What Defines a "Patentable Invention" in Japan, and How Are Software and Business Methods Treated?

Japanese Attorney at Law - Bengoshi L.L.

31 May 2025 • 9 min read

The journey to obtaining a patent begins with a fundamental question: does the subject matter at hand qualify as a patentable "invention"? This threshold determination is critical, as only true inventions are eligible for the exclusive rights that a patent confers. In Japan, the Patent Act provides a specific definition for what constitutes an "invention," and this definition, along with its interpretation by the Japan Patent Office (JPO) and the courts, dictates the boundaries of patentable subject matter. Understanding these criteria is particularly vital for innovations in rapidly evolving fields such as software and business methods, where the line between a patentable technical solution and an unpatentable abstract idea can be nuanced.

This article delves into the definition of a patentable invention under Japanese law, breaks down its core components, and explores how these principles are applied to challenging areas like software-related and business method-related innovations.

The Statutory Definition of "Invention" in Japan: Article 2(1)

Article 2, Paragraph 1 of the Japanese Patent Act defines an "invention" (発明 - hatsumei) as "the highly advanced creation of technical ideas utilizing the laws of nature." This concise definition encapsulates several key elements that must be satisfied for an idea to be recognized as a patentable invention:

Utilization of Laws of Nature (自然法則の利用 - shizen hōsoku no riyō)
Technical Idea (技術的思想 - gijutsu-teki shisō)
Creation (創作 - sōsaku)
Highly Advanced (高度なもの - kōdo na mono)

Let's explore these components. The "highly advanced" criterion primarily serves to distinguish inventions under the Patent Act from "devices" (考案 - kōan) under Japan's Utility Model Act, which are generally for less inventive creations. In practice, for patent eligibility, this aspect often merges with the inventive step requirement (Article 29(2)) and is less frequently a standalone hurdle for defining an "invention" if other criteria are met.

Element 1: Utilization of Laws of Nature (自然法則の利用)

This is arguably the most critical filter for subject matter eligibility in Japan. An invention must be based on or make use of the laws of nature. This requirement inherently excludes several categories of human endeavor:

Laws of Economics or Pure Business Rules: Abstract economic principles or business strategies, detached from any technical implementation utilizing natural laws, are not considered inventions. For example, a railway company's business plan for enhancing revenue through synergistic development of residential areas, amusement parks, and department stores along its lines would not, in itself, be a patentable invention.
Arbitrary Human Arrangements or Mental Steps: Rules of games, methods of linguistic instruction, mathematical algorithms per se, or purely mental processes are generally excluded.
- A method for creating telegraphic codes by merely combining letters, numbers, and symbols without the use of any specific apparatus or application of natural forces was found not to be a patentable industrial invention (Supreme Court, April 30, 1953, "Single European Character Telegraphic Code Creation Method" case).
- A novel accounting system for structuring a balance sheet based purely on economic or accounting principles, aimed at easier financial tracking, was deemed a creation involving human mental activity based on economic laws, not natural laws (Tokyo District Court, January 20, 2003, "Fund-Specific Balance Sheet" case).
Human Activities Per Se (Unconnected to Technical Means Utilizing Natural Laws):It's important to note that the mere involvement of a human activity does not automatically disqualify an invention. The crucial distinction lies in whether the core inventive concept is the human activity or mental process itself, or whether it is a technical means that supports, automates, or provides a new way for humans to interact with or leverage natural laws. If a creation, viewed as a whole, offers a technical solution that utilizes natural laws, it may be patentable even if it involves human interaction. An IP High Court decision on June 24, 2008 (the "Interactive Dental Treatment Network" case) suggested that the analysis should focus on whether the invention is directed at the mental activity itself or provides a technical means to assist or replace it, with the latter being potentially patentable. For instance, a networked computer system for dental treatment planning, incorporating databases and image processing, was found to be a patentable invention despite involving steps like a dentist's diagnostic judgment, because its essence lay in the technical system.
- A method of rotating advertisements on utility poles by manually moving them according to a schedule, without any specific technical means utilizing natural forces to achieve the rotation, was held not to be an invention (Tokyo High Court, December 25, 1956, "Utility Pole Advertising Method" case).

