Employee Inventions in Japan: Who Owns IP Created by University Professors in Collaboration with Companies?
The landscape of intellectual property (IP) ownership in Japan presents unique challenges and considerations, particularly at the intersection of academia and industry. When university professors, deeply engaged in research, develop potentially groundbreaking inventions, questions often arise regarding who rightfully owns the IP, especially when companies become involved, whether through collaboration, consultation, or even informal idea sharing. This article delves into the intricacies of Japanese patent law concerning inventions conceived in a university setting, the rights of inventors versus their institutions and corporate entities, and the remedies available in cases of disputed ownership or unauthorized patent applications.
What Constitutes a "Completed Invention" in Japan?
Before discussing ownership, it's crucial to understand what constitutes a patentable "invention" and when it is deemed "completed" under Japanese law. The Japanese Patent Act defines an invention as "a highly advanced creation of technical ideas by which a law of nature is utilized." However, merely having a technical idea is insufficient; the invention must be "completed."
Completion implies that the invention has been worked out to a degree that a person skilled in the art can implement it. This often involves demonstrating that the invention can achieve its intended purpose and can be reproduced. For instance, in the chemical or pharmaceutical fields, merely hypothesizing a new chemical compound with potential anti-cancer properties might not be enough. If the compound cannot be synthesized stably, or if its purported effects are not reasonably demonstrable (e.g., if severe side effects negate any practical utility, such as a substance that eliminates cancer but also invariably leads to the test subject's demise shortly thereafter), it may be considered an "incomplete invention."
The Japan Patent Office (JPO) examination guidelines state that an invention might be rejected as incomplete if, for example, the means to solve the stated problem are shown, but it's evident that these means cannot actually solve the problem. However, "repeatability" or reproducibility doesn't necessarily mean a 100% success rate in every attempt; even a low probability of achieving the effect can suffice if the effect is reliably obtained when it does occur. The utility of an invention, such as an "anti-cancer effect," is also a key factor for chemical inventions.
Employee Inventions (Service Inventions) in Japanese Universities
A significant portion of inventions in Japan, as elsewhere, arise from employment. The Japanese Patent Act, specifically Article 35, governs "employee inventions" (or "service inventions" – shokumu hatsumei). The general principle is that the right to obtain a patent for an invention made by an employee in the course of their duties and within the scope of the employer's business originally belongs to the employee-inventor. However, employers can secure this right through contractual agreements or work rules, often in exchange for reasonable remuneration to the employee.
The situation with university professors presents particular nuances:
- Scope of Duties and Academic Freedom: A professor's duties typically encompass teaching, research guidance, and conducting research. This broad scope, coupled with the principle of academic freedom (guaranteed by Article 23 of the Constitution), means professors often have considerable autonomy in choosing their research themes, differentiating them from corporate employees who typically operate under more direct employer instructions.
- Institutional Ownership vs. Inventor Ownership: Historically, inventions by university professors were often considered their personal property unless they arose from specific, externally funded projects where rights were pre-assigned (e.g., to the state for national universities). However, with the increasing emphasis on technology transfer from universities to industry, there has been a shift towards institutional ownership. Many universities now have established IP policies stipulating that the university will succeed to the rights of inventions made by their faculty, especially when university resources are used.
- University IP Policies: These internal regulations are critical. For example, a university's IP policy might state that inventions made using university research funds or facilities are considered employee inventions, and the right to obtain a patent is succeeded to by the university upon completion of the invention. Such policies often outline a process where an invention committee decides whether to file a patent application. If the university decides not to pursue a patent or manage the invention as know-how, the rights might then be transferred back to the inventor-professor. If an invention is not even brought before such a committee, perhaps because it was initially deemed unviable, the rights might remain with the professor by default, or due to a failure in the university's internal process.
- Use of University Resources: The use of significant university resources, such as advanced, expensive equipment (perhaps even equipment the professor strongly advocated for the university to acquire), can be a strong factor in deeming an invention as an employee invention subject to university ownership. The underlying principle is the university's contribution to the invention's creation.
