New JPO commissioner talks IP Bridge, monetisation and patent reform in exclusive IAM interview 09 Sep 16
Commissioners of the Japan Patent Office (JPO) tend to stay in the post for only about a year or so, and the typical profile is a senior official within Japan’s Ministry of Economy, Trade and Industry (METI) – not a figure from IP practice. But as this blog has outlined, Commissioner Yoshinori Komiya, who took the reins in June, is not a newcomer to the field. This week in Tokyo, industry figures have told me that the JPO’s new leader was instrumental in the creation of IP Bridge and other strategic IP projects, and is expected to hit the ground running in his new role. Yesterday, I sat down with Commissioner Komiya on the sidelines of IPBC Japan. The following is an excerpt from our conversation – the full interview will be published in upcoming issues of IAM’s English and Japanese-language editions.
You have worked in IP on and off going back to 2001. What has changed the most about the Japanese IP environment in these 15 years?
Yes, between 2001 and 2004, I served as director of the IP Policy Office of the Economic and Industrial Policy Bureau within METI. Also during this period we collaborated with the JPO to examine issues of intellectual property strategy. During the tenure of Prime Minister Koizumi, we drew up the Intellectual Property Basic Act, and since then after 12 years, I feel like I have returned to a home near to my heart. The situation has certainly changed during that time. In the past there was an extremely long waiting list, and the wait for a granted patent in Japan was up to two years. We did away with various administrative measures and now the average is one year or less… it’s a completely different world.
I have been told you were instrumental in setting up IP Bridge during your tenure with the Innovation Network Corporation of Japan (INCJ). Why was the project so important to you?
During my tenure at INCJ, in July of 2013 we made the decision to invest in IP Bridge. Back then, Japanese companies were deploying vast research and development funds and investment, and had accumulated enormous patent portfolios. But the proportion of ‘sleeping’ patents was high. These were not being effectively used by the entities that developed them. Further, because of the evolution and integration of certain businesses, the selling of patents to overseas markets was increasing. To prevent the outflow of patents from Japan, we looked to aggregate them and use them, for example, to support domestic SMEs. The aim was to aggregate these patents not used by the companies that developed them. We drafted the idea for IP Bridge also to utilise the knowhow of company engineers, so that we could offer patents together, and avoid the outflow of this knowledge. So this is the history that led to the decision to invest in IP Bridge.
In recent years, patent applications to the JPO have decreased. Do you see this as a cause for concern?
On the one hand, filings to the JPO are on a declining trend. But with the globalisation of Japanese companies, overseas patent filings generated in Japan are increasing, including applications through the PCT. Another factor is the ballooning expenses incurred by these companies that are filing more overseas patents – because of these costs, only truly critical applications will be pursued. So companies are becoming more selective and focused when it comes to obtaining patents, and that makes the overall environment more sound. Further, looking at the yearly trend since 2009, the trend is toward fading, or tapering off, of applications. But registrations, on the other hand, are staying approximately level. So the way we analyse it is by looking at the proportion of registrations to filings. So the registration rate is bucking that trend.
You mentioned in your inaugural speech that Japanese industry is in a “transition state”, and companies are moving toward “creating revenues by assigning and licensing intellectual property rights”. Are there steps the JPO can take to assist in this transition?
What I’d like to do is touch on how we perceive monetisation of IP rights. The patent right is the outcome, or deliverable, of technological development. It is also essential for companies to engage in the management of that right. It is a foundation, or a wall that companies build to protect themselves from imitation of their products. I do not believe it is significant in and of itself that IP rights be traded in the marketplace. But selling or trading IP assets together with business activity is a natural course. In recent times, we have seen M&A activity and separation of certain business divisions lead to rapid changes, and valuation and trading of IP rights is progressing. Recently, if you look at the macroeconomic trends, Japanese companies are becoming more globalised – and the licensing income returned to Japan is increasing. The origin of much of this income is from overseas subsidiaries set up by Japanese companies. The increase in licensing fee income is actually a result of this trend.
We heard from Secretary General Iuchi this morning that patent litigation levels in Japan are ticking upward but remain relatively low. I understand the JPO is studying the issue as well – do you expect to introduce proposals for litigation reform?
Our intention this year is to act based on the findings of the IP Promotion Plan 2016. We will look to set up a subcommittee to deliberate on potential measures of IP reforms going forward. To be frank, there are various views when it comes to litigation. There are objections by industry in Japan to certain proposals. For example, some of the experts stress the importance of emulating the system in the US, where litigants can obtain triple damages in cases of wilful infringement. But Japanese industry claims that this concept will not be well received in Japan. Industries in Japan are also claiming the importance of re-examinations and administrative proceedings. Other views include scholars who say we should be examining criminal law to enhance severity of penalties, or that there should be certified means for calculating damage amounts and preserving evidence. The views on these topics are quite wide. Given that, the subcommittee’s role will be to capture all these views.
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