International Journal of Intellectual Property Law, Economy and Management 1 (2005) 27–36

Technology Licensing and University Researchin JapanToshiko Takenaka
University of Washington School of Law

1. Introduction
The Japanese Bayh-Dole Act was enacted in 1999 aspart of the Industrial Revitalization Special Law. 1
Since the Japanese economy has plunged into the current deep recession, the Japanese government has been
looking for a measure to revive its economy. By
reviewing US legislation from the eighties and earlynineties, when the US was in a serious recession,
Japan’s Ministry of Economy, Trade and Industry(METI) was convinced that intellectual property related legislations encouraging technology transfer were
the primary reason for the US recession recovery.2 To
follow the US example, the government organized theCommission on Intellectual Property Rights in the
Twenty-First Century. In its report published in April
1997, the Commission emphasized the need to promote exploitation of technologies developed by universities and research institutions in order to promote
the development of breakthrough technologies. 3
Despite the significant increase in the number ofpatents issued to Japanese universities and research
institutions, these institutions’ royalty revenues haveremained low.4 A very small portion of patents issued
to these institutions were exploited because the government owned intellectual property rights resulting
from the publicly funded research in national laboratory institutions, but had no mechanism to promote
licensing the technologies.
Regarding research conducted in universities.
University professors (inventors) owned the intellectual property rights resulting from their publicly funded
research, unless the rights resulted from research that
falls into one of two exceptions: (1) specially funded
inventions and (2) inventions developed in special
research facilities.5 Due to the high cost and time-consuming process of procuring and licensing intellectual
property rights, Japanese university professors wereISSN 1349-7723© 2005 IPAJ All rights reserved.

seldom able to obtain intellectual property rights intheir research results. To promote procurement ofintellectual property rights in research results andexploitation of their patents, the Commission proposed
to set up technology-transfer offices as liaison offices
in universities and national research institutions. It also
recommended development of a mechanism to transfer
technologies promptly.
Thus, this article examines Japanese Bayh-Dole Act
and technology transfer related legislations from thecomparative law perspective and review the impact ofenactment of these laws. It also examines the current
system for managing ownership of intellectual property in university inventions. It also examines technology transfer organizations which promote both university-to-business transfer and business-to-business transfer. It concludes with a discussion of challenges forJapanese universities to successfully manage intellectual property rights in university inventions.

2. Japanese Bayh-Dole Act
2.1. Industry Revitalization Law and Related Laws
Responding to the Commission’s proposal, theJapanese Bayh-Dole Act was enacted, aiming toencourage research activities and promote the utilization of inventions arising from research or development supported by the Japanese government.6 The subject matter coverage under the Japanese Bayh-Dole
Act is broader than that of the US Bayh-Dole Act,
because it covers not only patent eligible subject matter but also other types of subject matter protected byother intellectual property rights. Such rights include(1) patent rights and rights for obtaining a patent7; (2)utility model registration rights and rights for obtaining utility model registration8; (3) design registrationrights and rights for obtaining design registration9; (4)copyrights for computer programs and databases10; (5)27T. Takenaka

semiconductor chip layout and rights for obtaining
semiconductor chip rights11; and (6) seed and seedlingregistration rights and rights for obtaining plant variety
registration rights12. Thus, the Act was enacted as partof a separate law, the Industry Revitalization Law,
instead of part of the Patent Law.13
However, the main function of the Japanese BayhDole Act is very similar to that of the US Bayh-Dole
Act. It aims to give ownership to universities andresearch institutions and promote transfer of their technology to industry for commercialization. Before theenactment of the Japanese Bayh-Dole Act, the government retained patents and all intellectual property
rights resulting from contracting research and developments. The only exception to this rule was international research projects where foreign governments or
non-profit organizations collaborated with Japanesecontractors.14
The enactment of the Japanese Bayh-Dole Actchanged the rule of ownership for inventions developed by universities and research institutions. The
Bayh-Dole Act Chapter of the Industry Revitalization
Law15 permits universities and research institutions toretain ownership of intellectual property rights arisingfrom government contracted research and developments under the following conditions. First, universities and research institutions must report an invention
to the government without delay after disclosure fromresearchers.16 Second, with respect to the subject matter that universities and research institutions haveacquired title, universities and research institutions
must grant the government a royalty free license to
exploit the subject matter if the government makes
clear a reason that the exploitation of the subject matter is necessary for the public interest.17 Third, theymust grant a license to a third party if they have notexploited the subject matter for a reasonable period oftime without any excuse, and the government makes
clear a reason that the exploitation of the subject matter is necessary for the utilization of intellectual property rights.18
The first condition parallels the “report requirement”
for the disposition of rights under US Bayh-Dole Act.19
The second and third conditions parallel the “march-inrights” including compulsory license provisions. 20
However, the Japanese Bayh-Dole Act is much simpler
than the US Bayh-Dole Act. The Japanese Act does
not provide for any restriction with respect to the entitlement of intellectual property rights as done by the
US Bayh-Dole Act.21 Further, the Act does not provide
for a prohibition of assignment of rights22 and, regarding licensing of such rights, the Act does not provide

