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March 2021
Contents
News about Sonoda & Kobayashi
1. Meet our Members

JPO News
1. Conclusion of State of Emergency in Four Provinces
2. Subcommittee on Patent System Issues Report Regarding Patent System in

the Corona/ Post Corona Era
Latest IP News in Japan
1. Partial revision of patent law, related to online hearings and payment of patentfees
2. Mitsubishi electric largest Japaneseler, 3rd globally

3. Changes to copyright act to allow for simultaneous distribution of tv shows
4. Number of counterfeit goods stopped at customs rose by 26%
5. International patent

ling ranked: Japan maintains 3rd place, China on number

1 spotIP Law Updates in Japan: Insights from Sonoda & Kobayashi
1. Infosheet on Arti cial Intelligence and AI patent protection in Japan- News about Sonoda & Kobayashi 1. Meet our members
In charge of the International Affairs Department, Nicole Bigler has been with the rm since2013. She is applying her experience in dealing with differences in regulations and herunderstanding of Japanese language and culture to expand Sonoda & Kobayashi’s clientbase and foster its relations with existing customers.

Q1: What brought you from banking to Sonoda & Kobayashi?
It had always been my dream to live and work in Japan one day. 9 years ago, I nally madethe big step, giving up my career in Swiss banking and starting in IP, which was acompletely new eld for me. Not only was the culture gap between Switzerland and Japanbig, but also between IP and banking there were many differences which I had to get used
to rst.

Q2: What do you enjoy about working at here?
That everyone can speak their minds and is given opportunities to develop new skills andtake on new challenges, disregarding seniority, titles, or nationality.
Our ex-time system is another great advantage allowing us to adapt our working schedule
according to individual needs most e ciently.

Q3: Tell us one thing about yourself many people do not know?
My main reason for coming to Japan had been Martial Arts and my rst years in Japan
centered on the study and practice thereof.

Q4: How do you feel about being a female working at a Japanese Intellectual Property
Firm?
I feel treated no differently from my male colleagues at the o ce. 50% of both our top andmid management are female, and the rm generally is putting high importance on diversity.
I think I am lucky to work in this kind of environment which has bene tted my career a lot.

Q5: What challenges do you face in your everyday work?
Working mostly remotely has impacted the way we interact with each other. While I think itworks well within departments where periodic meetings are held, communication acrossdepartments has become more di cult as we lose the chance for spontaneousinteractions at the o ce. While we are not planning on returning to a full-time work fromo ce set-up, I expect the situation will get better once the state of emergency in Japan islifted and we can return to our o ce more freely.

JPO News
1. Conclusion of State of Emergency in Four Provinces (Tokyo and Surrounding
Provinces）
On March 22, 2021, the JPO released a statement regarding the end of the state of
emergency that had been in effect in 4 provinces in and around Tokyo (Saitama Prefecture,
Chiba Prefecture, Tokyo, and Kanagawa Prefecture).

Along with announcing the immediate reopening of the main entrance of the JPO (which
had been closed since January 21, 2021), the JPO stated that it would continue to be
exible with respect to granting relief to applicants who seek relief from the passage ofdeadlines.

Speci c information on this topic can be found here:
https://www.jpo.go.jp/news/koho/info/covid19_shutsugan.html(in Japanese)
2. Subcommittee on Patent System Issues Report Regarding the Patent System in the“With Corona/Post Corona Era”
In February 2021, a subcommittee on the patent system In Japan issued a summary reporton a wide range of issues that have become apparent due to the spread of the novel
coronavirus infection, in order to ensure that the future patent system will be able torespond to the corona/post corona era.

The summary notes that, as a result of the spread of the novel coronavirus infection,
Japan's economic growth rate for the current scal year is expected to be -5.4%, which islower than the-3.4% after the Lehman shock. During the Lehman shock, investment in

R&D stagnated and Japan's innovation capability declined.

The number of patentapplications also declined signi cantly following the Lehman shock and still has notrecovered, and the present time period appears similarly challenging.

The subcommittee notes 3 challenging trends with respect to patent prosecution: (1) anincrease in the work associated with examination of patent applications based on the
search of foreign-language technical documents (a trend substantially impacted by the
recent increase in Chinese language technical documents); (2) responding to changing anddiverse user needs; and (3) managing limited resources allocated for patent prosecution.
The summary report also discusses plans to meet these challenges, including continual
implementation of AI related technology to make patent prosecution more e cient at the
JPO.

