Jointly Owning Patents in Japan: Key Rules for Exercising Rights and Licensing Differently from the US?

Japanese Attorney at Law - Bengoshi L.L.

• 8 min read

Joint ownership of intellectual property, including patents, is a common outcome of collaborative research, joint ventures, or through the assignment or inheritance of patent rights. However, the legal framework governing the rights and obligations of patent co-owners can differ significantly from one country to another. These differences have profound implications for how jointly owned patents can be exploited, enforced, and commercialized. For businesses engaging in international collaborations or managing global patent portfolios, understanding the specific rules of joint patent ownership in key jurisdictions like Japan is essential. This article explores the Japanese legal framework for jointly owned patents, focusing on how co-owners can exercise their rights, grant licenses, and assign their interests, particularly highlighting critical distinctions from the approach taken in the United States.

Establishment of Joint Patent Ownership in Japan

Joint ownership of patent rights in Japan can arise at two main stages: either in the "right to obtain a patent" (特許を受ける権利 - tokkyo o ukeru kenri), which exists before a patent is granted, or in the "patented right" (特許権 - tokkyoken) itself after grant.

  1. Co-ownership of the Right to Obtain a Patent:
    • Joint Invention: The most common scenario is when two or more individuals jointly conceive an invention. In such cases, they jointly own the right to apply for and obtain a patent.
    • Assignment or Inheritance: A share in the right to obtain a patent can also be transferred through assignment or inherited, leading to a situation where multiple parties co-own the right to file for the patent.
  2. Co-ownership of a Granted Patent Right:
    • This typically results from a patent application filed jointly by all co-owners of the right to obtain a patent.
    • It can also occur after a patent is granted if a co-owner assigns a share of their patent right to another party, or through inheritance.

Key Statutory Provisions Governing Joint Patent Ownership in Japan

Several articles in the Japanese Patent Act lay down the fundamental rules for jointly owned patent rights and rights to obtain a patent.

A. The Joint Application Requirement (Article 38)

If the right to obtain a patent is co-owned, Article 38 of the Japanese Patent Act mandates that all co-owners must jointly file the patent application. A patent application filed by only one, or not all, of the co-owners without the participation of others is procedurally defective. Such a unilateral application can be a ground for rejection by the Japan Patent Office (JPO) under Article 49(ii) or, if a patent is inadvertently granted, a ground for subsequent invalidation under Article 123(1)(ii).
It's worth noting that amendments to the Patent Act (e.g., relating to Article 74 concerning the transfer of patent rights obtained through misappropriation or improper application) provide mechanisms to rectify certain defects in inventorship or applicantship, which can include situations stemming from violations of joint application requirements.

B. Working the Patented Invention by a Co-owner (Article 73(2))

Once a patent is granted to joint owners, Article 73(2) provides that each co-owner may work the patented invention themselves without requiring the consent of the other co-owners, unless there is a specific contractual agreement between them to the contrary. This is often referred to as "self-working" (自己実施 - jiko jisshi).

A practical and frequently encountered question is whether a co-owner engaging a third-party subcontractor to manufacture the patented product on their behalf falls under this permissible "self-working" or if it constitutes a form of licensing that would require the consent of other co-owners (see below). Japanese courts have generally taken a pragmatic approach, permitting such subcontracting as a form of self-working provided certain conditions are met:

  1. The manufacturing by the subcontractor must be initiated by and conducted under the direction and control of the co-owner.
  2. All products manufactured by the subcontractor must be delivered exclusively to that co-owning patentee.

The rationale for this interpretation is that if these conditions are met, the scale of the commercial working is ultimately dictated by the co-owner's own capacity to distribute and sell the products, not by the subcontractor's independent capabilities. This is seen as not unduly prejudicing the interests of other co-owners and reflects the reality of modern business practices where subcontracting is common.

C. Licensing and Assignment by a Co-owner (Articles 73(1) and 73(3))

This is where Japanese law significantly diverges from U.S. practice.

