JICA(Sep.2005)(wakui) 1
JICA Training Course on Competition Law and Policy (FY2005)
Intellectual Property Rights and Antimonopoly Act
Masako Wakui Associate Professor (Economic Law) Graduate School of Law Osaka City University [email protected]
1. Intellectual Properties: Overview
1.1 Outline of intellectual property system
What is the "intellectual property"?
… "intellectual property" refers to inventions, devices, new varieties of plants, designs, works and other property that is produced through creative activities by human beings (including discovered or solved laws of nature or natural phenomena that are industrially applicable), trademarks, trade names and other marks that are used to indicate goods or services in business activities, and trade secrets and other technical or business information that is useful for business activities. (Basic Law on Intellectual Property Art.2) http://www.kantei.go.jp/foreign/policy/titeki/hourei/021204kihon_e.html
- Results of intellectual creative activities (inventions, etc.) as well as embodiment of one’s business reputation (eg, trademark, etc.)
- Common to both Intangible (having no physical substance) Initial production costs high; Additional production (copying) costs low; and, Detection and elimination of infringement costs high. “Quasi- public goods”
1 JICA(Sep.2005)(wakui) 2
The Types of Intellectual Property Rights and the System for Their Protection
(1) Intellectual Creations (a) Inventions - Patent Law [Japan Patent Office (JPO)] (b) Utility Models - Utility Model Law [JPO] (c) Designs *designs - Design Law [JPO] *product form - Unfair Competition Prevention Law [Office of IP policy, Economic and Industrial Policy Bureau, METI] (d) Trade Secrets (manufacturing technologies,customer lists,etc.) - Unfair Competition Prevention Law (e) Integrated Semiconductor Circuits - Laws for protection of semiconductor chips (f) Copyright (novels, music, etc.) - Copyright Law [Agency for Cultural Affairs] *rights similar to copyright (for stage performance producers, record producers, broadcasters, etc.)
(2) Commercial Symbols a. types of new plants - Seedling Law [Ministry of Agriculture, Forestry and Fisheries of Japan (MAFF)] b. trade names* (Trade Name Law) c. trademarks (including service marks) *registered trademarks - Trademark Law * unregistered (well known) trademarks - Unfair Competition Prevention Law d. geographical indications - Unfair Competition Prevention Law, Trademark Law, Liquor Industry Law.
See Japan Patent Office, Outline of the Intellectual Property System
2 JICA(Sep.2005)(wakui) 3
- Purposes of patent system: (i) Allowing right holders to earn profits through exclusive use of intellectual properties as an incentive, and thereby promoting their further creative activities; (ii) Likewise, promoting IP circulation activities, and, (iii) Facilitating IP disclosure.
- Purpose of trademark system: (i) inducing further quality improvement activities by IP right holders through allowing them to earn profit based on business reputation obtained through such quality improvement; and (ii) consumer protection.
Two typical measures to promote creative activities i) Subsidies delivered by the government (Advantage) - Intellectual properties can be freely used at no charge. (Disadvantage) - It is difficult for the government to properly determine the parties to which subsidies are delivered. - Intellectual properties are seldom utilized effectively, due to mal-distribution of information thereof.
ii)Grant of intellectual property right or any other form of legal protection to allow an exclusive use of intellectual properties “de-centralized solution to encourage R&D”
1.2 Intellectual-property protection system in Japan
See Figure 1
&
Basic Law on Intellectual Property (Law No.122 of 2002)[Strategic Council on Intellectual Property, Cabinet] “stipulating the basic ideas on the creation, protection and exploitation of intellectual property and the basic measures to achieve the ideas, clarifying the responsibilities of the State, local governments, universities, etc. and business enterprises, establishing the Intellectual Property Policy Headquarters, and providing stipulations on the development of a promotion program on the creation, protection and exploitation of intellectual property”.
In summary, － A series of IP-related laws and the Basic Law on Intellectual Property － Adjustment/coordination between such laws and multiple competent agencies, as well as formulation of national strategy
3 JICA(Sep.2005)(wakui) 4
(1) [Patent] Inventions *Applicable Laws: Patent Law
Patent Application: To obtain a patent right, one must apply to the Japanese Patent Office and go through an examination to determine whether the application fulfills all the necessary requirements.
The following documents are required to submit: Requests (The name of applicant and inventors, the address, etc); Patent claim(s); Specification (the title of the invention; a brief explanation of the drawings; a detailed explanation of the invention), Necessary drawings, Abstract
Publication of Unexamined Application (Kokai) : The JPO will publish the content of an application in the Patent Office Gazette after 18 months have elapsed from the date of filing.
Substantive Examination : The examination will be carried out by the examiners of the JPO, who will decide whether or not the claimed invention should be patented. An examination will firstly check whether the application fulfills the requirements prescribed by law, i.e., whether or not there are any reasons for refusal. These requirements include the following: - Whether the claimed invention is based on a technical idea which utilizes a law of nature, - Whether it has any industrial applicability, - Whether the technical idea existed before the filing of the current application, - Whether the claimed invention could have been easily arrived at by a person skilled in the art, - Whether the applicant is the first to file, - Whether the claimed invention is liable to contravene public order and morality, and - Whether the descriptions in the specification conform exactly with the requirements for patentability.
Protection Period: 20 years from the day when an application was filed (a limit of five years is applied to cases of pharmaceutical products and agricultural chemicals, but this period can be extended).
*Concrete Examples products or methods characterized by a high level of a creative technological idea; items characterized by a longer life cycle than a new utility model; hardware and related computer programs, items including plants, animals, and microorganisms.
4 JICA(Sep.2005)(wakui) 5
(2) Utility Models *Applicable Law: Law for New Utility Models Protection Period: 6 years from the day when an application was filed.
*Concrete Examples Items having a short life cycle, characterized by the potential for an early impolementation and a creative idea relating to the shape of products, their structure and other technological aspects; the technological aspect of a utility model may be on a lower level when compared to a patent; an idea of a method is not a valid subject.
(3) Designs *Applicable Law: Design Law … An examiner will check whether an application meets these requirements. The requirements with respect to the contents of a design include the following. - It should be a design, i.e., a shape, pattern, colour or combination of these in an article which arouses an aesthetic impression via the sense of sight. - The design can be utilized industrially. - The design should be innovative and without precedent. - The design should not be able to be easily created.
- In addition to these, there are several further requirements, for example that the design shall not contravene public order or morality.
Protection Period: 15 years from the date of registration of its establishment.
*Concrete Examples The shape, pattern, colour, and other design characteristics of of items relating to their external appearance; a simple picture or drawing is not a valid subject.
(4) Trademarks *Applicable Law： Trademark Law Protection Period: 10 years from the day when a created trademark was registered (continuous use can be obtained if an application is updated).
