1. 2011 Japanese Patent Law Revision AIPLA Annual Meeting October 21, 2011 Yoshi Inaba TMI Associates

2. Summary of Revisions 1. Six month Grace Period for any activities by applicant 2. No registration necessary for non- exclusive license 3. Misappropriated patent to be transferred to real owner 4. New Invalidation and Correction Trial procedure 5. Restriction to Re-trail

3. Summary of Revisions 6.Others:  Registrability of expired trademark  Reduction of fees  Remedy for failure to meet deadline (submission of translation)

4. Six month Grace Period for any activities by applicant Under the old law Grace Period is available for limited activities conducted by the applicant Under the new law Grace Period is available for any activities conducted by the applicant. Note: Grace Period remains 6 months.

5. No registration necessary for non- exclusive license Under the old law In order for a non-exclusive license to be effective against a third party including a successor of the patent, there must be a registration at the JPO. Under the new law No such registration is necessary and no such registration exists anymore, but licensee must show that such a license in fact exists. Note: Sen-Yo Jisshiken exclusive license must still be registered.

6. Misappropriated patent to be transferred to real owner Misappropriated patent means a patent filed by someone who is not an inventor or a successor of the right to obtain a patent. Under the old law There is a provision that such an misappropriated patent can be invalidated but no provision that the patent can be transferred to real owner. Under the new law Real owner may request transfer of such a patent.

7. Plaintiff Invalidity defense Infringement Defendant Court decision District Court Final and binding Infringement lawsuit Demandant Demandee Invalidity JPO Trial decision Patent correction Final and binding Invalidation trial New Invalidation and Correction Trial procedure - Current “Double track” in validity judgments IP High Court Appeal (lawsuit) Court decision Court decision

8. New Invalidation and Correction Trial procedure - Current “Catch-ball” phenomenon * Data from Japan Patent Office JPO Cancel trial decision Invalidation trial Reopen trial IP High Court 30 days90 days Patent correction 1 st trial decision Affirm trial decision Patent correction 1 st suit 444 cases* 902 cases in 2005-2009* 267 cases* 190 cases* Appeal (49%) Remand (43%) Final and binding 2 nd suit 81 cases* Patent correction 2 nd trial decision Appeal (43%) 26 cases* (4 cases remanded) Appeal Invalidation trial

9. New Invalidation and Correction Trial procedure Under the old law  Correction after appeal to IP High Court possible  Case bounces back and forth between the court and JPO. Under the new law  No Correction after appeal to IP High Court possible  Instead, before a final decision made, a preliminary trial decision will be made to give a patentee a Correction opportunity following the preliminary trial decision.

10. JPO Cancel trial decision IP High Court 30 days90 days old Invalidation trial Reopen trial Patent correction 1 st trial decision Patent correction Cancel trial decision 1 st suit AppealRemand 2 nd suit Patent correction 2 nd trial decision Appeal JPO IP High Court new 30 (or 60) days Patent correction Invalidation trial Preliminary trial decision to invalidate patent Patent correction Patent correction 1 st suit Appeal 30 days 1 st trial decision Cancel trial decision Reopen trial New Invalidation and Correction Trail procedure

11. New Invalidation and Correction Trial procedure - Third party effect of an invalidation trial decision abolished Under the old law  Once someone files a trial and a decision is made final, another trial based on the same facts and evidence cannot be filed by anyone. Under the new Law  A final invalidation trial decision binds only the parties involved in the invalidation trial.  A third party can still challenge validity of the same patent based on the same facts and evidence

12. Plaintiff Invalidity defense Infringement Defendant Final and binding court decision District Court Final and binding trial decision Infringement Infringement lawsuit Restriction to Re-trial Invalid patent Retrial Cancel the court decision Patent proprietor returns damage compensation. Demandant Demandee Invalidity JPO Patent correction Invalidation trial Defendant pays damage compensation. X

13. Restriction to Re-trail Gist of the reform  A final and binding court decision should be respected,  as it was delivered after sufficient offense and defence procedures between the parties, which include a defendant’s plea of invalidity of the patent (Art.104-3) and a patentee’s request to correct deficiencies of the patent. Newly introduced Art.104-4  No retrial against a final and binding court decision on the following grounds:  A final and binding trial decision of invalid patent  A final and binding trial decision of invalid extension of patent term  A final and binding trial decision of patent correction Applicable to retrials filed on or after 1 April 2012 (provisional)

14. Registrability of expired trademark Under the old law A registered trademark or similar thereto cannot be registered by a third party within one year of expiration of the trademark registration. Under the new law Above provision is abolished. No such restriction anymore.

15. - Remedies for failure to meet translation and patent fee deadlines Under the old law – Very strict  Japanese translation of an English-language application  14 months from a priority date (Art.36-2)  Japanese translation of an English-language PCT application  30 months + 2 months from a priority date (Art.184-4)  Late payment of patent fees (fourth annuity and onwards)  Late payment period: 6 months + surcharge (Art.112) Under the new law  Failure to meet the deadlines can be cured if caused by a justifiable reason  Hospitalization due to illness, unpredictable failure of a docketing system, etc.  Additional 2 months from the date when the reason is ceased, but not later than 1 year from the deadlines.

16. - Reduction of examination fees Reduction of an examination fee (basic fee)  by about 30% Reduction of PCT international search fees  by about 20-30%

17. - Fee reduction/exemption requirements for small entity, etc. Points of the revision  Extension of the reduction/exemption term for patent fees from 3 or 6 years to 10 years.  Broadening of the scope of small and medium-sized companies subject to reduction/exemption.  Abolishment of the employee invention requirements for universities, etc.

18. Effective Date of the Revisions has not yet been decided, but shall be someday before JUNE 8, 2012.

19. Thank you! Yoshi Inaba TMI Associates yinaba@tmi.gr.jp