  • No Unilateral Licensing (Article 73(3)): A co-owner of a Japanese patent cannot grant an exclusive license (専用実施権 - sen'yō jisshiken) or a non-exclusive license (通常実施権 - tsūjō jisshiken) to a third party without obtaining the consent of all other co-owners. This unanimity requirement for licensing is a cornerstone of Japanese joint patent ownership.
  • No Unilateral Assignment of Share (Article 73(1)): Similarly, a co-owner cannot assign their individual share of the patent right to a third party without the consent of all other co-owners. This restriction also applies to establishing a pledge on a co-owner's share. (This rule does not apply to general succession, such as inheritance).

The same consent requirement for assigning a share also applies to the jointly owned right to obtain a patent before grant (Article 33(3) of the Patent Act).

  • Initiating JPO Proceedings (Article 132(3)): If co-owners wish to initiate certain proceedings before the JPO concerning their jointly owned patent, such as a trial for correction (amendment) or an appeal against a JPO decision, they must generally do so jointly.
  • Responding to JPO Proceedings (Article 132(2)): If an action is brought against a jointly owned patent at the JPO, such as a trial for patent invalidation, all co-owners must be named as respondents (defendants) in that proceeding.
  • Infringement Litigation: In the case of patent infringement by a third party, each co-owner generally has the right to individually sue the infringer to recover their respective share of damages. However, the procedural aspects, especially for obtaining an injunction which benefits all co-owners, can be complex and may practically necessitate joint action or at least consideration of all co-owners' interests. When calculating damages in an infringement suit involving a jointly owned patent, the apportionment of damages among co-owners is not necessarily pro-rata based on their share percentage but may be determined by factors such as their respective contributions to working the invention or the market impact suffered by each.

Specific Scenarios and Complexities

The rules of joint ownership interact with other areas of patent law, creating specific complexities.

Joint Invention Involving an Employee (Employee Invention Context)

If one of the joint inventors is an employee whose invention qualifies as an "employee invention" under Article 35 (see separate discussion on employee inventions), their employer may have certain rights.

  • The employer typically obtains a statutory non-exclusive license to their employee's share of the invention (Article 35(1)). Importantly, this employer's statutory license generally does not require the consent of other independent co-owners of the patent.
  • If the employer has an agreement (e.g., invention regulations) to acquire their employee's share of the right to obtain the patent, this assignment from the employee to the employer, being an assignment of a co-owned share, would still generally require the consent of the other co-owners (the other joint inventors or their assignees) under Article 33(3). Without such consent, the employer might not validly acquire the title to that share.
  • Even if multiple employers each validly acquire their respective employee's share in a joint invention, any subsequent patent application must still be filed jointly by all these co-owning employers in compliance with Article 38. Unilateral actions can lead to defects in the application or patent.

Misappropriation or Improper Filing Involving Co-owners

If one co-inventor improperly files a patent application in their sole name, excluding other rightful co-inventors, this violates the joint application requirement of Article 38 and can be a ground for rejection or invalidation.
The Japanese Patent Act (notably Article 74, concerning the transfer of improperly obtained patent rights) provides mechanisms for rightful co-owners to recover their share or have their entitlement recognized. For instance, if a patent was granted to only one of several co-inventors, the omitted co-inventors can demand the transfer of their respective shares in the patent right. Article 74(3) implies that such a statutory transfer of a share does not require the consent of the improper sole patentee under Article 73(1).

Contrasting with Joint Ownership Rules in the United States

The Japanese approach to joint patent ownership differs markedly from that in the United States, and these differences are critical for businesses to understand.

Under 35 U.S.C. § 262, the U.S. statutory provision for joint ownership states: "In the absence of any agreement to the contrary, each of the joint owners of a patent may make, use, offer to sell, or sell the patented invention within the United States, or import the patented invention into the United States, without the consent of and without accounting to the other owners."

