Through IAM I became aware of a Nikkei.com article on a Japanese policy initiative regarding standard-essential patent (SEP) injunctions in the Internet of Things (IoT) space (including, inter alia, connected cars). I've tapped some other sources to find out about the status of Japanese policy-making in this area.
At the meta level, two differences between the situation in Japan and the one in the Western world are striking:
The new initiative to further restrict access to SEP injunctions comes from the Japan Patent Office (JPO). By contrast, the people working on policy matters at the European Patent Office (under whatever president) and the United States Patent & Trademark Office under Director (and long-time patent trolls' lawyer) Andrei Iancu are pro-patent-holder extremists whose only policy idea is to have more patents, stronger patents, and ever more leverage for owners of patents that for the most part shouldn't have been granted in the first place in light of prior art.
Even other policy-making institutions, such as the leadership of the IP subcommittees of U.S. Congress, the European Commission, or the German Federal Ministry of Justice have yet to acknowledge for the first time in history that it may be smart innovation policy to weaken patent rights. In Japan, an undoubtedly very innovative country, they're ahead of the pack. Especially in Europe, one-dimensional, backwards-oriented thinking is prevalent.
The Nikki article explains in its first paragraph that the JPO is working on a legislative initiative to deny SEP holders access to injunctive relief in cases in which their patents make only a minor contribution to IoT-related devices, which (as the Nikkei article clarifies) also includes connected cars and medical devices. It's hard to imagine a SEP that would not make only a minor contribution to an IoT product. Most SEPs are extremely underwhelming as they cover simple protocols of the "Hello, how are you? -- Thanks, I'm fine, how about you?" kind as opposed to rocket science. Even the few SEPs that are better than that merely constitute parts of standards with respect to which thousands of patents have been declared essential, and for every SEP there would have been numerous--often virtually infinite--numbers of viable alternatives at the time of standardization.
Japan wants its high-tech sector to be among the world leaders in IoT. You hear the same elsewhere, especially in the European Union, where one generation of politicians after the other states the ambition to make the economy more innovative while that continent is falling behind the U.S. and East Asia at a worrying pace. By contrast, Japanese policy makers appear to be prepared to not only talk the talk, but to walk the walk. According to Nikkei, the JPO's IoT-related proposal is envisioned to pass into law in 2021.
A JPO committee has outlined several cornerstones of a 2021 patent reform bill. Patent injunction reform has been discussed internally many times.
Not only is the JPO working on patent injunction reform but Japan's Ministry of Industry and Economy (METI) is drafting recommendations regarding SEP royalty rates.
I know that several Japanese car makers and automotive suppliers are watching with great interest what will come of Daimler's and four of its European suppliers' complaints against Nokia. At this point I'm not aware of official antitrust complaints lodged by Japan's automotive industry with the Japan Fair Trade Commission (JFTC), but anything's possible.
The draft patent reform bill Germany's Federal Ministry of Justice published earlier this year is fundamentally flawed and would likely have zero impact on SEP injunctions according to some leading litigators. While it's possible that Germany will enact a revised patent law slightly ahead of Japan, what actually matters is the impact any reform will have on litigation and, by extension, on licensing discussions that are informed by what would happen in hypothetical litigation. In that regard, Japan's approach looks more visionary for the time being.
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