Speci c information on this topic can be found here:
https://www.jpo.go.jp/resources/shingikai/sangyokouzou/shousai/kihonmondai_shoi/210203torimatome.html (in Japanese)- Latest IP News in Japan 1. Partial revision of patent law, related to online hearings and payment of patent fees
METI, March 2nd, 2021

On the 2nd of March, Japan’s Ministry of Economy, Trade and Industry (METI) announced
that the Japanese Cabinet approved a bill to revise the Patent Act and other acts regarding
intellectual property (Trademark Act, Utility Model Act, etc.).

These changes were triggered by the spread of the novel corona virus and the subsequentchange to the nature of economic activities to become more digital and focused on remote
work and social distancing.

Concerning digitization procedures the changes are the following:

The head Judge may decide at his or her discretion to allow parties to conduct oral
hearings via web conferencing systems instead of having them appear before thecourt.
For the payment of patent fees and other fees, it will now be possible to make thesein advance using bank transfer or by payment with credit card at the counter.
The JPO may now electronically send noti cations that designs or trademarks led
as international applications have been registered.
Right holders who due to the COVID-19 pandemic, natural disasters or other reasonsfailed to meet the due day for paying their patent fees, can now receive an
exemption of paying surcharges for a predetermined period.
Concerning the protection of rights in the light of changing corporate activities due to theadvancement of digitization and other technologies:
The act is revised to recognize that the sending of counterfeit products to Japan bypostal mail or otherwise is an infringement of trademark rights. This from the time
when those products enter Japan’s territory.
The removal of the requirement for licensers to gain consent from licensees thathave received their non-exclusive licenses when patent rights are corrected.
Relaxing conditions on which right holders can restore their patent and other rightsthat had been forfeited because of the expiration of the timeframe for the required
procedures.
Finally, some changes are set to be made to strengthen the foundations of the IP system.
After a nal examination by the Diet, the new law is likely issued:
Courts are planned to be able to broadly call for opinions from third parties inlitigation concerning the infringement of patent rights. Patent attorneys could
provide consultation services under this system.
The fee structures for patent and other IP rights are set to be reviewed to address
the increasing burden on examinations and digitized procedures.
Consultation and other services related to IP rights for agriculture, forestry andsheries would be o cially added to the list of businesses that a patent attorney
may conduct.
Speci c information on this topic can be found here:
https://www.meti.go.jp/english/press/2021/0302_002.html

2. Mitsubishi electric largest Japanese ler,3rd globally
Businesswire, March 2nd, 2021

Businesswire reports on Mitsubishi Electric’s announcement on its global patent lings.
According to the ranking made by the World Intellectual Property Organisation (WIPO),
Mitsubishi Electric

led the most international patent applications of any Japanesecompany in 2020.
In total, it led 2810 PCT applications in 2020, which is an increase from it 2019 gure of
2661 applications.
As its business has globalized, Mitsubishi Electric has been active tole international

patent applications. Over the past 6 years, the company has held the number 1 spot among
Japanese companies, while also ranking among the top 5 companies with mostinternational ling activity for the past 7 years. In the year 2020, it ranked 3rd place justbelow Huawei Technologies and Samsung Electronics, whereas in 2019, it ranked 2ndplace just below Huawei.
Mitsubishi Electric has been focusing in particular on the elds of IoT and AI-supported
solution, which have contributed to its increased patent ling.

Speci c information on this topic can be found here:
https://www.businesswire.com/news/home/20210302006215/en/Mitsubishi-Electric-1stAmong-Japanese-Firms-and-3rd-Globally-in-International-Patent-Applications-Filed-in-2020

https://www.mitsubishielectric.com/news/2021/0303.html

3. Changes to copyright act to allow for simultaneous distribution of tv shows
IT Media, March 8th ,2021

IT Media described the Japanese government’s changes to the copy right act to simplify
procedures for so-called “simultaneous distribution” as well as “chase distribution” and“missed distribution”. The former means broadcasting TV shows on the internet at thesame time as they are being broadcasted on TV, while the second term refers to viewers
watching a program from the start after it has already begun. Finally, the latter word meansthat viewers can still watch a show after it has ended.
Under the present law, one needs separate permissions for broadcasting on TV and forother types of distribution. Therefore, sometimes shows broadcasted on TV could not be
distributed in another way because procedures weren’t completed in time. The newamendment now assumes that if no speci c intention was expressed when obtaining
permission for broadcasting on TV, the permission for internet broadcasting will also be
granted.
Moreover, the amendment also simpli es the use of sound records in broadcasts.
Presently, there is no prior permission necessary for TV broadcasting, while for internet
broadcasting permission is needed. In the new situation, sound records not undercentralized control can be used without prior consent as long as normal royalties are paid.
A similar rule has been made for the distribution of visual performances.