*Concrete Examples Letters, diagrams, symbols (colours) having the effect of identifying the subjet of various products or services with which are identified
Source: JPO “Outline of the Industrial Property Right System” http://www.jpo.go.jp/seido_e/index.htm & “Procedures for Obtaining a Patent Right” http://www.jpo.go.jp/tetuzuki_e/index.htm
5 JICA(Sep.2005)(wakui) 6
In case of Infringement: Severe sanction including criminal penalties. (No triple damage system in Japan, however)
* Patent Infringement (a) Injunction (b) Damages (c) Measures for recovery of the patent owner's reputation (d) Criminal penalties & (e)[Especially for Import] "Border enforcement" by Customs*
“Border enforcement”
What is it based?: Penal provisions of the Customs Law relating to the import of articles infringing intellectual property rights and Customs Tariff Law.
Violator: The violator who imported, imported, attempted to import, or prepared to import the articles infringing intellectual property rights shall be punished by imprisonment not exceeding five years, or a fine not exceeding five million yen, or both. (Customs Law, Art. 109.2.)
Employer of the violator: In case any employee of a corporate body imports, attempts to import, or prepares to import the articles infringing intellectual property rights in the course of his/her work, such corporate body shall be penalized by fine not exceeding five million yen. (Customs Law, Art. 117.1.)
Infringing articles: Intellectual property infringing articles involving criminal offence shall be confiscated. In case such confiscation is impossible to execute, penalty assessment equivalent to the amount of value evaluated based on the time at which such violation was committed shall be imposed. (Custom Law, Art. 118.1.2.)
“Import suspension motion”: The system which allows a holder of any IP such as patent rights, utility model rights, design rights, trademark rights, copyrights, work neighbouring rights, or the breeder's rights to file a motion with the Director General of Customs to suspend the import of the cargo which may infringe one's IPR, and to execute the (infringement) designation procedures. (Customs Tariff Law, Art. 21.2; Enforcement Ordinance thereof, Art. 61.4). Customs executes the border enforcement upon “provision of information for import suspension motion” from the IPR holder.
Import suspension results: 2,923 cases/260,656 articles within the three months from January to March, 2005 (Customs, Customs and Tariff Bureau, Ministry of Finance)
Excerpt from Japan Customs’ Website http://www.customs.go.jp/mizugiwa/chiteki/index.htm [Japanese]
6 JICA(Sep.2005)(wakui) 7
Importance of intellectual properties for Japan － Japan has already caught up with Europe and the U.S. in technologies. － However, outnumbered by those in the US in terms of IPRs particularly/ － Outright disadvantage in respect of costs and expenses for manufacturing industries. － Perception that media-content industries including animation and computer video game software are becoming increasingly important, and that they are internationally competitive
"Nation built on intellectual property "(!) Strategic Council on Intellectual Property, The Cabinet, “Intellectual Property Policy Outline” (3 July 2002) http://www.kantei.go.jp/foreign/policy/titeki/index_e.html
7 JICA(Sep.2005)(wakui) 8
2. Intellectual property rights and Competition: Principle
2.1 Fundamental Distinction
"The Antimonopoly Act is an act to prohibit monopoly. By contrast, intellectual property laws allow monopolizing technologies. Therefore, they contradict one another. Intellectual properties are the exception to the Antimonopoly Act". ???
Distinction between “monopoly” over a technology and the market monopoly
2.2 Built - in System :Designing Intellectual Property Laws taking into account the Competition
- Objectives to be right granted/registered: ・Limited to inventions having industrial applicability and technical ideas (Patent Law); ・"Neither generic names of merchandise nor selling place thereof are registerable as a trademark." (Trademark Law)
- Duration of rights
- Scope of rights
- Exhaustion Doctrine
- Permissible acts / Fair Use (Eg.) "Examination and research" (Patent Law, Art. 69), Limitations on Copyright (Copyright Law, Chapter 5: reproduction for private use, reproduction in libraries, educational institutions, or mass media, etc.)
- Arbitrary license system, or Compulsory License (details explained later)
- Sham Litigation and Thread : Cases under Unfair Competition Prevention Act (Sec.2 (14))
8 JICA(Sep.2005)(wakui) 9
2.3 Relationship between IPRs and antimonopoly act
- Principle
a. Fundamental Distinction between Monopolies
b. What does Antimonopoly Act do
c. Shared Aim and Competition Promotion function of IP Laws
- On Antimonopoly Act, Sec. 21 (Ex. Sec. 23)
Sec. 21 The provisions of this Act shall not apply to such acts recognizable as the exercise of rights under the Copyright Act, the Patent Act, the Utility Model Act, the Design Act or the Trademark Act.
- Nature of the provision
- “Exercise”
- “Recognizable”
Section 21 (Ex.23) is viewed as having been enacted for the purpose of confirming that (1)“Acts recognizable as the exercise of rights” under the Patent Act, etc., are not subject to the Antimonopoly Act and shall not constitute a violation of the Antimonopoly Act; but that (2), on the other hand, even if acts are considered to be the “exercise of rights” under the
Patent Act, etc., if the said acts are considered to deviate from or run counter to the purposes of the IPR system to, among other things, encourage innovation, the said acts are will no longer be deemed “acts recognizable as the exercise of rights” and the Antimonopoly Act shall be applicable to them.
9 JICA(Sep.2005)(wakui) 10
For instance, even if an act is, on its face, considered to be an exercise of rights under the Patent Act, etc., if the said act is conducted under the pretext of exercising rights but in reality is considered to be employed as part of a series of acts that constitute an unreasonable restraint of trade or private monopolization, the said act is considered to deviate from or to run counter to the purposes of the IPR system to, among other things, encourage innovation and, for this reason, the said act is no longer deemed an “act recognizable as the exercise of rights” under the Patent Act, etc., and is subject to the
Antimonopoly Act.
Furthermore, in addition to the above-mentioned situation, even if an act on its face appears to be an exercise of rights under the Patent Act, etc., if the said act, after evaluating its purpose and particular circumstances and the extent of its impact on competition in a market , is considered to deviate from or to run counter to the purposes of the IPR system, it is possible that the Antimonopoly Act will also apply to such act, since it would no longer be deemed an "act recognizable as the exercise of rights” under the Patent Act, etc.
(Excerpt from JFTC, Guide for Patent and Know-how Licensing Agreements under the Antimonopoly Act (30 July 1999))
Comment.
