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May 2021
Contents
News about Sonoda & Kobayashi
1. Internal news

JPO News
1. JPO relief measure procedures and how they are affected by Covid-19
2. Change in fees for international registration of trademarks in Japan

Latest IP News in Japan
1. Japanese pharmaceutical industry opposes US backing for vaccine patent waver
2. The competition for automated driving patents: Car manufacturers recovering while IT companies fallback
3. District court orders ne to Japanese messenger app LINE for patent infringement
4. Japan’s rst insurance for infringement of 3rd party IP launched

IP Law Updates in Japan: Insights from Sonoda & Kobayashi
1. Statistical overview of JPO Status Report 2021

- News about Sonoda & Kobayashi 1. Sonoda & Kobayashi attending trade fairs in China
As the Covid-19 pandemic has pushed Tokyo into its 3rd state of emergency, the global picture starts to diverge more
and more. While certain countries have been practically Covid-free since the beginning, others have recently had to facean unexpected surge in infections. Yet others again have made progress with their vaccination programs and are able torelax preventative measures.
In this uncertain situation, Sonoda & Kobayashi has so far not been able to visit you or meet you at physical trade fairs
around the world. It has instead relied on digital meetings and digital congresses to maintain and expand its network ofpartners and clients.

With a changing situation comes unexpected opportunity, and it is therefore that Sonoda & Kobayashi will soon bepresent physically at a trade fair for the rst time in 1,5 years.
We will be present on several fairs in China throughout this year:- The Global Med Device IP Summit 2021, on 2nd-4th of June in Shenzhen.
- The CIPF, on 21st-23rd of July in Shanghai.
- The 6th China Pharma IP Summit 2021, on 16th-18th of September in Beijing.
- The CIPAC, on 8th-9th of November in Suzhou.

We would be pleased to meet our clients and business partners at these occasions.

JPO News
1. JPO relief measure procedures and how they are affected by Covid-19
The Japanese Patent O ce (JPO) has several procedures, or relief measures, in place that can be used if one
accidentally misses the time limit for applying for a patent. There is a procedure for “reasons beyond one’s control” andone called “legitimate reasons”. While there are rules in place on using these procedures, the JPO is exible when it
comes to procedures negatively affected by Covid-19.
In practice, this may mean not being required to submit certain documentary evidence. One is also allowed to submit
reasons such as the o ce being closed and the work being not done in time because of Covid-19.
Examples of situations where one can cite Covid-19 as one of their reasons are:
When the applicant or their representative has been infected with COVID-19;
When the o ces of the applicants or their representatives have been closed due to people being infected with
COVID-19;
When (local) governments order or request movement restrictions, and access to the o ce is severely restricted.
When the applicant is unable to perform the procedures due to nancial di culties caused by the Covid-19
pandemic
The exibility regarding these procedures will be in place for an unspeci ed amount of time.

Click here for details. (in Japanese)2. Change in fees for international registration of marks in JapanThe JPO reported that as of May 29th 2021, the individual fees for designating Japan on an international application for
trademark registration will change. This fee also applies when Japan is designated after international registration has
been completed, and at renewal of an international registration.
The fees are set in Swiss Francs by the World Intellectual Property Organisation (WIPO) in Geneva.
In many cases, the new fees are lower than the old ones:

Amounts(in Swiss francs)
ITEMS

until

as from

May 28, 2021

May 29, 2021

– for one class of goods or services

108

97

– for each additional class82

73– for each class of goods or services

269

241

– for each class of goods or services

371

331

First Part:

Application or
Subsequent

Second Part:

Designation

RenewalClick here for details. (in Japanese)
Click here for details. (in English)- Latest IP News in Japan 1. Japanese pharmaceutical industry opposes US backing for vaccine patent waver
Kyodo News, May 8, 2021
On the 8th of May, Kyodo news reported on the opposition by the Japanese pharmaceutical industry to the US support
for temporarily waiving patent rights related to coronavirus patents.
The Japan pharmaceutical industry claims this would increase shortages in vital vaccine components worldwide, andaffect views on vaccine quality.

