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The Japanese Experience in Wealth Creation
Average reader rating: 0  
by Hisamitsu Arai, WIPO 23 Intellectual Property

Intellectual Property Policies for the Twenty-First Century: The Japanese Experience in Wealth Creation

Introduction

As Sony co-founder Masaru Ibuka remarked upon being awarded the Japanese Order of Culture, “Inventions are the fount of culture. They are essential to any culture’s development. There have been many significant inventions throughout the course of history - among them the ancient inventions of the water clock and paper-making, the invention of the printing press in the Middle Ages and, more recently, Edison’s phonograph and the steam engine, which powered the industrial revolution. All of these inventions have had a profound impact on the course of human civilization and sparked great cultural development.”

Sakichi Toyoda, widely acknowledged as one of Japan’s top ten inventors of all time for his invention of the world’s best automatic looms, was very offended by American policies to exclude Japanese in the early decades of the 20th century. Commenting on these anti-Japanese policies, he said ruefully, “What have the Japanese contributed to the building of modern civilization? The Chinese invented the compass, but the Japanese have invented nothing. That is why the Americans see Japan only as a copycat nation.” Believing that Japan had to produce outstanding inventions, to demonstrate to the United States that the Japanese also possessed very capable intellects, he donated large sums of money to the Japan Institute of Invention and Innovation to promote the invention of efficient storage batteries. Indeed, it was his belief that inventing useful technologies and obtaining good patents contributed to the advance of civilization – and that patents are thus the foundation of civilization.

[...]

Epilogue
When I was appointed JPO Commissioner in July 1996, I was curious about what kind of person files a patent application. How do the people at startup companies invent their new products, and how do they successfully commercialize them? Thus I was interested in meeting people from SMEs and in touring factories and research facilities. And I was surprised to hear people complain that, “the JPO is the only hope we have of protecting SME technology, but the examination takes so long that counterfeit products are taking our customers away before we even get the patent.” Knowing that seeing is believing, I visited R&D laboratories and intellectual property offices in big companies. I went to universities and talked with chancellors and deans, and I sought out their views on how the patent process impacts research and development and what they would like to see done about the problems.

In trying to get other people to tell me what they thought, I realized I had to put my own thinking on the table as well, and I embarked upon a nationwide speaking tour. I went not only to Tokyo, Osaka, and Nagoya but also to Sapporo, Sendai, Hiroshima, Takamatsu, Fukuoka, Naha, and almost everywhere else throughout Japan. I spoke with the people and sought out their views, and I made an effort to get a first-hand feel for the pulse of the country.

I went to symposia hosted by the ten leading Japanese intellectual property organizations and I was invited to speak to the economic and business organizations. I was on a Tokai University television hook-up to all of their campuses, nationwide. I spoke at Kyoto University, Ritsumeikan University and in other places. I did the whole circuit. And each time I spoke, I felt that people went away more interested in patent issues. I treasured these people’s views on the system, and their criticisms. I tried to make sure that their comments, e-mail, letters, and other messages came to be part of the thinking, as we worked for systemic reforms.

I was also interested in finding out how things worked overseas, so I visited WIPO, the European Patent Office (EPO), the EU Office for Harmonization in Internal Markets (OHIM), and the American, British, German, French, and Austrian patent offices as well as those in China, Korea, Thailand, Indonesia, Malaysia, the Philippines, and Singapore. And as I saw how other patent offices handled incoming applications, how they did their examinations, and how they notified applicants, I was constantly comparing this with the Japanese situation. In some aspects, Japan was ahead of the rest of the world. In others, we had some catching up to do.

Realizing how important patents will be in the 21st century, I decided that we needed a national effort to restructure our patent system for the information age, and I asked Yoshito Arima, the former President of the University of Tokyo and Minister of Education, Science and Technology to help form a Commission on Intellectual Property Rights for the Twenty-first Century in the fall of 1996. In addition to Arima, who served as chair, the Commission included leading academicians, business leaders, media people, and others who had not been much involved in patents and were able to look at things with a fresh eye. The Commission held its wide-ranging discussions over breakfast, with the secretariat’s documents distributed ahead of time so that the discussion could be as free-wheeling as possible. It was not, as several people commented, at all typical of the way the bureaucracy does things, and the Commission’s thoughtful discussions culminated in a set of eight recommendations in April 1997.

These recommendations were:

(1) to broaden the scope of intellectual property
(2) to strengthen the protection for intellectual property
(3) to enable universities to play a stronger role in patents
(4) to establish a patent market
(5) to establish cyber-patents
(6) to help the developing countries strengthen their patent systems
(7) to work for global patents
(8) to mount a national effort on intellectual property rights issues

Then, based upon these recommendations, I decided to change the way the JPO operates, to realign budgeting, and to ask the companies and universities that file for patents to help me implement these changes. As part of the push for global patents, I also had the Commission’s report translated into English and distributed overseas for comment. Happily, the other patent offices read the report, gave it their serious consideration, and generally declared themselves in agreement.