- 2015 Amendment to Patent Act Article 35: It's important to note the 2015 revisions to Article 35, which, among other things, clarified that employers can, through prior agreement (e.g., in employment contracts or work rules), stipulate that the right to obtain a patent for an employee invention shall belong to the employer from the outset. If a university's policy speaks of the university "succeeding to" the right, it implies the right initially vests with the employee, whereas a policy framed under the new Article 35 could provide for direct institutional ownership at the moment of invention.
Unauthorized Patent Applications by Third Parties
A common and contentious scenario involves a university professor who conceives an invention and perhaps informally discloses it to a company, for example, during discussions about potential joint research. If that company subsequently files a patent application for that invention (or a developed version of it) solely in its own name, without acknowledging the professor's contribution or rights, this constitutes an "unauthorized application" (bōnin shutugan).
Under Japanese patent law, the person entitled to obtain a patent is the inventor or their successor in title. An application filed by a person not entitled to do so is a ground for patent invalidation. More directly, since a 2011 amendment to the Patent Act, the rightful owner (the inventor or their institution) has the right to demand the transfer of a patent that was granted as a result of an unauthorized application (Patent Act Art. 74(1)).
This remedy, however, can become complicated if the company's patent includes claims that go beyond the professor's original invention. For instance, the patent might have:
- Claim 1: Covering the professor's originally conceived chemical substance.
- Claim 2: Covering a therapeutic agent that combines the original substance with another substance (a further development potentially by the company).
- Claim 3: Covering the method of manufacturing the therapeutic agent in Claim 2.
In such cases:
- Transfer of Specific Claims: Generally, a patent is a unitary right, and demanding the transfer of only specific claims (e.g., only Claim 1) is not possible under Article 74(1), as Article 185 (deeming claims to be separate patents for certain purposes) does not include Article 74(1).
- Transfer of a Share: A more viable approach might be for the rightful inventor to demand the transfer of a share in the entire patent, proportionate to their contribution to the patented invention as a whole. This would result in co-ownership of the patent between the inventor (or their institution) and the company.
A critical factor in these disputes is the nature and timing of the professor's disclosure. If the professor "blew the horn" about their invention to company employees without a non-disclosure agreement (NDA) in place, or under circumstances where confidentiality could not be reasonably implied, the invention might have lost its novelty before the company's application was filed. If an invention lacks novelty at the time of filing, it's unpatentable, and thus there would be no valid patent right to transfer. The right to obtain a patent itself is often considered to be extinguished if novelty is lost. However, whether patentability requirements (like novelty) must be met for the right to obtain a patent to exist for the purposes of an Article 74(1) transfer claim is a debated point, with some court precedents in other contexts (like employee invention remuneration) suggesting that an "invention" under Article 2(1) is sufficient, regardless of its ultimate patentability.
Co-Inventions and Joint Ownership
The situation becomes even more complex if the company, after receiving the professor's initial idea, undertakes further research and development, leading to an improved or modified invention that is then patented. This raises the question of co-inventorship.
Under Japanese law, a co-inventor is someone who has made an actual, creative contribution to the conception of the invention, particularly to its essential features that solve the technical problem addressed by the invention. Simply providing known information or routine assistance is not enough.
If the company's employees made creative contributions that built upon the professor's foundational work to arrive at the patented invention (e.g., Claims 2 and 3 in the example above), the invention might be deemed a co-invention.
- Distinction from Copyright: Unlike co-authorship in copyright, which often requires a mutual intent to create a single, integrated work, co-inventorship in patent law is determined more objectively based on the respective creative contributions to the features of the invention. The passage of time (even 20 years, as in the source material's hypothetical ) or lack of direct collaboration between all contributors does not necessarily negate co-inventorship if their respective creative contributions are identifiable in the final patented invention.
- Impact on Remedies: If the patent covers a co-invention, the professor (or university) would be entitled to a share of the patent, not the entirety of it. The unauthorized applicant (the company) would also be a co-owner if its employees were legitimate co-inventors of some claims.
