W.Herbert Sponsored Doing Business In Japan Presentation

Intellectual Property & Observations about Contracting in Japan William A. Herbert, Attorney at Law (admitted in Georgia, New York & Washington) william@wherbertlaw.com 1 © 2010 William Herbert (info@wherbertlaw.com)

Japanese Intellectual Property Patent Rights Copyrights Rights in Registered Trademarks/Service Marks ,[object Object],Lesser known rights (Registered Utility Models, Registered Designs, Registered Integrated Semiconductor Chip Layouts, Registered Plant Matter) 2 © 2010 William Herbert (info@wherbertlaw.com)

Patent Rights Subject Matter (novelty, inventive step, industrial applicability) Priority Filing Ownership Licenses Registered under Art. 77 of the Patent Act Registered under Art. 78 of the Patent Act Compulsory Licenses ,[object Object]

Patentable Subject Matter “Highly advanced creations of technical ideas utilizing the laws of nature” Subject matter must be novel, involve an inventive step, and have industrial applicability to be patentable. Patentable subject matter includes: Computer programs that express a sequence of processes or operations in a time sequence; So called “business methods” Products of genetic engineering (microorganisms) Subject matter is not patentable if publicly known or used in Japan or abroad before the date the patent application claiming it is filed in Japan (no novelty and thus is not patentable). But, inventors who have tested their invention or presented it in a printed publication or at a study meeting held by a scientific organization designated by the JPO may maintain novelty of if they file a patent application within six months after the date of the testing or presentation. 4 © 2010 William Herbert (info@wherbertlaw.com)

Patent Ownership If patentable subject matter is jointly owned, then any patent application claiming it must be filed jointly by all owners, or if by only one co-owners, then all other owners must have assigned their interest to applicant to that owner. Joint patent owners may work a patented invention without the consent of the other owners, absent agreement otherwise to the contrary (Art. 73(1)); BUT Joint owner may not assign, pledge or grant a license (exclusive or non-exclusive) to a patent without the consent of all of the other owners. (Patent Act, Art. 73 (1)(3)) Compare with U.S. patent law: Absent agreement to the contrary, each of the joint inventors of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners. 6 © 2010 William Herbert (info@wherbertlaw.com)

Compulsory Licenses The JPO may award compulsory non-exclusive licenses to a party who would like such a license if, at least four years after the patent has issued, the patented invention has not been “sufficiently and continuously” worked for three or more years in Japan. If four or more years have passed since the patent was issued, and if the patented invention has not “sufficiently and continuously” worked for three or more years in Japan, then a party may ask the patentee to grant the party a non-exclusive license to the patent. If the parties are unable to agree on the granting of a non-exclusive license, then then party wishing to receive a non-exclusive license may petition the JPO to award it a non-exclusive license. The JPO may award the petitioner a royalty bearing non-exclusive license. (Patent Act, Art. 83, 84 and 85) 8 © 2010 William Herbert (info@wherbertlaw.com)

Infringement/Damages & Remedies Patent infringement includes, with respect to a product claimed in a patent. Producing; Using; assigning to a third party; offering to assign (“assigning” refers to transferring or leasing); importing, or possessing for the purpose of assigning or exporting; or employing a process that is claimed in a patent and producing, assigning to a third party, offering to assign, importing or exporting, a product to be used in a process claimed in a Japanese patent. Infringement of a patent right creates a presumption of negligence when committing the infringing act. Actual knowledge of patent not required. Patent owners need not send a warning letter to alleged infringers before bringing a claim. Damages and Remedies The patent right holder’s choice of: the profit per unit of product that would have been sold by the holder of the patent right had there been no infringement, multiplied by the number of infringing products sold by the infringer; the profits earned by the infringer; or the consideration that the holder of the patent right would have been entitled to receive for granting the infringer the right to work the patent. Patent owners and licensees who register their licenses under Article 77 may seek injunctions to stop ongoing infringement or to prevent threatened infringement, and demand disposal of infringing products and products produced by processes claimed in the patent. 9 © 2010 William Herbert (info@wherbertlaw.com)