As the United States spoke out in favour of temporarily waiving COVID-19 vaccine patents, it was supported by theWorld Health Organisation, who encouraged other countries to follow the example.

While the Japanese government has not yet made its stance clear on the issue, the Japanese pharmaceutical sector isagainst the waiver. It claims that the even if a waiver were to be granted, this does not guarantee that vaccines of
equivalent quality to current ones would be produced. It is worried that some non-effective products could circulate,while the risk of side effects from vaccines would rise too.

In a statement, the association said that "we are deeply concerned that if vaccines are made in an uncontrollable

environment, it will intensify scarcity of raw materials as well as further disperse and disrupt supply chains, possibly
leading to a further delay in distribution”.

Meanwhile in Europe, France’s president Emmanuel Macron expressed strong support for the patent waiver. Germany,for its part, opposes the idea.

Click here for details.
2. The competition for automated driving patents: Car manufacturers recovering while IT companies fall backNikkei, May 16, 2021
Nikkei wrote about the global competition for patents for automated driving on May 16th.
While in the past IT companies used to hold the edge in this eld, large automobile companies are making a comeback.

A U.S survey from the end of January found that the Alphabet group has fallen back to 3rd place compared to 2.5 years
ago, when it used to hold the most patents. Instead, Ford and Toyota hold the top 2 spots.
Among the top 50 companies, there were 12 Japanese enterprises, a group which did not only contain car
manufacturers but also included those such as the Sony group. The car manufacturers have been strong in patents for
fundamental technologies such as driving, stopping, and turning. As the commercialization of self-driving technologies
approaches, competition with IT companies will remain strong.
Nikkei asked a patent research company to look into this January data, and examine the competitiveness of patents
related to autonomous driving in the United States. They added up the number of times competition companies wereling similar patents, and the number of times a company led a court case against another. Their numbers indicate theimportant patents in this highly competitive area.
In terms of the competitiveness score assigned, Ford took the lead, followed by Toyota and Alphabet’s Waymo (whichcame in at No.1 in July 2018). Compared to past assessments, Ford’s score increased by 3.6 times, Toyota’s by 2.4
times and Waymo by 1.7. Ford and Toyota are both highly competitive in terms of technology for adjusting motor
output and for mechanisms for systematizing steering wheel operations. Ford is also particularly strong in technology
related to parking. Its competitiveness score in this area was 3 times as high as Toyota and 5 times that of Waymo.

Chinese and Korean companies also stand out in the top 50 in terms of patent competitiveness. In the previous survey,
only South Korea (in the form of Hyundai Motor) was in the top 50, but this time, ve Korean companies and two
Chinese companies were included. Among the Chinese enterprises, Baidu, a major internet service company, was 23rd,and Shanghai NIO, an electric vehicle (EV) maker, came in at 35th.
In the eld of autonomous driving, major IT companies are seen to be selling their businesses one after another. For
example, by the end of January 2021, Uber Technologies Inc. sold its development subsidiary, ATG, to its peer Aurora
Innovation. The US company Lyft also announced at the end of April that it would sell its autonomous driving division to
Toyota. Due to accidents during driving tests, IT companies are having di culty in the practical application stage of thedevelopment of autonomous driving.

Click here for details. (in Japanese)
3. District court orders ne to Japanese messenger app LINE for patent infringement
Japan Today, May 20, 2021

Japan Today wrote on the 20th of May about the recent judgement on patent infringement for a case between LINE, thecompany behind a popular messenger app, and Future Eye Co, a Kyoto-based IT company.
The District court in Tokyo acknowledged that Future Eye held a patent, for the system that allowed users to shake theirsmartphones in order to exchange account details, since September of 2017. Future Eye had argued that LINE infringed
on this patent and requested damages of 300 million JPY (27.6 million dollars). It claimed that the infringement of thispatent had allowed LINE to expand its userbase and earn over 150 billion yen in advertising fees.

