAO interviewed that had filed patent infringement suits
in Japan said that the difficulties they had had in enforcing their
patents in Japan had adversely affected their companies.
PROPOSED CHANGES UNDER HARMONIZATION MAY ADDRESS U.S. COMPANIES
CONCERNS
The United States is currently involved in two sets of
multilateral negotiations on intellectual property rights that may
lead to significant changes in the Japanese patent system and the
U.S. patent system: a patent harmonization treaty through the World
Intellectual Property Organization; and the Uruguay Round of the
General Agreement on Tariffs and Trade which includes negotiations
on intellectual property issues.
The Japanese Patent Office is considering making major
revisions in its system within the context of a patent
harmonization treaty, including allowing patent filing in an
applicant's native language. A majority of companies responding to
the GAO survey said that most of these changes would greatly
improve their patent experience in Japan. About two-thirds of the
companies also support fundamental changes in the U.S. patent
system pursuant to harmonization, such as (1) the adoption of a
system in which the first inventor to file an application is
entitled to receive the patent and (2) the publication of all
patent applications after 18 to 24 months. However, many companies
told GAO they would not support changes in the U.S. patent system
unless Japan agreed to make significant changes in its patent
system under harmonization.
RECOMMENDATIONS
This report contains no recommendations.
AGENCY COMMENTS
In commenting on portions of the draft report, the U.S. Patent
and Trademark Office and the European Patent Office generally
agreed with the information presented. The Japanese Patent Of fice
provided some technical comments that GAO considered in preparing
this report. In addition, GAO received comments from patent
attomeys from these jurisdictions as well as verification from
appropriate companies that specific examples presented in this
report accurately represent their views of their experiences.
=================================================================
CHAPTER 1
INTRODUCTION
Patents are one of the primary forms of intellectual property
protection in worldwide use. There are fundamental differences
between the US patent system and those of other countries,
including Japan. For example, among the developed countries in the
world, the United States is the only one that awards patents to the
first inventor regardless of when he or she files a patent
application. Further, US patent applications are kept secret until
a patent is granted. Like most developed countries, Japan awards
patents to the first inventor who files an application. Also, 18
months after a patent application is filed, Japan publishes the
application.
According to US and Japanese patent attorneys, patents are
perceived and used differently in the United States than in Japan.
In the United States, many patent experts assert that the focus of
the patent system is to protect individual patentees and provide
them with exclusive rights to their inventions. By contrast, many
experts contend that the focus of the Japanese patent system is to
promote industrial development by diseminating technology.
In recent years, some US companies have complained about
difficulties in obtaining adequate and effective patent protection
in Japan. Since 1989, Japan has been on a US Trade Representative
(USTR) watch list of countries that lack adequate protection for
intellectual property.
IMPORTANCE OF PATENTS
A patent is the grant of a property issued by a national
government or an international intergovernmental authority for an
invention. Inventions covered by patents typically include
products as well as processes for making or using new or existing
products. While the nature of patent rights varies by country, a
patent typically gives an inventor the right to exclude others from
commercially making, using, or selling the invention during the
patent term. Patents encourage the introduction of innovative
products and technologies to the public by guaranteeing their
owners a limited exclusive right to whatever economic reward the
market may provide. Any violation of the right is considered an
infringement.
Patent protection is most important for industries with
products that are easy to duplicate, have long product life cycles,
and have high front-end research and development costs. Several
studies have shown that patents are most important for chemical,
pharmaceutical, and biotechnology products and generally not as
important for primary metals, electrical equipment, instruments,
office equipment, automobiles, rubber and textiles.
Strengthening protection for intellectual property rights,
including patents, emerged in the 1980s as one of the more
important international trade issues for the United States. Before
then, the U.S. government viewed protection of such rights largely
as a technical matter and not as a trade policy issue broadly
affecting U.S. competitiveness. The recent increase in concern over
inadequate protection of intellectual property rights abroad stems
in part from the perceived decline in U.S. competitiveness in
several key high-technology sectors and the economic development of
Japan and several newly industrialized countries. Some U.S.
industries maintain that the inability to obtain strong protection
for their intellectual property overseas has contributed to this
decline. U.S. interest in strengthening intellectual property
protection is not surprising since the United States is a world
leader in inventing new technologies.
U.S., JAPANESE, AND EUROPEAN PATENT SYSTEMS
The three major patent systems in the world today are those of
the United States, Japan, and Europe. In the United States, the
patent system is administered by the U.S. Patent and Trademark
Office (PTO) within the Department of Commerce. In Japan, it is
administered by the Japanese Patent Office (JPO) within the
Ministry of International Trade and Industry.
In Europe, patents can either be obtained through national
patent offices in individual European countries or through a
centralized organization known as the European Patent Office (EPO).
EPO, founded in 1977 under the European Patent Convention, issues
"European patents" that are valid in up to 17 European countries on
the basis of a single application and an examination procedure
using uniform standards.2 Applicants can designate in which of the
17 countries they would like to obtain patent protection. A
European patent gives its holder the same rights in the countries
designated as does a national patent. Patent enforcement matters
are governed by national law and are under the jurisdiction of
national courts. For convenience, European and foreign companies
are increasingly filing in Europe through EPO rather than in
individual countries. According to an EPO official, about half of
U.S. applicants file in Europe through EPO.
EPO member states are Austria, Belgium, Switzerland, Germany,
Denmark, Spain, France, the United Kingdom, Greece, Ireland, Italy,
Liechtenstein, Luxembourg, Monaco, the Netherlands, Portugal, and
Sweden.
The United States, Japan, and most European countries are
parties to the Paris Convention for the Protection of Industrial
Property. The convention allows foreign applicants to file their
patent applications in member countries up to 12 months after first
filing in their country of origin, while retaining their claim to
novelty. U.S. firms, thus, have 1 year after filing a U.S.
application to file in Europe or Japan.
[ In 1883, 11 countries established the International Union for
the Protection of Industrial Property by signing the Paris
Convention. As of 1993, 108 countries were party to the convention.
The convention requires each contracting country to grant the same
protection to nationals of other contracting countries as it grants
to its own nationals. ]
DIFFERENCES BETWEEN U.S. AND FOREIGN PATENT SYSTEMS
The U.S. patent system varies widely from that of other
countries. The United States, for example, is the only developed
country that uses a "first-to-invent system." Under this system,
when there are two or more applicants for the same invention, the
applicant who legally establishes the earliest invention date will
receive the patent.
When two or more persons are claiming substantially the same
invention, U.S. PTO initiates a proceeding to determine priority
among the inventors. This proceeding is termed an "interference".
The party that U.S. PTO finds has made the invention first based on
a number of factors will be awarded the patent. Interference
proceedings are fairly rare in the United States, affecting
substantially fewer than 1 percent of the total applications filed
each year. Further, less than one-tenth of 1 percent of all
patents are awarded to someone other than the first to file.
Table 1.1 highlights the major differences between the U.S.,
European, and Japanese patent systems.
-----------------------------------------------------------------
TABLE 1.1
Patent System Features US PTO Japan JPO Europe EPO
Patents granted on the NO YES YES
basis of first-to-file
Filing permitted in any YES NO Any
European
language?
Convention
languages
Are patent applications No, secret 18 months 18 months
published? until patent after filing after
filing
is granted
Can patent examination NO YES, for 7 years Yes,for 6 months
be deferred? after
18-month
publication
Is there an opposition NO, but other Yes, before Yes,
after system? parties can patent is patent is
request granted granted
examination
Patent term 17 years from 15 years from date 20 years from
patent issuance of publication for filing
opposition purposes
but not more than
20 years from filing
Grace period (amount of 1 year with no 6 months with 6 months with
time inventors have to restrictions restricted restricted
file patent applications on disclosure disclosure disclosure
after their inventions by inventor permitted permitted
have been made public)
-----------------------------------------------------------------
Japan's patent system was originally patterned after Germany's,
and is fairly similar to the system used by EPO. One feature of
the Japanese system that is different from that in the United
States and Europe is that US PTO and EPO allow applications to be
filed in different languages, whereas JPO accepts applications only
in Japanese. US PTO will accept applications in any language, but
an English version must be submitted within 2 months. EPO will
accept applications in languages of the countries that are party to
the European Patent Convention, but a translation must subsequently
be submitted in English, French or German. In EPO, the language
of the proceedings, i.e. English, French or German, is referred to
in the case of any patent disputes, including infringement suits.
In U.S. PTO, the original language version is referred to in the
case of any disputes.
Another difference between the US patent system and that in
Japan and Europe involves patent examination. Unlike the United
States, JPO and EPO examine applications only upon request; in
Europe, an applicant has 6 months after publication of the search
report to request an examinaton, and in Japan he or she has 7 years
from filing. Failure to request an examination results in the
application's being deemed withdrawn. (The reasons that applicants
may decide not to request examination are discussed in ch. 4.) U.S.
PTO, by contrast, examines all patent applications automatically.
In addition, JPO and EPO both have "opposition systems" whereby
third parties can oppose the granting of a patent on specific
grounds. In Japan, however, applications can be opposed before a
patent is granted, whereas in EPO they can only be opposed during
a 9-month period after they are granted. The United States does not
have an "opposition system" per se. However, it has a limited
reexamination procedure whereby parties can request that U.S. PTO
reexamine patents after they are granted to determine their
validity.
The term of a patent, i.e., the duration of patent protection,
is also different in the United States than it is in Japan and
Europe. In the United States, the patent term does not begin until
the patent is granted, and then it extends for 17 years. Patents
issued by JPO are valid for 15 years from the date the application
is published for opposition (which occurs after JPO has completed
its examination of the patent application), but not more than 20
years from the date when the application was filed. Patents issued
by EPO are valid for 20 years from the filing date.
Another difference between the U.S. patent system and that in
Japan and Europe involves the "grace period", which is a fixed
period of time immediately preceding the filing of a patent
application during which certain disclosures of the invention to
the public are permitted without prejudicing the patentability of
the invention. In the United States, inventors have a grace period
of 1 year in which to file an application after they have disclosed
their invention to the public, with no restrictions on the ways
they may disclose their inventions. JPO and EPO have a grace
period of 6 months, but only certain types of disclosures are
allowed without loss of the right to a patent.
Currently, multilateral efforts are taking place to harmonize
international patent procedures and aspects of substantive law
through an agency of the United Nations--the World Intellectual
Property Organization. If a harmonization treaty is enacted, it
would cause significant changes in the U.S. and Japanese patent
systems, and, to a lesser extent, in the European system. (See ch.
6 for more information on patent harmonization efforts.)
THE PATENT EXAMINATION PROCESS IN THE THREE SYSTEMS
While there are major variations among the patent systems in
the United States, Europe, and Japan, the patent examination
process is fairly similar in the three jurisdictions. The merits
of a patent application are decided during the examination. After
an application is submitted to the patent offices in these regimes
(and after an examination is requested in Europe and Japan), it is
assigned to an examiner with expertise in the subject area of the
application. The examiner reviews the application and compares it
with the "prior art", the body of relevant information, including
patent and nonpatent literature. The examiner then reaches a
preliminary decision on the patentability of the proposed
invention.
An "office action" notifies the applicant of the examiner's
decision. It states reasons for any adverse decision, objection, or
requirement and provides information that may assist the applicant
in judging whether to pursue the application. If the invention is
not considered patentable, the claims will be rejected. (The claims
define the scope of protection requested by the inventor.) Some or
all of the claims may be rejected on the first action by the
examiner;8 relatively few applications result in patents as
originally filed. In all three jurisdictions, applicants have the
right to appeal the rejected claims.
CULTURAL DIFFERENCES BETWEEN THE U.S. AND JAPANESE PATENT SYSTEMS
According to U.S. and Japanese patent attorneys, there are
significant differences in the way patents are perceived and used
in the United States and Japan, with the European system being
somewhere between the two. The United States, many patent experts
assert, seeks to foster technology development by protecting
individual patentees and granting them exclusive rights to their
inventions. The policy of U.S. patent law is that anyone who has
invested time and labor in developing a patentable product or
process should have the right to exclude others completely from the
enjoyment of his or her invention. This belief is apparent from
several features of the U.S. system. For example, U.S. applicants
do not have to disclose their inventions to the public until a
patent is granted; if they do not receive a patent, they can choose
to keep their inventions secret. The first-to-invent principle
also reflects the U.S. attitude that the first inventor is entitled
to the patent, not the inventor who is the most expeditious filer
of an application.
By contrast, patent experts contend that the Japanese patent
system seeks to promote technology development by disseminating
technology, rather than rewarding inventors with exclusive rights.
Various features of the Japanese system, such as the provisions for
18-month publication, 7-year deferred examination, and pre-grant
oppositions, foster this goal. These provisions serve to make
innovations available to industry before exclusive rights are
granted, enabling industry to learn from the technology and make
further innovations. Another feature of the Japanese system that
reflects its promotion of industrial development is that Japan
provides for compulsory licensing of patented inventions if a
second patent improves on the original patented invention.
CURRENT CONCERNS ABOUT JAPAN'S PATENT SYSTEM
In recent years, some U.S. companies have expressed concern
about difficulties in obtaining and enforcing patents in Japan. For
example, at Senate hearings on the Japanese patent system in 1988
and 1989, several U.S. companies identified aspects of the Japanese
patent system that were problematic for them, particularly delays
in obtaining patents and the narrow scope of patent protection
granted. They also complained about "patent flooding" by Japanese
industry (filing excessive numbers of applications claiming minor
technical improvements) resulting in pressure on U.S. companies to
license their technology to Japanese competitors. Since 1989, USTR
has placed Japan on a watch list of countries with inadequate
protection for intellectual property, partly because of the
reported problems with its patent system.
OBJECTIVES, SCOPE, AND METHODOLOGY
At the request of Senators John D. Rockefeller IV and Dennis
DeConcini, and former Senator Lloyd Bentsen, we reviewed patent
protection for U.S. products in Japan as compared with that in the
United States and Europe. Specifically, we examined (1) U.S.
companies' experiences in obtaining patents in Japan as compared
with those in the United States and Europe; (2) the sources of U.S.
companies' patent problems in Japan and recent changes in the
Japanese patent system; (3) practices that may affect U.S.
companies' patent experiences in Japan; (4) U.S. companies'
experiences in enforcing patents in Japan as compared with those in
the two other jurisdictions; and (5) progress toward greater
international patent harmonization and U.S. firms' views on whether
harmonization would improve their patent experience in Japan.
To obtain information on U.S. firms' patent experience in the
United States, Europe, and Japan and their views on international
patent harmonization efforts, we sent a mail survey to 346
U.S.-based companies. The survey was sent out in late August 1992,
and follow-up mailings were made through December 1992. We
received responses from 300 of the companies, for an 87-percent
response rate. (A copy of the mail questionnaire and the overall
responses for each question is in app. I). We subsequently
telephoned more than 20 of the companies surveyed to obtain
additional information on or clarification of their responses.
We surveyed companies that were top U.S. patent holders (in
terms of the number of patents held) in three sectors--chemicals,
semiconductors, and biotechnology. These sectors were selected
because they (1) are considered ones in which U.S. and Japanese
companies have a strong presence; (2) are ones to which patents are
considered important; and (3) are inclusive of one mature
industry--chemicals; one of intermediate maturity--semiconductors;
and one emerging industry--biotechnology.