Copyrightable Subject Matter “Productions in which thoughts or sentiments are expressed in a creative way and which fall within the literary, scientific, artistic or musical domain” are copyrightable. This includes: novels, plays, scripts, musical works, choreographic works and pantomimes, paintings, engraving and sculptures, architectural works, cinematographic and photographic works, and computer programs. A work created by translating, arranging musically, transforming, dramatizing, cinematizing, or otherwise adapting a pre-existing copyrightable work is a derivative work, and thus is copyrightable. However, copyright of a derivative work does not affect authorship rights in the original work. 11 © 2010 William Herbert (info@wherbertlaw.com)

Authorship Authorship is attributed to the person who creates the work, except in cases in which an employee, in the course of employment duties, makes a work on the initiative of a corporation or other legal person. Then, unless stipulated in the employment contract, the work is attributed to the corporate entity. Authorship of cinematographic works is attributed to those who have creatively contributed to the creation of the work as a whole by taking charge of producing, directing, filming, and/or artistically directing it. 12 © 2010 William Herbert (info@wherbertlaw.com)

Author’s Rights Exclusive right to reproduce their work, to perform it publicly, make it public by screen presentation, publicly transmit it, and offer it to the public by transferring ownership of the original work or reproductions of it. Authors of literary works have the exclusive right to recite their works publicly, while authors of artistic works and unpublished photographic works have the exclusive right to exhibit them publicly. Japanese law also recognizes so called “moral rights” of authors and the “neighboring rights” of performers and broadcasters Right to publish their work, to determine whether or not authorship of the work is attributed to them, to maintain the integrity of the work and to prevent distortion, mutilation, or other modification of the work. Performers have the exclusive right to make sound or visual recordings of their performance, and to broadcast and to wire broadcast their performance. Broadcasting organizations which have obtained authorization from a person who has the right to broadcast a performance may make a sound or visual recording of the performance. Performers have the right to receive fees for the broadcast and the secondary use of commercial phonogram incorporating the sound recording of the performance. Absent agreement to the contrary, once a performer authorizes the broadcast of a performance, the performance may be broadcast in the future, with the broadcaster obligated to pay the performer a reasonable royalty. 13 © 2010 William Herbert (info@wherbertlaw.com)

Registration Copyright arises concurrently with the creation of the work. There is no examination or registration with a governmental agency necessary for rights to vest. But: copyright holder may register the date of first publication of the work; authors may have their name registered with respect to the work; and authors of copyrightable computer programs may have the date of the creation of the program registered with Japan’s Agency for Cultural Affairs. The transfer or limitation on the disposal of a copyright and the establishment or modification of a pledge on a copyright may not be enforced against third parties unless the transfer, limitation or pledge is registered with the Agency for Cultural Affairs. 14 © 2010 William Herbert (info@wherbertlaw.com)

Copyright Term For works authored by a natural person, copyright expires fifty years after the death of the author, or fifty years after the death of the last surviving author for a co-authored work. For anonymous or pseudonymous works, copyright expires fifty years after the making of the work, unless the fifty-year period after the death of the author lapses before fifty years following the date the work was made public, in which case the copyright expires fifty years after the death of the author, if known. In the case of works whose authorship is attributed to a corporate body or other legal person, copyright expires fifty years after work was made public. Copyright of cinematographic works expires seventy years after the work has been made public, or if the work is not made public, seventy years after creation of the work. 15 © 2010 William Herbert (info@wherbertlaw.com)

Infringement Infringement includes: importing into Japan, for purposes of distribution, objects made by conduct that would have infringed the copyright if the conduct had occurred in Japan; distributing, or possessing for purposes of distributing, an object made by an infringing act; using on a computer program reproduced by an infringing act; intentionally adding, removing, or modifying information which identifies the work, or the owner of the rights, or information regarding the manner of the authorized exploitation of the work; and exploiting a work prejudicial to the honor or reputation of the author. Importing, distributing, possessing for the purpose of distributing, or using or reproducing on a computer objects that are copyrighted also amounts to infringement. 16 © 2010 William Herbert (info@wherbertlaw.com)

