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.