Speci c information on this topic can be found here:
https://www.itmedia.co.jp/news/articles/2103/08/news061.html (in Japanese)

4. Number of counterfeit goods stopped at customs rose by 26%
Chunichi shimbun, March 5th, 2021

The Chunichi Shimbun wrote an article on the announcement by the Japanese ministry ofnance. In 2020, customs stopped 30,305 imports of counterfeit branded goods and othertypes of goods infringing on intellectual property rights. This is an increase of about 26.6%
compared to 2019 and the third highest level since the counting started in 1987.

The ministry reported that due to the novel coronavirus there was a particularly sharp
increase of injunctions against illegal imports of goods that people would buy throughinternet shopping, such as DVDs of popular anime series, and related merchandising.
Looking at the injunctions per item, it becomes clear that bags and wallets make up thelargest group with 29,2% of total injunctions. They are followed by clothing items at 27%
and watches at 11.9%. Also of note was the in ux of replica medals, infringing on theTokyo Olympics’ and Paralympics’ trademarks.

Speci c information on this topic can be found here:
https://www.chunichi.co.jp/article/212970 (in Japanese)
5. International patent ling ranked: Japan maintains 3rd place, China on number 1 spot
Asia Nikkei, March 3rd, 2021

On the 3rd of March, Asia Nikkei reported on the country ranking for international patentapplications or PCT applications.
This ranking, created by WIPO, lists China as number 1 among international patentapplications. In total, Chinese companies submitted 68,720 PCT requests in 2020, which is
16% higher than in 2019. The second place went again to the United States, whose
companies led 59,230 applications, an increase of 3% compared to 2019.
Japan took third place once more with a total of 50,520 applications, but its total lings
decreased by 4% from the year before. At a news conference, WIPO Director-General Daren
Tang said that “ It's not as if lings from the traditional parts of the world like the U.S. or
Europe have decreased, it's just that the rate, the acceleration, has become a lot stronger inAsia".
Asia Nikkei continues by stating that Asia has become the center of technologicalinnovation. The Chinese and Korean government have both created programs to modernize
industry, and have seen their international patent lings go up. Japan maintains its number
3 spot, while Singapore and Saudi-Arabia have also gained momentum. Together,companies from China, Japan and Korea take up about 60% of the top 50 spots of mostling enterprises.
In total, worldwide international patent applications climbed by 4% in 2020 to reach an alltime high of 275,900 applications. Global trademark applications declined somewhat
however to 63,800 lings. This likely re ects that fact that due to the global pandemic theoutput of new goods and services, otherwise protected by trademarks, slowed. At thesame time, for patent applications, social distancing needs sped up technologicaldevelopments for virtual and augmented reality and other audiovisual technologies.

Speci c information on this topic can be found here:
https://asia.nikkei.com/Business/Technology/China-beats-US-in-patent- lings-for-secondstraight-year- IP Law Updates in Japan : Insights from Sonoda & Kobayashi 1. Infosheet on Arti cial Intelligence and AI patent protection in Japan

Arti cial Intelligence, or AI for short, is a rapidly emerging technological eld that is de nedby smart computer programs conducting tasks autonomously without the help of human
intelligence.
The technology is bringing change to a large variety of industries from manufacturing tohealthcare, and from security to education.
Given its transformative potential, this article summarizes the recent status of AI-related
patents in Japan and highlights a number of points to keep in mind when applying for suchpatents in Japan.

