IPTF Presentation to JSTC Yasushi Matsui Semiconductor Industry Association in Japan February 23, 2011 Millennium Hongqiao Hotel Shanghai

Topics and Issues Regional Updates Improving Patent Quality Semiconductor Counterfeiting Non-Practising Entities (NPEs)

Regional Updates on IP Developments/Cases/Issues Europe IP Update:  Progress on the Unified Patent System  Compromise proposed under the ‘Enhanced Cooperation’ provisions of the Lisbon Treaty as a way past the prior failure to achieve the required unanimity on the translation arrangement  Outline of the respective translation requirements of the various EU members under the London Agreement Chinese Taipei IP Update:  As of 22 November 2010, Chinese Taipei and China have begun accepting priority claims based on applications filed with their respective counterpart patent offices.  Taiwan Association for Copyright Protection and National Copyright Administration now recognized by SIPO and TIPO respectively as copyright registration bodies.  Progress in clearing the backlog of patent applications by increasing the number of examiners.  Changes to rules on copyright collective management organizations.

Regional Updates China IP Update: China now one of the global top four PCT filers Copyright rules have been revised and strategies on patent development released New campaign launched against IPR violations, with the total number of resolved patent disputes in the two months following the launch of this campaign increasing by more than 70 percent. Japan IP Update Anti-counterfeiting campaign: Web-based simulator of the damage caused by counterfeiting created Third Working-Level Consultations of the Multilateral Meeting on the Patent Prosecution Highway held in Tokyo in January 2011 New JPO logo adopted to commemorate the 125th anniversary of the institution of industrial property rights

Regional Updates Korea IP Update: ・ Amendments to compulsory licensing requirements came into force as of 1 January 2010. Amendments also made to Design Patent Act, making drawing requirements simpler and more flexible. Amendments to KIPO fee schedule include the introduction of installment payments for the trademark registration fee as well as hikes in other types of fees. US IP Update: ・ Patent reform bill to be moved shortly to the Senate floor, where there may be some significant amendments General agreement that the USPTO needs to keep the funds it gets from its fees rather than these going to Congress; legislation may be proposed in that regard. US Supreme Court decision to take up the I4I v. Microsoft case in relation to the burden of proof; could result in lowering the burden of proof for invalidating patents from “clear and convincing” to “preponderance of the evidence” under some circumstances.

Improving Patent Quality: Europe Update: Quantitative survey on ten major areas reveals that the EPO/GPO are doing well in a global comparison of patent quality, as well in keeping standardized and transparent metrics. Significant effort put into examiner training, and examiner turnover ratio is low. More needs to be done to improve the speed of patent examinations. Translation costs push up the overall examination cost. China Update: Nothing to report. Japan Update: SIA in Japan met with JPO; JPO welcomed the suggestion chart and expressed willingness to hold further meetings with SIA in Japan. Statistics on metrics are already published annually on the JPO website. No specific comment made concerning more detail for rejections relating to lack of inventive step. Korea Update: Follow-on discussions with KPO after the GAMS included the specific areas of improvement noted in the chart. KPO noted that it would look carefully at the suggestions. KPO is taking steps to improve transparency, including putting up more information on its website.

Improving Patent Quality: US Update: SIA in US met with the USPTO Patent Commissioner and discussed the chart and also the patent reform bill. Technology Center 2800 will hold a tech fair at USPTO headquarters in May 2011 as an opportunity for industry to educate examiners and share ideas. USPTO and the Patent Advisory Board have developed seven quality metrics. WIPO letter SIA in Chinese Taipei noted that WIPO had sent a response to the letter sent by the JSTC Chairs, thanking JSTC for its contribution in this important area.

Proposed WSC Joint Statement on Patent Quality (CT) Towards this end, last year the WSC members provided to their respective patent offices a country-specific summary of observed good practices and suggestions for improving patent quality and harmonization. This initiative was announced in the May 27, 2010 Joint Statement of the 14th Meeting of the World Semiconductor Council, and the summary was attached as Annex 4 to that Joint Statement. The WSC has kept the WIPO apprised of this initiative and will look for ways to cooperate with the WIPO on improving global patent quality. The WSC is pleased to report that all of the patent offices were open and receptive to these observations and suggestions by industry.  They provided to the respective WSC members useful information about the efforts and plans of the offices to improve patent quality. The WSC intends to maintain this dialogue by periodically following up with its members and with the patent offices regarding the status of patent examination throughout the world, progress in making improvements, and ideas for enhancing patent quality.

