INTELLECTUAL PROPERTY PROTECTION If you are seeking to develop trade or to license your technology in Japan, you should take the steps necessary to obtain and protect your rights in patents, trademarks, copyrights, designs, trade secrets, and other intellectual property rights in Japan. Failure to do so can limit your potential for success. Japan and the United States are signatories of the Paris Convention for the Protection of Industrial Property and other treaties governing the protection of industrial property rights. These treaties, however, do not automatically protect patents or trademarks your business has acquired in the United States. You will have to file applications for patents or for trademark registrations in Japan, but your U.S. rights can provide certain advantages if applications are filed promptly in Japan. A U.S. patent or trademark attorney, as appropriate, can provide advice, but you will also need to hire a Japanese attorney, preferably one with which your U.S. attorney has an established relationship, to prosecute the application for a patent or for registration of a trademark. Japan and the United States belong to the Berne Convention for the Protection of Literary and Artistic Works and to the Universal Copyright Convention. These conventions provide automatic protection for copyrighted works, including computer programs, originating in either country or produced by authors of either country. The owner of a U.S. copyright which is infringed in Japan would be able to sue the infringer in Japanese courts. Registration for copyrighted works is not required. Japan does provide for voluntary registration of computer programs and musical works, which simplifies the evidence that must be produced in court. U.S.-produced semiconductor chips are protected in Japan under the Japanese Law Concerning the Circuit Layout of a Semiconductor Integrated Circuit. Under this law, foreign chip layout-designs should be entered in the registry maintained by the Industrial Property Cooperation Center. Obtaining and protecting intellectual property rights in Japan can be time-consuming and costly. While the cost or time involved in acquiring intellectual property rights might seem prohibitive, lack of such rights would permit competitors both in and outside of Japan to copy your product or production process which you want to market or license in Japan and to compete with your firm in the Japanese market. Even when intellectual property rights have been acquired, pirating of technology and designs can occur in Japan, as it does in many countries, including the United States. Each company in a trading or licensing agreement should understand clearly what its rights and obligations are with respect to the intellectual property rights owned or acquired by the other. Such a clear understanding helps to create a good rapport based on mutual trust, thereby ensuring the success of the trading or licensing agreement. In 1989, 1990, and 1991, Japan was included on the "Watch List" under the so-called Special 301 provisions of the Omnibus Trade and Competitiveness Act of 1988, because of deficiencies in its intellectual property laws and problems of a practical nature involving protection of patents, copyrights, and trademarks. Patents: Japan's patent law differs from U.S. patent law in several important ways. First, under Japan's patent law, patents are granted to the first inventor to file an application claiming a particular invention, rather than to the first to invent as is done in the United States. Under the Paris Convention, the date on which a U.S. applicant filed his U.S. application will become the Japanese filing date so long as the corresponding application, in Japanese, is filed in Japan within one year of the U.S. filing date. Prompt filing in Japan is also important because printed publication of a description of the invention anywhere in the world, or knowledge or use of the invention in Japan, prior to the filing date of the Japanese application would preclude the grant of a patent on the application. Second, unlike the United States, where examination of patent applications is automatic, an applicant must request examination of his patent application in Japan but has seven years in which to do so. As is true in most countries of the world, but not in the United States, all patent applications are published in Japan 18 months after filing. If, during the examination, the Japanese Patent Office (JPO) finds no impediment to the grant of a patent for a particular invention, it publishes the patent application a second time, including any changes that have been made during the examination. Following this second publication of the application, any party may oppose the grant of a patent by demonstrating that the standards for patentability are not met by the invention. Japan and the United States are signatories to the Patent Cooperation Treaty (PCT), which is administered by the World Intellectual Property Organization. Under the PCT, an applicant can file a single "international application" designating the PCT member countries in which a patent is sought. The international application has the same effect as filing individual national applications in each of those countries. U.S. nationals can file an international patent application with the U.S. Patent and Trademark Office of the U.S. Department of Commerce and designate Japan as one of the countries in which a patent is sought. The international patent application under this program does not obviate the need to file a separate patent in Japan. However, it does provide the applicant with certain advantages regarding time limits and translations. It takes a long time to obtain a patent in Japan. Like patent offices in other countries, the JPO does not begin examination until 18 months after a patent application is filed, even if examination is requested at the time of filing. The shortage of patent examiners adds to the problem as does the number of patent applications filed by Japanese companies, causing a significant backlog of applications awaiting examination. An applicant can request accelerated examination under certain circumstances, but this does not help reduce the period of examination in ordinary cases. The JPO has added some examiners to its staff and has begun to hire subcontractors to perform initial searches of patent applications. In December 1990, the JPO inaugurated the world's first electronic filing system for patent applications. These measures, however, have yet to result in substantial reductions in the time required to examine a patent application and grant the patent. It must be emphasized that correct translation is necessary in the patent application process. The JPO shows little sympathy towards translation mistakes or typos. Companies should ensure that translations of their applications are perfect. The average time required to examine a patent application in Japan was 32 months in 1990. That is in addition to the 18 months prior to initial publication and the 2 months following publication for opposition, indicating that, on average, it took 52 months to obtain a patent in Japan (assuming there were no oppositions filed). During the examination period, no effective legal protection will exist. By comparison, the average period required for the U.S. Patent and Trademark Office to process a patent application is 18 months. In the U.S.