Friday, December 30, 2016

Patent Licensing & Acquisition Deals Japanese Companies Signed in 2016

As 2016 comes to a close, here are patent licensing and acquisition deals Japanese companies signed this year which were reported in the media.  Unsurprisingly, all deals cannot be reported.

As shown above, generally, Japanese companies often get license from US companies, while licensing to Chinese companies. 

The deal between domestic companies (ITOKI) was made under a local government program on technology transfer, i.e. to assist SMEs in their product development using non-use patents owned by large companies. Maybe, patent owners cannot expect great licensing revenues under such a program. However, it may be a good fit for Japanese personality and readily accepted by both sides, licensor and licensee. In this case, a patent is a certificate of technical capabilities, rather than a tool of exercising the right.

Funai was also reported that they partnered with Intellectual Ventures (now Xinova) in June. They seem to be active on open innovation.

Friday, December 23, 2016

Japan to Strengthen Oversight of Overseas Transfer of Patents

The fiscal 2017 tax reform outline unveiled on December 8 includes strengthening measures concerning cross-boarder tax cheats. 

The scope of the foreign subsidiaries unitary tax system that imposes a tax for a parent company and their foreign subsidiaries in a lump will be expanded in order to prevent activities to elude taxation in Japan by transferring income to a subsidiary established in a country or region with lower tax rate. After April 2018, a foreign shell company, independent of its location (currently applied only to a company established in a country or region with tax burden ratio of less than 20%), will get taxed combined with its parent Japanese company. Further, when it is recognized as a subsidiary with the intent of tax cheats, such a subsidiary will get taxed under the unitary tax system, even if it is not a shell company. 

The tax reform outline provides an addendum on "Basic Idea for Ideal Form of International Taxation" and mentions overseas transfer of intellectual properties.  It states that:
     The overseas investment and technologies transfer should be made for pure business reasons, but not for reduction of tax burden. For example, transferring intellectual properties, which are created through research and development using Japanese infrastructure and labor power, to a foreign shell company not only causes loss-of-taxation but also potentially hampers conservation of Japanese intellectual properties.

    The government will review necessary practice according to a basic idea of matching “the location of activities” and “the location of taxation” which is recommended in the BEPS (Base Erosion and Profit Shifting) project. Regarding “the location of activities” for intellectual properties, two locations should be considered, i.e. the location of creation of intellectual properties through research and development and the location of profit through the use of intellectual properties. 

International coalition is a must for prevention of tax cheats by multinational companies. At the same time, governments are supposed to consider the interest of their own domestic companies. I hope that the Japanese government carefully examines the measures including the conditions and the timing to be applied, so as not to cause harm to competitiveness of Japanese companies.

Thursday, December 15, 2016

Content Curation Sites under Pressure to Change

More than 100,000 contents suddenly disappeared on the net. Japanese content curation sites are forced to be suspended in quick succession.

This was triggered by a medical information site “WELQ”, which was managed by DeNA Co., Ltd., a provider of mobile and online services, having provided inaccurate information and many contents accused of copyright infringement. 

Eventually, DeNA decided to suspend all of their content curation sites. Responding to this uproar, other major curation platform providers, such as CyberAgent, Inc. and Recruit Holdings., Ltd., also decided to suspend some of their content curation sites. 

Curation services which select valuable contents among infinite digital contents with mixture of wheat and chaff are very helpful. The DeNA’s curation service has prospered in business, according to such users’ needs, as shown in the sales chart below (Source: The results briefing on 2Q of 2016). 

I believe that the media has the responsibilities of checking the accuracy of the information and also conducting the copyright clearance not to infringe other parties’ rights. However, in the Internet world, the existence of contents without the credibility is observed as a matter of course. It seems that the media thrusts responsibility of checking the sources of the information to decide the accuracy on the readers. 

It costs time and money to check the accuracy of the information and copyright clearance. Having ignored the review process raised this affair. What’s worse, it is reported that DeNA provided a guidebook for writers to rewrite original contents to produce contents easily, which is suspected of suggesting to disguise copyright infringement. 

We should take this occasion to learn how the media should be. And, I hope low-quality media are weeded out.

This affair makes me feel I may incur cost to maintain quality contents providers.

Sunday, April 17, 2016

Franck Muller Loses Trademark Case Against Parody Watch “フランク三浦 [Franck Miura]”

On April 12, Japan IP High Court handed down a lenient judgment for a parody watch manufacturer on a trademark case. Franck Muller alleged that the parody watch manufacturer’s registered trademark “フランク三浦 [Franck Miura]” which sounds similar to “Franck Muller” should be invalidated. However, the court decided that there is no likelihood confusion in the marketplace, because “フランク三浦 [Franck Miura]” is significantly different in appearance and meaning, and the parody watches are cheap. A provision for preventing “free riding” (Article 4, paragraph (1), item (19) of the Trademark Act) requires similarity between two of the marks.

A parody is a work created based on an original work, and thus uses the value of the original work. However, Trademark Act is not designed to prevent such a parody itself. You must prove the similarity.

For comparison, the Copyright Act is not so lenient to a parody work. 

Sunday, April 3, 2016

Generic Drug Manufactures on the Backfoot

Japans courts recently give decisions in favor of original drug manufactures one after another, while the government is seeking to promote generic drugs in order to reduce total medical expenses.

In June last year,the Supreme Court gave a ruling regarding product-by-process claims that a product having the same structure or feature infringes the patent, even if its production process is different (TEVA v. Kyowa Hakko Kirin). In November, the Supreme Court made a decision that Patent Term Extension should be approved for a drug patent when the drug is granted marketing authorization for different dosage and administration even if the drug has the same ingredients (Genentech Inc. v. JPO), as reported in this blog.

Then, in March 25 this year, IP High Court upheld the decision of Tokyo district court in favor of Chugai Pharmaceutical that generic drug manufactures infringe the Chugais patent for manufacturing process of maxacalcitol which is the active ingredient of antipsoriatic agent, under the doctrine of equivalents. In this case, Chugais corresponding substance patent was already expired but the process patent was alive when generic drug manufactures sold their drugs. 

In view of the above, it seems there is a trend of original drug manufacture’s patent being protected for a longer time and interpreted more broadly.

Thursday, March 24, 2016

Honda likely to Release FCV related Patents, following Toyota

On March 10, Honda announced the launch of their fuel cell vehicle (FCV) ”CLARITY”. Honda owns approximately 4,000 FCV related patents, and their executive officer of FCV development Toshihiro Mibe said that they are open to discuss the license of these patents with all auto manufactures, according to a media report.    

This statement must have been influenced by Toyotas announcement regarding the royalty-free license, that is a limited time offer until year 2020, of approximately 5,680 FCV related patents in January 2015, and also Teslas  patent release of their electric vehicle (EV) related 200 patents in June 2014.

Patent release is used to disseminate a particular technology and expand a particular market. Certainly, it helps to lower a barrier to enter the market. However, the market size and trends should be more important to decide if companies enter the market. Many companies may think it is too early to enter the market, when they see the sales forecast chart prepared by the government (See below). The infrastructure development is also important for the widespread use of EV and FCV. 80 charging stations for FCV will be installed in the country at the end of March, while more than 17,000 EV charging stations are available.