Since there was no information available on leading patent
holders in Japan, we surveyed top U.S. patent holders, a universe
that included over 90 percent of U.S. companies that were among the
top 200 patent holders in the United States in 1991. The universe
included only companies with U.S. addresses; however, it included
several U.S. subsidiaries of foreign companies. We did not include
universities or other nonprofit organizations in the survey
universe. The survey results are based on responses from companies
that had filed for patents in Japan in the past 10 years--a group
that included 92 percent of the survey respondents.
In addition to the mail survey, we conducted interviews with 58
U.S. companies that were patent holders in the selected sectors to
obtain detailed information about their patent strategy and
experience in Japan as compared with that in the United States and
Europe. Thirty-five of these companies were among the top 20 U.S.
patent holders in at least one of the three sectors, accounting for
about two-thirds of top patent holders in these three sectors.
These interviews were conducted between June and September 1992.
To obtain information on the U.S., European, and Japanese
patent systems, we interviewed more than 40 patent attorneys in
private practice as well as several academics and of ficials from
various trade and intellectual property associations. In addition,
we obtained information on the three patent systems and on
negotiations over international patent harmonization from officials
at the U.S. Patent and Trademark Office, the Department of
Commerce, and the Office of the U.S. Trade Representative. We also
reviewed numerous academic and legal articles on patents and
comparative patent systems. Information in this report concerning
European and Japanese law does not reflect original analysis on our
part but is based on discussions with patent attorneys and other
secondary sources.
In Europe, we discussed the ongoing multilateral negotiations
on intellectual property rights with officials from the World
Intellectual Property Organization (WIPO); the Permanent Missions
of Japan, Canada, and the European Community to the International
Organizations in Geneva; and the General Agreement on Tariffs and
Trade (GAIT). We also discussed these negotiations with offcials at
the Commission of the European Communities and the German Ministry
of Justice. In addition, we met with officials from six European
industry and intellectual property associations to obtain their
views on multilateral patent negotiations and on patent protection
in the United States, Europe, and Japan.
In Germany, we also met with officials from the European Patent
Office and the German Patent Of fice to discuss patent procedures
in these regimes and to obtain their views on patent harmonization
efforts. To obtain information on European firms' patent experience
in Japan as compared with that in the United States and Europe, we
met with patent attorneys from nine European companies and obtained
written information from two others. All of these companies were
among the top eight European patent holders in the United States in
the selected sectors.
In Japan, we met with officials from the Japanese Patent Office
to discuss Japanese patent procedures and proposed changes in their
system as well as changes that have recently been adopted. We also
discussed U.S. company complaints about the Japanese patent system
and obtained JPO views on the reasons why U.S. companies may be
experiencing problems. In addition, we met with representatives
from six Japanese patent firms that file patents for U.S. companies
in Japan. Our purpose was to discuss their U.S. clients' patent
strategy and experiences in Japan and the possible reasons for any
problems encountered. To discuss patent enforcement issues, we met
with two Japanese attorneys who have been involved in representing
U.S. and Japanese companies in patent infringement suits in Japan
and with several academics and former judges.
Further, in Japan, we met with representatives from several
associations, including the Japanese Patent Association and the
Japanese Patent Attorneys Association, to discuss their views on
the Japanese patent system as compared with the U.S. and European
systems, and on multilateral efforts to achieve patent
harmonization. We also met with patent counsel from two Japanese
companies and one U.S. company with operations in Japan to discuss
their patent strategy and experience in Japan as compared with that
in the United States and Europe. Finally, we met with officials of
the Japanese Ministry of Foreign Affairs to discuss their views on
patent harmonization.
We performed our review from December 1991 to May 1993 in
accordance with generally accepted government auditing standards.
U.S. PTO, EPO, and JPO provided comments on portions of the
draft report. U.S. PTO and EPO generally agreed with the
information presented. JPO provided some technical comments that we
considered in preparing this report. Private U.S. and Japanese
patent attorneys also reviewed relevant sections, and appropriate
companies verified that specific examples presented in this report
accurately represent their views of their experiences.
=================================================================
============
CHAPTER 2
U.S. FIRMS' EXPERIENCES IN
OBTAINING PATENTS IN JAPAN
To develop an understanding of U.S. firms' patent experiences
in Japan, we surveyed companies that were top U.S. patent holders
(in terms of the number of patents held) in three
sectors--chemicals, semiconductors, and biotechnology. Ninety-two
percent of the 300 U.S. firms that responded to our survey had
filed patent applications in Japan in the past 10 years. (All
subsequent survey results are based on responses from companies
that had filed patent applications in Japan in the past ten years).
Sixty-eight percent held 10 or more Japanese patents. The majority
of the responding firms were large. Almost 60 percent had annual
sales of over $1 billion. Ninety percent were either U.S. companies
or subsidiaries of U.S. companies; 10 percent were subsidiaries of
foreign firms.
According to the survey results, the patent problems companies
reported in Japan were generally more widespread than those they
experienced in the United States or Europe. Of the responding
companies, more than three times as many were dissatisfied with
their overall patent experience in Japan as compared with that in
the United States and Europe. Thirty-nine percent expressed
dissatisfaction with their patent experience through JPO, while 13
percent were dissatisfied with U.S. PTO and 3 percent with EPO.
These results indicate that U.S. companies were not necessarily
partial to U.S. PTO since the responding companies were generally
more satisfied with their overall patent experience with EPO than
with U.S. PTO.
Sixty-five percent of the responding companies reported at
least one major problem in obtaining patents in Japan. In contrast,
25 percent reported at least one major problem in Europe, and 17
percent in the United States. In obtaining Japanese patents, the
companies frequently cited problems with the length of time
involved, the cost, the scope of patent protection granted, and the
ability to obtain patents for pioneering inventions. However, only
6 percent of the companies reported that patent problems in Japan
had had a serious adverse effect on their company. Some companies
that reported significant patent problems in Japan told us that
these problems had not yet caused adverse effects because they
currently had few sales in Japan. Some corporate patent counsel
noted that it is difficult to isolate the effect of patent problems
in Japan from other problems their companies face in trying to
penetrate the Japanese market.
The European company officials we interviewed expressed similar
views on the length of time involved and the more limited scope of
protection granted in Japan. However, European company of ficials
expressed overall satisfaction with the patent protection their
firms have received in Japan, as well as in Europe and the United
States.
PROFILE OF U.S. FIRMS RESPONDING TO GAO SURVEY
Figure 2.1: Size of Responding Firms, by 1991 Sales
56% Over $1 billion in sales
21% $100 million - $1 billion in sales
20% Less than $100 million in sales
3% Unable to estimate
The responding firms had the following other characteristics:
- Almost half (49 percent) had over 10,000 employees worldwide.
Thirty-two
percent had between 500 and 10,000 employees, and 19 percent
had 500 or
fewer employees.
- Seventy percent were established before 1971, and 21 percent
were
established in 1980 or later.
- Ninety percent were either U.S. firms or subsidiaries of U.S.
firms.
Nine percent were subsidiaries of European firms, and 1
percent were
subsidiaries of Japanese firms.
Figure 2.2 shows the filing activity of the responding firms, by
sector.
Figure 2.2: Current Flllng Actlvity of Responding Firms, by Sector
50% Chemical
41% Biotechnology
35% Semiconductor
Almost half of the responding companies were either diversified
or not primarily involved in these three sectors. Sixteen percent
described themselves as primarily chemical companies, 15 percent as
primarily biotech companies, and 14 percent as primarily
semiconductor companies.
Small firms made up about one-third of firms filing for
biotechnology patents, while large firms formed the majority of
companies filing for chemical patents. Almost half of the firms
filing for semiconductor patents were large. (We defined "small"
firms as those with 1991 worldwide sales of less than $100
rnillion. We defined "large" firms as those with 1991 worldwide
sales of at least $1 billion.
U.S. FIRMS' PATENT ACTIVITY IN THE THREE SYSTEMS
During the past 5 years, the patent filing activity of the
responding firms in the United States, Europe, and Japan was as
follows:
- One hundred percent had filed patent applications in the
United States,
and 95 percent had 10 or more active U.S. patents.
- Ninety-nine percent had filed applications in Europe.
Ninety-two percent
had filed most or all of their European patent applications
through EPO.
Seventy-nine percent held 10 or more active patents in
Europe.
- Ninety-two percent had filed in Japan, and 68 percent had 10
or more
active Japanese patents.
U.S. FIRMS' BUSINESS ACTIVITY IN JAPAN
A majority of the responding firms have extensive business ties
in Japan. In the past 5 years, 90 percent of the firms said they
had conducted business arrangements with Japanese companies,
including licensing arrangements and joint ventures. Currently, 52
percent of the firms wholly or partly own subsidiaries or
manufacturing facilities in Japan, a majority of which have been
established for at least 10 years.
The responding U.S. firms considered the Japanese market to be
less important than the U.S. and European markets. Of the
responding films, 98 percent said the U.S. market was of "great" or
"very great" importance, while 58 percent said the Japanese market
was of similar importance to their firm. Seventy-eight percent
believed that the European market was of great or very great
importance.
SURVEY RESULTS:
U.S. COMPANIES' OVERALL EXPERIENCE IN OBTAINING PATENTS IN JAPAN
Of the U.S. firms responding to our survey, 39 percent reported
that they were dissatisfied with their overall experience
prosecuting patents through JPO, while 21 percent said that they
were satisfied. In contrast, most companies were satisfied with
U.S. PTO and EPO. Figure 2.3 shows the U.S. companies' overall
level of satisfaction with prosecution through JPO, U.S. PTO, and
EPO. As shown in the figure, the responding firms were not
necessarily partial to U.S. PTO since they were generally more
satisfied with their overall experience with EPO than with U.S.
PTO.
(The preparation of a patent application and the process of
obtaining a patent is known as "patent prosecution".)
Figure 2.3: Percent of Firms That Are Satisfied/Dissatisfied With
Their Overall Patent Prosecution Experience in Japan, the United
States, and Europe
Japan: 21% Satisfied 39% Dissatisfied
United States: 62% Satisfied 13% Dissatisfied
Europe: 74% Satisfied 2% Dissatisfied
To compare U.S. companies' patent experience in Japan with that in
the United States and Europe, we asked companies to consider four
aspects of the patent prosecution process that may have been
problematic for them in these jurisdictions in the past 5 years:
- the length of time needed to obtain a patent,
- the cost of obtaining a patent,
- the scope of patent protection granted, and
- the ability to obtain protection for pioneering inventions.
(Pioneering inventions are those that involve substantially
new,
or breakthrough, technologies).
As shown in figure 2.4, 65 percent of the companies reported
experiencing problems in at least one of the above areas in Japan
and indicated on the survey that it was a "great" or "very great"
problem to their firm. Twenty-five percent reported at least one
major problem of this magnitude in Europe and 17 percent in the
United States.
Figure 2.4: Percent of Firms with Great Patent Problems in Japan,
Europe, and the United States
UNITED
JAPAN STATES EUROPE
Length of time to obtain patent 42% 6% 5%
Cost of obtaining patent 42% 20% 12%
Scope of claims granted 41% 6% 5%
Ability to obtain patents for 39% 9% 7%
pioneering inventions
Experienced at least one of 65% 25% 17%
these problems
JAPAN'S PATENT APPROVAL PROCESS IS LENGTHY
Forty-two percent of the responding companies said that "patent
pendency" in Japan, or the length of time needed to obtain a
patent, was a "great" or "very great" problem, compared with 5
percent that had similar problems with pendency in the United
States and 6 percent in Europe. One clear result of the long
pendency period in Japan is a shorter patent life, which begins at
the time an application is filed in Japan. Several company of
ficials noted that excessive delays in obtaining patents "eat into
the effective patent life." As discussed in chapter 3, patents
usually take 6 to 7 years to be issued in Japan.
Another common complaint from the companies we interviewed was
that it takes too long for JPO to begin an examination of the
patent after the applicant requests one. Several corporate patent
counsel said that it takes at least 3 years for an examination to
begin after it is requested. Many company representatives
complained that the combination of publishing patent applications
after 18 months in Japan and the long delays in the start of an
examination allows competitors to "produce around" their products,
making only minimal changes without infringing on the patent.
JPO GRANTS NARROWER SCOPE OF PROTECTION
The scope of patent protection outlines the boundaries of the
invention for which the inventor holds exclusive rights. Under
Japanese patent practice, patent claims are construed as narrowly
as possible. Forty-one percent of the companies reported that the
scope of patent protection they received for their inventions from
JPO was a "great" or "very great" problem. In contrast, 5 percent
said that the scope of protection granted by U.S. PTO was a major
problem, and 6 percent said that the scope granted by EPO was a
major problem.
To further address the issue of patent scope, we asked
companies to rate the scope of patent protection they received in
Japan, Europe, and the United States, using a scale from "much too
broad" to "much too narrow." As shown in figure 2.5, about six
times as many of the responding companies indicated that the scope
of protection granted in Japan was too narrow, as compared with
companies that said the scope granted in the United States was too
narrow.
Figure 2.5: Percent ot Firms That View the Scope of Patent
Protection as Too
Narrow in Japan, Europe, and the United States
71% Japan
25% Europe
12% United States
The patent counsel at a major U.S. chemical company said that
in Japan, the scope of his firm's claims was "narrowed by 85
percent of what it is granted in the United States or Europe." A
patent attorney at another large U.S. firm said that in two cases,
where his firm's U.S. patents were successfully enforced in the
United States, the scope of the corresponding Japanese patents for
these products was too narrow to bring an infringement action in
Japan.
PIONEERING INVENTIONS FACE PARTICULAR DIFFICULTIES
More than four times as many companies viewed their ability to
obtain a patent for a pioneering invention as a problem in Japan as
compared with that in Europe or the United States. As shown in
figure 2.4, 39 percent found obtaining protection for pioneering
inventions from JPO to be a "great" or "very great" problem, while
9 percent indicated similar problems with EPO and 7 percent with
U.S. PTO.
In comparing their experience in obtaining patents for
pioneering inventions in Japan with that in the United States and
Europe, 44 percent of the responding companies said that they
experienced Umuch more" or "somewhat more" difficulty in Japan. In
addition, many company officials told us that it is particularly
difficult to obtain patents on broad, commercially valuable
technologies in Japan or on those that involve important new
technologies. Several U.S. patent attorneys told us that JPO does
not provide broad protection for emerging technologies until
Japanese industry is well established in the field or unless there
are no Japanese competitors. For example, U.S. companies
experienced the following difficulties:
- The patent counsel at a U.S. electronics company said that in
the early and
mid-1980s, his firm had encountered no problems in Japan in
obtaining the
first 10 patents related to an important new telecommunications
technology.
In his view, at that time Uno one understood the technology's
importance."
Since then, however, he said that the technology has become the
U.S.
standard in its field, and Japanese companies have become
interested in
developing it. During the past 5 years, the firm suddenly
stopped receiving
additional Japanese patents on this technology although the
corresponding
patents have been issued "all around the world."
- The patent counsel at a biotechnology firm said a significant
problem with
the Japanese patent system is that applicants are granted
equally narrow
patent protection regardless of their product's level of
innovation, or
the amount of time and money invested in developing it. He said
that in
the United States, pioneers in a field are generally given broad
patent
protection.
ALLIED-SIGNAL'S EXPERIENCE WITH A PIONEERING TECHNOLOGY
A case that is often cited as an example of the (lifflculty in
obtaining a patent for a pioneering invention in Japan is
Allied-Signal's experience with its breakthrough amorphous metal
technology, known as "Metglas", in the 1980s. Officials from
Allied-Signal told us that their overall experience in securing
patent protection in Japan has been favorable. However, based on
their experience with Metglas, they believe that pioneering
inventions that are targeted as "critical technologies" by the
Japanese government face particularly long delays at JPO.