In the past, whenever there has been patent friction between Japan and the United States, the pattern has been for the U.S. to be on the offensive and Japan on the defensive, but after reading the report, the U.S. delegation indicated its surprise and pleasure that Japan was taking a global initiative in patents. “We are,” they said, “in complete agreement with the thrust of this report. This report is in the best interests of U.S. applicants, and it will also serve to promote technological development worldwide. Our only hope is that we will be able to explain this report to the Administration and Congress and get them to go along with it.” The era of Japan-U.S. patent friction is over.

As a representative of one Asian nation remarked, “We are also making an effort to put our patent house in order to further economic development, but it is hard to get the politicians to understand the patent system. Yet we had this Japanese report translated into our language, explained it to the president, and won increased staffing for the patent office.”

Newly appointed WIPO Director General Dr. Idris remarked that the report outlines a joint direction that the Japanese Patent Office and WIPO can take for the future, and that he hopes Japan and WIPO will be able to join hands in taking the lead for the global patent system.

With this broad support from overseas and general agreement on what the governments should do, the Japanese, U.S., and European patent offices met in Kyoto in November 1997 and started work on specific cooperative programs toward agreement on a worldwide system for the grant of patents. Meanwhile, greater understanding has been achieved in Japan on the need to be more propatent in the decades ahead, including amending the Patent Law. Everyone agrees when I tell Diet members that I want to amend the Patent Law, because the situation in which patent infringement pays is counter-productive to the development of innovative technologies.

But the legal experts have all kinds of reservations. Because the Patent Law is a special law under the Civil Code, many of them say it would be wrong to carve out such major exceptions and we should first think about changing the Code’s general principles. But my position is that, because the Patent Law is a special exception to the Civil Code’s indemnification provisions, it has to be brought into line with patent realities lest Japan be left behind in the march of progress.

In working to amend the Patent Law, we have held meetings of the Industrial Property Council at least every month since April 1997. Seeking to get the Council to elucidate the legal thinking needed for the new era, we formed a working group of young university faculty members and held intensive discussion sessions, meeting more than fortnightly over the summer vacation. The people working on this in the JPO also gave up a lot of their days off. Because this would be the first major overhaul of thinking on compensation in 40 years, we divided this into two stages - the things that should be fixed in the first year and the things that should be fixed in the second year. We managed to get the first-stage amendments made. This was closely watched by academics and the media, and the process sent a clear message to companies, universities, and everyone else concerned that the Japanese government will not tolerate a situation in which it pays to infringe on other people’s patents.

With these changes, companies can win stronger patent protection and can feel more secure about their patents. They can assert their rights more confidently. Everyone now knows that producing counterfeits is asking for trouble, and counterfeiters are now looking for honest ways to make a living. There has been a revolution in patent awareness, and some people have referred to this as a “patent Big Bang” equivalent to the changes that are revolutionizing the financial services sector.

As part of this process, we also realized that we would have to change the way university professors think about patents before we could hope to encourage more start-up ventures in Japan, and we made a concerted effort to get the Law Promoting Technology Transfer from Universities to Industry passed, so that university research could be patented and licensed to commercial firms, and could actually benefit the whole of society. Happily, this bill was deliberated along with the amendments to the Patent Law and both bills were passed in April 1998.

The media gave this process extensive coverage and provided valuable feedback. At first, there was considerable criticism that there did not seem to be any sense of urgency about the JPO’s work. Because society at large had an outdated image of the JPO as a lethargic bureaucracy, the media reminded me of the need to send a clear message that the JPO had changed and was still changing. Whenever I went out for speaking engagements or to talk with people, I sensed that there were growing expectations of the JPO. More and more people were pressing for revisions.

So I brought this information back, told everyone throughout the JPO of these heightened expectations, and tried to stir up discussion of how we could best meet society’s requirements in the years ahead. Some younger patent officers formed a JPO Society discussion group, to study the issues involved. They then issued their own set of recommendations for the future. They analyzed the differences in filing behavior between Japanese and American companies and put together their own proposals for a global patent system.

Communication is fundamental if the JPO is going to contribute to the kind of society that is needed in the 21st century, and the JPO has availed itself of a wide range of means to convey its thinking and to get its information out, in line with calls for greater disclosure and accountability. As part of this, it has published Japan’s New Era of Pro-Patent (1997), Patents Support Venture Business (1998), and Era of Patent Strategy ~Pro-Patent Big Bang~ (1999), all in Japanese.

During my term as JPO Commissioner, I became keenly aware of the need to globalize intellectual property rights management and to recognize the greater role in the economy played by intellectual property rights. I looked for foreign literature on intellectual property rights policy, but found little. Thus I took it upon myself to have my own views translated into English for distribution to politicians, government officials, lawyers, patent attorneys, business leaders, academics, the media, and anyone else with an interest in intellectual property rights - both to inform their discussion and in order that their feedback could inform my own thinking.

In closing, I would like to express my deep gratitude to Mr. Yo Takagi of WIPO, Mr. Hiroshi Nishiwaki of the JPO, and Mr. Frederick Uleman of Japan Research Co. for their excellent work in the publication of this book.


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