Revisions Made to the Japan Patent Law Relating to Employee Invention System (made effective on April 1, 2016)

Article 35 of the Patent Law, which prescribes the employee invention system, was amended by the 2015 revision in order to reduce potential litigation risk, which may otherwise increase as technical innovations made by businesses become more highly developed and complicated. The revised law, which came into effect on April 1, 2016, newly prescribes: that (i) an employer can make an agreement (via, e.g., a contract or employment rules) with an employee that when the employee makes an “employee invention” (i.e., an invention made in the course of exercising his work duties), the right to obtain a patent for the “employee invention” shall inherently be vested in (i.e., shall inherently belong to) the employer; that (ii) the employee can receive a reward for his “employee invention” in the form of “reasonable [..] economic profits”, which shall not be limited to a “remuneration” (monetary reward), but shall also include any other types of economic profits; and that (iii) the Minister of Economy, Trade and Industry shall provide a guideline for determining the “reasonable profit” as a reward for an “employee invention”. This article explains the changes made to the employee invention system in Japan by the 2015 revision to the Patent Law.