In 1973, Allied-Signal filed an application in Japan for a
composition patent related to amorphous metals. In 1977, it filed
an application to protect a new process for casting the material
and also requested examination of the composition patent. In the
late 1970s, Allied-Signal officials said Japan's Ministry of
International Trade and Industry organized and subsidized a
consortium of Japanese companies to develop amorphous metal
technology.
Six companies and individuals opposed Allied-Signal's
application on the composition patent after it was published for
opposition in 1980, and in 1982, JPO rejected the application.
However, Allied-Signal appealed the decision, and the patent was
eventually granted in 1984.
Allied-Signal requested examination of the process patent in
1979. After it was published for opposition in 1986, seven
companies and individuals filed oppositions to it. After almost
3-1/2 years, JPO decided in Allied-Signal's favor in 1989. While
JPO granted the respective patents in 1984 and 1989, they were due
to expire in 1993 and 1997 (20 years after the initial filing
date). Thus, less than 10 years of patent life remained as a
result of the delays in issuance.
Allied-Signal had several complaints about JPO'S handling of
its patent applications. For example, company officials told us
that JPO intentionally reassigned examiners to their cases several
times to delay patent prosecution. Company officials also contend
that JPO purposely delayed patent issuance to allow Japanese
competitors time to catch up in developing amorphous metal
technology and to lock out Allied-Signal from the Japanese market.
(By 1987, one Japanese company had developed a similar technology).
According to company estimates, the value of the Japanese market
during this time frame totalled $90 million annually for electric
utility transformers, the major product from amorphous metals.
In the spring of 1990, Allied-Signal filed a complaint with
USTR for an investigation under section 301 of the 1974 Trade Act.
However, the case was settled when the Japanese government agreed
to protect Allied-Signal's manufacturing rights until 1997 and to
purchase a specified amount of the material.
(Section 301 of the Trade Act of 1974, as amended, 19 U.S.C. 2411,
provides a procedure under which affected enterprises or
individuals may petition USTR to initiate actions to enforce U.S.
rights under trade agreements. It may also be used to respond to
unreasonable, uruustifiable, or discriminatory foreign government
practices that burden or restrict U.S. commerce.)
PATENT FLOODING IS NOT RAMPANT, BUT MAY BE TARGETED
"Patent flooding"-the practice of filing many patent
applications claiming minor, incremental changes surrounding
another patentee's core technology--has been publicized as a
widespread problem in Japan. Of our survey respondents, 12 percent
said patent flooding was a "very great" or "great" problem in
Japan. Five percent reported that it was a very great or great
problem in the United States, and 3 percent in Europe. Both U.S.
and Japanese patent attorneys agreed that pioneering inventions
and/or technology that promise high commercial returns are usually
the targets of patent flooding in Japan when it occurs. Some
examples of the problems U.S. firms have reported with patent
flooding are as follows:
- The patent counsel at a major U.S. semiconductor manufacturer
told
us that it is very common for Japanese competitors to surround
his
company's core patents with patent applications that contain no
substantive improvements. Usually, his company will negotiate
with its
competitors to abandon these minor patent applications. The
problem, the
attorney noted, is that the company does not have the money to
monitor
all its competitors' patent applications in Japan. Therefore,
in cases
where JPO grants minor patents that border on its own
invention, the
company must negotiate a cross-licensing agreement, exchanging
its
technology for the competitor's.
- A patent counsel for a chemical company described a case
involving a
breakthrough synthetic fiber, for which it had filed several
patent
applications in Japan in the 1970s. Within 10 years, a major
Japanese
competitor had filed 150 patents directed at making incremental
changes
in the U.S. company's claimed inventions. In the company
official's view,
the competitor's objective was to limit the U.S. inventor's use
of its own
technology. He noted that the Japanese company attempted to
pressure
the company into cross-licensing its technology, but the U.S.
company
refused.
- The patent counsel for a large U.S. company told us that
after his firm had filed an application for a patent on a
specialized light bulb, a Japanese firm notified his firm that
it had filed 200 applications on a related technology and was
interested in a crosslicense from his firm. The patent counsel
said that his firm was unable to use a similar filing strategy
in Japan because the costs, particularly for translation, would
be prohibitive. In addition, he noted that his firm could never
build a "blanket" portfolio of patents around its own
inventions to protect a technological area because of the high
filing and translation costs in Japan.
PRE-GRANT OPPOSITIONS ADD TO DELAYS
Forty-five percent of the U.S. companies responding to our
survey said that at least one of their patent applications was
opposed in Japan in the last 5 years. Of these, 71 percent said
that their opposed patent application had 1 to 5 opponents, 15
percent had 6 to 10 opponents, 9 percent had 11 to 50 opponents,
and 2 percent had more than 50 opponents. Of the companies that
reported receiving at least one opposition, 10 percent said that it
had adversely affected their companies to a "great" or "very great"
extent. U.S. and Japanese patent attorneys told us that pre-grant
oppositions in Japan can delay patent issuance anywhere from 2 to
5 years, and, in some cases, extend the process of obtaining a
patent beyond its useful life.
U.S. and Japanese patent attomeys also told us that
applications for pioneering inventions are commonly the target of
oppositions because of their high technological and commercial
value. Moreover, several U.S. attorneys said they had firsthand
knowledge of Japanese companies working together to oppose certain
applications, both domestic and foreign. Some of the specific
problems\encountered included the following:
- One U.S. attomey described his company's experience with a
patent application for an advanced material generally
acknowledged to be a pioneering invention. When the
application, which was initially rejected by JPO but allowed on
appeal, was published for opposition, it was opposed by 18
competitors, 17 of which were Japanese firms. The U.S. attomey told
us that none of the 17 Japanese oppositions offered any new
references for pending or existing patents, and all 17
oppositions contained attachments bearing the same photocopier
marks, suggesting to the attorney that the Japanese firms
collaborated on an opposition strategy against the U.S.
company.
- The patent counsel at a major chemical company told us that
one of his firm's applications for a pigment encountered six
opponents, and the opposition period lasted 11 years. The
patent was issued with 1 month of its term remaining. He noted
that the process can take so long because JPO examiners do not
review oppositions concurrently; rather, they are decided upon
consecutively.
- The patent counsel for a biotechnology firm told us that
oppositions in Japan posed a very great problem for his
company. In one important case involving a breakthrough drug,
his company's application faced 28 Japanese opponents and 7
European opponents.
FILING FOR PATENTS IN JAPAN IS MORE COSTLY
Processing a patent application in Japan involves costs similar
to those incurred in other jurisdictions: filing fees paid to the
govemment patent office; fees paid to the patent attomey preparing
and prosecuting the application; and fees paid for translation
incurred when filing in foreign countries. Forty-two percent of the
respondents said that the cost of processing an application in
Japan was a "very great" or "great" problem, while 20 percent
stated that this cost was a similar problem in Europe, and 12
percent in the United States.
According to a 1993 survey on patent-filing costs in 32
countries, the cost of filing in Japan for foreign applicants was
the highest in the world, due to translation costs and fees charged
by "benrishi" (Japanese patent attorneys.) For example, in
comparing the total costs of filing in Japan to those in the United
States, the survey found that the average cost of filing a 25-page
patent application in Japan was $4,772, while in the United States
the same case was $1,390.
PATENT ATTORNEY FEES
Patent attomey fees in Japan were the highest of any of the
countries surveyed. For example, in comparing attorney fees for
prosecuting a 25-page application, the survey found that Japanese
benrishi charged about three times more than U.S. patent attomeys.
In addition, in Japan, patent attomeys are members of an
association that establishes a standard fee schedule with separate
schedules for domestic and foreign clients. A few U.S. patent
attomeys said that Japanese patent attorneys have told them that
large Japanese companies are able to negotiate special deals that
exempt them from the benrishi's fixed schedule. One corporate
patent counsel noted that the fixed fee schedule for benrishi
allows Japanese patent firms to charge the same fees for all the
services they perform as if they were done by an attorney, although
many of them may actually be performed by a paralegal or a
secretary.
TRANSLATION FEES
Fees paid to Japanese patent attomeys by foreign clients
include the cost of translating the application into Japanese. In
addition, in many cases, Japanese patent attomeys must have office
actions, prior art references, and oppositions translated. The cost
of translating English into Japanese is calculated on a per-word
basis and is considerably more expensive than translating into a
European language. For example, according to the survey on patent
filing costs, the average per-word cost for English/Japanese
translation is 43 cents, while translation into German and French
is about 32 cents per word, a difference of 34 percent. This
expense can be significant since patent applications usually range
from 15 to 125 pages. [A typical patent application ranges from 15
to 40 pages. However, applications in the computer and
biotechnology sectors tend to be longer, up to 100 to 125 pages in
some cases.
U.S. FIRMS' VIEWS OF THE JAPANESE PATENT OFFICE
As shown in figure 2.6, companies were least satisfied with the
quality of patent examinations conducted by JPO, and most satisfied
with those conducted by EPO.
Figure 2.6: Percent of Firms That Are Satisfied/Dissatisfied With
the Quality of Patent Examination in Japan, the United States, and
Europe
Japan: 37% satisfied 23% dissatisfied
United States: 61% satisfied 19% dissatisfied
Europe: 84% satisfied 2% dissatisfied
JPO'S OFFICE ACTIONS VIEWED AS UNCLEAR
Nineteen percent of the responding companies said they were
satisfied with the clarity of of fice actions issued by JPO, while
44 percent were dissatisfied. In comparison, a majority (55
percent) of the companies were satisfied with the office actions
issued by U.S. PTO, and 15 percent expressed dissatisfaction. EPO
received the highest rating for the clarity of its office actions,
with 71 percent of the companies reporting satisfaction and 5
percent dissatisfaction. A common complaint that U.S. patent
attorneys made was that JPO of fice actions were overly brief and
vague, to the point of being cryptic. However, other U.S. patent
attorneys we interviewed told us that in the past 5 years JPO
office actions have been getting longer and more detailed. Problems
some U.S. firms have had with JPO office actions include the
following:
- Company officials at a major U.S. firm told us that JPO
examiners will not clarify the basis for rejecting patent
claims and will not discuss problems with individual claims
within a group of claims. The examiners' "boilerplate"
rejections do not help the applicant determine what the basis
for the rejection was. Therefore, the applicant will attempt to
limit the scope of the protection they are seeking in an effort
to eliminate the specific claim to which the examiner is
objecting.
- Another corporate patent counsel said that his firm has
received vague and ambiguous rejections, citing unrelated and
irrelevant Japanese references for prior art without any
explanation of how the references make his application
unpatentable. He added that such terse office actions force his
firm to study the entire reference and construct a possible
rejection to which it can respond, which requires extensive effort
and expense.
JPO'S REQUIREMENTS FOR EVIDENCE TO SUPPORT CLAIMED INVENTIONS
Thirty-four percent of the companies expressed satisfaction
with the extent of disclosure, or the supporting evidence required
to describe their claimed invention at JPO. An equal number (34
percent) expressed dissatisfaction with the extent of disclosure
required by JPO. In contrast, almost three-fourths of the
responding companies were satisfied with the extent of disclosure
required to support their claims by both U.S. PTO (74 percent) and
EPO (71 percent). The patent counsel at a pharmaceutical company
told us that JPO requires applicants to support all its claims with
a full range of data. To satisfy the JPO'S requirements, he said
applicants must pursue additional development of the product or
process in question, which he believes is unnecessary and draws
money away from other projects.
JPO TREATMENT OF U.S. APPLICANTS
Twenty-one percent of the responding companies reported that
they perceived they had been treated differently by JPO than
Japanese applicants. Nineteen percent responded that they were
"probably" treated differently, and 3 percent answered that they
were "definitely" treated differently. A majority (63 percent)
indicated that they were uncertain. The following are examples
illustrating why some U.S. firms felt they were treated differently
by JPO:
- One corporate patent counsel said that his firm has filed
several Japanese applications that it co-owned with a Japanese
company. The co-owned applications were examined much more
quickly than those the U.S. firm filed only in its own name.
- Another patent attomey we interviewed from a medium-sized
biotech company described a situation in which he had filed
patent applications in Japan. At a much later date, a Japanese
competitor filed applications with similar claims. The Japanese
competitor was successful in obtaining patent protection within
the scope of the U.S. company's disclosure, and also in
narrowing the U.S. firm's claims. The attorney noted that his
company had received broad coverage for this invention in the
United States and in Europe.
- The patent counsel for a major U.S. company said he had
experienced difficulty prosecuting an application for a medical
device, which he later learned was related to a product that a
Japanese company produced. The JPO examiner repeatedly
requested additional experimental data and detail on the
specifications, which the attorney felt were excessive (the same
device was patented in Europe without such questioning). In his
view, the examiner sought to narrow the scope of the claim so
as not to interfere with the Japanese company's product.
Asked whether the JPO'S treatment of their company has changed
in the past 5 years, the maJority (56 percent) of responding
companies said that it has remained the same. Fourteen percent
responded that it has improved "greatly" or "somewhat," and 6
percent said that it has worsened "greatly" or "somewhat". Several
companies noted that within the last 5 years, JPO has become more
willing to hold interviews with applicants regarding patent
applications.
U.S. FIRMS OF ALL TYPES EXPERIENCED PATENT PROBLEMS IN JAPAN
In our analysis of the survey results, we found that regardless
of the sector (semiconductors, chemicals, and biotechnology) in
which they were involved,9 companies reported having "very great"
or agreat" problems in Japan with patent pendency, the scope of
protection granted, the costs of obtaining patents, and the ability
to secure protection for pioneering inventions. For example, 46
percent of the biotech firms responding to our survey reported that
they had very great or great problems with the length of time
required to obtain a patent, as did 49 percent of the semiconductor
firms and 38 percent of the chemical companies. [Many of the firms
in our survey file patent applications in more than one sector.
They may experience problems in multiple sectors.]
Additionally, our survey results indicated that U.S. companies
of varying size and age were experiencing patent problems in Japan.
For example, of the firms with 1991 sales of less than $100
million, 40 percent said that they had had very great or great
problems with the scope of protection they received in Japan
compared to the 40 percent of firms that had 1991 sales of over $1
billion who responded similarly. Moreover, 41 percent of the firms
that were established before 1971 said that they had had very great
or great problems with patent pendency in Japan, while 45 percent
of firms established between 1971 and 1979 and 44 percent of
companies established after 1979 reported similar problems with the
pendency period.
Finally, there was not a great difference in the severity of
problems perceived among companies that file frequently and thus
have more experience filing in Japan and those companies that file
less frequently. For example, 48 percent of the companies that
held fewer than 10 Japanese patents reported very great or great
problems with patent pendency, while 40 percent that held 10 or
more Japanese patents reported similar problems with pendency. Of
the companies that filed 20 or fewer applications per year in
Japan, 38 percent had very great or great problems in obtaining
protection for pioneering inventions, compared with 41 percent that
filed more than 20 applications per year.
HIGH-TECHNOLOGY FIRMS REPORTED MORE PROBLEMS IN JAPAN
Our analysis of the survey results did, however, show that
high-technology companies reported "very great" or "great" problems
with patent pendency in Japan more frequently than companies not
defined as "high-tech". For example, 50 percent of the high-tech
companies reported very great or great problems with the pendency
period, while 32 percent of the other companies viewed pendency as
a very great or great problem. Forty-three percent of the
high-tech companies indicated that obtaining patent protection for
their pioneering inventions was a very great or great problem in
Japan, compared with 35 percent of the other companies that
reported a similar level of problems.