.

LINE for its part argued that the patent for the technology should be invalidated, as the invention was easy to make.

In its judgement, the court ruled that LINE had indeed infringed upon Future Eye’s patent, though it stated that the
impact of the technology on the LINE’s revenues was limited.
Therefore, Line Corp was instructed to pay 14 million yen (128,500 dollars) in damages.

In reaction, Future Eye said that the amount of damages was too low, given the huge pro t Line was claimed to havemade using the feature. Line, on the other hand, said the issue had been "resolved amicably" and vowed to "continue
protecting intellectual property and improve our services."

Click here for details.
4. Japan’s rst insurance for infringement of 3rd party IP launched
Hokenshijo times, May 5, 2021
On the 5th of May, the Hokenshijo Times reported upon a new type of insurance in Japan that was announced by Sompo
Japan Insurance just a few days before.
It concerns an insurance product that would compensate the policy holder for the legal liability that arises out of
infringement of a 3rd party’s intellectual property right.
An amendment to Japanese patent law in 2020 states that an amount equivalent to the licensing fees is now a factor in
determining the amount of damages for infringement. As a result, it is feared that the total amount of damages
awarded will increase.
Responding to such legal changes, businesses seek to avoid IP related risks. The insurance product in turn caters tosuch demands.

Click here for details. (in Japanese)- IP Law Updates in Japan : Insights from Sonoda & Kobayashi 1. Statistical overview of JPO Status Report 2021
Every year, the Japan Patent O ce releases a thorough report, the ‘’JPO Status Report’,’ on recent intellectual property
developments and trends in Japan and an overview of global intellectual property trends across the IP5 O ces.

This report is based around several segments which include reports on IP trends and examinations, trials and appeals,
and international initiatives, but also JPO support measures and recent law amendments. We hereby outline theprincipal takeaways from this report.

1. Key gures in IP Protection in JapanA.

Newly led patent applications in Japan continue to drop.

Patent applications led at the JPO decreased for the third time in a row, which symbolizes the crystallization of a trend
which started back in 2001.
According to the JPO Status Report 2021, patent applications led in Japan dropped by 6.3%, from 307,969 newly led
applications in 2019 to 288,472 newly led applications in 2020. This trend originates from a decline in the number ofpatent applications led by domestic Japanese applicants for over a decade. This constant decrease may be justi edby the shift in IP strategy from a quantitative focus towards a qualitative one, as well as revision of budget allocation in
the context of accelerated globalization.
B.

Slight increase in international patent applications in Japan.

While domestic applications continue to shrink, conversely the number of international patent applications newly led at
the JPO continues to grow. According to the JPO Status Report 2021, international patent applications led in Japan
showed a slight increase of 1%, from 66,968 led applications in 2019 to 67,634 led applications in 2020. This marks acontinuation of a ten-year-plus trend of increasing numbers of

led patent applications in Japan by international

corporations. As for the origin of PCT applications, the majority of cases are led by Japanese companies (26,963
applications) followed by companies from the U.S. (14,656 applications) andcompanies from China (5,330 applications). Nevertheless, China and the U.S. outperform Japan in reference to top
ranking countries with most led PCT applications in 2020. In fact, China holds rst place in PCT lings since 2019 with
68,720 PCT applications

led last year while 56,982 PCT applications were

led at the USPTO and 49,314 PCT

applications in Japan in the same year. Despite bene tting from a general increase in globally led applications, theJapan Patent O ce diversi ed measures to both attract a wider community of applicants and facilitate the IP
protection experience in Japan for non-Japanese entities. Among such measures can be found the shortening ofprosecution time, patent cost reductions, and the supply of English materials.