Element 2: Technical Idea (技術的思想)

An invention must embody a "technical idea." This implies that the invention must be a concrete and objective means to achieve a specific technical purpose. A key aspect of a "technical idea" is its workability and repeatability (実施可能性・反復可能性 - jisshi kanōsei / hanpuku kanōsei). A person skilled in the art (POSITA) should be able to work the invention and achieve the purported results consistently.

Incomplete or Unworkable Inventions (未完成発明 - mikansei hatsumei): If an alleged invention cannot be practically carried out to achieve its stated technical objective, or if its operation is not controllable, it may be deemed an incomplete invention and thus not a patentable "technical idea."
- A prominent example is the Supreme Court decision of January 28, 1969 (the "Nuclear Reactor" case), where an invention related to controlling nuclear fission was deemed technically incomplete because it could not be operated safely and stably to achieve its purpose.
- It's important to distinguish this from general safety. The "Nuclear Reactor" case concerned an invention whose fundamental operation was unmanageable from a safety perspective integral to its claimed function, rendering it unworkable. It doesn't mean all inventions must be absolutely safe to be patentable; an otherwise operable machine might be poorly designed from a safety standpoint (e.g., a car without brakes) but could still be considered a "workable" technical idea, even if its commercialization would require safety modifications.
Repeatability: The invention must be capable of being reproduced with a consistent outcome. Even if the success rate of a particular step is low (e.g., in biotechnological processes), if the method can reliably, albeit infrequently, lead to the desired result, and that result itself is then reproducible, the requirement for repeatability may be satisfied. This was affirmed by the Supreme Court on February 29, 2000, in a case concerning a method for breeding and propagating new plant varieties.

Element 3: Creation (創作 - sōsaku)

The term "creation" implies that the invention must be something new that has been brought into existence by human ingenuity, rather than a mere discovery of something already existing in nature or a law of nature itself.

Discoveries vs. Inventions:
- Simply finding a previously unknown natural substance or identifying a law of nature is a discovery, not a patentable creation.
- However, if a naturally occurring substance is isolated from its natural environment for the first time, purified, and found to have a specific utility, the isolated and purified substance, or the method of its use for that utility, can be considered a patentable creation because of the human technical intervention involved. The act of isolating or adapting a natural thing for a specific, previously unrealized technical purpose through human effort can qualify as a "creation."
- For newly synthesized chemical compounds, the compound itself is a creation. To be patentable in Japan, it typically needs at least one specific, credible utility to satisfy industrial applicability requirements. For a truly novel compound, patent protection often extends to the compound itself, which can cover various uses, not just the first one identified.
- In contrast, discovering a new use for a known substance can lead to a patentable "use invention" (用途発明 - yōto hatsumei). For use inventions, patent protection is generally limited to the newly discovered use, not the known substance itself for all purposes.

The application of the "invention" definition to software and business methods has been a subject of considerable attention globally, and Japan is no different.

The patentability of software-related inventions in Japan has evolved. Initially, there was a strong emphasis on the invention needing to control physical hardware or result in a tangible physical change.

Statutory Recognition: The Japanese Patent Act was amended to explicitly recognize that "programs, etc." (defined in Article 2(4) to include computer programs and data structured for processing by a computer) can fall under the category of a "product" invention (Article 2(3)(i)).
Substantive Requirements Still Apply: This categorization does not automatically make all software patentable. A software-related invention must still satisfy the core definition of an "invention," particularly the "utilization of laws of nature."
JPO Examination Guidelines and Court Practice: Current practice, as reflected in JPO Examination Guidelines, focuses on whether the information processing performed by the software is concretely realized by using hardware resources (e.g., processors, memory, peripherals) and, as a whole, brings about a technical effect that utilizes natural laws.
- If software controls a machine, processes physical data (like sensor readings) to achieve a technical outcome, or manages physical resources in a novel way, it is more likely to be considered a patentable invention.
- However, software that merely automates a mental process, performs calculations based on mathematical algorithms without specific technical application, or presents information without a further technical effect tied to natural laws, may be deemed an unpatentable abstract idea or arbitrary arrangement. A Tokyo High Court decision on December 21, 2004 (the "Circuit Simulation Method" case), for example, touched upon the principle that a software algorithm itself, as an artificial rule, is not a utilization of a natural law.
- The crucial aspect is not just how the claim is drafted (e.g., as a "program" or a "system including a program"), but the underlying substance of the invention and its tangible technical realization and effect.