10 JICA(Sep.2005)(wakui) 11
3. Cases
Case 1: Manhole - Cover (JFTC Recommendation Decision of 10 September 1993)
Hinode Suido Kiki (waterworks equipment) Co., Ltd. (hereinafter, “Hinode Suido”) and four other companies are the manufacturers/distributors of cast-iron manhole covers used for public sewage systems in the northern Kyusyu area. Kota-Kyusyu City has prescribed the specifications of such manhole covers including materials, weight, shape, and structure, while nominating the providers capable of manufacturing/selling the manhole covers thus specified beforehand. This nomination limited the suppliers to the five companies above. Meanwhile, Kita-Kyusyu City revised the manhole cover specifications by adopting the utility model [right] of Hinode Suido into such specifications.
Against the background, the five companies centering on Hinode Suido met to predetermine the purchasers, selling price and sales ratio of the manhole covers per nominated company. Sales ration was settled among the parties after the incorporation of Hinode Sudo’s utility model right, which was: 40 percent to Hinode Suido, and 60 percent in total to the other four companies, in increments of 15 percent each.
In the examination initiated by the JFTC, the examinee alleged that determining the sales quantity ratio of the manhole covers is a legitimate exercise of their utility model rights. The JFTC, however, simply denied the allegation indicating the fact of a negotiation process through which quantity ratios were predetermined as well as the fact that the aggregate amount demanded is allocated among the five companies, and that the quantity for manufacture/sale thus allocated is ensured for each. The JFTC found no necessity for further consideration and/or examination. The conduct was found a violation of the
Antimonopoly Act, Sec. 3, latter subsection, unreasonable restraint of trade.
11 JICA(Sep.2005)(wakui) 12
Case 2: Pachinko Patent Pool (JFTC Decision on Recommendation of 6 August 1997)
A patent managing company, Nittokuren, managed the patents and utility models covering ‘Pachinko’, or pinball machines. Nittokuren has operated a licensing business under rights granted by Pachinko machine manufacturers and patents that it acquired on its own. A law controlling amusement businesses, Huuzoku
Eigyo Ho, sets the standards for the Pachinko machine and requires approval for their sale. It was difficult to get approval without the license of these patents. The pool was organized by members of a business association, Nikkouso, and, among them, ten manufacturers, nine of which held important patents, held over 50% of the interest directly or indirectly and sent personnel to the company as directors. The members of the Nikkouso, 19 manufactures of Pachinko machines, took most of the share in the Pachinko machine market, and all of them were granted the license from Nittokuren.
Against the background, in the license terms, Nittokuren restricted cutting price and output.
Nikkouso demanded and monitored its observation. When the entrants started threatening the positions in the Pachinko machine market, Nittokuren and ten major members set the policy to exclude entrants and refused the licence against new entrants. The termination clause was set when the licensee changed its operation status. This conduct inhibited new entrance, especially by the manufacture of a similar but different amusement machine, Pachinko Slot Machine.
The JFTC found that Nittokuren and ten manufacturers were in violation of Art.3, the prohibition of private monopoly through such conduct under the policy of eliminating new entrance, and issued a cease and desist order (‘Elimination Measures’). It ordered ten companies and Nittokuren to void the policy, measures adopted under the policy relating to licensing, which was indeed the refusal of license, and the termination clause in case of change of operation status. At the same time the JFTC issued a warning against them to refrain from restrictive conduct such as limiting price cuts, which are against Art. 3 and Art.
19. The JFTC also issued a warning under Art. 8 (1) against Nikkouso to refrain from committing the exclusion scheme and restricting cutting prices.
12 JICA(Sep.2005)(wakui) 13
Case 3: Hokkaido Shimbun Press (JFTC Decision on Consent of 28 February 2000)
The Hokkaido Shimbun Press publishes a daily newspaper which comprised almost all newspapers circulated especially in the Hakodate district. Then a new newspaper company named “Hakodate Shimbun” was established. In response to this newcomer, the Hokkaido Shimbun Press approached TV stations with a request not to accept advertisements for the Hakodate Shimbun. The Hokkaido Shimbun Press also filed application for trademarks covering newspaper titles that Hakodate Shimbun was likely to adopt at the
Patent Office, trade mark “Hakodate Simbun” for example.
The JFTC condemned the Hokkaido Shimbun Press for violation of the Antimonopoly Act, Sec. 3, first half paragraph (Prohibition of private monopolization) committed to exclude the business operations of the Hakodate Shimbun through those behaviors above, and substantially restraining competitions in the daily newspaper market in the Hakodate district. Additionally, the JFTC issued an order to withdraw the applications for trademark registration mentioned above.
Case 4: ScubaPro Asia Case （JFTC Recommendation Decision of 26 December 2002）
ScubaPro Asia constrained retailers by itself or through wholesalers dealing with its products for sale of a certain scuba diving equipment bearing the ScubaPro trademark at a price higher than a fixed amount. The
JFTC concluded that such behavior falls within the scope of unfair trade practices, #12 (resale price restriction).
Case 5: Twentieth Century Fox (JFTC Recommendation Decision of 25 November 2003)
Twentieth Century Fox Japan, Inc., which is in charge of distributing films from Twentieth Century Fox
(US) to cinema theatres in Japan, restricts the admission charge by setting specific amount of admission rate and requiring prior authorization of discount. JFTC found the restriction constitutes “Dealing on restrictive terms” (#13) and issued cease and the desist order.
13 JICA(Sep.2005)(wakui) 14
Case 6: Microsoft (Tie-in Case) (JFTC Recommendation Decision of 14 December 1998 )
Microsoft Japan (a subsidiary company of Microsoft Corporation) engages in development and sales of
Microsoft operating system (OS) and other application software. The spreadsheet software “Excel”, word processing software “Word” and schedule management software “Outlook” are among others. At the time of the conduct, which is to be found violation of the Antimonopoly Act, these software were competing against “Ichitaro” (word processing software) developed by a Japanese company, Justsytem Corporation and Lotus Corporation Schedule managing software “Organizer”. “Ichitaro” and “Organizer” accounted for the highest share in the respective software market until FY 1996/until 1995 (respectively) while “Excel” had been accounting for the highest since 1993.
Software products were distributed though PCs pre-installing or bundling the software as well as distributor and software companies. The preinstall/bundling practice became popular in 1999, when Fujitsu attracted consumers with its PCs pre-installing “Ichitaro”. Personal computers shipped with preinstalled/bundled spreadsheet and word processor software accounted for about 40 percent of the all PC shipped in 1997. In case of preinstall and/or bundle, most PC manufacturers/distributors did not preinstall/bundle the same kind of software into their PC in order to achieve the lowest possible selling price.
Under these conditions, Microsoft attempted to increase the supply of "Word" by forcing the PC manufacturers/distributors to accept the licence to preinstall/bundle "Word" together with licence for
"Excel". Microsoft rejected requests for license only to preinstall Microsoft “Excel” by PC manufacturers/distributors who wished to preinstall “Excel” and “Ichitaro” into their PCs for sale and did not need the licence for “Excel”. Later, Microsoft forced them to also accept an agreement to add
“Outlook” preinstall/bundle licence.
