Guidelines for Employee Inventions -Proposal - September Toshifumi Onuki Japan Patent Attorneys Association International Activities Center AIPLA Annual Meeting 2015 IP Practice in Japan Pre-Meeting Seminar

Review of Employee Inventions 2016 Revision AIPLA Annual Pre-meeting

Employee Inventions -Revised Law in Employee Employer If No Specific Contract Reasonable Benefit Not limited to monetary compensation Guidelines clarify the standards for “Reasonable Benefit” Not limited to monetary compensation Guidelines clarify the standards for “Reasonable Benefit” Right to Obtain a Patent If Specific Contract Non-exclusive License AIPLA Annual Pre-meeting 20153

Proposed Guidelines for Employee Inventions Drafted by METI Industrial Structure Council’s Patent System Subcommittee 4

AIPLA Annual Pre-meeting 2015 To clarify what employers and employees take Employees have the right to receive “reasonable benefit” “Benefit” given to employees should not be “unreasonable” (§35(5) ) If the “benefit” is considered “unreasonable,” the “reasonable benefit” may be determined (by the court) based on the profits that the employer will make and on the contribution made by the employee (§35(7)) Purpose of Guidelines 5

AIPLA Annual Pre-meeting 2015 Entire procedure should be given much weight The following factors should be specifically scrutinized: 1.How and to what degree discussions are made to decide upon the standards 2.How the decided standards are disclosed 3.How and to what degree hearings are held to determine a reasonable benefit Outline of Guidelines 6

Flowchart until Settlement on Reasonable Benefit AIPLA Annual Pre-meeting 2015 Create Proposed Standards Determine Reasonable Benefit Discuss Proposed Standards Decide Standards Disclose Standards Conduct Hearings Settle on Reasonable Benefit ST1 ST2 ST3 ST4 ST5 ST6 ST7 7

Standards Not necessarily determined in advance No specific form is required for standards Can be based on contribution of both parties Can be based on judicial precedents on Employee Inventions Upper limit can be set in the standards AIPLA Annual Pre-meeting 20158

Discussion Negotiations/discussions should be conducted between the employee and the employer to determine the standards No specific methodology is required Discussions can be held with a representative of the employees The fact of the parties failing to agree with each other does not automatically lead to a presumption of “unreasonability” Negligence of employer in answering employee’s opinions may be presumed as “unreasonability” AIPLA Annual Pre-meeting 20159

Disclosure The decided standards should be made accessible to employees whenever necessary No specific methodology is required Circulation of documents by paper or OK Uploading onto the company intranet: OK AIPLA Annual Pre-meeting

Meeting with Employee (Hearings) In order to hear from the employee who made the Employee Invention so as to decide on its reasonable benefit No specific methodology is required Meeting in advance: OK Meeting after a benefit is awarded: OK Disclosing comments for a certain period: OK Employers are required to be honest regarding such meetings Market size, projected profit, contribution, turnover, license royalties, etc. can be discussed AIPLA Annual Pre-meeting

AIPLA Annual Pre-meeting Procedure when reasonable benefit is other than monetary compensation 2.Procedure when standards are to be revised 3.Procedure for newcomers 4.Procedure for retired employees 5.Procedure for small and middle size companies 6.Procedure for universities 7.Others Research on Guidelines 12

Time Table until Enforcement September 16, 2015 Guidelines proposed Until November 2015 Public comments are invited January 2016 Guidelines will be officially settled AIPLA Mid-Winter Institute – Don’t miss it! April 2016 New Employee Invention Guidelines will come into force AIPLA Annual Pre-meeting

AIPLA Annual Pre-meeting 2015 TOSHIFUMI ONUKI TMI Associates Thank you for your attention 14