Saturday, April 29, 2017

JPO Expands IP Insurance Coverage to the Entire World

The Japan Patent Office (JPO) has provided an IP insurance which covers expenses when an SME is involved into IP disputes in foreign countries since July 2016, as previously reported in this blog.

The outline of the insurance is as below.

  • Covered region: the entire world (can select countries)
  • Payment limit: JPY 30 million and 50 million newly added to the existing plans

This insurance doesn’t pay for damages and license fee. Therefore, SMEs still should obtain good patents, whether by themselves or from third parties, in the countries where they do business, even when they buy the insurance.

According to the JPO’s follow-up survey on subsidy for foreign patent filing in 2016 (933 responses), 6% of companies have been asserted IP infringement. I hope that Japanese SMEs become active and successfully distinguish themselves in foreign countries enough to make competitors feel an urge to drive them away from the market.

Friday, April 21, 2017

New JPO ADR Decides License Fee

It was reported by multiple media that the Japan Patent Office (JPO) will present an amendment of patent law to the Diet in 2018 for creating JPO alternative dispute resolution (ADR) system.

In this JPO ADR system, it is expected that an arbitrator who is an expert selected by the JPO presents an appropriate license fee, payment method etc., and the arbitrator makes a legally binding ruling. Details of the system will be further discussed.

The purpose of the JPO ADR system is to prevent patent trolls from bringing an unreasonable action and to reduce damage of production companies from patent trolls. Another purpose is to solve disputes between large companies and SMEs, where an arbitrator is supposed to assist SMEs. Many Japanese tend to support for an underdog.

However, the reality in Japan is that there are only around 200 new IP lawsuits per year. In fact, there is an existing ADR system for IP disputes which is run by the Japan Intellectual Property Arbitration Center (JIPAC) established by the Japan Patent Attorneys Association (JPAA) and the Japan Federation of Bar Associations (JFBA). According to statistics provided by JIPAC, it receives less than 10 application cases per year, as shown in the right figure. It is far from active.

First of all, Japan should create an inviting environment for patent holders to utilize their patent right. Don't you think that patent holders are the underdogs?

Saturday, April 15, 2017

Can Japan Build a Data Market?

Japan has been studying the intellectual property system for promoting the utilization of new data-related assets (e.g. IoT data), expecting a data market to be built to assist companies create new services. 

In March 2017, Intellectual Property Strategy Headquarters published a report “Committee to Review Intellectual Property regarding New Data-related Assets” (English summary is available.). 

The committee defined “valuable data” to be considered in this study as “data or aggregated data which has not been protected by existing IP rights such as copyright and patent, and needs certain investment or effort to collect, accumulate, store etc.” Data obtained from sensors of a machine tool, and data obtained from a car-mounted sensor/ camera,  a smartphone, or a wearable device are examples of the valuable data.

Data-based services are already provided by many companies. However, the government expects a more open data market where a company can create new services using the data which another company owns; e.g. damage insurance using car driving data, taxi dispatch system using position data of a mobile phone. This data market is expected to provide functions of price formation, matching demand and supply, refinement of trade terms and conditions, standardization of trade data, credit guarantee and so on.
The report concludes by pointing out the matters to be further discussed or considered, as follows.  

1. Support for contract for data usage
We will establish contract guidelines concerning use of valuable data, which will lead to clarification of points to be considered when establishing arrangements for sharing of profits created through data usage taking into account respective contributions. 

2. Construction of a good foundation for data sharing
We will promote efforts to secure information security and improve the environment such as demonstration of valuable data utilization and distribution infrastructure. In the data distribution base such as the data trading market, we will explore concretely about making de facto rules concerning usage and profit sharing accompanying it.

3. Secure a fair competitive order
In order to ensure fair competition and orderly markets where data holders and users can reliably provide and use valuable data, we will examine the data and actions which may be considered as “unfair competition practice” based on actual state of industry.

4. Review of restricted rights for promotion of utilization
While paying close attention to trends in data utilization business, to the situation of data trading market, and to situation of regulation in foreign countries, we will continue to consider the option of possible introduction of limited rights.

The concept of the data market is interesting. However, it is going to take some time before deciding the specification of the data market. Companies will continue to create new services using their valuable data without waiting for building of the data market. Also, there may be not so many companies which want to openly share their data itself with other companies, differently from the government or public sector’s open data.

Instead, companies may choose to provide and license an API or component which provides access to their data to enable other companies use it to develop their unique services, like a mashup in web development. Then, a directory service may be useful to locate such API or components.

Saturday, April 8, 2017

Reemerging Business Method Patents in Japan

In the United States, business method patents or software patents have been unstable after Alice. On the other hand, in Japan, the number of patent applications and patent grant rate for business related inventions have been on the increase.

On March 24, Japan Patent Office (JPO) released "Recent Trends in Business-related Inventions*". According to JPO, the number of patent applications for business-related inventions has been on an upward trend since 2011, and 7,111 patent applications were filed in 2015. The patent grant rate for them has been also improved. It is now 69% for patent applications filed in 2012, while it was less than 10% for applications filed in 2000 when business method patents became the rage which was originated from the US. JPO explains that a better understanding of the Patent Examination Guidelines has improved the patent grant rate.
(Note *: “Business-related Invention” is defined as invention which realizes a business method by using information and communication technology.)

New services using IT technology have been developed one after another in a variety of fields. Such services often have uniqueness in their business models, rather than element technologies which are used to realize those services. Therefore, the service providers have more interest in obtaining patents to protect their business models. In the coming years, it is expected that patent applications for IoT-related and/ or AI-related business models will further increase.

The table below shows the Japan patent ranking in the number of patents granted in 2016 in the field of business-related inventions (FI = G06Q). Sumitomo Mitsui Banking Corporation (SMBC) is ranked in the top 10. SMBC was covered in the previous articles of this blog, "A Japanese Megabank Launches IP Marketplace for their Clients" and "SMBC Signs MoU to Partner with NineSigma". It is rediscovered that SMBC has strong interest in intellectual property.

Saturday, April 1, 2017

Toyota Accelerates Alliance Formation in Connected Car

Toyota is accelerating alliance formation in connected car. In this field, partnering with IT companies is essential for automobile manufacturers. Microsoft seems to have built up a good relationship with Japanese automobile manufacturers.

On March 22, Microsoft announced patent license agreement with Toyota. This isn't Toyota's first partnership with Microsoft. In April 2016, Toyota and Microsoft established a joint venture company  Toyota Connected, Inc. in the US to analyze driving information. Patent licensing after strengthening business ties. This may be a good strategy, but hard to follow by NPEs.

In Japan, Toyota and Microsoft appear extremely active in connected car. Microsoft also has a partnership with Nissan, which was announced in September 2016, to develop next-generation connected services for cars powered by Microsoft Azure. Contrary to Google, Microsoft has not shown their intention to develop its own automobiles. This may be one of reasons why Toyota and Nissan decided to work with Microsoft.