Microsoft increased its market share in the word processor and schedule management software domains, and achieved the highest share in FY1996 (to the date of the decision) in the relevant market.
The JFTC concluded that Microsoft committed a violation of the Antimonopoly Act, Sec. 19 (JFTC
Designation, #10, “Tie-in sale”).
14 JICA(Sep.2005)(wakui) 15
Case 7: Asahi Denka (JFTC Recommendation Decision, 13 October 1995)
Asahi Denka Co., Ltd., the leading manufacturer of epoxy plasticizers holding the top market share in the manufacture and sale of such products in Japan, and Oxirane Chemical Co., Ltd (all shares of which are owned by four Japanese companies including Asahi Denka) entered a know-how licensing agreement regarding the manufacture of epoxy plasticizers with Chang Chun Petrochemical Co., Ltd. (licensee), a
Taiwanese company. In this agreement, Asahi Denka and Oxirane Chemical obliged Chang Chun
Petrochemical: (i) not to manufacture or sell epoxy plasticizers in Japan following the expiration of the know-how licensing agreement (valid for 10 years); and, (ii) to obtain prior written consent of Asahi Denka when Chang Chun Petrochemical attempts to do so.
The JFTC concluded that the acts described above fall within the scope of unfair trade practice
(dealing on restrictive terms). The JFTC official in charge of this case summarized that the know-how in question was substantially transferred to the licensee by virtue of the agreement in question, and, accordingly, the licensee should have a right to freely use such know-how after the expiration of the agreement. Nevertheless the licensors restricted such free use including exportation to Japan. While taking notice of the fact that the agreement imposes nothing but restraint on entering the Japanese market after 10 years at the time of expiration, the JFTC official concluded that the licensors restricted competition regarding the manufacture and sale of epoxy plasticizers in the Japanese market.
15 JICA(Sep.2005)(wakui) 16
Guidelines:
Guidelines for Patent and Know-How Licensing Agreements under the Antimonopoly Act
(30 July 1999) Fair Trade Commission [the index attached to the text] http://www2.jftc.go.jp/e-page/legislation/ama/patentandknow-how.pdf
Comments: Over formalities?
“White”: “will not, in principle, fall within the category of unfair trade practices [etc.]”
“Gray”: “in certain circumstances fall within the category of unfair trade practice”
“Dark Gray”: “is highly likely to fall within the category of unfair trade practice.. “
“Black ”: “will in principle fall within the category of unfair trade practices …”
Guidelines concerning Joint Research and Development under the Antimonopoly Act
(20 April 1993) Fair Trade Commission http://www.jftc.go.jp/e-page/legislation/ama/jointresearch.pdf
[On Joint R&D and the access to the resulted IPRs]
Guidelines concerning Patent Pools accompanied with Standadization
(29 June 2005) Fair Trade Commission
http://www.jftc.go.jp/pressrelease/05.june/05062902.pdf [Japanese only]
** How to Analyze IPRs Cases: Review Points
- whether the parties concerned are competitors to each other
(*Licensor/Licensee are not competitors to each other in respect of the technology
if the license is indeed needed, although they can be competitors in goods/services market),
- which aspect of the business activities will be restricted due to such an agreement or contract
(*Normal spectrum and peculiarities in IPR cases, i.e., consideration of patent scope
: price, output, geographic location, field of use, term …. )
- whether the act in question is being conducted in the process of, or to facilitate, any legitimate
joint activity (or cooperation) between companies or, otherwise. (*Less Restrictive Alternative Test)
16 JICA(Sep.2005)(wakui) 17
4. Some Issues
4.1 Parallel import and IPRs
Parallel Import:
- Import by way of channels other than that covered by formal distributorship agreement[s] between foreign manufacturer and distributor in Japan.
- Goods distributed in the third country as well as manufacturer’s own country can be the source.
- Occurs where price difference is significant enough so as to justify the cost of securing goods and setting up distribution channels for the parallel import.
- Promotes price competition and consumer welfare, normally.
- Difficult case when it hampers incentive for authorized distributors to develop the market and/or composition/quality of the goods is made differently among the countries.
Parallel Import and Antimonopoly Act:
Authorised distributor’s conducts to stop/inhibit parallel import – Examples:
- To press overseas manufacturers and/or distributors not to sell to the parallel importer;
- To deal with its distributors on condition that they shall not handle parallel import goods;
- To induce its wholesalers not to sell the product covered by the contract to a retailer that is handling parallel import goods;
- To allege, without adequate reasons, that parallel import goods are counterfeit and infringes the trademark, etc.;
- To corner (buy out) the parallel import goods so as to obstructing the transaction;
- To refuse repair parallel import goods or to obtain necessary repair parts without reasonable justification where it is extremely difficult for any party other than the authorised distributor to conduct the repair and/or obtain the parts;
- To induce publishers of magazines, newspapers, and other media not to carry advertisements on parallel import goods, etc.
17 JICA(Sep.2005)(wakui) 18
Principle:
“In general, parallel imports are considered to promote price competition in a market, and accordingly, obstruction of parallel imports presents a problem under the Antimonopoly Act, if it is conducted to maintain price level of the product covered by the contract.”
Secretary General, Fair Trade Commission, Guidelines concerning Distribution Systems and Business
Practices under the Antimonopoly Act #3-3 (11 July 1991) http://www.jftc.go.jp/e-page/legislation/ama/distribution.pdf
- Exception to the principle
- In case the products are covered by IPRs effective in Japan
Parallel Import and IPRs:
- “Exhaustion Principle” for domestic products:
Exhaustion Principle: If the right holder once trades the products of his IPR legitimately,
he cannot prevent subsequent distribution thereof by exercising its intellectual property rights.
Cf. First Sale Doctorine
- Applicable to the international transaction? “International exhaustion” possible?
- Legislation & Case laws
For Trademark Rights, such a principle has been established that an injunction based on trademark rights against import of a genuine article is not allowed, unless the article impairs trademark’s fundamental function to indicate place-of-origin and assure the quality.
18 JICA(Sep.2005)(wakui) 19
The Copyright Law, amended in 2004, stipulates that copyrights owner can file an injunction of reimport of phonograph records/CDs applied only to overseas distribution into Japan, even though such products are the same as those distributed in Japan.
On the other hand, the Copyright Law, Art. 2. bis. 2.4. explicitly expresses that the transfer rights of the author (rights to provide the general public his/her works by transferring them) except for those of
CDs mentioned above and the works of movies shall not extend to works that are legitimately transferred overseas by the author.