Pure business methods – such as new ways of organizing commercial transactions, advertising strategies, or financial schemes – if claimed as abstract ideas or economic principles, are generally not patentable in Japan because they do not "utilize laws of nature."

However, a business method that is implemented using specific technical means (e.g., computers, software, networks, specialized devices) may be patentable if the invention, when considered as a whole including its technical implementation, satisfies the definition of an invention under Article 2(1) and also meets other patentability criteria such as novelty and inventive step.

Focus on Technical Realization: The JPO and courts will scrutinize the technical aspects of the implementation. If the business method is merely carried out using conventional computer technology in an obvious way, it may lack inventive step, even if the underlying business concept is novel.
"Invention as a Whole": The patentability of a computer-implemented business method is assessed by looking at the combination of the business idea and the technical means for its execution. The invention must provide a concrete technical solution to a problem, utilizing natural laws through its technical components.
The JPO Examination Guidelines for "Computer Software-Related Inventions" provide specific examples and criteria for assessing the patentability of various types of computer-implemented inventions, including those related to business activities.

Industrial Applicability (産業上の利用可能性)

While technically a requirement for patentability under Article 29(1) rather than part of the definition of "invention" in Article 2(1), industrial applicability (産業上の利用可能性 - sangyō-jō no riyō kanōsei) is a closely related threshold. An invention must be capable of being utilized in an industry. This excludes:

Methods for medical treatment (surgery, therapy, or diagnosis) practiced on the human body. These are generally considered not to be for "industry" due to ethical considerations, the non-commercial nature of direct medical practice, and the urgency often involved.
However, pharmaceutical products, medical devices, and methods of manufacturing them are considered industrially applicable and are patentable subject matter. The distinction is typically between methods of medical treatment of humans versus products for medical treatment.
Inventions that are practically impossible to use or have no conceivable industrial application.

Comparison with U.S. Subject Matter Eligibility (35 U.S.C. § 101)

The Japanese approach to defining a patentable invention has both similarities and differences when compared to U.S. patent eligibility under 35 U.S.C. § 101.

Statutory Categories vs. Definitional Elements: U.S. law (§ 101) broadly defines patentable subject matter as "any new and useful process, machine, manufacture, or composition of matter." The Japanese definition in Article 2(1) is more philosophical, focusing on elements like "utilization of laws of nature" and "technical idea."
Judicial Exceptions: Both systems effectively exclude abstract ideas and laws of nature. In the U.S., these are judicial exceptions to § 101. In Japan, the "utilization of laws of nature" is a core statutory requirement that serves a similar filtering function.
Software and Business Methods: The U.S. has grappled significantly with the patent eligibility of software and business methods, with landmark Supreme Court cases like Alice Corp. v. CLS Bank International (2014) establishing a two-step framework for assessing whether claims are directed to an unpatentable abstract idea and, if so, whether they contain an "inventive concept" that transforms them into a patent-eligible application. Japan also carefully scrutinizes these areas, but primarily through the lens of "utilization of natural laws" and the overall "technical character" of the invention as realized through concrete means.
Medical Treatment Methods: While methods of medical treatment practiced on the human body are generally not patentable subject matter in Japan, they can be patented in the U.S. However, U.S. law (35 U.S.C. § 287(c)) provides certain limitations on remedies against medical practitioners for infringing such patents in the course of performing medical activities.

Conclusion

The definition of a patentable "invention" in Japan, as set forth in Article 2(1) of the Patent Act, requires a "highly advanced creation of technical ideas utilizing the laws of nature." This definition serves as a critical gateway for patentability, with the "utilization of laws of nature" and the embodiment of a concrete "technical idea" being central requirements. While abstract concepts, purely mental steps, and economic principles per se are excluded, innovations that provide concrete technical solutions leveraging natural laws – including appropriately framed software and technically implemented business methods – can qualify. For innovators, especially those working in cutting-edge or interdisciplinary fields, understanding and articulating how their creations meet these foundational criteria is essential when seeking robust patent protection in Japan.