EDITORIAL: Giving patent rights to companies would demoralize creative employees
Under Japan’s Patent Law, patent rights to corporate
in-house inventions belong to the employees who come up with the
inventions.
However, the administration of Prime Minister Shinzo Abe decided in the Cabinet meeting on June 7 to consider a policy change that would award the rights to companies rather than individual inventors.
We believe patent ownership should remain with employees. A change in the system could stunt technological renovation in Japan and lead to a brain drain.
As in Japan, patent rights currently belong to employees in the United States, Germany and South Korea. But the thinking in countries such as Britain, France and China is that patent rights belong to companies because they provide the funding and research environment for in-house inventions.
A decade ago, a high-profile patent ownership lawsuit made headlines in Japan. Filed in 2001, the plaintiff was Shuji Nakamura, who developed the blue light emitting diode (LED) technology while in the employ of Nichia Corp., a chemical engineering and manufacturing company. Upon his resignation from Nichia, Nakamura sued the company, demanding 20 billion yen ($204 million) in compensation for his invention.
The Tokyo District Court ruled in favor of Nakamura, noting that his contribution is estimated to be worth 50 percent of the profit the company made from his invention.
But Nichia appealed. Following a recommendation by the Tokyo High Court, the two sides agreed to settle the case with Nichia paying 840 million yen to Nakamura. The high court put more weight on Nichia’s sales promotion efforts and other factors not related to Nakamura’s invention.
In response to the case, Keidanren (Japan Business Federation) has pressured the government to award patent rights to companies, maintaining that failure to do so could lead to numerous high-stakes compensation lawsuits.
The Abe administration’s decision was in compliance with Keidanren’s wishes. Should a new policy come into effect, companies will reward their in-house inventors by paying bonuses or other measures. This means that the inventors will only receive “rewards” at the company’s discretion, instead of being adequately compensated for their inventions under the legal rights.
Traditionally, Japanese companies have shown little regard for workers’ intellectual property. Nakamura, for instance, received a paltry 10,000-yen bonus from Nichia when an application was filed to patent his blue LED technology, and another 10,000 yen when it was patented. At the time of his resignation from the company, his annual salary was about 15 million yen, which shocked his research colleagues abroad.
They told him he was virtually a “slave” of the company.
Lawsuits similar to Nakamura’s were filed by frustrated employees of other companies. But there has been no new major case since the Patent Law was revised in 2004, encouraging negotiations between companies and workers to spell out the sums of compensation in contracts.
It would be extremely shortsighted to deny patent ownership to employees now to block future lawsuits. Such a move would not only demoralize creative workers but also give the impression that Japan and Japanese companies have no qualms about treating workers as expendable parts of the organization.
That is no way to attract competent workers.
In this age of global competition that requires originality and creativity, it is no longer acceptable to put corporate profit ahead of everything. The mother of invention is not the organization, but the creativity of individual members of the organization.
--The Asahi Shimbun, June 19
However, the administration of Prime Minister Shinzo Abe decided in the Cabinet meeting on June 7 to consider a policy change that would award the rights to companies rather than individual inventors.
We believe patent ownership should remain with employees. A change in the system could stunt technological renovation in Japan and lead to a brain drain.
As in Japan, patent rights currently belong to employees in the United States, Germany and South Korea. But the thinking in countries such as Britain, France and China is that patent rights belong to companies because they provide the funding and research environment for in-house inventions.
A decade ago, a high-profile patent ownership lawsuit made headlines in Japan. Filed in 2001, the plaintiff was Shuji Nakamura, who developed the blue light emitting diode (LED) technology while in the employ of Nichia Corp., a chemical engineering and manufacturing company. Upon his resignation from Nichia, Nakamura sued the company, demanding 20 billion yen ($204 million) in compensation for his invention.
The Tokyo District Court ruled in favor of Nakamura, noting that his contribution is estimated to be worth 50 percent of the profit the company made from his invention.
But Nichia appealed. Following a recommendation by the Tokyo High Court, the two sides agreed to settle the case with Nichia paying 840 million yen to Nakamura. The high court put more weight on Nichia’s sales promotion efforts and other factors not related to Nakamura’s invention.
In response to the case, Keidanren (Japan Business Federation) has pressured the government to award patent rights to companies, maintaining that failure to do so could lead to numerous high-stakes compensation lawsuits.
The Abe administration’s decision was in compliance with Keidanren’s wishes. Should a new policy come into effect, companies will reward their in-house inventors by paying bonuses or other measures. This means that the inventors will only receive “rewards” at the company’s discretion, instead of being adequately compensated for their inventions under the legal rights.
Traditionally, Japanese companies have shown little regard for workers’ intellectual property. Nakamura, for instance, received a paltry 10,000-yen bonus from Nichia when an application was filed to patent his blue LED technology, and another 10,000 yen when it was patented. At the time of his resignation from the company, his annual salary was about 15 million yen, which shocked his research colleagues abroad.
They told him he was virtually a “slave” of the company.
Lawsuits similar to Nakamura’s were filed by frustrated employees of other companies. But there has been no new major case since the Patent Law was revised in 2004, encouraging negotiations between companies and workers to spell out the sums of compensation in contracts.
It would be extremely shortsighted to deny patent ownership to employees now to block future lawsuits. Such a move would not only demoralize creative workers but also give the impression that Japan and Japanese companies have no qualms about treating workers as expendable parts of the organization.
That is no way to attract competent workers.
In this age of global competition that requires originality and creativity, it is no longer acceptable to put corporate profit ahead of everything. The mother of invention is not the organization, but the creativity of individual members of the organization.
--The Asahi Shimbun, June 19
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