AI-related patents in Japan and by Japanese companies

A 2020 study by the Japanese Patent O ce (JPO) reported a dramatic rise in led patentapplications for AI-related inventions in recent years. From a historically average 1084
applications in the year 2014, numbers rose to 4728 applications in the year 2018.
This development has been characterized by the JPO as the “third AI boom”[1].
A similar trend can be seen across the USA, the EU, China and South-Korea, where thenumber of applications of AI-core technologies have all been rising. That said, for thesecore technologies, the increase has been speci cally stark in the US and China.
Japan is not only a popular jurisdiction forling AI-related patents, but Japanesecompanies themselves have been strong when it comes to AI inventions around the world.
A study by the European Patent O ce (EPO) from the end of 2020 looked at top global
patentling companies during 2000 – 2018 in theelds such as IoT, big data, cloudcomputing, 5G and AI. They found that 9 of the 25 top global patent ling rms in these
elds were Japanese companies, including for example Sony, Panasonic, Fujitsu, Hitachi
and Canon[2]. Nevertheless, when comparing the 2000 – 2009 period to 2009 – 2018, it
was found that both the Japanese and European top applicants had to give ground to rms
from South-Korea, China, and the US.

Using AI within the JPO

The use of AI also extends to the work of the JPO itself. Following its 2017 plan, theorganization has been carefully examining for what part of its operations AI can be used
for and has been subsequently running tests. Important here is that the JPO recognizes
that in some elds of application, the appropriate AI technology does not exist yet. In 2018,
the JPO started trial implementation of AI technologies for answering questions by phoneand converting paper applications to electronic formats for example, although the former
has been discontinued since 2020 after evaluating the trial results. As of 2020 several
areas are undergoing trials, or rather continued agile development where improvements are
realized and subsequently evaluated. The operations subject to this process are theassignment of patent classi cations, several steps of the prior art search for patents aswell as the search for prior graphical trademarks and the investigation of designated goods
and services.

Pointers for AI patent applications in Japan

Given the rapid development of AI as described above, and its application internally within
the JPO, it is no a surprise that the JPO issued guidance in 2018 on applying for a patentfor an AI technology.

Following the relevant patent law, the most important pointers are as below.
1. In general, it can be said the JPO is generous regarding the subject matter eligibilityof AI or computer related inventions, but stricter when it comes to inventive step. For
any invention to be patentable in Japan, it must utilize the laws of nature. For
software, this means that if it directly drives an engine or machine, or processes
sounds or images it is patentable. If this is not the case per se, and the invention
relies on computer software, the question is whether the invention utilizes thecooperation of software and hardware resources (see gure 1). Given this approachthat allows for combining hardware and software functions, subject matter eligibility
for AI software is relatively easy to obtain in Japan compared to other jurisdictions.

[1] https://www.meti.go.jp/english/press/2020/0727_001.html[2] http://documents.epo.org/projects/babylon/eponet.nsf/0/06E4D8F7A2D6C2E1C125863900517B88/$File/patents_and_the_fourth_industrial_revolution_study_2020_en.pdf

Figure1

2. Concerning inventive step, it is important to note that simply applying AI to a humanoperation where this was not done previously is generally not su cient. In order to
add an inventive step then, one could show that the selected training data or the
preprocessing of training data of the AI leads to an advantageous effect.

3. Concerning the description of AI inventions, su cient support and enablement are
required even in the case of “black box” AI mechanisms. For AI an invention
involving a correlation between input and output data, the rationale behind thecorrelation should ideally be disclosed explicitly, even though implicit support may
be acceptable in some cases, for example, if the correlation is well known to aperson skilled in the art.
If an AI tries to produce a model claiming to satisfy certain properties (such as amodel for a material having a certain curing rate) it should be shown that the model
has been veri ed experimentally and actually produces the claimed results. The

claims cannot be generalized or extended beyond the features and embodiments inthe description. As such, it is valuable to describe the features and embodiments
both in general and in detailed terms.

Sonoda & Kobayashi and AI prosecution

Naturally, given the fast-paced development of AI technology, Sonoda & Kobayashi has
also made sure to further improve its own expertise. Over the years we have worked on
cases involving for example:
The use of neural networks having various subnets for improved image
classi cation. Whereas neural networks are commonly used in image classi cation,
this particular arrangement of the subnets was not disclosed in the prior art.
Attribute-based hierarchical image classi cation. The examiner cited a prior art
neural network image classi cation having related concepts and features, requiring
us to distinguish the neural network system from the hierarchical system.

Among our staff handling such cases, we have extremely experienced patent attorneys
holding PhDs and having years of experience developing system software as well as
younger but thoroughly trained patent engineers with degrees in computer science.
Our attorneys and engineers would gladly put their expertise to use in protecting your AI
technologies in Japan and China.

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