Patent protection of computer technologies
By Karl Ruping Innovators are seeking patent protection for new computer technologies with increasing frequency. This article, part one of a two-part series, looks to Japanese patent protection laws for computer hardware and the strategies available for securing international rights for domestic inventions. After years of playing catch-up with foreign technology, the Japanese computer industry has become an international competitor, if not a leader in certain key areas. A mix of government-sponsored research and development projects, new industry trade policies and aggressive corporate investment have benefited the industry so that today it enjoys rapid technological advances and international market growth. Though there are untiring advances in computer technology, legal protection for these new forms of intellectual property are being created at a much slower pace. The result is a growing gap between technology and law. And while technological advances are global in this increasingly wired world, legal protections remain national, and sometimes nationalistic. Early Japanese computer technology lagged behind that of the US, and so did domestic legislation establishing and protecting intellectual property rights in this new industry. The first commercial electronic computers emerged at the end of the 1940s in the US. Japanese equivalents did not appear for almost a decade later, and even then Japanese products could not compete internationally in terms of price or performance. Through the 1960s Japanese industrial policy for high technology supported research and development in Japan while maintaining import restrictions that protected most of the domestic market from Japanese competitors. Japanese patent protection during this period was widely criticized by the few international competitors who braved the Japan market. Examination of foreign applications was uncomfortably long, the judicial interpretation of patent claims surprisingly was narrow and damage awards for infringement were frustratingly low. This was complicated by a judicial system that failed to provide an effective discovery procedure necessary for a patent holder to prove infringement. An example of the frustrating system is the Kilby patent. In 1961 Texas Instruments filed a Japanese patent for its breakthrough invention, the integrated circuit. Of the 14 corresponding applications, 12 were rejected and the final examination was not complete until 1989, some 29 years after the initial filing. The Japanese patent law has enjoyed progressive revisions that have both expanded the scope of statutory subject matter and the depth of the patent right. This was partly in response to foreign pressure, gaiatsu, but also as a result of growing domestic competitiveness and the emergence of Japan as a technology exporter. Today Japanese patent law offers rights comparable to other industrial nations, but there are some important caveats of which the computer innovator should be aware. Japanese patent law has an industry-orientated purpose: to promote the protection and utilization of inventions with a view to encourage inventions, and thereby to contribute to the development of industry. The patent holder enjoys the exclusive right to commercially run a protected invention for a period of twenty years from the date of filing the patent application. Only an inventor can apply for a patent, but the inventor may transfer such right explicitly by means of a contractual agreement or implicitly - and possibly unwittingly - in the employment relationship (see CJ April 1997 pg. 35). Unlike the first-to-invent system in US law, the Japanese patent right is determined by a race to the patent office, so priority is given to the first to submit a patent application with the Japan Patent Office (JPO). The international filer may enjoy certain exceptions to this rule, which are described later on. The JPO will initially undertake only a preliminary review to ensure application formalities are met. Unless withdrawn, the patent office will publicly "lay open" the application eighteen months after the filing date. Applicants have up to seven years to request an examination to determine the patentability of their claims. Since the 20-year patent right is measured from the date of filing rather than the date of patent issue, an early examination is preferred to ensure the maximum life of the monopoly right. An applicant can use the seven-year delay to consider the commercial value of the underlying technology or to perfect the invention before undertaking the expense of full-patent prosecution. If the examination is not requested within seven years, however, the patent is considered withdrawn and the technology becomes part of the public domain. A patent is granted only to subject matter that falls within the statutory definition of invention, or hatsumei. Section 2 of Japan's patent act defines a patentable invention as a highly advanced creation of a technical idea utilizing a law of nature, or shizen hoosoku. While this protection applies to all areas of technology, explicitly excluded are inventions that are contrary to public order, good morals or public health. Patent protection does not extend to mere discoveries of an existing law of nature. Also excluded are claims to mathematical formula, such as the