-Japan Structural Impediments Initiative (SII), the Government of Japan has agreed to reduce the period required for examination to 24 months within 5 years. If the application is uncontested in Japan and all requirements are met, the patent is granted and valid for 15 years from the date the application is published (but not more than 20 years from the date the application was submitted). Trademarks: To provide for protection for the brand names of products, Japan enacted the Trademark Law of 1959. Under the law, the first person to file an application for a particular trademark is entitled to the registration of the mark in connection with the particular class of goods. Japan has just enacted a new law providing for the registration of service marks which comes into effect in April 1992. Currently, service marks are protected only under Japan's Unfair Competition Law. The trademark law permits the owner of a well-known foreign trademark or service mark to oppose the registration of a mark if it can demonstrate that the mark is confusingly similar to its own. One common mistake to avoid is to trademark just your product. You should also trademark the packaging and/or promotional materials that go along with your product. A trademark registration is valid for ten years from the date of registration and can be renewed indefinitely for ten year periods so long as the trademark continues to be used. If a mark has not been used for a period of three years, it can be canceled. On February 20, 1990, Japan agreed to the Nice Agreement Concerning the International Classification of Goods and Services for the Purposes of the Registration of Marks. As is the case with patent applications, a resident agent (usually a lawyer or patent agent) must prosecute the trademark application. As with the processing of patent applications, Japan's trademark registration process is very slow. It takes an average of 4 years to process a trademark registration in Japan, compared with an average of 13 months in the United States. The only protection available for a trademark in Japan prior to registration is under the Unfair Competition Law. Under this law, the owner of the mark must demonstrate that the mark is well-known in Japan and that consumers will be confused by the use of an identical or similar mark by the unauthorized user. Copyrights: Japan's copyright law is administered by the Copyright Office of the Cultural Affairs Agency, Ministry of Education. Under the Berne Convention for the Protection of Literary and Artistic Works and the Copyright Convention, Japan provides protection for copyrighted works, including computer programs, for nationals of member states of those conventions and/or works first published in member countries. The protection lasts for the life of the author plus 50 years or 50 years from publication in the case of juridical entities. Registration is not required. Japan amended its copyright law in April of 1991 to extend protection for sound recordings from 30 to 50 years, to provide a rental right for foreign phonogram producers, and to provide criminal penalties for copying previously unprotected U.S. and certain other foreign-produced sound recordings released from 1968 to 1978. The one-year prohibition against rental starts to run from the date of first sale anywhere in the world, not from the date of first sale in Japan; there is no protection for foreign sound recordings produced before 1968. In 1988, Japan enacted legislation to facilitate the prosecution of suspected video pirates, although loopholes remain. The law must be enforced more rigorously if it is to be effective in curbing abuses which have cost U.S. owners of rights in video recordings an estimated $200 to $250 million each year. Semiconductor Chip Layout and Design: The layout-designs of U.S.-produced semiconductor chips are protected in Japan under the Japanese Law Concerning the Circuit Layout of a Semiconductor Integrated Circuit. This law is administered by an independent registration agency, the Industrial Property Cooperation Center (IPCC). Under the Japanese law, foreign chip layout-designs may be registered in the registry maintained by the IPCC. The duration and the level of the protection is essentially the same as under the U.S. Semiconductor Chip Protection Act. Japanese layout-designs are eligible for protection in the United States under orders issued by the Assistant Secretary and Commissioner of Patents and Trademarks. Utility Model and Design Protection: The Japanese utility model system parallels the patent system. It serves as an incentive to individual inventors and small and medium-sized businesses (which lack large budgets for research and development) to invent. While novelty remains an important requirement, the degree of inventiveness for a utility model is less than that required for a patent. Devices are protected as utility models, but not methods. Application procedures are similar to those for patents, but the period of protection is 10 years from the date of publication of the application and no more than 15 years from the date of application. Japan also protects registered designs under a system modeled on the British. To be registered, a design must be industrially useful, novel, and creative. The design right lasts 15 years from the date of registration. The application for registration is similar to that for patent applications. Trade Secrets: Japan enacted amendments to the Unfair Competition Law in 1990 which provide some measure of protection for theft of trade secrets such as know-how, customer lists, sales manuals, and experimental data. The law provides for injunctions against wrongful use, but not against use by innocent third party transferees of trade secrets. If you are interested in protecting your product in Japan, you will need a Japanese lawyer (bengoshi) or patent agent (benrishi). Consult with your attorney here in the United States, the Martindale-Hubbell Law Directory, or for a list of selected lawyers and patent attorneys, contact the Japan Export Information Center (JEIC) at (202) 377-2425. Other English-language intellectual property protection publications available include: "Patent Protection or Piracy - A CEO Views Japan," Harvard Business Review. September/October 1990, pp 58-67. Reprint Product Information and Orders: (617) 495-6192. Patent Application Paperless System: Guide Book. Japanese Patent Office (1990). Guideline for Accelerated Examination and Accelerated Appeal Examination System for Working-Related Patent (or Utility Model) Applications. Japanese Patent Office (July 1989). Effect of the Japanese Patent System on American Business: Subcommittee Hearing. U.S. Government Printing Office (June 24, 1988). Guide to Industrial Property in Japan. Japanese Patent Office (1988). Outline of Japanese Trademark System: An Introduction to Foreigners. Japanese Patent Office (1986). Industrial Property Rights in Japan. Japan External Trade Organization (Revised 1981).