Japan, US to Clarify Patent Rules US Companies Are Winning Suits against Japanese Firms for Infringement of Patent Rights - Spurring Efforts on Both Sides to Harmonize Patent Procedures

Article excerpt

AS many an American inventor has found out the hard way, build a better mousetrap and companies in Japan will beat a path to their own patent office to claim some variation on the idea as their own.

What's more, a well-made, inexpensive, made-in-Japan version of that mousetrap might then emerge later and win market share in the United States.

But the days may be numbered when a Japanese firm can easily imitate (some foreign firms say "steal") a foreign discovery with only minor mutation. The US and Japan appear to be moving toward an agreement on how to "harmonize" their very different ways of granting patents.

"We're moving quickly from friction over patents to harmonization," says Shoji Tada, an official at the Japan Patent Office, which is under the Ministry of International Trade and Industry.

A compromise may not come too soon for some Japanese firms. Many of them are being forced to pay high penalties to American firms and inventors who have gone to US courts in recent years to claim infringement on their patents.

Last spring, in the most recent notable case, Minolta camera company was forced to pay $127.5 million after Honeywell filed a lawsuit claiming that it had invented the autofocus idea now used in almost every Japanese camera. Other Japanese firms face similar claims by Honeywell.

Such well-publicized disputes over high-tech patents, as well as over drug designs and computer software, have encouraged many US firms to defend their patents in court. And often, the Japanese firms are easy targets in what has become known in Japan as "patent wars." The Nikkei business newspaper estimates Japanese firms face about 1,000 patent disputes. "There's still a big gap in concept between the US and Japan on what is infringement of a patent," says Yoshikazu Takaishi, general counsel for IBM Japan.

In a 1990 Japanese Machinery Exporters Association survey, 173 Japanese firms reported that they were involved in 207 patent-infringement suits filed by foreign firms, mainly from the US.

"US industry has been slowing down and companies are going to court to protect their patents and make more money," says Akira Okawa, a private patent attorney and former chief examiner in the Japan Patent Office. Most of the US victories rely on judgments by American juries. "We don't have much experience with a jury system," says Mr. Okawa. "And US juries are politically biased against Japanese companies."

THE exporters association also found that in 248 cases the Japanese firms settled out of court. Most settlements were cash payments, but some resulted in cross-licensing agreements and payment with special technology. "These lawsuits are added pressure on us to harmonize the Japanese patent system with the US system," Mr. Okawa said. They also have spurred Japanese companies to beef up their patent offices and learn more about US patent law.

More than just a moneymaker for US firms, however, the lawsuits are a highly visible example of a decade-long push by the US government and industry to fight back against Japan's economic challenge and to improve American competitiveness by better protecting US intellectual property rights, which includes patents, copyrights, and trademarks.

In various political arenas, US officials have tried to pressure Japan to alter its patent system. …

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