This leads to several fundamental distinctions:

  • Unilateral Exploitation and Licensing: The most significant difference is that a U.S. co-owner can generally make, use, sell, and import the patented invention, and importantly, grant licenses to third parties (including non-exclusive and potentially even exclusive licenses with respect to their own undivided interest) without needing the permission of the other co-owners. This freedom to unilaterally license is a stark contrast to the Japanese requirement for unanimous co-owner consent under Article 73(3).
  • Unilateral Assignment of Share: A U.S. co-owner is also free to sell, assign, or mortgage their individual share of the patent right without the consent of other co-owners. Again, this differs from the Japanese requirement for unanimous consent under Article 73(1).
  • No Duty to Account: Under U.S. patent law, a co-owner who unilaterally works the invention or licenses it to a third party has no inherent legal duty to share any profits derived from such activities with the other co-owners (unless a contract between them stipulates otherwise). In Japan, while each co-owner can self-work, the inability to unilaterally license means the economic benefits are more contained or require collective agreement for broader exploitation.
  • Enforcement (Joining Parties): While in the U.S. all co-owners are generally considered indispensable parties who must ordinarily join in an infringement suit, procedural rules allow for involuntary joinder or for one co-owner to sue if others refuse, though the dynamics can be complex.

These contrasting approaches mean that the default positions for co-owners are vastly different. In the U.S., co-ownership allows for considerable individual freedom of action, which can be both an advantage (flexibility) and a disadvantage (potential for one co-owner's actions to devalue the patent for others, e.g., by licensing to a competitor at low rates). In Japan, the default is a more restrictive regime requiring collective action for most forms of commercial exploitation involving third parties or transfers of interest, which prioritizes the collective interest and control of all co-owners.

Practical Implications and Strategic Considerations

The specific rules governing joint patent ownership in Japan necessitate careful strategic planning:

  • Joint Development and Collaboration Agreements: When U.S. companies engage in joint R&D with Japanese entities, or when any collaboration is expected to result in jointly owned Japanese patents, the collaboration agreement must be meticulously drafted. It should explicitly address:
    • Determination of inventorship and ownership shares.
    • Procedures and responsibilities for filing and prosecuting Japanese patent applications (ensuring joint filing).
    • Allocation of costs for patent prosecution and maintenance.
    • Clear rules for each party's right to "self-work" the invention.
    • Crucially, detailed provisions for licensing the patent to third parties. Given the default unanimity rule, the agreement should specify the conditions and procedures for granting licenses (e.g., unanimous consent, majority consent, or pre-defined terms for certain types of licenses).
    • Provisions governing the assignment of a co-owner's share.
    • Strategies and responsibilities for enforcing the patent against infringers.
    • Dispute resolution mechanisms between the co-owners.
  • Due Diligence: When acquiring Japanese patents or shares in such patents, or when licensing technology that might be co-owned, thorough due diligence is required to ensure that all necessary consents from any co-owners were properly obtained for past assignments or licenses. The chain of title and any inter-co-owner agreements are critical.
  • Structuring Ownership: Businesses might consider alternative ownership structures (e.g., assigning all rights to a single jointly owned entity which then manages the IP) to avoid the complexities of direct co-ownership under Japanese statutory defaults, if greater flexibility in licensing is desired.

Conclusion

Joint ownership of patents in Japan is characterized by a framework that emphasizes collective rights and decision-making, particularly concerning the exploitation of the patent through licensing to third parties and the transfer of ownership shares. The requirement for unanimous consent from all co-owners for these critical actions stands in sharp contrast to the more individualistic approach seen in U.S. patent law. This makes well-drafted agreements between co-owners not just advisable but essential for the effective management and commercialization of jointly owned Japanese patents. For international businesses, recognizing these fundamental differences is the first step in developing sound IP strategies and fostering successful collaborations involving Japanese patent rights.