Thursday, March 15, 2018

Japan releases SEP licensing negotiation guide and reveals plan for establishing International Arbitration Center in Tokyo

The Japan Patent Office (JPO) has released the draft of “Guide to Licensing Negotiations involving Standard Essential Patents” to hear public comments. The English translation is also available. As previously reported, before developing this Guide, the JPO asked for public comments from home and abroad last year. So, the comments the JPO received should be reflected in this Guide.

The JPO commissioner Naoko Munakata introduced this Guide at the international symposium “Toward Solving Disputes over Standard Essential Patents: Licensing 5G SEPs” which was held in Tokyo on March 13 2018 and asked the audience to make sure that “it is not legally binding”, and also “it does not present “recipes” which can be used to automatically calculate the appropriate royalty rate – rather, it is meant to present factors to be considered when determining what a reasonable royalty is.”

It remains simply a summary document containing domestic and foreign court precedent, decisions by competition authorities, and issues in licensing negotiation. But it looks well summarized and could be a good reference especially for small and medium sized companies which don’t have enough resources with patent licensing expertise. It is expected to serve as one of the tools for solving SEP-related disputes as well as "HANTEI" on SEP.

Further, Munakata also stated that international arbitration is an effective solution for global dispute resolution, and it is planning to hold mock arbitrations with Randall Rader, the former chief judge of the Court of Appeals for the Federal Circuit, on June 29 2018. Then, Rader mentioned “International Arbitration Center in Tokyo (IACT)” in his speech at the conference, and explained IACT will gather leading expert judges from around the world, and its rules will be similar to ICC rules. It seems the JPO has been discussing IACT with Rader, and he is likely to play a key role in the development of IACT. 

It was a surprise. The JPO deferred the originally intended JPO ADR system just last December, because of being questioned about its ability to set out appropriate license conditions and other reasons, as reported. This might be plan B for the JPO. The details are unknown yet. Let's keep a close eye on the developments.

Saturday, March 10, 2018

Baidu document-sharing site discloses corporate confidential documents

It is reported that Japanese companies’ internal documents marked “CONFIDENTIAL” are posted on Baidu document-sharing site. 186 companies’ confidential documents which includes a product diagram have been reportedly posted on this site between June 2017 and February 2018. 

Japanese companies today carefully review and select their technologies to be filed patent applications, considering cost and risk of unnecessary technology disclosure, and therefore reduce patent application filing. At the same time, they are attracted to trade secret protection and its related services such as  timestamp service which is used to prove existence of a particular electrical data at a specific date.

Once trade secret or know-how is leaked to the outside, it loses its value. In case of patent-protected technology, patent holders can remove violative products from the marketplace by enforcing patent right. Actually, according to the Japanese government data, IP holders could successfully suspend imports of 30,627 cases in which 92.2% of them came from China in 2017.

I have no idea how the leakage of confidential information on the Baidu document-sharing site impacted the victim companies. Certainly, there are doubtlessly circumstances when it makes sense to protect it as trade secret. However, we should fully recognize the risk of the leakage of trade secret. It is important to make employees aware of the seriousness of information leakage through signing a confidentiality agreement or providing confidential information trainings. Before that, it is more important to avoid disclosing confidential information beyond necessity even within a company.