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Policy Proposals  Industrial Technology Proposal on revision of the employee inventions system -- To strengthen industrial competitiveness of Japanese companies --

May 14, 2013

It is essential to induce investments in research and development by private companies at a maximum rate in order to create innovation which contributes to the realization of economic growth. From this perspective, the employee invention system in Japan has a serious restriction in the field of intellectual property.

With regard to employee inventions (inventions made by employees during the course of their duties) in most countries, the right to obtain a patent initially vests in companies and remuneration paid for inventions takes the form of compensation set beforehand in contracts, etc.

In Japan, on the other hand, the right to obtain a patent initially belongs to inventors and they transfer the right to companies. On such occasions, employees, in return for inventions, can claim remuneration including profits gained from commercialization of inventions. Inventors can also fight over the appropriateness of remuneration in lawsuits. The current system under which companies carry risks over a long period of time is considered disadvantageous from the perspective of international competitiveness and an obstacle to cooperating or restructuring of business operations with foreign companies.

Employee inventions are accomplished as a result of professional duties with support provided by employers, and contribution of other employees is essential in commercialization of inventions. Thus, it is necessary for companies to implement measures based on their own creative efforts to boost the motivation of each employee including inventors.

Toward strengthening industrial competitiveness, and as one of the important efforts to make Japan a front-runner in innovation, Keidanren calls for revision of the system so that the ownership of employee inventions will initially belong to corporations, while further studying measures for improvement of employees' motivation at the same time.

Industrial Technology