Damages and Remedies Infringers are liable for damages calculated at the copyright holder’s choice of: the number of objects sold or reproduced multiplied by the per unit profit that the copyright holder could have sold had there been no infringement; or the sum that would have been received by the copyright holder through the exercise of the rights. The profits, if any, received by the infringer as a result of the infringement are presumed to be the damages suffered by the copyright holder. Copyright holders may seek injunctions to stop infringement or to prevent threatened infringement, and also may demand destruction of infringing articles or equipment used exclusively for infringement. 17 © 2010 William Herbert (info@wherbertlaw.com)

Marks and Registration Trademarks and service marks, are “characters, figures, signs, or three dimensional shapes, any combination of them, or any combination of them with colors.” An applicant may register a mark used in connection with goods or services for business purposes, unless the mark lacks distinctiveness. The application to register a mark must specify the goods or services for which the mark is intended. The application is examined by the JPO, and if no grounds for refusing the registration are found, then the registration is published in the official bulletin. At any time within two months from the date of publication in the bulletin, anyone may file an opposition to the registration. Common grounds for opposition to registration include: the opponent’s belief that the mark lacks distinctiveness; the opponent’s belief that the mark does not fulfill the requirements for registration; or that registration of the mark is otherwise prohibited under Japanese law. Once a mark is registered, it may be invalidated if the JPO erroneously granted the registration, if the registration violated a treaty to which Japan is a party, if the applicant did not have rights in the mark when it was registered, if the mark is identical or similar to a trademark that is already well known among consumers in Japan or abroad as indicating goods or services pertaining to a business of a person different from the registrant, if the mark is likely to cause confusion in connection with the goods of services pertaining to a business of another person, or if the mark as registered is used by the registrant for unfair purposes. 19 © 2010 William Herbert (info@wherbertlaw.com)

Cooperative Associations Cooperative associations may obtain a regionally based collective trademark to be used exclusively by their members in accordance with the policies of the association. Cooperative associations or foreign associations equivalent to cooperative associations in countries other than Japan may also register their marks in Japan. As of February 18, 2010, there were 447 registered regionally based collective marks. Only two of them were for foreign products – one was for ham produced by members of the Parma Ham Consortium, and one was for pork produced by members of Canada Pork International. 20 © 2010 William Herbert (info@wherbertlaw.com)

Infringement Infringement includes: using a mark similar to the registered mark in connection with goods or services designated for the registered mark; using the registered mark or a mark similar to it in connection with goods or services similar to goods or services designated for the registered mark; possessing, for the purpose of assignment, transfer, or export, goods designated for the registered mark or goods similar to the designated goods or services, that bear the registered mark or a mark similar to the registered mark; possessing or importing articles that bear the registered mark or a mark similar to it that are used to provide designated services or services similar to the designated services for the purpose of providing the designated services through use of the articles; assigning, delivering, possessing or importing for the purpose of assigning or delivering articles that bear a registered mark or a mark similar to it, for the purpose of causing the provision of designated or similar services through use of the products; possessing products indicating the registered mark or a similar mark for the purpose of using the registered mark or the mark similar to it in connection with the designated goods or designated services, or similar goods or services; assigning, delivering, or possessing for the purpose of assigning or delivering articles bearing the registered mark or a mark similar to it for the purpose of causing the registered mark or a mark similar to it to be used in connection with the designated goods or designated services, or similar goods or services; manufacturing or importing products indicating the registered mark or a mark similar to it, for the purpose of using or causing to be used the registered trademark or a trademark similar to it in connection with the designated goods or designated services or similar goods or services; and manufacturing, assigning, delivering or importing products to be used exclusively for manufacturing products bearing the registered mark or a mark similar to it. Those who infringe a the rights of a holder of rights in a registered mark are presumed to be negligent when they commit the infringing act, even if they had no actual knowledge of the existence of the registered mark that they infringe. 22 © 2010 William Herbert (info@wherbertlaw.com)