If the professor's initial contribution (e.g., the chemical substance P in Claim 1) became public knowledge due to their own disclosure, then Claims 2 and 3 (the therapeutic agent and its manufacturing method) would need to be non-obvious over this public knowledge to be patentable as separate inventions. In such a case, the professor might be seen as merely providing a piece of prior art, not as a co-inventor of Claims 2 and 3. However, if the professor's initial invention, while disclosed, still possessed novelty (even if lacking in inventive step without further development), their contribution to the overall patented subject matter (Claims 2 and 3) could still be seen as part of a co-invention.
Statutory Licenses After Patent Transfer (Patent Act Art. 79-2)
Assuming the rightful owner (e.g., the professor or university) successfully demands and obtains the transfer of a patent that was improperly granted to a company, what are the implications for the company's use of the invention prior to the transfer registration, and its ability to continue using the invention?
Japanese Patent Act Article 79-2 provides for a statutory non-exclusive license (a type of hōtei tsūjō jisshiken) in such situations. If the original patentee (the company, in this scenario, who improperly obtained the patent) or its licensee was, in good faith, commercially working the invention in Japan or making preparations to do so before the registration of the demand for patent transfer, they are granted a non-exclusive license to continue working the invention under the patent.
Key aspects of this statutory license include:
- Good Faith: The provision typically requires that the party (the company or its licensee) was unaware that the patent was obtained without proper entitlement. If the company knew it was not entitled to the invention (e.g., it knew the professor was the true inventor and had not assigned the rights), the good faith requirement might not be met. However, if the company genuinely believed the professor's disclosure had rendered the core substance public domain and their patent was for subsequent, independent improvements, good faith might be arguable for those improvements.
- Scope: The license is limited to the scope of the invention and the business purpose for which it was being worked or prepared to be worked.
- Remuneration: The new, rightful patent owner is entitled to "reasonable remuneration" from the licensee (the company) for this statutory license.
This statutory license aims to balance the rights of the true inventor with the need to protect investments made in good faith by the party who was, for a time, the registered patentee.
What about the period before the patent transfer is registered? Can the rightful owner sue the company for damages for infringement during this period?
The patent transfer, once registered, has a retroactive effect, meaning the rightful owner is deemed to have been the patentee from the beginning (Patent Act Art. 74(2)). This would suggest that the company's prior use was infringing. However, the existence of Article 79-2 complicates this. If the company is granted a statutory license, its actions covered by that license (even retroactively) would not be infringing. Instead of infringement damages, the rightful owner would be entitled to the "reasonable remuneration" stipulated under Article 79-2(2). The discussion often revolves around whether Article 79-2 itself has a retroactive effect akin to the patent transfer. If the company's actions were in good faith, subjecting them to full infringement damages for past conduct (when they were the registered patentee) could be seen as overly harsh. The law seeks to avoid undue disruption to established businesses operating under a registered patent, even if that registration is later corrected.
However, if the patent was co-owned (e.g., the professor/university and the company become co-owners after transfer of a share), then under Japanese Patent Act Article 73(2), each co-owner can work the patented invention without the consent of other co-owners (unless otherwise agreed). In this scenario, the company's ongoing use might not even constitute infringement against the professor/university, and no royalties might be due for its own working of the invention.
Navigating the Complexities
The interplay between university research, employee invention rules, corporate collaborations, and patent law in Japan is evidently complex. For university professors, understanding their institution's IP policy is paramount. For companies collaborating with universities or engaging with academic inventors, clarity on IP ownership from the outset, often through well-drafted agreements, is essential to avoid future disputes. When unauthorized patent applications do occur, Japanese law provides mechanisms for rightful owners to reclaim their IP, though the process can be intricate, especially when improvements or further developments are involved. The statutory license provisions also ensure that business activities undertaken in good faith under a registered patent are not entirely upended by subsequent ownership corrections, striking a balance between protecting inventors and maintaining commercial stability.