OPPOSITIONS IN JAPAN ARE RELATED TO OTHER PATENT PROBLEMS
If a company indicated that it had received pre-grant
oppositions on its patent applications, it was more likely to
report experiencing very great or great problems in Japan with
other aspects of the Japanese patent process. For example, 48
percent of the companies that reported receiving one or more
oppositions said that they had had "very great" or Ugreat" problems
with the pendency period in Japan, compared with 32 percent of
those that had never received an opposition. Additionally, 43
percent of companies that had received oppositions viewed the scope
of protection they had obtained as a very great or great problem,
compared with 36 percent of companies that had not received them.
THE IMPACT OF PROBLEMS IN OBTAINING PATENTS IN JAPAN
Several U.S. companies told us that as a result of the patent
problems they have experienced in Japan, they have decided to
reduce their patent filing there. For example, one U.S. patent
attorney told us that his firm has almost given up on patenting
anything but the most crucial inventions in Japan due to the costs,
difficulties, delays, and inability to monitor or enforce its
patents. The patent counsel at a large chemical company said that
because of the delays in obtaining patents in Japan and the limited
scope of protection granted, his company plans to file fewer
applications in Japan in the future and to invest less in Japan.
SOME U.S. FIRMS TRANSFERRED TECHNOLOGY TO AVOID PATENT PROBLEMS
Thirty-four percent of the companies responding to our survey
reported that they file for patents in Japan in order to enter into
licensing arrangements involving technology transfer to other
companies "always or almost always," "very often," or "often." In
comparison, 33 percent said that they "sometimes" file for patents
in Japan to negotiate licensing agreements involving technology
transfer; 29 percent said they "seldom if ever" do so.
In the past 5 years, 8 percent of the responding companies said
that they "definitely" or aprobably" had transferred technology to
Japanese firms solely to avoid patent problems in Japan. The great
majority (83 percent) indicated that they "definitely" or
"probably" did not enter into technology transfer agreements in
Japan solely to avoid patent problems. However, in cases where
firms responded that they definitely did transfer technology to
avoid patent problems, significant technologies were generally
involved. The following are examples of such transfers:
- The patent counsel at a chemical firm told us that about 10
years ago, his company filed an application at JPO for a
breakthrough plastic material. Soon after, a Japanese
competitor filed applications surrounding his firm's invention
with minimal, alleged improvements on the material. After the
application was published for opposition, the Japanese company
began to submit oppositions aggressively. The case is still
pending due to these opposition proceedings. When the Japanese
firm began to sell a product using technology in the U.S. firm's
pending patent, the company officials felt compelled to
negotiate a licensing agreement and earn royalty income or face
losing its technology without gaining compensation. The company
decided to license its technology. The U.S. attorney told us
that when a problematic patent case arises, he feels that he is
forced to "make peace with the Japanese on their terms" with
such an arrangement.
-Another corporate patent counsel told us that his company
generally seeks to license technology to a Japanese partner
because the Japanese firm will help it in prosecuting the
patent through JPO. He explained that his firm has had little
success in obtaining patents on its own in Japan in the past,
and in general, his firm does not anticipate receiving broad
Japanese patents on its own. Based on his experience, he said that
a U.S. company is much more likely to receive a broad Japanese
patent if it has a Japanese partner.
PATENT PROBLEMS IN JAPAN HAVE LITTLE ADVERSE EFFECT ON U.S. FIRMS
Responding to whether patent problems in Japan have had an
adverse effect on their company, 6 percent said that patent
problems had a "very great" or "great" adverse effect, and 12
percent indicated a "moderate" adverse effect. Sixty-five percent
responded that these problems had adversely affected their company
to "some" or "little/no extent".
Many companies that reported great or very great patent
problems in Japan said that these problems did not have a serious
adverse effect on their firm. Some corporate patent counsel noted
that it is difficult to isolate the effect of patent problems in
Japan from other problems their companies face in trying to
penetrate the Japanese market. They indicated that they currently
had few sales in Japan, and therefore, patent problems had not yet
had any severe consequences. Several companies explained that they
were filing in Japan mainly for defensive purposes.
Some companies that reported they were adversely affected by
patent problems in Japan told us that these problems contributed to
their difficulty in establishing market share in Japan. The
following are examples:
A U.S. patent attorney for a medium-sized electronics firm told
us that there is a distinct difference between the number of
patents that his firm has obtained worldwide and the number it
holds in Japan. This situation is problematic because his
company is involved in negotiating many licensing arrangements
with Japanese companies. He explained that the low number of
patents that his firm holds in Japan puts his company in a weak
bargaining position when it comes to negotiating these
agreements. He believes that his weakened position effectively
prevents companies like his from gaining a dominant position in
Japan and allows Japanese companies to monopolize the field.
- The patent counsel of a small U.S. biotech company said that
start-up firms face particular problems in Japan. He told us
that the narrow scope of patent rights his firm has received in
Japan allows competitors to enter the market and produce
similar products without incurring the substantial research and
development expenses that firms like his have incurred. As a
result, the value of his patents is diminished.
- The patent counsel of a large U.S. chemical company believed
that patent problems in Japan have had a great adverse effect
on his company. In his view, diffficulties in obtaining patents
in Japan affect his company's ability to expand in certain
business areas there, hindering its capacity to penetrate the
market successfully.
DOES THE JAPANESE PATENT SYSTEM GIVE JAPANESE FIRMS AN EDGE?
Asked whether they believe the Japanese patent system gives a
competitive advantage to Japanese companies over their firms, 23
percent of the companies responded that it did to a "very great" or
"great" extent, 19 percent said to a "moderate" extent, and 28
percent said to "some" or "little/no extent". Thirty percent said
that they had no opinion or no basis to judge. The following are
examples cited by some U.S. patent attorneys who felt that the
Japanese patent system gives Japanese firms a competitive
advantage:
- One U.S. patent attorney felt that Japanese companies have
easier access to and are better able to communicate with JPo
examiners about their competitors' pending applications.
-Several corporate patent attorneys complained that U.S. and
other foreign applicants face extensive delays and other
difficulties in obtaining Japanese patents, whereas Japanese
applicants do not face similar obstacles in the United States.
One attorney commented that "the Japanese take great advantage
of the U.S. patent system, while U.S. companies are de facto
prevented from obtaining patents in Japan. This is out of balance
and hurts competitiveness."
EUROPEAN FIRMS' PATENT EXPERIENCE IN JAPAN
Regarding patent pendency and the scope of protection granted
by JPO, the patent counsel of the European firms we interviewed
largely echoed the views of their U.S. counterparts. For example,
some European company officials said that patent pendency for
certain technologies was longer in Japan than in the United States
or Europe. One European company official noted that in the
biotechnology field, JPO usually requires 6 years from the time
that a request for examination is submitted, to the time of patent
grant if there are no oppositions; with oppositions, the average
delay is an additional 3 to 4 years. In his view, U.S. Pro would
grant a patent on the same case within 3 years. European company
officials also said that Japanese firms commonly use patent
flooding as a strategy to gain access to the technology of other
patent holders, who must then consider cross-licensing
arrangements. The company officials said the narrow scope of
protection JPO grants allows this practice to occur.
Overall, however, the European company officials that we
interviewed were satisfied with the patent protection their firms
received in Japan, Europe, and the United States. Several European
company officials said that the longer pendency period and narrower
scope of patent protection they received in Japan did not impede
their firms' competitiveness. Some company officials said that some
reasons why European firms may be generally satisfied with their
experience in Japan are that they have (1) historically relied on
foreign markets and patents for economic survival; and (2) focused
their efforts on mastering foreign patent practices, including the
Japanese svstem.
--
*****************************************************************
*********
Greg Aharonian
srctran@world.std.com
Source Translation & Optimization
617-489-3727
P.O. Box 404, Belmont, MA 02178
=================================================================
Recently the GAO released a report on patenting in Japan for
American companies. It is an excellent report, with many insights
and lots of advice on patenting strategies. This part 2 of 2.
Greg Aharonian
=================================================================
============
CHAPTER 3
CAUSES FOR U.S. COMPANIES' PATENT
PROBLEMS IN JAPAN AND RECENT CHANGES
IN THE JAPANESE PATENT SYSTEM
U.S. firms have reported a number of patent problems in Japan;
however, most of these relate to the long pendency period and the
limited scope of protection that their inventions have received.
The pendency period is the amount of time required to obtain a
patent. While it is difficult to compare the pendency period in
Japan and the United States because of fundamental differences in
the two systems, it is clear that the pendency period in Japan is
longer than that in the United States. In Japan, the typical patent
takes an average of 6 to 7 years to be issued, compared with about
19 months in the United States. Among the reasons for the longer
pendency period in Japan are the pre-grant opposition system and
the fact that JPO receives more than twice as many patent
applications per year as U.S. PTO, while employing far fewer
examiners. Further, several Japanese patent attorneys said that a
narrower scope of patent protection is granted in Japan as compared
with that in the United States.
Recently, JPO has begun implementing measures to improve
Japan's patent system, including introducing accelerated
examination procedures, allowing multiple claims within one patent
application, and encouraging Japanese industries to file fewer
applications. Under the U.S.-Japan Structural Impediments
Initiative (SII), the Japanese government has agreed to reduce
patent pendency time and to increase the number of patent
examiners. It has made some progress in honoring these pledges.
SYSTEMIC DIFFERENCES AND ADMINISTRATION OF THE JAPANESE PATENT
PROCESS POSE PROBLEMS
Many U.S. patent attorneys and other patent experts do not
believe that the Japanese patent system inherently discriminates
against foreign applicants. However, they agree that certain
cultural and structural aspects work together to make it difficult
for non-Japanese firms to obtain effective patent protection in
Japan. As discussed in chapter 2, over 40 percent of the U.S.
companies responding to the GAO survey indicated that they had
experienced problems with the long patent pendency period in Japan
and the narrow scope of protection granted, while less than 6
percent reported having these problems in Europe and the United
States. Moreover, many other patent problems in Japan, such as
patent flooding and the difficulty of obtaining broad coverage for
pioneering inventions, are related to the pendency period and the
limited protection granted.
DELAYS IN PATENT PENDENCY
Fundamental differences in the U.S. and Japanese patent systems
make it difficult to directly compare specific aspects of the
systems, including patent pendency. Calculating pendency in Japan
is difficult for two reasons: (1) unlike in the United States, an
applicant has the option of deferring the request for an
examination in Japan for up to 7 years; and (2) as of 1991, JPO had
a backlog of about 350,762 pending patent applications (for which
requests for examination had already been made).
Despite the difficulties in calculating the pendency period in
Japan, the time required to obtain a patent in Japan is clearly
longer than in the United States. Currently, the average amount of
time for a typical Japanese patent to be issued appears to be about
6 to 7 years. Further, it may take up to 10 years for patents to be
issued in active technological areas at JPO, such as organic
chemicals and electronics. In the United States, by contrast, the
average amount of time that elapsed for patents to be issued or
rejected in 1991 was 19 months. However, in some technology areas,
such as biotechnology, the average pendency period was 25 months in
1991.
According to JPO statistics, the average pendency period in
Japan in 1991 was 30 months, or 2.5 years. However, this figure is
misleading because it does not take into account the time that
elapses before an examination actually begins in Japan. [ JPO
calculated this figure by dividing 596,470 (the backlog of patent
and utility model examination requests) by 243,267 (the number of
examinations completed in 1991). The result, 2.46 years, or 30
months, represents the time it would take JPO to dispose of the
current backlog of applications. Therefore, this figure, taken
alone, should not be interpreted as the total average pendency for
patent applications. ]
According to leading U.S. and Japanese patent experts, due to
the backlog of applications in Japan, there is an average minimum
delay of 3 to 4 years before JPO will begin an examination even if
a request for examination is made at the time the application is
filed. In the view of several Japanese patent attorneys, due to
this 3- to 4-year delay, it is generally advisable for applicants
to wait at least 3 years before requesting examination. This
waiting period allows them additional time to assess the viability
of the invention and to defer examination fees.
It is possible to view the Japanese patent application process
as involving three phases. Table 3.1 outlines the average amount of
time that elapses in each phase.
Table 3.1: Three Japanese Patent Processing Phases, as of 1992
PHASE 1
Processing Phase: Date of patent filing to date of request for
examination
Average Time: 36-48 months, due to backlog of applications
PHASE 2
Processing Phase: Date of examination request to date first
office action is
received
Average Time: 18 months
PHASE 3
Processing Phase: Date of first office action to date of patent
issuance
Average Time: 21-24 months, if no oppositions are lodged
The final phase of the Japanese patent process includes the
time allowed for the applicant to amend the application and for
competitors to file oppositions to the proposed patent (see
discussion in the following section.) As shown in table 3.1, if no
oppositions are submitted, this period is approximately 21 to 24
months.
RECENT DECLINE IN THE NUMBER OF PATENTS ISSUED BY JPO
In 1991, JPO issued 36,100 patents, down from 59,401 issued in
1990 and 63,301 issued in 1989. This decline represents a
39-percent drop from the number issued in 1990 and a 43-percent
drop from the 1989 level.
REASONS FOR DELAYS
FEWER PATENT EXAMINERS AT JPO THAN U.S. PTO
One key problem that U.S. patent experts frequently cite as
contributing the long delays in obtaining patents in Japan is the
relatively low number of JPO patent examiners. While the number of
patent applications filed annually in Japan has almost doubled over
the past 10 years, the number of examiners has remained steady. As
shown in figure 3.1, the ratio of patent applications filed to
patent examiners is about 4 times higher in Japan than in the
United States. In 1991, JPO had 955 patent examiners to handle
369,396 patent applications filed that year. U.S. PTO, in
comparison, had 1,890 patent examiners in 1991 to review 178,083
applications filed.
Figure 3.1: Number of Patent Applications Per Patent Examiner in
the United States and Japan, 1991
Japan: 387
U.S. : 94
Some patent experts point out, however, that increasing the
number of examiners alone cannot address the current backlog of
applications. Further, according to Japanese patent attorneys, the
Japanese government is constrained by a law that restricts the
number of civil servants in Japan. Therefore, the government is
not likely to dramatically increase the number of patent examiners.
PRE-GRANT OPPOSITION SYSTEM ADDS TO DELAYS
As discussed in chapter 1, Japan has a pre-grant opposition
system. This system allows a third party to lodge an opposition
against another application before JPO grants a patent. In 1991,
6.5 percent of all applications were opposed, and each opposed
application had an average of 1.8 opponents.
Pre-grant opposition procedures in Japan follow a prescribed time
frame.
- After JPO has completed an examination and has found no
reason to reject the application, it is published "for
opposition."
- Within 3 months from the publication date, an opponent may
lodge an opposition. Oppositions may cite objections regarding
the substance of the invention, such as prior art against the
claimed invention, or a procedural problem involving
prosecution.
- Applicant is then given an opportunity to respond to the
opposition(s) by filing amendments to the specification,
claims, or drawings. A domestic applicant must respond to an
opposition within 60 days (foreign applicants must respond
within 6 months) from the date of the opposition statement sent
by JPO.
- An opposition case is closed when the patent examiner issues
a determination, accepting or rejecting an opposition, which
will result in the issuance or rejection of the patent
application. According to JPO officials, a patent examiner has
no time limits to decide on the validity of an opposition or to
evaluate an applicant's response.