With regard to Patent Rights, the Supreme Court decision of 1 July 1997 (BBS Case) clarified the possibility for recourse to patent rights to stop the parallel import:
BBS Case [Patent rights and Parallel import: Infringement case]
[Fact]
The Decision stated first that generally the international exhaustion principle cannot be accepted; because, (i) a patentee does not always own patent rights on the same invention in two countries, and (ii) granted that the patentee owns such rights in two countries, the rights are different from one other. Therefore, (iii) it cannot be [unqualifiedly] considered that (the patentee) benefited twice from a single patent.
The Decision, however, continued that (i) in the light of the situation in which international commercial transactions are developing on a broad scale, freedom of circulation of goods, including import of goods, is required to be valued at the maximum, and that (ii) even outside Japan, commercial transactions are made on the presupposition that the assignor generally transfers all the rights to the assignee, and the assignee acquires all the rights the assignor had. Under such conditions, (iii) it could
19 JICA(Sep.2005)(wakui) 20
naturally be expected that the assignee and/or a person who was assigned the patented products by the assignee would export /import such products to/into Japan as business.
The Decision then went on to the proposition that, taking into account the situation described above, if a patent holder who owns patent rights in Japan once assigned patented products to another person outside Japan, then, it is reasonable to conclude that the patent holder may not seek an import injunction of the patented products by exercising the patent rights in Japan, unless there is an agreement with the assignee to exclude Japan from the areas of sale or use of the said products, and that such descriptions are explicitly indicated on the products. [In short, this Supreme Court decision can be summarized as deeming import rights into Japan as impliedly accepted, unless explicitly agreed. (“Implied license” theory) ]
### Pros & Cons (formalistic / economical consideration)
Implications for Antimonopoly Act
Implication
Cf.… Concerning TM, “No problem” to a) cases where consumers may misunderstand parallel
import goods with different specification or quality are identical to the product handled by
authorised distributor, because of false representation of origin or other reasons; or b) cases
where the credit of the product handled may be damaged because of such reasons as threats to
consumers’ health or safety caused by deterioration of the parallel import goods. (Guide)
…. And, Caveat (Is any explicit restriction on the distributors possible?)
20 JICA(Sep.2005)(wakui) 21
4.２ Abuse of dominant bargaining position and subcontract transactions
Prohibition of Abuse of Dominant Bargaining Position
General Designation #14 [Abuse of Dominant Bargaining Position]
Taking any act specified in one of the following paragraphs, unjustly in the light of the normal business practices by making
use of one's dominant bargaining position over the other party:
i) Causing the said party in continuous transaction to purchase a commodity or service other than the one involved in the
said transaction;
ii) Causing the said party in continuous transaction to provide for oneself money, service or other economic benefits;
iii) Setting or changing transaction terms in a way disadvantageous to the said party;
iv) In addition to any act coming under the preceding three paragraphs, imposing a disadvantage on the said party
regarding terms or execution of transaction; or
v) Causing a company which is one's other transacting party to follow one's direction in advance, or to get one's
approval, regarding the appointment of officers of the said company…
Cf. Antimonopoly Act Sec.2 (9)
The term "unfair trade practices" as used in this Act shall mean any act coming
under any one of following paragraphs, which tends to impede fair competition and
which is designated by the Fair Trade Commission as such: …
(v) Dealing with another party by unjust use of one's bargaining position; …
- Peculiarity of the Designation #14
- “Dominant bargaining position”
cf. Dominant position in the market, market power
- “Setting or changing transaction terms in a way disadvantageous to the .. party
- Competition restraint effect is not required (?)
21 JICA(Sep.2005)(wakui) 22
- Peculiar …, really?
Article 82 of the EC Treaty (ex Article 86)
Any abuse by one or more undertakings of a dominant position within the common market or in a substantial part
of it shall be prohibited as incompatible with the common market insofar as it may affect trade between Member
States. Such abuse may, in particular, consist in:
(a) directly or indirectly imposing unfair purchase or selling prices or other unfair trading conditions;
(b) limiting production, markets or technical development to the prejudice of consumers;
(c) applying dissimilar conditions to equivalent transactions with other trading parties, thereby placing them
at a competitive disadvantage;
(d) making the conclusion of contracts subject to acceptance by the other parties of supplementary
obligations which, by their nature or according to commercial usage, have no connection with the subject of such
contracts.
- Implications of #14 for IPRs cases
- “Foundation for free competition” “Order of unrestricted and fair competition”
against Japanese historical, social and cultural background
- Practical Use of #14
- legal action difficult to explain the cause
- correcting transaction practices and protecting vulnerable business
- Act against Delay in Payment of Subcontract Proceeds, etc. to Subcontractors
(“Subcontract Act”) (Law No. 120 of 1956) and its amendment in 2003.
22 JICA(Sep.2005)(wakui) 23
Outlines of Subcontract Act in relation to IP
A. Purpose (Sec.1):
“to make transactions of parental entrepreneurs with subcontractors fair, and,
to protect the interests of the subcontractors,
thereby contributing to the wholesome development of the national economy.”
B. Features: [More] clearly designated violations and obligation, Active enforcement,
Regular report, Quick resolution
C. Scope
- manufacturing commission (including manufacturing metal dies),
- repairing commission,
- “information-based product creation commission”,
- service provision commission (incl. information processing, etc)
(** “information-based product” includes i) programs, ii) films, broadcast program, and other products composed of images or audio and other sounds;( ii) products composed from letters, figures or symbols or from their combination, or from a combination of letters, figures, symbols and colours; iv) in addition to those stipulated in the preceding three paragraphs, similar products that are stipulated by government ordinance [= programs].)
(*** In FY2004, the warning cases relating to the information based product reached 1,064 cases of
2,584 cases in total.)
- gap in size between parental entrepreneur and subcontractor (note)
Note: With regard to information based product creation commission and service provision commission,
the required amount of total subscribed equity is set as follows:
Parental entrepreneur Subcontractor
Exceeding 50 mill. Yen － Not exceeding 50 mill. yen
Exceeding 10 mill. Yen
to not exceeding 50 mill. yen － Not exceeding 10 mill. yen
23 JICA(Sep.2005)(wakui) 24
C. Liabilities of and prohibited acts on the parental entrepreneur i) Liabilities:
- Issuance of purchase order sheet, documentations and documents storage,
- Determination of payment due date for subcontract proceeds, and payment of past due interest
(In the event that it is impossible to determine the contents beforehand, as seen in the case of the consignment of “information artefact creation”, flawed documents, if any, are considered justifiable. In such a case, it is acceptable to add descriptions afterwards.)
ii) Prohibited acts:
- Refusal to receive products/works delivered;
- Delay in payment of subcontract proceeds;
- Reduction of the amount of subcontract proceeds;
- Returning goods/works; - Beating down of prices;
- Coercing subcontractor into purchasing any article/using any service;
- Retaliation against subcontractor;
- Requesting subcontractor to make early payment in settlement of raw materials and such that the parental entrepreneur supplied for a consideration;
- Delivering a bill difficult to be discounted by a general financial institution;
- Demanding unjust economic benefits from subcontractor;
- Unjustly coercing subcontractor into changing/reworking the content of the work, etc.
