More monetisation in Japan, new SEP guidelines in China on the cards in 2016

As always, the arrival of the new year provides an opportunity to set out grand plans for the twelve months to come and indulge in a bit of optimism about what can be accomplished in that time span. Patent offices are no different, and today we look at year-end statements from the Japan Patent Office (JPO) and China’s State Council in an attempt to read the tea leaves and find out what two of Asia’s big three IP offices will be focusing on in 2015.

First up is Japan. As we noted in our wrap-up of the major stories to come out of the Asia IP market in 2015, a couple of new Japanese companies took the plunge last year and began working openly with NPEs in order to extract value from their patent portfolios. Rohm and Funai, partnering with NPE WiLAN, became the latest to try an approach that, while far from mainstream, we are slowly but steadily seeing more of. We also saw the country’s sovereign patent fund (SPF) operator, IP Bridge, take the momentous step of filing its first known patent infringement lawsuit. JPO Commissioner Hitoshi Ito’s New Year’s message of course does not mention these developments, but does allude to new ways in which the nation’s IP is being used to generate income.

The main focuses of the commissioner’s letter are efforts to bolster examinations and quality (for example by adding 100 fixed term examiners) and initiatives aimed at supporting small businesses. Another matter of business will be conforming to the requirements of the agreed-upon Trans-Pacific Partnership, which will mean extending the terms of some patent protections, among other IP reforms. The commissioner ends, though, with a nod to the commercial and financial value that IP returns to Japanese companies, pointing out that the country’s balance of payments for the use of intellectual property has been in the black for the last thirteen years, and the surplus now stands around $14.3 billion. “This demonstrates that Japan has been experiencing a transition toward adopting new forms of revenue generation derived from the utilization of intellectual property”, Ito added. With the nation’s corporates continuing to be squeezed by tough regional competition, this is not a movement we expect to see slowing down in the new year.  

Meanwhile, China’s State Council in the waning days of 2015 released an “Opinion on Building a Strong IP Nation”. This was a more comprehensive and forward-looking blueprint, and as evidenced in USPTO counsel Mark Cohen’s close reading of the Chinese-language text, it contained plenty of interesting nuggets. The emergence of specialist IP courts in Beijing, Shanghai and Guangzhou over the past year has led many to wonder whether the country could attract more international patent litigation in the future, and it seems this is a development the central government might welcome. The State Council says it will participate in more joint enforcement efforts with other countries with a view to “making [China] an important venue for settling international disputes regarding intellectual property”. The opinion also says the government will aim to help Chinese companies do more IP licensing-out overseas, but according to Cohen, it does not mention “how to improve the environment for imported technology”. This suggests that another continuing theme will be the overall difficulty of the business environment for foreign businesses, especially in the tech sector. Both of these trends will weigh in patent owners’ minds as they weigh up licensing and litigation options in the country.

The document also reveals that despite lots of major developments in 2015, the course China will ultimately take on issues of FRAND licensing is yet to be seen, and the subject is likely to stay in the spotlight. On the agenda is “improving” the policy for SEP licensing as well as introducing “practical rules for stopping infringement”, which may address the availability of injunctions in cases involving FRAND-encumbered patents. Cohen notes that some subtle changes can be inferred between this document and last year’s NDRC draft IP abuse guidelines, writing: “The recognition that the failure of a prospective licensee to take a license could constitute infringement, rather than an abuse of injunctive relief as was suggested by NDRC in its draft IPR abuse guidelines, suggests that a more holistic approach could be in the works.”

As with any New Year's resolutions, we have no idea how much of what these two countries hope to accomplish in the IP field will actually come to fruition, this year or ever. But they do give us a bit of insight into where priorities lie. IAM will of course be following all of these threads and many more in the year to come.

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