Damages and Remedies Infringers are liable for damages calculated at the claimant’s choice of: the profit per unit of goods that would have been sold by the holder of rights to the registered mark had there been no infringement, multiplied by the number of infringing goods sold by the infringer; the profits earned by the infringer; or the consideration that the holder of rights to the registered mark would have been entitled to receive for the use of the mark. Holders of rights in registered marks may demand injunctions to stop or prevent infringement by anyone who infringes or threatens to infringe the right in the mark. Trademark licensees who register their exclusive right to use a mark under Article 33 of the Trademark Act enjoy rights that are similar to patent licensees who register their licenses under Article 77 of the Patent Act, including the right to demand damages and injunctions. 23 © 2010 William Herbert (info@wherbertlaw.com)

Definition Trade secrets, defined as “technical or business information useful for commercial activities, such as manufacturing or marketing methods, that is kept secret and that is not publicly known” are intellectual property proprietary to their owner. 25 © 2010 William Herbert (info@wherbertlaw.com)

Maintenance of Trade Secret Protection To establish that information is a trade secret, the holder of the information must implement and maintain procedures to preserve the secrecy of the information. Administrative agency regulations describe standards and procedures which, if taken by the owner of information purported to be a trade secret, increase the likelihood that the information will be deemed to have been maintaining as secret. These include: Marking the information as “Confidential” Placing limits on who may access the information. Informing in writing those who do access the information that they have an obligation not to disclose or use the information, and binding them to obligations of confidentiality. Additional actions that the corporate owner of a purported trade secret should implement include appointing a particular person within the organization to act as the manager of confidential information; training employees on the importance of maintaining trade secrets as confidential; and drafting specific in-house rules on the maintenance of secrecy. 26 © 2010 William Herbert (info@wherbertlaw.com)

Misappropriation of Trade Secret Legally impermissible unfair competition includes: acquiring trade secrets through theft, fraud, duress, or other wrongful means; using or disclosing trade secrets acquired through such wrongful means; acquiring trade secrets with knowledge that they had been acquired through wrongful means, or lacking knowledge of the wrongful acquisition only through gross negligence; using or disclosing trade secrets after becoming aware that they had been wrongfully acquired, or lacking awareness of the wrongful acquisition only through gross negligence; using or disclosing trade secrets for purposes of unfair business competition, illicit gain, or causing injury to their owner; acquiring a trade secret with the knowledge that it was acquired through improper disclosure, or lacking such knowledge only through gross negligence, or using or disclosing a trade secrete so acquired; using or disclosing an acquired trade secret after becoming aware that the trade secret had been improperly disclosed or if not becoming aware of the improper disclosure, lacking such awareness due to gross negligence. 27 © 2010 William Herbert (info@wherbertlaw.com)

Remedies for Misappropriation Those whose business interests have been infringed or are likely to be infringed as a result of a third party misappropriating their trade secret may seek: injunction stopping or preventing infringement; and the destruction of any articles that constitute infringement. ,[object Object]

The claimant may also choose to claim damages for trade secret infringement calculated as the profits received by the infringing party through the act of infringement, or the consideration that reasonably should have been received for the infringer’s use of the trade secret. Finally, anyone who infringes a trade secret may also be ordered to restore the business reputation of the owner of the secret in lieu of or in addition to compensating the owner for damages. 28 © 2010 William Herbert (info@wherbertlaw.com)

Japanese Attitudes toward Contracting Contracts are less detailed and physically shorter in length Contracts are often seen as beginning of relationship, rather than final promise on matter Contracts seen as one of many other agreements that have been made and will be made 29 © 2010 William Herbert (info@wherbertlaw.com)

Clause for Ownership of Research Collaboration IP If any results of the collaborative research is a new invention, device, design copyrightable work, intellectual property rights (rights to receive rights in patent rights, utility model rights, design rights, trademark rights, and if registered rights arising after their registration, and also an copyrights), then the parties shall negotiate in good faith and agree separately regarding their ownership and share of rights regarding the results. 30 © 2010 William Herbert (info@wherbertlaw.com)

Indemnification Clause If either party to this agreement should incur some damage due to the failure of the other party to perform under this agreement, then the party so damaged may demand that the party failing to perform indemnify it. 31 © 2010 William Herbert (info@wherbertlaw.com)

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