Japan Patent Office: new policy on sharing patent licensing fees to boost creativity

On July 12, the Japan Patent Office (JPO) was revealed to be considering designing a new mechanism where companies providing services with the use of final products such as automobiles and smartphones will be required to share the patent licensing fees that were originally solely borne by their manufacturers. The JPO has established a research team to conduct research on related issues, and will consider the necessity of amending the Patent Law based on the research results. With the development of new services such as in-vehicle communication services, this research may attract wider attention. Japan is the first country to carry out this legislative research aimed at optimizing the environment for innovation and creation.


According to the plan, before March 2022, the research team will hold 3 expert meetings and prepare related reports.


It is understood that the basic goal of this new mechanism is to allow patentees with partial or basic technology patents to obtain invention compensation by charging part of the price of the final product using the patent as a licensing fee.


However, under the current patent system, the patent right disappears as the product goes on the market (exhaustion of the right), and it is difficult to require the service provider who uses the final product to bear the licensing fee. Therefore, the research team will focus on the requirement that patent rights will not be exhausted. The ultimate goal is to reduce the manufacturer's excessive burden by allowing the entire operator to bear the license fee broadly and thinly within the scope of the right not disappearing.


The research team will also discuss the payment of a reasonable licensing fee commensurate with the market value to the patentee. If the new mechanism works, it is expected that a virtuous circle will be formed, that is, the company or university to which the inventor belongs will use the patent license income obtained for the next step of research and development.

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