As noted in chapter 2, pre-grant oppositions can further delay
patent issuance. Particularly long delays occur for applications
that encounter multiple oppositions. The delays are compounded by
the fact that JPO examiners are not required to review oppositions
concurrently, but may assess them individually. Patent applicants
must prepare and submit a response to JPO for each opposition
filed. Foreign applicants usually must have each opposition, as
well as the JPO response, translated into their native language.
According to some patent attorneys, in addition to causing
protracted delays, the pre-grant opposition process also serves to
narrow the scope of the claims in a patent application beyond JPO'S
own examination process. An applicant will usually attempt to
overcome a competitor's opposition by restricting or dropping
claims within the patent.
U.S. patent attorneys said that Japanese firms will frequently
oppose their competitors' applications in order to delay or prevent
a patent from being issued. Often their intent is to obtain a
cross-license. [ Conversely, the patent counsel of some U.S. firms
that are generally willing to license their technology told us that
they have had few problems with pre-grant oppositions in Japan
because Japanese firms know that they will eventually obtain a
license]. While Japanese firms will lodge oppositions against
other Japanese firms' applications, they generally "settle
amicably," that is, they will negotiate a licensing agreement. On
the other hand, Japanese firms will oppose foreign competitors'
applications because they believe that foreign firms will be
unwilling to license their technology since they generally seek
exclusive rights to it. Additionally, according to U.S. patent
attorneys, the number of oppositions lodged is related to the
importance of the technology in question and the level of maturity
of Japanese industry in that field.
JAPANESE INDUSTRIES' PATENT PRACTICES CONTRIBUTE TO BACKLOG AND
DELAYS
Japanese firms have traditionally filed many more patent
applications than U.S. and European firms. Some major Japarlese
firms file approximately 10,000 patent applications per year at
JPO; in peak years, they have filed more than 20,000 applications.
In comparison, the top U.S. patent holders we interviewed filed
about 1,300 applications per year at U.S. PTO. Numerous factors
lead Japanese industry to file in such great numbers, including the
following:
- The first-to-file system, coupled with the 7-year deferral
option,
allows Japanese firms to file applications for inventions of
questionable merit and those that may not be fully developed.
Frequently, applicants file without intending to request an
examination. In 1989 and 1990, for example, about 40 percent of
the applications filed at JPO were abandoned (i.e., after the
full 7-year deferral period had elapsed).
- Until 1988, as a general rule, Japanese patent applications
could claim only one invention per application. (U.S. Pro, by
contrast, has allowed the use of multiple claims since the
1800s.)
- The type of research and development in which Japanese firms
have historically been involved focuses on incremental
improvements, which lends itself to numerous, narrow patents.
- In Japan, the number of patent filings has traditionally been
used to measure a firm's level of innovation and to reward its
engineers' productivity. Further, since fees for filing
applications at JPO have been relatively low (approximately
$100), firms have had little incentive to limit the number of
applications they file. (Higher costs are incurred when a
request for examination is submitted.)
- Strategically, Japanese firms believe that owning a large
volume of narrow patents is more prudent than holding a handful of
broad patents. The rationale is that if an action, such as an
infringement suit, is taken against the firm, an unfavorable
decision exposes a company with one or two broad patents to risk
"losing it all" if the patent is invalidated.
THE NARROW SCOPE OF PROTECTION GRANTED IN JAPAN, AND RELATED
PROBLEMS
In both the United States and Japan, the scope of patent
protection that an applicant is seeking is described in the
~claims," which serve to distinguish the invention from the prior
art. The claims also serve to outline the boundaries of the
invention, or the area for which the inventor is seeking exclusive
rights. The "specification" section of the application describes
the technical details of the invention; it is used to help the
examiner interpret the breadth of the claim. According to many
patent experts, JPO examiners are guided by Japanese patent
practice to restrict patent claim scope as much as possible,
including limiting the scope of protection to the specific examples
provided in the application. For example, JPO generally requires
the applicant to include specific working examples and the results
thereof to support the claims. The examples are supposed to
demonstrate a one-to-one correspondence with the claims, and the
claims are to be supported by the specific results provided. In
contrast, U.S. patent applications generally include broad claims,
which U.S. PTO will usually allow even if they are not based on
working examples. The scope of the claims in the United States is
limited only by the information provided in the specification and
the prior art.
Providing strong working examples in Japan is particularly
important for applications in the chemical, biotechnology, and
pharmaceutical fields because JPO examiners are very strict about
requiring actual physical data for all compounds covered by a
claim. JPO examiners, unlike those in U.S. PTO, will not accept
theoretical or "paper" examples. According to a patent counsel at
a U.S. biotechnology firm, this requirement makes it virtually
impossible for pioneering inventions in the chemical,
biotechnology, and pharmaceutical areas to be adequately protected.
In contrast, an invention in the mechanical and electrical fields
does not require such strict disclosure of working examples because
drawings generally serve to disclose the invention. Therefore,
according to some U.S. and Japanese patent attorneys, applications
in these areas seem to face fewer prosecution problems in Japan.
PATENT FLOODING
Many U.S. patent experts have criticized the Japanese patent
system for enabling large firms to force small firms or those
without a large patent portfolio into licensing or cross-licensing
arrangements. One U.S. patent attorney asserted that Japanese
companies use patent flooding as a tactic to force cross-licensing
by obtaining patents on numerous and insignificant variations,
holding another inventor's basic patent "hostage" with the threat
of bringing an infringement action based on the variations.
Several U.S. patent attomeys noted that most U.S. firms would
not engage in patent flooding in Japan because (1) they generally
do not file improvement patents on other companies' patents, (2)
they file for patents in Japan and in other foreign countries only
on their most important inventions, and (3) they feel the cost of
monitoring competitors' filings and submitting large numbers of
applications would be prohibitive due to the need for translation.
JPO HAS IMPLEMENTED CHANGES
In the 1980s, JPO implemented a number of changes in the
Japanese patent system. JPO officials say these changes have
improved the system. The changes were primarily aimed at reducing
the length of time it takes JPO to process patent applications. In
addition, JPO has made efforts to alter the way in which the
Japanese business community uses the patent system.
RECENT ALTERATIONS
In 1988, legislation was enacted in Japan allowing applicants
to file more than one claim in each patent application for the same
invention. Under the revised law, it is now possible for applicants
to file several different claims defining substantially the same
inventive concept. Before 1988, Japanese applicants could generally
file only one claim for one invention. As previously noted, this
practice resulted in the high volume of patent filings by Japanese
industry and the large backlog of pending applications at JPO. In
the view of one Japanese patent attorney, the new system of
multiple claims should enable applicants to seek the broadest
possible patent protection.
Due to the delays in processing patent applications at JPO and
Japan's deferred examination system, many patent attorneys told us
that it is too early to determine how beneficial the multiple-claim
system will be in broadening the scope of patent protection
granted. According to JPO officials, many Japanese and foreign
applicants are already making use of the multiple-claim system.
They noted that there was an average of 3.1 claims per application
in 1991, compared with 2.7 claims in 1988.
In 1986, JPO introduced procedures to provide accelerated
examination of patent applications that meet certain conditions. [
While JPO does not charge any additional fees for an accelerated
examination, Japanese patent attorneys charge higher fees for
preparing and filing such an application. ] The main criterion is
that the invention is already being "worked," or manufactured in
Japan, or is scheduled to be manufactured within 6 months.
According to JPO, the accelerated examination system was introduced
to "minimize the adverse effects that could accompany a delay in
patent examination". If an application is deemed eligible for
accelerated examination, JPO is supposed to begin examination
immediately and to issue an office action within 4 to 8 months. JPO
officials told us that the accelerated examination system has not
been widely used to date. In 1991, for example, 343 requests for
accelerated examination were submitted, 20 of which were made by
U.S. applicants.
In 1984, JPO implemented a 10-year plan to establish an
electronic application and examination system ("a paperless
system"), which was the first of its kind in the world. JPO began
operating the electronic application system in late 1990, when it
first accepted electronic filing of patent applications. (U.S. PTO
is also working to establish an electronic filing system, but it is
not expected to begin operating until 1995). Although JPO maintains
that the "paperless" system will eventually reduce patent pendency,
several Japanese benrishi we interviewed said that the system has
not yet had much impact.
JPO'S CAMPAIGN TO REDUCE PATENT FILING
In addition to instituting these formal changes in the patent
system, several years ago JPO launched a campaign to encourage
Japanese companies to reduce the overall number of patent
applications they file. As part of this effort, JPO has requested
the top management of companies that are the most active Japanese
patent filers to improve their oversight of their patent filing. To
do so, they are being encouraged to conduct more thorough searches
of the prior art and to evaluate the quality of their firm's
inventions more stringently, screening out applications of marginal
value. JPO has also encouraged applicants to utilize the
multiple-claim system to consolidate the applications they file.
JPO officials told us that they believe the campaign to reduce
patent filing has been fairly successful; they pointed out that the
number of patent and utility model applications filed in Japan
decreased from a peak of about 543,000 in 1987 to about 484,000 in
1991. However, this decline mainly reflects a drop in the number
of applications filed for utility models and not for patents. As
noted earlier, the number of patent applications filed during this
time frame actually increased from about 341,000 in 1987 to about
369,000 in 1991. The number of utility model applications filed
decreased from about 202,000 in 1987 to about 115,000 in 1991.
[ Utility model patents are those involving the shape or
construction of articles or a combination of articles. The term of
a utility model patent is 10 years from the date of publication of
the examined application, but not more than 16 years from the
filing date. ]
OTHER MEASURES TO REDUCE PATENT PENDENCY
As an additional measure to reduce patent pendency, JPO is
considering eliminating the requirement for examination of utility
model applications. Under the new system, utility model
applications would be published without substantive examination.
Implementing this measure would significantly reduce the workload
of JPO examiners and the backlog of pending applications. In 1991,
utility model applications accounted for 24 percent of the total
number of patent and utility model applications filed.
Finally, to further expedite patent processing, JPO has also
begun to employ a private, nonprofit agency on a contract basis to
conduct patent searches (searches of the prior art conducted during
the patent examination). In 1990, the private a~ency did about
50,000 such searches.
JAPAN'S COMMITMENTS UNDER THE STRUCTURAL IMPEDIMENTS INITIATIVE
The Structural Impediments Initiative was an effort begun in
1989 by the governments of the United States and Japan to identify
and solve structural problems in both countries that hinder trade
and balance of payments adjustments. In addressing the issue of
patent protection, included in SII's discussions on intellectual
property rights, the primary U.S. concern was the amount of time it
takes to obtain a Japanese patent. In 1990, the Government of Japan
made a commitment to "use its best efforts" to reduce the average
patent examination period to 24 months by 1995. According to JPO,
the average examination period was 30 months in 1991, down from 37
months in 1988. (As discussed earlier, however, the examination
period does not account for the total pendency period in Japan.)
In the SII talks, the United States also raised the issue of
increasing the number of patent examiners in Japan. As previously
discussed, in 1991 U.S. PTO employed 935 more examiners than JPO,
which had more than double the number of applications to examine.
In 1989, as a result of SII, the Japanese government increased the
number of positions for examiners by 30, representing a 4-percent
increase. In 1990, JPO increased its staff by about 5 percent, for
a net increase of 42 patent and utility model examiners. According
to USTR, however, despite these increases in personnel, JPO iS
still inadequately staffed.
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============
CHAPTER 4
PATENT PRACTICES OF U.S. FIRMS CAN AFFECT
THEIR PATENT EXPERIENCE IN JAPAN
While some patent problems U.S. firms are experiencing in Japan
stem from aspects of the Japanese patent system, others result from
U.S. firms' patent practices in Japan. Both U.S. and Japanese
patent attorneys told us that a number of the problems encountered
by U.S. firms are due to their limited knowledge of the Japanese
patent system, translation difficulties, and poor communication
between U.S. patent counsel and their Japanese patent
representatives.
To address these problems, some U.S. firms have adopted
practices that have improved their patent experience in Japan.
These strategies include establishing patent offices in Japan,
translating their Japanese applications back into English to ensure
their accuracy, and tailoring their applications to better conform
to the Japanese application style.
U. S. FIRMS PATENT PRACTICES IN JAPAN
As noted in chapter 1, foreign applicants must have a Japanese
patent representative to prosecute their patents at JPO.
- The majority (56 percent) of firms responding to our survey
said they generally filed patent applications in Japan directly
through a Japanese patent attorney, or "benrishi". Most of
these firms were large, with 1991 annual sales of over $1
billion.
- Thirty-five percent said they generally file indirectly
through U.S. law firms (the U.S. patent attorney deals directly
with the "benrishi"). Most of these firms had annual sales of
less than $1 billion in 1991.
- Nine percent of the respondents said their firm maintained
its own patent office or department in Japan. Officials from
several of these patent offices told us they employ both
American and Japanese staff who are responsible for filing
their firm's applications and monitoring patent prosecution at
JPO. Most of the U.S. firms with patent offlces in Japan were
large, with 1991 sales of over $1 billion.
The U.S. firms responding to our survey reported that they
employed the following patent practices and strategies in Japan:
- Eighty-seven percent said they file applications in Japan
that are virtually the same as their U.S. applications "always"
or "most" of the time.
- As a quality check, 28 percent said that their company had
the claims portion of their application translated back into
English always or most of the time. 31 percent said they never
or almost never retranslate their claims back into English or
have someone fluent in Japanese review their applications.
- Nineteen percent reported that in the last 5 years, a company
official had held an interview with a JPO examiner to discuss
an application, while 81 percent said that no one from their
company has met with an examiner.
- Seventy-five percent of the responding firms said they had
not requested an accelerated examination in the last 5 years.
A large majority of these firms said they did not need an
accelerated examination, and about one-fourth said that cost
was a factor. In general, the firms that requested an
accelerated examination were large firms.
The majority of the 58 firms we interviewed said they deferred
examination in Japan for about 5 years. (As noted in ch. 1, in
Japan applicants have the option of deferring examination of their
applications for up to 7 years). Twenty-seven of the 58 firms said
they defer for the full 7 years. The firms cited several reasons
for deferring examination, including the desire to (1) further
evaluate the commercial value of their product, (2) defer costs,
and (3) see how their original applications fare in the United
States and other countries.
U.S. FIRMS' PATENT PRACTICES IN JAPAN CAN CAUSE PROBLEMS
Many U.S. and Japanese private and corporate patent attorneys
attributed some U.S. companies' patent problems in Japan to their
own filing practices. For example, they noted that many U.S. firms
do not
- allow adequate time for their Japanese patent attorney, or
benrishi, to prepare the Japanese application properly and have
it translated accurately;
- tailor their applications to conform to the Japanese
application style;
- provide clear guidance to the benrishi prosecuting the
application;
- commit adequate time and staff to learning about the Japanese
patent system.
U.S. FIRMS OFTEN SUBMIT LATE APPLICATIONS TO JAPANESE PATENT
ATTORNEYS
A JPO of ficial and most of the benrishi we interviewed told us
that U.S. applicants often submit applications for filing at JPO
only a week or 2 before their priority year deadline.l Several
benrishi told us that in some cases their U.S. clients have
submitted applications only days before the deadline. The limited
amount of time permitted between submission and filing at JPO is
problematic because applications generally have to be translated
into Japanese, and the average length of a U.S. application is 15
to 125 pages. In such cases, the benrishi will divide the
application among a number of translators and consolidate the
application just before filing it by the deadline. They acknowledge
that this practice often results in applications with numerous
translation errors and poor overall coherence.