(excluding the acts attributable to subcontractor)
Cf. Prior to the amendment
JFTC, Guidelines Concerning Abuse of A Dominant Bargaining Position in
Service Transactions under the Antimonopoly Act
(17 March 1998, amended on 31 March 2004)
http://www.jftc.go.jp/e-page/legislation/ama/servicetransactions.pdf
### Protect foreign subcontractor under the Subcontract act ?
24 JICA(Sep.2005)(wakui) 25
4.2 Access to essential IPRs and compulsory license
The need for securing access to essential IPRs:
- Examples:
Arbitrary licence system under IPR Laws
The Patent Law provides that negotiations for licensing with right holder should be possible, and if the negotiation fails, or is disabled, the license applicant may request the Minister of the Economy Trade and
Industry [METI] (in public interest case) or the Director-General of the Patent Office (others) to rule that a non-exclusive license should be given when;
i) [non-exploitation] patented invention is not properly exploited within Japan for more than three yeas without legitimate reason (except for the case in which four years has not lapsed from the day of patent application) (Patent Law, Art. 83);
ii) [blocking relations] In case a patentee or exclusive licensee exploits another right-holder’s patented invention, registered utility model, or registered design filed/registered prior to the day of patent application of the patentee’s own patented invention, in order to use such patented invention ["in case it falls under the stipulations of Art. 72"] (Patent Law, Art. 92); and,
iii) [public interest] the exploitation of the invention is especially needed for the public interest
(Patent Law, Art. 93).
In arbitration procedure, the hearing is held and the amount of compensation is determined when the licence is granted. The licence under Art.92 cannot be granted when it unjustly diminishes the profits of other person, patentee, or exclusive licensee.
The Utility Model Law has similar provisions (Art. 21 to 23).
The Design Law has provisions similar to the Patent Law, Art. 92 (blocking relations).
25 JICA(Sep.2005)(wakui) 26
History:
- In 1909, the prototype of this system was introduced into domestic law.
- Main issue: “whether proper exploitation should be found when the demand is satisfied with imported patented goods?”
Record:
- No licence granted so far.
Reasons and Backgrounds:
"Operation procedures for license arbitration system"
Industrial Property Council, METI (issued on 1 December 1975/ revised on 24 April 1997)
…
[Non-exploitation]
i) The sentence “(a patented invention) is not properly exploited” in the Patent Law, Art. 83.1. shall be construed, in
principle, to refer to such cases that a patented invention is being less exploited in name only on an extremely small
scale compared to demand therefor, or that the patented products are imported products not being manufactured in
Japan. Another expression “in the event that the patented invention is not properly exploited” stated in the Law, Art.
90.1. shall also be construed in the same way as above.
ii) Whether “a patent owner has a legitimate grounds on which to not properly exploit his/her patented invention” in
the Patent Law, Art. 85.2. shall be determined taking into consideration of all circumstances. Typical cases where such
ground to be found include cases that a patented invention cannot be exploited due to inability of repair/maintenance of
the facilities or others necessary for the said exploitation caused by disaster or other events not attributable to the
demandee, etc., or that a patented invention cannot be exploited due to delay in procedures for the approval/permit
necessary for the said exploitation caused by any circumstances not attributable to the demandee.
26 JICA(Sep.2005)(wakui) 27
[Blocking Relation] iii) The expression "in case it falls under the stipulations of Art. 72" used in the Patent Law, Art. 92 shall be construed as such cases that one's own patented invention cannot be exploited unless another person's patented invention is exploited. Such case will be found when the substance patent of first file and process patent/use patent of later application are concerned, or the case of the patent of selection invention.
iv) Whether "case it unjustly diminishes the profits of other person, patentee, or exclusive licensee being defined in
Art. 72 " (the Patent Law, Art. 92.5) is found shall be determined taking into consideration of all factors, which include the substance of patented invention of first file and the patented invention of later application, pecuniary resources of the parties interested, particular business situation. The case will be generally found in such cases that the profits of the demandee are significantly diminished due to difficulty in the continuation of business caused by the establishment of a non-exclusive license.
[Public Interest] v) Major case examples falling under the expression "in case it is especially needed for public interest" used in the
Patent Law, Art. 93.1. shall construed as such cases in which:
- It is necessary to secure the lives and properties of Japanese nationals, as well as for the field/spectrum directly connected with people’s living including construction of public facilities, etc; or,
- a patented invention, the non-exclusive license of which is not exploited, hampers sound development of the industry necessitating such invention, and accordingly exerts substantial ill effects upon people's lives.
….
The arbitrary license system shall be executed in compliance with the Agreement on Trade-Related Aspects of
Intellectual Property Rights [TRIPs] and other international agreements.
(English translation of Japanese text)
27 JICA(Sep.2005)(wakui) 28
Agreement of 16 August 1994 by the IPR working groups at the Japan-U.S. framework trade negotiations
“The Patent Office of Japan (JPO) shall not rule the establishment of compulsory license related to dependent inventions after July 1, 1995, except for the correction of customary practices adjudicated as anti-competitive through judicial/administrative procedures or permission of public or noncommercial use.”
“Deregulation of technologies-adoption and legal problems pertaining to Patent Law, Antimonopoly
Act, and others” Report of Foreign Investment Advisory Council, Special Committee
(15 March 1968) [Outlines of perspective on arbitrary criteria for compulsory licensing to be made
under the Patent Law, Art. 93 [Public Interest]]
Possible cases to which the Patent Law, Art. 93 may be applied can assume that the patented invention in question is
especially needed for the security of the lives and health of Japanese nationals, and for the field/spectrum directly
connected with people’s living including construction of public facilities, etc. Another possible case assumes that a
patented invention critical to the manufacture of specific products or to the performance of specific methods is
monopolized, causing the occurrence of the situations listed below that could exert consequent serious effects upon
people’s lives; under which there is the threat of:. i) Irruption of the unemployed in an ailing industry facing financial
disruption including bankruptcy, due to non-exploitation of the patented invention that the industry desperately
needed, ii) Disposition of enormous existing manufacturing facilities/equipment, which would have been fully used if
the patented invention in question could be exploited, by an industry in desperate need of such invention due to the
occurrence of financial disruption including bankruptcy; or, iii) Occurrence of financial disruption including
bankruptcy at pillar industries, key export industries, or high-tech industries in desperate need of the patented
invention in question, and of significant disincentive to sound development of economy and technologies of such
industries.
