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.

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