Many Japanese and U.S. patent attomeys said that foreign
clients should decide early in the priority year whether they will
file for foreign patents. For Japanese filings, they should submit
their applications to their benrishi at least 1 to 2 months before
the priority year deadline, thus allowing adequate time for
translating and preparing the application. In this way, the
benrishi would have time to discuss and clarify technical points
and translation questions with the client.
U.S. APPLICATIONS DO NOT ALWAYS CONFORM TO JAPANESE APPLICATION
STYLE
JPO officials told us that U.S. applicants tend to draft their
Japanese applications based on U.S. patent law and format, rather
than on Japanese patent laws. As a result, JPO examiners
frequently have difficulty understanding the claimed scope of the
invention as it is presented. According to the benrishi we
interviewed, foreign patent applications generally do not require
detailed revision to conform to the Japanese patent application
style. However, Japanese patent law does contain certain
stipulations regarding the manner and content of the specification
that differ significantly from U.S. patent practice. Many benrishi
told us that the most important differences are that the Japanese
application must clearly describe
(1) the "effect of the invention", that is, how the applicant's
claimed invention resolves technical problems posed by
previously claimed inventions (the prior art), which should be
presented in a "problem and solution" approach; and
(2) the "meritorious or advantageous effects" that are obtained
by the applicant's claimed invention as compared with
previously claimed inventions.
According to JPO of ficials and benrishi, some U.S. patent
applications fail to adhere to Japanese procedure. Common problems
they cited include the following:
- The description of the "advantageous effect," or how the
disclosed invention is superior to the prior art cited in the
application, is missing or unclear.
- The "problem/solution" approach is not used to describe the
advantageous effect over the prior art.
- The features of the invention defined in the claims do not
demonstrate a clear one-to-one correspondence with the working
examples provided.
- The number of working examples provided is insufficient given
the number of claims.
- The background, including the description of the prior art,
is excessively long and detailed.
U.S. and Japanese patent attorneys told us that foreign
applicants are much more likely than domestic applicants to receive
office actions or rejections for "insufficient disclosure." A JPO
examiner will issue such an office action when the applicant fails
to discuss the invention's "advantageous effect" or to use the
"problem/solution" method, or when aspects of the disclosure are
unclear. One benrishi told us that he will revise U.S.
applications to conform to the Japanese application style only if
the applicant submits it 3 months before its deadline. He said
that only a few U.S. firms submit their applications to the
benrishi already in the Japanese format.
As noted earlier, almost 90 percent of the responding companies
indicated that most of the applications they file in Japan are
virtually identical to their U.S. applications. Several benrishi
told us that most of their U.S. clients do not want them to modify
their applications to include the "problem/solution" approach
before filing them at JPO because of the cost and time involved.
Rather, U.S. applicants want them to wait to do so after they
receive the first office action from JPO. While this modification
can be done, it serves to increase the pendency period.
Poor Communication Between US Firms and Their Japanese Patent
Representatives
Poor communication between U.S. applicants and their Japanese
patent representatives appears to be a widespread problem. [ This
section focuses mainly on the practice of U.S. firms that file
directly through a Japanese patent attorney ("benrishi") and not
those that file through pnvate U.S. patent attorneys. ]
Many U.S. companies complained that their benrishi were not
aggressive enough in representing their companies' interests,
especially in their attempts to gain broad patent coverage from
JPO. Some U.S. corporate patent counsel also complained that their
benrishi did not advise them on how to better tailor their
applications to fit the Japanese application style.
On the other hand, several benrishi told us that their U.S.
clients fail to clarify their expectations and the amount of work
the clients expect the benrishi to do. For example, one benrishi
said he will translate and interpret office actions and prior art
citations if the client is willing to pay for the additional
translation costs. He added that many of his U.S. clients are
unwilling to incur these costs. Moreover, some benrishi noted that
their U.S. clients rarely tell them which of their applications
they consider to be the most important or give them any guidance on
the scope of claims they expect to receive from JPO.
According to many U.S. and Japanese patent attorneys we
interviewed, a number of U.S. firms do not actively participate in
the prosecution of their Japanese patents. They sometimes delegate
too much to their Japanese patent firms, expecting them to devise
a filing strategy, produce accurate translations of their
applications, and prosecute their cases aggressively at JPO.
However, in many instances, they do not appear to give their
benrishi clear instructions or guidance on how they would like
their applications to be filed. A representative from a Japanese
patent firm told us that "too many U.S. applicants leave it all in
the hands of their benrishi."
Conversely, the Japanese benrishi we interviewed did not appear
to take a proactive role in filing applications for their U.S.
clients. Benrishi told us that they will give advice to their
clients only when specifically asked. For example, one benrishi
said that his firm's strategy for having JPO begin an examination
as quickly as possible is to request an examination about 3 years
after filing (due to the backlog of applications at JPO). However,
he will offer this advice only if the client asks. If, for example,
a U.S. client asks that an examination be requested at the time the
application is filed, the benrishi will comply. Further, a
Japanese patent attorney practicing in the United States
acknowledged that some benrishi do not attempt to interpret vague
or cryptic JPO office actions for their U.S. clients.
Some U.S. patent attorneys noted that the roles and duties of
benrishi differ significantly from those of U.S. patent attorneys.
The former will usually only translate and file an application in
Japan, whereas the latter will generally take a more proactive
role, rewriting an application to conform to the U.S. style and
actively advising the client about filing.
A factor that may contribute to the perceived passivity of some
benrishi is that in Japan, a civil servant, such as a JPO examiner,
holds an esteemed position in society. Accordingly, a benrishi
will tend to defer to the examiner and not to challenge or
aggressively press him, leading some U.S. clients to question
whether the benrishi is truly representing their interests. Another
factor may be that benrishi have a fixed fee schedule, which may
discourage them from performing additional, unsolicited services.
TRANSLATION PROBLEMS
Many U.S. patent attorneys identified the translation of a U.S.
application into Japanese as another key area in which U.S. patent
counsel should provide greater oversight. Under Japanese patent
law, translation errors cannot be corrected if such a correction is
deemed to change the gist of the invention. According to JPO
officials, U.S. applications frequently contain translation errors.
In fact, some U.S. patent attorneys identified language as "the
biggest barrier" in the Japanese patent system. One patent
attorney admitted that his company was not aware of translation
errors in its Japanese applications until the company entered into
licensing negotiations in Japan.
One corporate patent counsel described a patent infringement
case involving a chemical patent that contained a translation error
in the patent application. The translator had misunderstood the
element "boron" and translated it as "bromine". The patent holder
lost the case because of this translation error. Although the
patent holder appealed the ruling, the attorney said that the
appeal was denied because under Japanese patent law, a patent
examiner must recognize from the invention's description that the
language used is clearly in error in light of the rest of the
application.
A Japanese patent attomey had the following suggestions for
minimizing the chances for such translation errors: (1) use English
terminology in brackets after the Japanese translation of important
terms so that corrections can later be made relying on the English
word and (2) disclose the invention fully in drawings where
appropriate.
A U.S. patent attomey who is fluent in Japanese told us that he
sees translation errors in most U.S. applications he reviews,
regardless of the size of the firm or the patent's importance to
the firm. He gave an example of how the language difference has
presented difficulty:
- There is no singular or plural form in Japanese. To properly
translate "a pencil with an eraser" into Japanese, a benrishi
suggested that the word "singular" be added to modify "eraser".
However, the U.S. patent attorney thought that this addition
narrowed the claim and refused to make the change. As a result,
the JPO examiner found the description ambiguous and rejected
the claim.
This U.S. patent attomey's recommendation to his clients is to
have their applications translated into Japanese in the United
States, which he will review before sending the applications to
Japan. While he admits this solution is costly, he believes it is
important that the U.S. attorney have greater control of the
translation. As previously noted, some U.S. companies do see a need
for verifying the quality of their benrishi's translation of their
applications. Among the responding companies, 28 percent reported
that they had at least the claims portion of their Japanese
application translated back into English by a translation service
outside their benrishi's fimm always or most of the time. Another
6 percent reported that they had someone fluent in Japanese
(outside their benrishi's firm) review their application always or
most of the time.
U.S. Firms Do Not Emphasize Mastering the Japanese Patent System
While not discounting the structural and cultural factors that
hinder foreign patent applicants in Japan, some U.S. patent experts
acknowledged that U.S. firms have been slow in making foreign
patent filing a priority. In their opinion, since the United States
has been the dominant world market for decades, most U.S. firms
have tended to focus on domestic patent filing: foreign filing has
been treated as secondary. As a result, until recently many U.S.
companies have placed little emphasis on foreign patent filing.
Some U.S. patent counsel acknowledged that they are not very
familiar with patent prosecution in Japan or with the Japanese
judicial system.
In contrast, because Japanese firms have always looked to
overseas markets, especially the United States, they have invested
heavily in learning about foreign patent practices, particularly
the U.S. patent system. U.S. patent attomeys noted that Japanese
companies take a very active role in pursuing U.S. patents and in
monitoring patent activity worldwide. As a result, they have
committed significant time to understanding U.S. patent law and
U.S. patent prosecution and enforcement matters. For example, large
Japanese companies generally send one or two benrishi or other
patent department staff to the United States each year to serve as
apprentices in intellectual property law firms for an average of 6
months to 2 years. These Japanese apprentices will usually work on
preparing their own companies' applications for filing at U.S. PTO.
In contrast, the U.S. firms we interviewed generally had not sent
patent attomeys to Japanese patent law firms to learn about the
Japanese patent system.
SOME U.S. FIRMS HAVE ADOPTED STRATEGIES THAT IMPROVED THEIR PATENT
EXPERIENCE IN JAPAN
Table 4.1, an analysis of survey responses, shows the number
and percentage of U.S. firms that asserted that certain strategies
or practices had improved their patent experience in Japan.
Table 4.1: Firms' Views Regarding Actions That Improved Their
Patent
Experience in Japan
Number of
Percent of
Number of firms reporting
firms reporting
responding action improved
action improved
firms taking patent
patent
Action Taken action experience
experience
Maintain a company patent office 26 19
73
in Japan
File patent applications directly 155 89
57
through a Japanese patent attorney
Own subsidiaries or manufacturing 144 54
38
facilities in Japan
Have most applications reviewed 19 7
37
by someone fluent in Japanese
Have great/very great activity 104 35
34
conducting business arrangements
with Japanese firms in the last 5 years
Translate most patent applications 77 24
31
or claims back into English
( These percentages include only the firms that responded that
they
utilize these particular practices in Japan. )
SPECIFIC FIRMS' STRATEGIES
Officials at a maJor U.S. computer firm described their company
as successful in its efforts to secure patent protection in Japan.
They attributed the firm's success to a number of factors,
including establishing a large presence in the Japanese market and
maintaining a network of business ties with Japanese companies with
whom it licenses and cross-licenses technology. In addition,
company officials identified several strategies they believe have
improved their experience in obtaining patents in Japan. These
actions included establishing a company patent office in Japan
about 25 years ago, staffed with 50 Japanese nationals who
regularly hold interviews with JPO patent examiners. According to
company officials, prosecuting their patents in-house allows the
inventing group to explain the technology to their patent attomeys
and to work closely with them. The firm also tailored all its
applications to conform to Japanese practice, including modifying
or deleting claims when necessary.
In 1989, JPO recognized this U.S. firm with an award for
excellence in the quality of its Japanese patent applications. The
award was given for the first time to a non-Japanese company.
The corporate patent counsel at another U.S. firm, which
maintains a patent office in Japan staffed by six Japanese
nationals, told us that his firm performs an annual management
review of this office. In addition, to oversee the firm it employs
for translations, the company administers a standard exam to all
translators before they are assigned to work on the company's
applications. According to the company official, taking these
actions ensures that their translators understand the "vocabulary
of their technology." The official believes these actions have
improved the overall quality of translations.
WORKING WITH JAPANESE BUSINESS PARTNERS HAS HELPED SOME COMPANIES
Of the companies that had great business activity in Japan, 34
percent reported that these business ties improved their patent
experience. Thirty-eight percent that reported having a direct
business presence in Japan said it had improved their patent
experience. Some U.S. patent attorneys told us that U.S. firms that
have business ties with Japanese firms generally have a better
patent experience in Japan. Further, one U.S. patent attorney
explained that the quickest way to achieve priority status in the
backlog of cases at JPO is to work an invention in Japan through a
Japanese joint venture partner or a licensee. However, based on
interviews with U.S. firms that have ties with Japanese firms, it
appears that the majority do not seek advice or assistance from
their Japanese business partners. Companies that did seek
assistance from their business partners said they received advice
on patent strategy and on selecting benrishi to prosecute
applications. They also received other benefits, such as having the
Japanese partner hold interviews with JPO examiners. For example,
one corporate patent counsel told us his firm's Japanese business
partners have helped them m Japan in many ways, including selecting
Japanese patent attorneys for enforcing patents, providing advice
on prosecuting patents, and monitoring Japanese competitors'
applications and research activities. Also, the patent counsel at
a major U.S. chemical firm said his firm's joint venture partners
and licensees played a big role in helping them to secure patent
protection. For example, their partners have helped them identify
and address prior art citations, have suggested terminology to be
used in applications, have explained where their applications are
in the prosecution process, and have offered interpretation of JPO
office actions when needed.
INTERVIEWS WITH JPO EXAMINERS HAVE IMPROVED SOME FIRMS' EXPERIENCE
According to some benrishi and U.S. patent counsel, it is
beneficial for U.S. company officials to hold interviews with JPO
examiners, particularly for important or problematic patent
applications. Many U.S. patent counsel indicated that the
interviews they have had with JPO examiners have helped their cases
significantly, giving the U.S. inventor or attorney the opportunity
to refine their responses to examiners' questions and to explain
their inventions further. Moreover, JPO officials told us that
their examiners feel honored when a U.S. company representative has
gone to the effort of meeting with them and discussing his or her
invention.
In the 1980s, JPO began encouraging intelviews between
examiners and applicants. However, according to JPO officials, few
U.S. applicants meet with JPO examiners. As noted earlier, 81
percent of the firms responding to our survey said that no one from
their company had met with a JPO examiner in the past 5 years.
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============
CHAPTER 5
U.S. FIRMS' EXPERIENCE IN
ENFORCING PATENTS IN JAPAN
According to several Japanese patent attorneys, the Japanese
legal system poses more difficulties for a plaintiff in an
infringement case than does the U.S. legal system. The difficulties
in bringing infringement actions in Japan include the lack of
discovery, the length of court proceedings, the narrow
interpretation of patent claims, the difficulty in obtaining
preliminary injunctions, business risks associated with the
Japanese aversion to litigation, and the logistics of pursuing a
suit in Japan. According to U.S. corporate and private patent
attorneys, patent holders have a harder time enforcing patents in
Japan than in the United States due to these difficulties. This
partly explains why the number of patent infringement suits brought
in Japan is significantly lower than the number of suits brought in
the United States. Some of the U.S. company officials we
interviewed said that the problems they experienced in enforcing
their patents in Japan had adversely affected their companies.
SPECIFIC DIFFICULTIES ENCOUNTERED
Some of the difficulties U.S. firms have experienced in
enforcing their patents in Japan stem from the differences in U.S.
and Japanese substantive law and in civil procedure. For example,
Japan has virtually no discovery procedures, compared with the
discovery permitted in the United States. Further, court
proceedings in infringement suits in Japan are generally more
lengthy than those in the United States. In addition, the Japanese
courts interpret the scope of patent claims more narrowly than
courts in the United States. Other problems in bringing
infringement actions in Japan include the difficulty in obtaining
preliminary iIuunctions, the inadequate damages awarded, the fact
that litigation is viewed with disfavor in Japan, and the logistics
problems.