Careful attention should be paid to the operation of the Patent Law, Art. 93., which is a critical restraint on patent
rights. In addition, the compulsory license stipulated in the Patent Law, Art. 92 should not be exercised.
28 JICA(Sep.2005)(wakui) 29
Recourse to Antimonopoly Act
Sec. 3 [Private Monopolization]
Sec. 19 [Unfair Trade Practices]
General Designation #2 Refusal to deal
- Note:
a) Distinction between unilateral conduct and others
(boycott, exclusive license, conditional use, etc.)
b) legitimacy of the IPRs
(Please refer to section 3 [antimonopoly cases] )
- Points to consider
- freedom of contract
- exercise of IPRs explicitly authorised in IPR laws
- effect on the competition
- consideration of R&D incentive, or the need to assure reward
- practical difficulties
29 JICA(Sep.2005)(wakui) 30
4.4 Regulation on international technology transactions: History
- Applicability of antimonopoly act to International transaction
- Provisions
Antimonopoly Act Sec.6: No entrepreneur shall enter into an international agreement or an
international contract which contains such matters as constitute unreasonable restraint of trade or
unfair trade practices.
“Sec. 6 (2) In accordance with the rules of the Fair Trade Commission, any entrepreneur who has
concluded an international agreement or contract, either of which is of a kind designated by the rules
of the Fair Trade Commission as likely to contain matters that may constitute undue restraint of trade
or unfair business practices,1 shall file a report with the Fair Trade Commission within 30 days after
the day of such conclusion. Along with this report should be a copy of such agreement or contract … “
* Failure to notify the FTC under Article 6, paragraph 2 of the Antimonopoly Act could result in a fine of 200,000 yen.
** Designated contracts (1982- ) included; Technological Collaboration Contract: Continuous Sales Contracts ; JV
Contracts ; Contracts for Use of Trademarks and Copyrights ; Joint Purchase or Sales Contracts ; International Cartels
- Case
- Function & Criticism
- Amendment of the Act (1996); Deletion Sec. 6 (2)
30 JICA(Sep.2005)(wakui) 31
Conclusion
31 JICA(Sep.2005)(wakui) 32
ACT CONCERNING PROHIBITION OF PRIVATE MONOPOLIZATION AND MAINTENANCE OF FAIR TRADE (Law No. 54 of 1947) (Japan Fair Trade Commission Tentative Translation) Full Text is available at http://www2.jftc.go.jp/e-page/legislation/ama/ama.pdf
Sec. 1 [Purpose] This Act, by prohibiting private monopolization, unreasonable restraint of trade and unfair trade practices, by preventing excessive concentration of economic power and by eliminating unreasonable restraint of production, sale, price, technology and the like, and all other unjust restriction of business activities through combinations, agreements and otherwise, aims to promote free and fair competition, to stimulate the creative initiative of entrepreneurs, to encourage business activities of enterprises, to heighten the level of employment and people's real income, and thereby to promote the democratic and wholesome development of the national economy as well as to assure the interests of consumers in general.
Sec. 2 [Definitions]
(5) The term "private monopolization" as used in this Act shall mean such business activities, by which any entrepreneur, individually or by combination or conspiracy with other entrepreneurs, or by in any other manner, excludes or controls the business activities of other entrepreneurs, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.
(6) The term "unreasonable restraint of trade" as used in this Act shall mean such business activities, by which any entrepreneur, by contract, agreement or any other concerted actions, irrespective of its names, with other entrepreneurs, mutually restrict or conduct their business activities in such a manner as to fix, maintain, or increase prices, or to limit production, technology, products, facilities, or customers or suppliers, thereby causing, contrary to the public interest, a substantial restraint of competition in any particular field of trade.
(9) The term "unfair trade practices" as used in this Act shall mean any act coming under any one of following paragraphs, which tends to impede fair competition and which is designated by the Fair Trade Commission as such: …
Sec. 3 [Prohibition of private monopolization or unreasonable restraint of trade] No entrepreneur shall effect private monopolization or unreasonable restraint of trade.
Sec. 6 [Prohibition of particular international agreements or contracts, filing requirement] No entrepreneur shall enter into an international agreement or an international contract which contains such matters as constitute unreasonable restraint of trade or unfair trade practices.
Sec. 19 [Prohibition of unfair trade practices] No entrepreneur shall employ unfair trade practices.
Sec.21 [Acts under intellectual property rights] The provisions of this Act shall not apply to such acts recognizable as the exercise of rights under the Copyright Act, the Patent Act, the Utility Model Act, the Design Act or the Trademark Act.
32 JICA(Sep.2005)(wakui) 33
DESIGNATION OF UNFAIR TRADE PRACTICES (18 June 1982) Fair Trade Commission Notification No. 15 of 1982 http://www2.jftc.go.jp/e-page/legislation/ama/unfairtradepractices.pdf
…
(Concerted Refusal to Deal) 1. Without proper justification, taking an act specified in one of the following paragraphs concertedly with another entrepreneur who is in a competitive relationship with oneself (hereinafter, referred to as a ''competitor''):
(1) Refusing to deal with a certain entrepreneur or restricting the quantity or substance of a commodity or service involved in the transaction with a certain entrepreneur; or
(2) Causing another entrepreneur to take an act which comes under the preceding paragraph.
(Other Refusal to Deal) 2. Unjustly refusing to deal, or restricting the quantity or substance of a commodity or service involved in the transaction with a certain entrepreneur, or causing another entrepreneur to take any act which comes under one of these categories.
(Discriminatory Pricing) 3. Unjustly supplying or accepting a commodity or service at prices which discriminate between regions or between the other parties.
(Discriminatory Treatment on Transaction Terms, etc.) 4. Unjustly affording favorable or unfavorable treatment to a certain entrepreneur in regard to the terms or execution of a transaction.
(Discriminatory Treatment in a Trade association, etc.) 5. Unjustly excluding a specific entrepreneur from a trade association or from a concerted activity, or unjustly discriminating against a specific entrepreneur in a trade association or a concerted activity, thereby causing difficulties in the business activities of the said entrepreneur.
(Unjust Low Price Sales) 6. Without proper justification, supplying a commodity or service continuously at a price which is excessively below cost incurred in the said supply, or otherwise unjustly supplying a commodity or service at a low price, thereby tending to cause difficulties to the business activities of other entrepreneurs.
