31/07/2015
Recent decisions of the Supreme Court in Teva v Kyowa Hakko Kirin and Teva v Tori Limited have changed the interpretation of product-by-process claims applied in Japan, bringing that interpretation more in line with the related practice in Europe. Changes to Japanese patent law are also planned under a new bill recently approved by the Japanese Diet.
Supreme Court Decision On Product-by-process Claims
Following the decision of the Supreme Court in cases (H24) 2012 (Ju) 1204 – Teva v Kyowa Hakko Kirin and 2012 (Ju) 2658 – Teva v Tori, the Japanese Patent Office (JPO) has changed its practice regarding the examination of product-by-process claims. The JPO’s English guidance note published on 6 July 2015 is available here. Product-by-process claims seek to define a product with reference to the method or process by which the product was produced, and often give rise to difficult questions of how the claim should be interpreted.
Under the new guidance, the JPO will object that a product-by-process claim lacks clarity under Article 36 of the Japanese Patent Act, unless they consider that it was “impossible” or “impractical” to define the product by anything other than a reference to method or process features.
If such an objection is encountered, the applicant will either be required to define the product in terms of the product’s structural features, or demonstrate that it was not possible to define the product in any other way than by use of a product-by-process claim at the filing date of the application. Deletion of the claim, or recasting the claim as a process claim is also possible though clearly less desirable. The extent to which JPO examiners will entertain an argument that a product-by-process claim formulation was the only suitable claim formulation available to the applicant will no doubt be tested over coming years.
The change in practice applies not only to applications that are currently pending or yet to be filed, but also to patents that are already granted and which are subsequently challenged by a patent invalidity action at the JPO or in court.
Until the decision of the Supreme Court, product-by-process claims could be construed either narrowly or broadly. Under the broad construction, any product that had the same physical characteristics as the product defined in the product-by-process claim was considered covered by the claim. Under the narrow interpretation, however, only products that were actually made by the process were considered covered. In patentability cases, the broad interpretation tended to be used, but in infringement cases, both narrow and broad interpretations were used, leading to uncertainty for patentees and third parties. The Supreme Court decision also clarifies that the broad interpretation should be used both for considerations of patentability and infringement.
Bill For The Partial Revision Of The Japanese Patent Act & Other Acts
A new bill for revising the Japanese Patent Act was passed by the Japanese Diet on 3rd July 2015. The bill is intended to improve Japan’s intellectual property system, and make the necessary provisions for Japan to implement the Patent Law Treaty and the Singapore Treaty on the Law of Trademarks later in the year. The Ministry of Economy, Trade and Industry (METI ) published a brief commentary on the bill here when it was approved by the Japanese Cabinet in March. The bill is expected to become law within the year.
Inventor Compensation
According to the new bill, the right to obtain a patent for an invention will automatically belong to the inventor’s employer, as long as there is an agreement to that effect existing between the employee-inventor and the employer at the time the invention was made. Japanese companies will therefore need to ensure that employee contracts and company regulations contain the appropriate wording. If they do not, then the right to obtain a patent for the invention will belong to the inventor as is the case under the current regulations.
The revisions improve the mechanism for transferring ownership of inventions created by employee-inventors to their employers. Although current guidance is that companies should set regulations providing for transfer of an inventor-owned right to the company, there were concerns in industry that transfers were not always guaranteed (the inventor could theoretically transfer the right to a third party before transfer to the company took place) and could also be problematic in cases of joint ownership by inventors employed at different companies (where the assent of all of the inventors would be needed to transfer to the parent companies).
The inventor will continue to have the right to reasonable monetary compensation and other economic benefit as remuneration for the transfer of their right to their employer. METI will set policy for deciding what is appropriate compensation. The guidance of METI on the question of reasonable monetary compensation and other benefits is also hoped to reduce the number of lawsuits where inventors challenge the amount of remuneration paid by their employer.
Reduction In Renewal Fees & Relaxation Of Time-limits For Translation
The bill also proposes a 10% reduction in the annual patent renewal fees, and under the Patent Law Treaty means that it will be possible to late-file translations of the application into Japanese if the translation cannot be filed within the initial prescribed period.
This article is for general information only. Its content is not a statement of the law on any subject and does not constitute advice. Please contact Reddie & Grose LLP for advice before taking any action in reliance on it.