LACK OF DISCOVERY
Like some European countries, Japanese law does not provide for
discovery. While almost all the attorneys we spoke with, both in
the United States and Japan, agree that discovery procedures
dramatically increase the cost of litigation, they acknowledge that
discovery is helpful and often necessary to prove that infringement
has occurred. It is particularly difficult to prove infringement
without discovery in the case of a "process" patent (a patent
concerning the mode of treatment of certain materials to produce a
certain result; it applies to a new method of making an article).
Without access to the alleged infringer's plant or documents,
demonstrating that a certain process is being used to produce a
product is hard.
Fourteen of the 58 U.S. firms we interviewed had filed patent
infringement cases in Japan. Of these, six said the lack of
discovery was a "great" or "very great" problem. One Japanese
patent attorney told us that his U.S. clients are reluctant to file
infringement suits in Japan because of the lack of discovery.
Furthermore, representatives from one large chemical company and
one semiconductor company said the lack of discovery had affected
their firms' decisions not to bring infringement suits involving
processes in Japan. One pharmaceutical company representative told
us his firm was only able to prove infringement in a process patent
case in Japan because it had developed a technology that allowed
the firm to analyze the infringer's final product to identify the
process that was used.
LENGTHY COURT PROCEEDINGS
Patent infringement proceedings in Japan generally take longer
than those in the United States. According to several patent
attorneys, infringement cases usually take 3 to 9 years to conclude
in Japan as compared with 2 to 3 years in the United States. Of
the U.S. firms we interviewed, 11 out of 14 that had tried to
enforce their patents in Japan said that the Japanese legal system
for infringement suits was slower than the U.S. legal system. Two
U.S. corporate patent attorneys said their firms have recently been
involved in infringement cases in Japan that have gone on for more
than 10 years. Moreover, several company representatives told us
they were reluctant to file infringement suits in Japan because of
the lengthy court proceedings.
A major reason for the lengthy patent infringement suits in
Japan is the
manner in which such suits are conducted. Typically, an
infringement suit in Japan consists of a series of hearings held
once a month lasting only a few minutes each. During that time,
written arguments are submitted to the court, and a date for the
next hearing is determined. Occasionally, some oral arguments are
presented, but most of the evidence is submitted in writing.
Further, unlike in the United States, Japanese courts do not have
the authority to rule on patent validity. If this validity is
challenged, the case is reviewed by JPo in a separate proceeding.
In addition, according to a Japanese attorney, judges assigned to
patent cases in Japan may be transferred before a decision is
reached, thus further delaying the proceedings.
JAPANESE COURTS INTERPRET CLAIMS NARROWLY
Japanese courts generally give a more narrow interpretation of
a patent's claims than do courts in the United States. One Japanese
patent attorney commented that Japan has in practice the strictest
system of claim interpretation of any of the leading industrial
countries. Patent infringement litigation often focuses on the
scope of the patent's claim in order to determine whether the
defendant's product or process falls within that scope. Thus, the
court's interpretation of the scope of a claim is often critical in
a patent infringement case. According to several U.S. patent
attorneys, the Japanese courts' narrow interpretation of claims
enables companies to make minor changes to other companies'
patented products or processes without being found to infringe on
them.
Related to the narrow interpretation of claims is the fact that
Japan has virtually no "doctrine of equivalents" as that term is
used in the United States. In the United States, the doctrine of
equivalents is used to broaden the interpretation of the scope of
the claimed invention to cover allegedly infringing products or
processes outside the wording of the claim, if those products or
processes perform substantially the same function in substantially
the same way to obtain the same result. In contrast, Japanese
courts tend to adhere more strictly to the literal interpretation
of a claim.
According to many U.S. patent attorneys, moreover, patent
enforcement in the United States has been strengthened by the 1982
establishment of the U.S. Court of Appeals for the Federal Circuit
(CAFC). This court hears patent-related appeals. In its rulings,
CAFC has been viewed as broadly interpreting patent claims and as
generally favoring the rights of patent holders.
DIFFICULTY OBTAINING PRELIMINARY INJUNCTIONS
Infringement actions often involve requests by the plaintiffs
for a "preliminary injunction" -- a court order granted at the
beginning of a lawsuit to prevent the defendant from doing or
continuing some act, the right to which is in dispute. The
injunction may be discharged or made perpetual as soon as the
rights of the parties are determined when the case is resolved. In
general, U.S. firms have not had much success in obtaining
preliminary injunctions in Japan. While permanent injunctive relief
is available as part of the "main infringement" action, preliminary
injunctions in Japan can only be obtained through a separate,
specialized legal action. This separate case can run "parallel" to
the main action. Preliminary injunction cases typically include
numerous hearings spaced out every 3-4 weeks until the judge feels
sufficient arguments have been made. This process usually takes 18
to 24 months.
Of the 14 US firms we interviewed that had filed patent
infringement suits in Japan, nine said that obtaining a preliminary
iluunction in Japan was more difficult than in the United States.
One U.S. patent attorney told us that preliminary iruunctions are
rarely used in Japan and could take up to 3 years to obtain. He
also said that, because of the cultural proclivity toward
settlement in Japan, these injunctive hearings are often spread out
to intervals of 8-16 weeks, giving the parties time to reach an
agreement before a preliminary injunction is granted. Another U.S.
patent attomey said it is virtually impossible to get a preliminary
iluunction; without one, it is difficult to stop the infringement.
One U.S. patent attorney gave an example of a U.S. drug company
that dropped a 6-year infringement suit in Japan. He said that by
the time the company had received an injunction, it had lost so
much of its market that it decided to abandon the product. One U.S.
firm, however, recently received a preliminary iIuunction in Japan
3 years after filing.
INADEQUATE DAMAGES
The amount of damages awarded in Japan is generally less than
that awarded in the United States. Damages in Japan can be awarded
on the basis of either lost profits or a reasonable royalty, i.e.,
the value of a license in Japan. However, in practice, damages
awarded in Japan are usually based on a reasonable royalty because
of the difficulty in determining lost profits without using
discovery procedures. As a result, one patent counsel noted that a
company would be better off settling with an infringer in Japan and
negotiating a license than pursuing litigation. Further, there are
no treble damages or attorney fees awarded in Japan as are
sometimes available in the United States in patent infringement
actions. Several patent attorneys told us that the damages awarded
in Japan are so low that the suits are often not worth the
associated costs.
LITIGATION VIEWED WITH DISFAVOR IN JAPAN
According to Japanese patent attorneys, litigation of any sort
is viewed as an extreme action in Japan. In general, Japanese
companies rarely sue one another. Infringement suits are usually a
matter of last resort and are viewed as damaging to business
relations. When infringement occurs, the parties will almost always
negotiate a settlement rather than enter into litigation.
Litigation, however, is more common in the United States; many U.S.
firms are regularly involved in litigation as a plaintiff or
defendant. Thus, little business risk is associated with bringing
an infringement action in the United States.
LOGISTICAL PROBLEMS OF BRINGING A SUIT IN JAPAN
Logistical factors complicate bringing a suit in Japan, as the
time and costs associated with travelling to Japan are significant.
In addition, the distance, language, and cultural differences can
thwart communications, as can the dissimilarities in U.S. and
Japanese civil procedures. Further, U.S. firms seeking to litigate
in Japan must retain a Japanese general attorney, or "bengoshi"
[benrishi is a 'patent' attorney]. According to some Japanese
patent attorneys, it is more difficult to find a good attorney in
Japan than in the United States because there are far fewer
Japanese bengoshi than there are U.S. attomey -- 15,000 bengoshi
compared with more than 700,000 U.S. attorneys.
MORE INFRINGEMENT SUITS IN THE UNITED STATES THAN JAPAN
Litigation is pursued in the United States more frequently than
in Japan. For example, in 1990, there were 1,236 patent
infringement suits filed in the United States as compared with 141
filed in Japan.
Overall, the US firms responding to our survey had filed more
infringement suits in the United States than in Japan or Europe. In
each of the three jurisdictions, the majority of the responding
firms had filed fewer than two suits in the past 5 years. Fifty-six
percent of the films had filed a patent infringement suit in the
United States in the last 5 years. In comparison, within the same
time frame, 7 percent had filed an infringement suit in Japan, and
24 percent in Europe. Further, 29 percent had filed three or more
suits in the U.S. courts compared with 2 percent that had filed
three or more suits in Japan.
EFFECT OF ENFORCEMENT PROBLEMS ON COMPANIES
The difficulties associated with enforcing patents in Japan
have adversely affected some of the U.S. firms we interviewed.
Approximately 20 percent of the responding firms indicated they had
experienced infringement problems in Japan but had not filed
infringement suits in the Japanese courts. The most common reasons
they cited for avoiding litigation in Japan were (1) the amount of
time it takes to conclude cases, (2) the cost and difficulty of
managing a suit in Japan, and (3) the lack of familiarity with the
Japanese legal system.
Of the 14 firms we interviewed that had filed infringement
suits in Japan, several corporate patent counsel told us their
firms had suffered from some of the of following problems
associated with enforcing patents in Japan:
- A representative from a large chemical company said his firm
had filed a patent infringement suit in Japan in 1980. After 10
years of litigation involving 30 hearings, there appeared to be
no prospect of receiving a decision. The company representative
said that the judge pressured his firm to settle the case for
a very low royalty. The U.S. firm subsequently decided to drop
the suit in exchange for a 0.5-percent royalty. According to
the company official, another licensee was paying a 25-percent
royalty for use of this patent.
- An official from another company told us that his firm had
filed an infringement suit on a chemical process patent in Japan
in the early 1980s. He said that three sets ofjudges and three
sets of appeal examiners have been assigned to the case since
it began. However, the biggest problem his firm has had in
proving infringement has been the lack of discovery procedures.
The suit is still ongoing.
- A representative from another company said his firm was
forced to settle an infringement suit in Japan because by the
time it reached trial, the patent term in Japan had expired.
=================================================================
============
CHAPTER 6
PROGRESS IN WORKING TOWARD INTERNATIONAL
PATENT HARMONIZATION
The United States is currently involved in two sets of
multilateral negotiations on intellectual property rights: the
Uruguay Round of GATT, which includes negotiations on intellectual
property issues; and a patent harmonization treaty through WIPo, a
United Nations agency based in Geneva. The proposed GATT agreement
would require some changes in the U.S., European, and Japanese
patent systems, but the current GATT negotiations were at a
stalemate as of mid-1993. A harmonization treaty, by contrast,
would require fundamental changes in the patent laws governing the
U.S. and Japanese patent offices, and to a lesser extent in the
patent laws governing EPO. U.S. PTO officials view the multilateral
efforts in GATT and WIPO as instrumental in achieving strengthened
patent protection worldwide.
Currently, Japan is considering major revisions in its patent
system within the context of ongoing multilateral negotiations to
harmonize patent systems. The changes being contemplated include
allowing filing in a language other than Japanese, eliminating the
pre-grant opposition system, and applying a doctrine of equivalents
in patent infringement suits. A majority of the U.S. companies
responding to our survey indicated that most of these changes would
improve their patent experience in Japan.
The United States is also considering a number of changes in
its patent system within the context of international patent
harmonization, most notably the adoption of a first-to-file system
and publication of all patent applications after 18 to 24 months.
About two-thirds of the U.S. companies responding to our survey
supported these changes in the U.S. patent system in the context of
a harmonization treaty. Many companies said, however, that they
would not approve of changes in the U.S. patent system without
agreement from Japan to make significant alterations in its patent
system as part of a harmonization effort.
GATT NEGOTIATIONS SEEK TO ESTABLISH A MINIMUM LEVEL OF PATENT
PROTECTION WORLDWIDE
At the urging of the United States, standards to protect
intellectual property were introduced into the ongoing Uruguay
Round negotiations of GATT that began in September 1986.
Negotiations among GATT members on intellectual property issues
resulted in a proposed agreement in 1991, called the agreement on
Trade-Related Aspects of Intellectual Property Rights--commonly
referred to as "TRIPS". If a final GATT accord is reached that
includes the current draft TRIPS proposal, it would establish
minimum standards of patent protection and enforcement worldwide.
According to GATT officials, the proposed GATT TRIPS accord is
primarily aimed at getting developing countries to strengthen their
protection of intellectual propertLy. However, if a final agreement
is reached, the TRIPS accord would also require some changes in
U.S., European, and Japanese patent laws and procedures. Some of
the most significant changes called for in the three systems are
shown in table 6.1.
Table 6.1: Fundamental Changes Required in European, Japanese, and
U.S. Patent Procedures Upon Ratification GATT TRIPS Accord
EPO change JPO change USPTO change
Proposed GATT TRIPS article required? required?
required?
Allow for limited discovery a YES
NO
procedures in patent
infringement cases
Prohibit discrimination in NO NO
YES
awarding patents based on
where inventions were made
Grant parent protection for NO YES
YES
20 years from filing date
(Note: (a) = As noted in Chapter 1, EPO grants a bundle of
individual
patents, each of which is valid in countries designated by the
applicant.
Thus, procedures used in infringement suits vary according to
national
laws. According to GATT officials, while the United Kingdom
has some
discovery procedures, some European countries, such as France
and Germany,
currently have no provisions for discovery in their national
patent laws.
Therefore, these countries may have to allow for limited
discovery upon
the ratification of GATT TRIPS.)
According to several US patent attorneys, the provision in the
draft TRIPS proposal that relates most specifically to Japan is
that involving discovery procedures in patent infringement suits.
As noted in chapter 5, discovery procedures are currently not
available to plaintiffs in infringement actions in Japan.
According to a U.S. PTO official, however, the draft TRIPS proposal
calls for countries to permit plaintiffs to have limited
evidence-gathering ability in infringement actions, rather than the
extensive discovery procedures that are available in the United
States. Some Japanese patent attorneys told us that it is unclear
what type of discovery procedures would be permitted in Japan if
the TRIPS proposal were adopted.
[ Under the TRIPS discovery provision, "[J]udicial authorities
shall have the authority, where a party has presented reasonably
available evidence sufficient to support its clairns and has
specified evidence relevant to substantiation of its claims which
lies in the control of the opposing party, to order that this
evidence be produced by the opposing party, subject in appropriate
cases to conditions which ensure the protection of confidential
information."]
Another proposed TRIPS article prohibits discrimination in
patent rights regarding the place of the invention. This provision
may require the United States to modify section 104 of title 35 of
the United States Code; under section 104, foreign inventive
activity is disregarded in determining which of several inventors
is the first to invent. (This requirement would no longer be an
issue if the United States moves to a first-to-file system). All
of the European firms we interviewed stated that section 104 is
discriminatory toward foreign filers. Another TRIPS provision would
require both JPO and U.S. PTO to change their terms of patent
protection to 20 years from the filing date.
The Uruguay Round of GATT is currently in a stalemate pending
the resolution of certain issues between the European Community and
the United States. If these issues are resolved, GATT Secretariat
offlcials anticipate that the TRIPS text will not be revised.
WIPO PATENT HARMONIZATION NEGOTIATIONS
WIPO'S efforts to harmonize the world's patent laws began in the
1980s. The purpose of the harmonization effort is to develop a
treaty that will simplify and expedite the process of obtaining
patent protection around the world and to strengthen protection
once granted. According to WIPO'S Deputy Director General, a
harmonized world patent system is essential because companies
around the world are increasingly turning toward global markets;
thus, in his view, the differences between national or regional
patent systems may increasingly act as a trade barrier as well as
an impediment to inventors.