C. Newly led Utility Model applications in Japan unexpectedly increased.

After seven years of gradual decline and growing unpopularity, the number of newly

led utility models in Japan

increased by 14.8%, from 5,241 newly led utility model applications in 2019 to 6,018 in 2020. Two explanations can begiven to justify this sudden increase: in view of the present tight economic situation, some applicants decided to opt for
utility models. Indeed, utility models are a strategic choice for companies with the desire to save costs or get fast IP
rights protection. One must remain cautious, as utility models also have disadvantages such as vulnerability toinvalidation due to the lack of examination. Another possibility can be that Chinese applicants who are ling a big
number of utility model applications in China increased their applications in Japan. The vast majority of utility model
applications originates from Japanese companies (73%) followed by Chinese (13%) as well as Taiwanese companies(10%).
2.

Key trends in IPR Enforcement in Japan
A. The number of opposition proceedings in Japan remains stable with around 1,000 cases every year.

After being suspended in 2003 to conserve a single system for invalidation patents, the Japan Patent O ce (JPO)
reintroduced Patent Opposition Proceedings in 2015 to any third party interested in revoking a patent within 6 months
following its publication. This measure was in line with the idea that invalidation proceedings were su cient. However,from 2003 to 2015, the number of led nullity actions remained below expectations even well after the abolition of the
opposition system. The stable number of nullity action proceedings in Japan may be explained by the fact that the useof a straw man is not allowed (which is allowed under opposition proceedings) and that the incurred costs for ling anullity action are higher than those of opposition proceedings.

Five years after the reintroduction of oppositions, the number of led oppositions has stabilized ataround 1,000 cases per year. We can observe that the number of oppositions led has substantially dropped comparedto that under the old system, which saw an average of 4,450 cases led per year. The reason for this is believed to be a
surprisingly low success rate of oppositions: in recent years, below 10% of opposed patents ended up being invalidated
after opposition proceedings were concluded.
B. The number of led nullity actions slightly increased.

A slight increase can be noticed in the number of newly led Nullity Actions at the Japan Patent O ce. Despite thissmall change, a general decreasing trend has been observed over the last couple of years. Indeed, 121 cases were led
at the JPO in 2020, in contrast to 269 cases in 2011, which corresponds to a 55% drop. The reintroduction of the
Opposition system, bringing a new way to invalidate a patent without identity disclosure, combined with a deteriorationof success rate in nullity actions proceedings, play a signi cant role in this overall trend. However the success rate ofnullity actions was higher than ten years ago with 61.5% of disputed patents partly revoked in 2005 in contrast to 23.0%
in 2019. As a result, given the high cost of invalidation proceedings, plaintiffs may be more reluctant to commit to asigni cant investment due to the uncertainty of the outcome.
3. Overview of IP Trends at the IP5 O ces
A. The number of newly led patent applications worldwide has stabilized.
After over a decade of structural growth, the number of patent applications led worldwide has stabilized at around
3,200,000 applications per year. The number of newly led patent applications worldwide has skyrocketed by 61.4% innine years; 1,997,000 newly led applications worldwide in 2010 and 3,224,000 in 2019. While the need to protect
innovations has gained prominence among corporations worldwide, the explosion of led patent applications in China
also plays a signi cant role in the observed trend. Indeed, patent applications led at the CNIPA grew by 72.0% in lessthan ten years; from 391,000 newly led applications in 2010 to 1,401,000 newly led applications in 2019. The trend
however seems to be reversed from 2019.

B. The number of registered patents worldwide continues to increase.

Similarly, the portion of registered patents continues to grow worldwide. The number of granted applications worldwide
soared by 64.0% in nine years; 915,000 newly granted applications worldwide in 2010 and 1,501,000 in 2019. Thissigni cant rise can be explained by the easing of patent requirements by Patent O ces as well as the increase in
assistance to applicants through simpli ed proceedings. As an example, the number of registered patents has
increased by 253% from 2010 to 2019 at the CNIPA, by 165.4% at the EPO, by 121.1% at the KIPO and by 112% at the
USPTO during the same period.

Click here for the full report.

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