(Tie-in sales, etc.) 10. Unjustly causing the other party to purchase a commodity or service from oneself or from an entrepreneur designated by oneself by tying it to the supply of another commodity or service, or otherwise coercing the said party to deal with oneself or with an entrepreneur designated by oneself.
(Dealing on Exclusive Terms) 11. Unjustly dealing with the other party on condition that the said party shall not deal with a competitor, thereby tending to reduce transaction opportunities for the said competitor.
33 JICA(Sep.2005)(wakui) 34
(Resale Price Restriction) 12. Supplying a commodity to the other party who purchases the said commodity from oneself while imposing, without proper justification, one of the restrictive terms specified below: (1) Causing the said party to maintain the selling price of the commodity that one has determined, or otherwise restricting the said party's free decision on selling price of the commodity; or (2) Having the said party cause an entrepreneur who purchases the commodity from the said party to maintain the selling price of the commodity that one has determined, or otherwise causing the said party to restrict the said entrepreneurs’ free decision on selling price of the commodity.
(Dealing on Restrictive Terms) 13. Other than any act coming under the preceding two paragraphs, dealing with the other party on conditions which unjustly restrict any transaction between the said party and his other transacting party or other business activities of the said party.
(Abuse of Dominant Bargaining Position) 14. Taking any act specified in one of the following paragraphs, unjustly in the light of the normal business practices by making use of one's dominant bargaining position over the other party:
(1) Causing the said party in continuous transaction to purchase a commodity or service other than the one involved in the said transaction;
(2) Causing the said party in continuous transaction to provide for oneself money, service or other economic benefits;
(3) Setting or changing transaction terms in a way disadvantageous to the said party;
(4) In addition to any act coming under the preceding three paragraphs, imposing a disadvantage on the said party regarding terms or execution of transaction; or
(5) Causing a company which is one's other transacting party to follow one's direction in advance, or to get one's approval, regarding the appointment of officers of the said company (meaning those as defined by Subsection 3 of Section 2 of the Act Concerning Prohibition of Private Monopolization and Maintenance of Fair Trade).
(Interference with a Competitor's Transaction) 15. Unjustly interfering with a transaction between another entrepreneur who is in a domestic competitive relationship with oneself or with the company of which one is a stockholder or an officer and its other party to such transaction, by preventing the formation of a contract, or by inducing the breach of a contract, or by any other means whatsoever.
…
34 JICA(Sep.2005)(wakui) 35
GUIDELINES FOR PATENT AND KNOW-HOW LICENSING AGREEMENTS UNDER THE ANTIMONOPOLY ACT July 30, 1999 Fair Trade Commission http://www2.jftc.go.jp/e-page/legislation/ama/patentandknow-how.pdf
Part 1: Introduction
Part 2: Interpretation of Section 23 of the Antimonopoly Act on Patent Licensing Agreements, etc.
Part 3: Viewpoints on Patent and Know-how Licensing Agreements from the Perspective of Unreasonable Restraint of Trade, Private Monopolization, etc. 1. Basic viewpoint 2. Viewpoints from the perspective of unreasonable restraint of trade, etc. 3. Viewpoints from the perspective of private monopolization, etc.
Part 4: Viewpoints on Patent and Know-how Licensing Agreements from the Perspective of Unfair Trade
Practices 1. Basic viewpoint
2. Restrictions regarding the scope of licensing (1) Basic viewpoint (2) Granting licenses separately to manufacture, use, sell, etc. (3) Restrictions on duration (4) Restrictions on territory (5) Restrictions on the field of technology
3. Restrictions and obligations, etc. accompanying licensing (1) Basic viewpoint (2) Obligations regarding use of technology, etc. and royalties a. Obligations to pay a royalty based on the production volume, etc. of the specified products b. Restrictions on use of technology and obligations to pay a royalty after expiration of patent rights, etc. (3) Licensing of more than one patent as a package
(4) Obligations not to contest the validity of the patent (5) Restrictions and obligations regarding research and development activities, improved inventions, etc.
35 JICA(Sep.2005)(wakui) 36
a. Restrictions on research and development activities b. Obligations regarding improvement inventions, etc. (a) Obligations to assign rights and grant exclusive licenses for improvement inventions, etc. (b) Obligations to grant non-exclusive licenses for improvement inventions, etc. (c) Obligations to notify knowledge and experience obtained (6) Obligations not to assert the licensee’s patent rights (7) Other restrictions, obligations, etc. a. Obligations to make best efforts to exploit b. Obligations to protect secrecy c. Unilateral termination provisions
4. Restrictions and obligations regarding manufacture of patented products, etc.
(1) Basic viewpoint (2) Restrictions on production volume and frequency of use (3) Restrictions on the manufacture, use, etc. of competing products and on employing competing technology (4) Restrictions on sources of raw materials, components, etc. (5) Restrictions on the quality of patented products, raw materials, components, etc.
5. Restrictions and obligations regarding the sale of patented products, etc. (1) Basic viewpoint (2) Price restrictions a. Restrictions on resale prices b. Restrictions on sales prices (3) Non-price restrictions a. Restrictions on sales volume b. Restrictions on customers c. Restrictions on sales of competing products d. Obligations to use a trademark, etc.
(Attachment) Prior Consultation System for Patent and Know-how Licensing
36 History of Patent Law
Enactment The archetype of the Patent Law, the “Patent Monopoly Act”, was promulgated on 18 April 1885. In the same year the Patent Division was established in the Ministry of Agriculture and Commerce. One year later, in 1886, a separate Patent Office was established. In 1959, the act was replaced by the “Patent Act”, which is the current law.
“The roles of the patent system in Japanese economic development” explained by JPO’s official can be seen in; “Roles of the Intellectual Property Rights System in Economic Development in the light of Japanese Economy” (Takahiko KONDO, Commissioner, Japanese Patent Office (November 16, 1999)) Available at JPO website, Reference Room http://www.jpo.go.jp/shiryou_e/index.htm > [then click ] “Speeches” > [then click] “Keynote Address at Symposium to Commemorate the Centennial Anniversary of Japan's Accession to the Paris Convention”
Information on Copyright System is available at;
Copyright Research & Information Centre [useful to know the system] http://www.cric.or.jp/cric_e/index.html
“Copyright system in Japan” http://www.cric.or.jp/cric_e/csj/csj.html
Agency for Cultural Affairs [English] http://www.bunka.go.jp/english/2002-index-e.html
Information on the current policy http://www.bunka.go.jp/english/pdf/04_05-65-67p.pdf (Overview of the 2003 Law for Amendment of Japan's Copyright Law / Copyright Policy for Building a "Nation Based on Intellectual Property" / Overview of the 2004 Law for Amendment of Japan's Copyright Law)
JICA, IPRs & Antitrust (2005) Suppl. [email protected]