Proposed WSC Joint Statement on Patent Quality (CT) - continued - The WSC's longstanding view is that in order to maximize the beneficial effect that intellectual property protection has on stimulating and sustaining innovation, patent offices around the world should implement examination procedures that result in the granting of the highest quality patents possible in compliance with the statutory requirements of patentability. Effective quality control in the issuance of patents also should reduce the number of frivolous lawsuits that burden the semiconductor industry and stifle innovation. The WSC desires to promote a broad and continuing dialogue with the patent offices in GAMS members. Through this dialogue, the WSC hopes to convey the industry’s observations and suggestions regarding issuance of quality patents in the semiconductor area based on the industry's experiences as one of the most patent-intensive and innovative business sectors in the global economy.

Semiconductor Counterfeiting: Updates and Additional Information: SIA in Europe noted that: Cooperation had enabled the seizure of counterfeited ICs in Hong Kong. Such international cooperation will be further developed through five multilateral actions. The WSC and GAMS could be shown the progress made and difficulties faced in each region along the lines of the five points emerging from the 2009 Customs Experts Workshop. SIA in Japan noted that: SIA in Japan had been active in anti-counterfeiting activities and in encouraging its member companies to register and record their trademarks with customs authorities. Japanese government has been contacted concerning the attendance of customs officials at the 2011 Anti-Counterfeiting Workshop. SIA in Korea noted that: one anti-counterfeiting case in which one company’s website was illegally used by other smaller companies and a shutdown order was issued. SIA in US noted that: little success since the last meeting, but progress on the Florida case. In terms of customs, main issue is organizing the September meeting and working out how to pay for the event.

Proposed Joint Statement on Anti-counterfeiting (Europe) WSC welcomes and fully supports the conclusions of the GAMS summary of September 2010, and looks forward to be able to support and act upon the countermeasures taken by each region, including domestics, bilateral & multilateral, to fight the proliferation of semiconductors counterfeiting. WSC encourages the participation of customs representatives to deal with this issue in the context of the report to the 2011 GAMS. It reiterates its call for all governments and authorities to implement effective enforcement measures for protection of IP rights within their jurisdiction.

Proposed Joint Statement on Anti-counterfeiting (Europe) - continued - At the same time, WSC sees progress being made in many regions along the agreed 5 action points, and urges further efforts in all regions. It confirms that results can be achieved through an effective cooperation between industry and customs officials, among industry and across regions. It also recognizes the benefits of an integrated approach to fighting counterfeiting both at borders and within borders, as seen in the numerous seizures over the past months in Florida, France and Hong Kong. Full customs recordation remains an issue industry needs to address to secure effective seizures.

Non-Practising Entities (NPEs) SIA in Korea gave a presentation on NPEs, which was followed by extensive discussion. The chart outlining members’ views on NPEs will be tabled to the JSTC to fulfil the obligation to make a report to the JSTC while also providing an accurate representation of the divergence of views within the IPTF. Certain members want the chart to remain at JSTC level while others want some further report made to the WSC. Despite intensive discussion, consensus on NPEs has not been and will not be reached in IPTF among the associations . The IPTF asks JSTC to make decisions on the following items: Presentation to the WSC in May 2011; Whether a JSTC consensus can be reached on NPE; and JSTC recommendation to WSC To continue or discontinue discussion on NPEs.

Action Items SIA in Korea suggested developing more contact with WIPO in relation to, for example, patent highways, and will send out information and proposals for contact with WIPO to members before the September GAMS meeting. SIA in Chinese Taipei proposed ongoing regular dialogue with members’ respective PTOs; members agreed to update and share the patent quality chart with the PTOs if appropriate. SIA in Chinese Taipei will send out before September a reminder to members about what information is required to update the chart. Members agreed to circulate to the PTOs and their own members before the September meeting the US quality matrix.