Euclidean algorithm generating the greatest common devisor of two integers. On the other hand, the application of a law of nature to a technical idea that results in a highly advanced creation is eligible for protection under the patent act invention. For example, a sequence of transistors aligned in a manner to efficiently generate the greatest common divisor based on the Euclidean algorithm qualifies as statutory subject matter. While an ambiguous definition, the JPO and courts have progressively expanded the interpretation of patentable invention. Hardware applications fit comfortably into a patent regime that has long recognized advances in electronic engineering. The invention can be claimed as a process, machine or an element of a process or machine. Patent Requirements After establishing patentable subject matter, the application must sufficiently describe a new, non-obvious advance in the particular field of technology that has commercial use. To be novel an invention must be new and not part of the prior art senko gijitsu. (Prior art consists of inventions that were publicly known in Japan, publicly worked in Japan, or described in a publication distributed in Japan or any other country as of the application filing date.) The inventor should be careful when promoting an innovative idea that has not yet been claimed in a patent application, even when these activities are in a foreign country. Japanese patent law is forgiving for some activities. An invention does not lose its novelty if the inventor/applicant files an application within six months of engaging in a technical experiment, printed publication, or public presentation at a government-authorized exhibition. A six-month extension also is available if the invention is disclosed against the will of the inventor/applicant in an experiment, publication or presentation. Obviously the invention must be an advance in the existing technology. Commercial utility requires the claimed invention have an actual or potential industrial application, rarely a problem in the field of computer technology. However, the patent claims should be carefully drafted to ensure the invention is capable of achieving its stated purpose. Finally, the application must describe the invention such that a person with ordinary skill in the particular field can figure out how to use it. Thus, the patent applicant cannot hold back necessary information from the published claims to preserve trade secret protection or otherwise frustrate competing research. Patent protection is not immediate. JPO examination takes on average 22 months, but a longer period should be expected for complex claims or breakthrough technologies. Japanese patent law provides for a right to an interim royalty while the disclosed application is being reviewed, which is lost retroactively if the invention is rejected by the JPO or withdrawn by the applicant. Patent infringement occurs when an unauthorized party uses, sales, leases or imports the protected invention as a business. A simple offer to sell or lease is sufficient to establish infringement. For a patented process the importation of material produced by the protected process is a violation of the domestic patent right. The patent violator faces both civil and criminal liabilities. A patent holder can recover damages from an unauthorized user even for unintentional infringement. Patent damages are calculated according to the patent holder's lost profits or the infringer's profits that are generated from the infringing activities. Japanese patent law also provides an ersatz calculation of damages. The patent holder can recover an amount equal to a reasonable royalty for the particular infringement based on the scope of the patent and the unauthorized use. Reasonable royalty damages are awarded in 45% of successful cases and recovery rates remain low. The average award for both patent and design-right infringement is Y15 million, paltry when the filing fees and annuity costs for maintaining a patent over its lifetime easily reach \5 million. It is not surprising that only 20% of successful patent holders are satisfied with the recovery awarded. The patent holder may seek an injunction to prevent continuing acts of infringement. As part of the injunction the court can order the destruction of infringing material. The Code of Civil Procedure was recently revised to stream line these civil actions, but an injunction claim will still require substantial time before a final judgement. A more immediate, but more difficult, action is a petition for provisional disposition or karishobun, which is the equivalent of a temporary injunction in the US. Independent of a damage award or an injunction, a court may also order measures necessary to restore the business goodwill of the patent holder. These corrective measures usually take the form of an apology letter published in the general media or in industry publications. Criminal sanctions of up to five years are possible, but imprisonment rarely occurs. But caution, the patent laws call for "hard labor" - so after crunching numbers in Tsukuba you may be crushing rocks on Hachijojima. Next month's article will include information on patent tradeoffs and international perspectives. Karl Ruping frequently contributes articles on law and technology to Computing Japan. He can be reached at ruping@tuj.ac.jp |