Unlike the GATT TRIPS negotiations, WIPO'S harmonization
negotiations are viewed primarily as a forum to resolve differences
among the patent systems of the developed countries. In fact, WIPO
officials anticipate that the only countries that would be
signatories to the WIPO treaty would be the United States, Japan,
and most European countries.
HISTORY OF WIPO HARMONIZATION EFFORTS
Between 1984 and 1990, WIPO sponsored a series of meetings to
discuss eliminating differences among national and regional patent
laws. The initial purpose of the harmonization effort was to study
the establishment of a grace period in Europe. However, WIPO
offlcials subsequently determined that they could not address the
issue of the grace period alone because it involved related issues
such as whether the first-to-file principle should prevail over the
first-to-invent principle.
During the 6 years of deliberations, the scope of the proposed
harmonization treaty expanded to address many patent procedures,
which diverged greatly among regional and national patent laws.
WIPO established a committee to study patent harmonization. The
committee completed its preparatory work in November 1990 and
drafted a proposed treaty in December. In June 1991, a diplomatic
conference on patent law harmonization was held in The Hague to
review and refine the draft treaty. However, formal decisions on
finalizing the treaty's text were put off until the second session
of the diplomatic conference. The second session, scheduled for
July 1993, has been postponed indefinitely, primarily because of
the change in administrations in the United States.
MAJOR PROVISIONS IN THE DRAFT WIPO TREATY
The draft WIPO treaty would require fundamental changes in U.S.
and Japanese patent laws and procedures, and to a lesser extent in
the patent laws governing EPO. The proposed treaty calls for patent
procedures that generally are closest to existing procedures used
by EPO. For example, it seeks the adoption of a worldwide
first-to-file system, publication of all patent applications, and
a post-grant rather than a pre-grant opposition system. Table 6.2
shows the most significant changes that the draft treaty would
require in the three patent regimes.
Table 6.2: Articles in Draft WIPO Treaty Requiring Significant
Changes in the
European, Japanese, and U.S. Patent Systems
EPO change JPO change USPTO change
ARTICLES IN DRAFT WIPO TREATY required? required?
required?
Accept filing in any YES YES
NO
language (original
language version would
be the ruling document)
Change from pre-grant to NO YES
NO
post- grant opposition system
Adopt a 12-month grace period YES YES
NO
Adopt a 3-year maximum NO YES
NO
deferral of examination
Complete patent examinations NO YES
NO
within 2 years
Apply a doctrine of NO YES
NO
equivalents in patent
infringement suits
Adopt a first-to-file syste NO NO
YES
Publish applications NO NO
YES
after 18-24 months
Thus, the treaty would require two fundamental changes in the
U.S. patent system: the abandonment of the first-to-invent approach
and publication of all patent applications after 18 to 24 months.
JAPAN SUPPORTS ADOPTION OF SOME PROVISIONS IN GATT PROPOSAL AND
DRAFT WIPO TREATY
Within the context of ongoing multilateral patent harmonization
negotiations, Japan is considering several major revisions in its
patent system. In 1991, the Ministry of International Trade and
Industry's Industrial Property Council began reviewing Japanese
patent law and practices. It also started considering provisions
included in WIPO'S draft harmonization treaty and the proposed GATT
TRIPS agreement. In a report issued in July 1992, the council
stated that the Japanese patent system "should respond to the
globalization of economic activities and should provide
comprehensive protection to advanced technologies". The council
recognized the need for internationally harmonized patent systems
and practices in light of the wider dissemination of advanced
technology worldwide and shorter product life cycles.
The council report recommended consideration of several changes
in the Japanese patent system, including (1) the allowance of
filing in any language, (2) the elimination of the pre-grant
opposition system, and (3) the allowance of a 20-year patent term
from the filing date. The report stated that some of these changes
would be contingent on the u.s adopting such provisions included in
WIPO'S draft harmonization treaty as (1) instituting a
first-to-file system, (2) publishing patent applications, and (3)
adopting a 20-year patent term from the filing date.
JPO officials told us that they support most of the changes in
the draft WIPO treaty and the proposed GATT agreement. However,
they said that they did not believe that the proposed WIPO treaty
should include the provision regarding the time limit for
completion of a patent examination. JPO officials said that there
is no need to impose the 24-month cap on the examination period
since Japan has already pledged to accomplish this goal by 1995
under SII.
The JPO officials reiterated that they would not make the
changes called for in the harmonization treaty, such as eliminating
the pre-grant opposition system, unless the United States agrees to
(1) adopt a first-to-file system, (2) publish applications before
they are granted, and (3) institute a 20-year patent term.
U.S. GOVERNMENT VIEWS OF CHANGES IN JAPANESE PATENT SYSTEM UNDER
HARMONIZATION
According to U.S. government officials, the changes in the
Japanese patent system brought about by a harmonization treaty
would benefit U.S. industry. Such changes include (1) the ability
to file initial applications in English and to rely on the
Englishlanguage original when errors are found in the translations,
(2) the completion of patent examinations within 2 years, (3) the
elimination of pre-grant oppositions, (4) the establishment of a
12-month grace period, and (5) the application of a doctrine of
equivalents in patent infringement suits. In the WIPO negotiations,
the U.S. government has urged the Japanese government to address
these issues expeditiously.
U.S. COMPANIES' VIEWS ON CHANGES IN JAPANESE PATENT SYSTEM UNDER
HARMONIZATION
We asked the U.S. companies we surveyed for their views on
whether certain changes in the Japanese patent system under
harmonization would improve their patent experience in Japan. As
shown in figure 6.1, the largest number of companies (70 percent)
said that the allowance of initial filing in English (and the
ability to rely on the English-language original when errors are
later found in the translations) would improve their patent
experience in Japan to a "great" or "very great" extent.
Conversely, less than a third of the companies said that
eliminating pre-grant oppositions in Japan or adopting a 3-year
maximum deferred examination system would improve their Patent
experience to a great or very great extent.
Figure 6.1: Percent of Firms Viewing Potential Changes to Japanese
Patent System Under Harmonization as Improving Their Patent
Experience
70% Allow native language filing
52% Complete examination by JPO within 2 years
49% Adopt 12-month grace period
42% Apply a doctrine of equivalents
29% Change to post-grant opposition system
29% Adopt 3-year maximum deferral of examination
CHANGES IN THE U.S. PATENT SYSTEM UNDER A HARMONIZATION TREATY
In 1990, the Secretary of Commerce established a commission,
known as the Advisory Commission on Patent Law Reform, to study
ways to strengthen the U.S. patent system to foster U.S.
competitiveness. In addition to studying aspects of the U.S. patent
system, the commission examined harmonization issues addressed in
the GATT TRIPS proposal and the draft WIPO treaty. In September
1992, the commission issued a report to the Secretary of Commerce
recommending several changes in the U.S. patent system in the
context of a harmonization treaty, including (1) adoption of a
first-to-file system, (2) publication of patent applications after
24 months, and (3) adoption of a 20-year patent term measured from
the filing date.
We asked the U.S. companies we surveyed whether they would
support or oppose having the United States adopt a first-to-file
system in the context of a patent harmonization treaty. As shown
in figure 6.2, 66 percent of all the responding companies either
"strongly" or "generally" supported adoption of such a system,
while 22 percent strongly or generally opposed it. Although
companies with more than 10,000 employees were most supportive of
a move to the first-to-file system, a majority of companies of all
sizes supported the adoption of such a system.
The issue of moving to a first-to-file system has generated
considerable controversy in the United States. Many individual
inventors and small companies are vigorously opposed to the
first-to-file system because they believe it would limit their
ability to obtain patents and increase their costs. Resistance to
the United States' adopting a first-to-file system may hinder
patent harmonization efforts, as other WIPO member countries have
said that they would not be willing to make changes in their patent
systems under harmonization unless the United States agrees to move
to the first-to-file system.
Figure 6.2: Percent of Firms Supporting Adoption of First-To-File
System
Strongly/ Strongly/
generally generally
support oppose Neutral
--------- --------- -------
All firms in survey 66% 22%
7%
< 500 employee firms 51% 25%
8%
501 - 10000 employees 63% 28%
7%
> 10000 employees 75% 16%
7%
Sixty-four percent of the responding companies also either
strongly or generally supported the United States' publishing
patent applications after 18 to 24 months, while 21 percent were
generally or strongly opposed.
Many companies told us that they would not support changes in
the U.S. patent system unless Japan agreed to make significant
changes in its patent system as part of a harmonization effort.
SUCCESS OF DRAFT HARMONIZATION TREATY MAY HINGE ON OUTCOME OF GATT
TRIPS PROPOSAL
GATT'S proposed TRIPS agreement and WIPO'S draft harmonization
treaty are complementary. Both accords share similar objectives--to
strengthen protection and improve enforcement of intellectual
property rights, such as patents, through multilateral mechanisms.
The proposals are also mutually dependent. According to GATT
Secretariat officials, while TRIPS is not necessarily a
prerequisite for a ratffled WIPO treaty, a ratified GATT TRIPS
would strengthen WIPO'S draft treaty. However, according to several
U.S. patent attorneys, the success of WIPO'S harmonization treaty
is highly dependent upon the successful outcome of GATT TRIPS
because if the latter fails there would most likely be pressure to
include some of the TRIPS' provisions in the WIPO treaty. In the
view of some attorneys and U.S. PTO officials, TRIPS' failure could
ultimately compromise the WIPO effort because, unlike GATT, the
WIPO negotiation has no concessions to offer developing countries.
Moreover, WIPO officials told us that they may not resume the
harmonization treaty negotiations until the Uruguay Round is
concluded.
--
*****************************************************************
*********
Greg Aharonian
srctran@world.std.com
Source Translation & Optimization
617-489-3727
P.O. Box 404, Belmont, MA 02178
=================================================================
FREE NEW PATENT TITLES MAILING LIST VIA EMAIL
Starting in late October, I will be offering a free service to
anyone
who can receive email from the Internet. The service will be a
weekly mailing
of all of the patents issued by the patent office during the last
week (or
more specifically, all of the patents listed in the most recent
issue of the
USPTO Patent Gazette).
For each patent, the patent title and number will be listed.
The
mailing will consist of three files, each on the average totalling
50K of
ASCII text - one file with the mechanical patents, one file with
the chemical
patents and one file with the electronic patents. I have attached
some sample
listings to the end of this message. With each file there will be
provided
some information on how to order paper and electronic versions of
patents.
If you can receive and UNZIP a UUENCODED file, those files will be
about 25K
in size, for those with smaller mail buffers.
If this catches on, I will probably convert this over to a new
USENET
group, something like comp.patents.new or the equivalent. Also, I
will be
setting up an anonymous ftp site to store the files being mailed
out, as
well as back files. Until then, I will be running only the mailing
service.
SERVICE IS FREE - FILES UNCOPYRIGHTED
The service will be free, and the files are not copyrighted,
so you are
free to do whatever you want with the information. The
mailing-list is open
to anyone on the planet. If this service is of help, a voluntary
registration
fee will be appreciated. Given sufficient contributions, I will be
able to
post to the Internet and mailing list other patent information, in
particular
more information on US patents, such as patent classification and
patent
assignee, and brief information on foreign patents (in particular,
Japanese
and British). My goal in the long run is to help coordinate
hooking up the
Patent Office's APS system to the Internet, and attach to the
Internet CDROM
drives with the CDROMs sold by the Patent Office.
Occasionally I will mail out to the mailing list announcements
from the
Patent Office and other tidbits of patent information. This will
tend to be
short messages. I am not affliated with the Patent Office in
anyway, nor am
I am patent lawyer.
TO RECEIVE THE NEW PATENT LISTINGS FILES
If you are interested in receiving these files, please send to
me
your name and postal and email addresses, the words MECHANICAL,
CHEMICAL
and/or ELECTRONIC (depending which groups you care to receive), and
the
words ASCII or UUZIP (depending on which format you want - UUZIP
means
you can receive and UNZIP a UUDECODED file). If you want to
receive patent
news information (PTO announcements, lawsuit outcomes), send the
word NEWS.
If you want to receive all of the files, send the word ALL.
Also, if you don't mind, please include some information on
what you do
and how you might use this patent information. Forward your
requests to:
patents-request@world.std.com
Please pass the word, especially to those not on the Internet
or that
don't read USENET. Patent information is very valuable for finding
out what
others are doing, for locating new technologies to license, and to
measure
rates of progress in other fields.
If you have any questions, please contact me at
patents@world.std.com
and I'll get back.
Gregory Aharonian
617-489-3727
Source Translation & Optimization
P.O. Box 404
Belmont, MA 02178
patents@world.std.com
SAMPLE LIST OF PATENTS AS DISTRIBUTED TO MAILING LIST
5177809 Optical cable having a plurality of light waveguides
5177808 Optical energy beam transmission path structure
5177807 Device for the alignment of an optical fiber and an
optoelectronic
component
5177806 Optical fiber feedthrough
5177805 Optical sensors utilizing multiple reflection
5177804 Waveguide-type optical switch
5177803 Coaxial optical fiber coupler transmitter-receiver
apparatus and
method of making same
5177802 Fingerprint input apparatus
5177801 Cross fader for editing audio signals
5177800 Bar code activated speech synthesizer teaching device
5177799 Speech encoder
5177798 Sound reproducer for high definition television
5177797 Block transformation coding and decoding system with
offset block
division
--
*****************************************************************
*********
Greg Aharonian
srctran@world.std.com
Source Translation & Optimization
617-489-3727
P.O. Box 404, Belmont, MA 02178
=================================================================
In <28dsvuINNh60@gap.caltech.edu> cco.caltech.edu!gageorge (Glen
Arthur George)
writes:
>Is the patent description in the public domain, i.e. am I allowed
to read
>it?
Please, please, readers of this group please keep in mind the
difference between what the patent *discloses* and what it
*claims*. A patent may disclose A, B, C, D, and E, and yet may
claim only doing C on Tuesdays. The patent laws and the courts
encourage people to pay the $3 for a copy of a patent for its
content, which typically includes disclosure of things beyond what
it claims. They encourage people to be inventive and to find ways
to "design around" the claims, which further promotes science and
the useful arts.
Yes, you are allowed to read the patent.
And if you happen to be outside the US, you can do whatever you
want without having to worry about the patent at all. (There are
exceptions, such as importing patented stuff or products of
patented processes back into the US; if you care about this, see
a lawyer. This is not legal advice.)
And, when the patent term expires (which is at 4, 8, 12, or 17
years, depending on what maintenance fees, if any, are paid by the
patent owner) you can proceed even within the US without having to
worry about being sued by the patent owner for doing what is in the
claims.
>I have always assumed this to be true. If I can't "build" the
>invention to add on a new, novel feature and get my own patent it
would
>seem that a basic patent is much more valuable than I thought. I
guess it
>depends on your definition of "research". I use it in the
academic sense
>(i.e. I want to compare my new and improved compression algorithm
with
>someone else's - which mine is based on) which was the sense in
the
>original posting (as I recall). Is my interpretation incorrect?
It is commonplace for A to get a patent on chairs, and for B to
later invent the rocking chair and get a patent on that. That is,
people regularly get improvement patents. How does B manage to do
research on chairs while A holds the patent on chairs? Easy -- B
does it outside the country where A holds the patent. Or, less
easy, B gets advice of a lawyer that B's proposed conduct will not
give rise to liability, perhaps because it falls in the research
exception area. Or, B has a patent license from A.
--
Carl Oppedahl AA2KW (patent lawyer)
1992 Commerce Street #309
Yorktown Heights, NY 10598-4412
voice 212-777-1330