28

for any small business preference23 or domestic industry preference.24
These differences resulted from the broader goal of
the Industry Revitalization Law rather than the US
Bayh-Dole Act. The US Bayh-Dole Act aims to promote participation of small business firms in federallysupported research and development efforts. 25 The
Industry Revitalization Law aims to maximize business resources in Japan for recovery of Japan’s economy from recession.26 Further, the Japanese Bayh-Dole
Act provides that “the government can choose torefuse a transfer of patent and other rights” from contractors.27 This suggests a broad discretion on the government to decide whether to allow contractors toretain intellectual property rights arising from contracting research and developments. Thus, it is notnecessary to provide exceptions for refusing to let contractors retain intellectual property rights, because thegovernment can simply exercise its discretion ofrefusal.
In practice, when the government funds a university
or research institute to engage contracted research projects, it uses a uniform agreement to execute a contract. The uniform agreement clarifies that the university or research institute retains any intellectual property rights resulting from the contracted research project.
If it is necessary, the government can change the termand specify that intellectual property rights, resulting
from the research projects, will be transferred to thegovernment.
The Japanese Bayh-Dole Act does not discriminate
small business firms and nonprofit organizations fromprofit organizations and large corporations. The Act
allows profit organizations and large corporations toretain patents and intellectual property rights. These
contractors are free to license technologies to both
domestic and foreign profit and nonprofit organizations.
The Japanese Bayh-Dole Act does not provide any
requirement of compensation for inventors. This isbecause the Patent Act provides a requirement of compensation, thus a provision is unnecessary.28 Regarding
the compensation for university professors, MEXT
(Ministry of Education, Culture, Sports, Science andTechnology) publishes an instruction for compensating
employee inventions and other intellectual property
rights developed by employees of MEXT. 29 The
instruction provides that when a patent right or right toobtain a patent is transferred to the government, resulting from an application filed prior to the 1987 Patent
Law Revision, the government must pay to the inventor-university professor 4,500 yen for each patent rightTechnology Licensing and University Research in Japan
Table 1.
Revenues＜1,000,000 yen

50％ of revenues

Revenues＞1,000,000 yen （Revenues−1,000,000 yen）
×25−％＋5,000,000 yen

or application in addition to the 4,500 yen for eachclaim included in the patent right or application. 30
When a patent right or right to obtain a patent, resulting from an application filed after the 1987 Patent Law
Revision, is transferred to the government, the government must pay an inventor-professor 7,500 yen foreach patent right or application in addition to 7,500
yen for each claim included in the patent right orapplication.31 The same rule applies when the government obtains a foreign patent right or a right to obtaina foreign patent right. If the government receives
license revenues from the patent right transferred byan inventor-professor, the government must pay theinventor according to the following table32:
The Industry Revitalization Law also requires the
Ministry of Economy, Trade and Industry (METI) and
Ministry of Education, Culture, Sports, Science andTechnology (MEXT) to implement measures to promote technology transfer of results arising fromresearch activities in universities to private industry
through licenses or assignments of intellectual property rights in such results.33 Utilizing such measures,
METI enacted (1) Law for Promoting UniversityIndustry Technology Transfer (TLO Promotion Law34),(2) Improvement of the Deduction System of
Incremental R&D Tax Credits35 (From 1999), (3) Law
of Small and Medium-size Business Innovation
Research System (Japanese SBIR) (December 199836),
and a revised Patent Law in 1998 and 199937.
2.2. TLO Promotion Law
The Law for Promoting University-Industry
Technology Transfer (TLO Promotion Law) aims topromote (1) the progress of industry and creation of
new industry, and (2) research activities through technology transfer of research results developed by universities and public research institutions to industry.38
The Law provides a definition of “technology licensing organization” (TLO) as a business for arranging
assignments, licenses and other activities of intellectual property to appropriate private institutions, whichrights are owned by university professors andresearchers, and private and public universities. 39
According to the Law, TLO’s business includes (1) the
discovery, evaluation and selection of research results,

which can be commercialized by private institutions;(2) procurement, maintenance and enforcement ofintellectual property rights in such research results; (3)providing information about such research results; (4)technology transfer of such intellectual property rights
to industry; and (5) distribution of revenues resulting
from such technology transfer. The TLO Promotion
Law requires METI and MEXT developing guidelines
for encouraging transfer of university developed technologies to industry by identifying the direction andconditions to set up a technology transfer office withina university.40 According to the guidelines, METI and
MEXT review and approve business plans.41
Although anyone can create a TLO without anapproval, METI-MEXT approved TLOs are entitled toadvantages under the TLO Promotion Law. First, such
TLOs are eligible for receiving grants from METI, up
to 30,000,000 JPY.42 METI guarantees TLO debts withrespect to approved business, which facilitates TLOs
to obtain bank loans. Second, the Japanese Patent Law
was revised to make approved TLOs eligible for discount, exemption or deferral of patent annual fees andofficial fees for requesting examination.43 Other intellectual property laws were also revised to make similar
discounts for official fees available for approved TLOs
with respect to procurement for other types of intellectual property rights. Further, approved TLOs are eligible to use government-owned facilities such as spacein national universities without charge when they workat transferring technologies developed by these universities. Finally, the Law of Small and Medium-size
Business Innovation Research System,44 was enacted
to make it possible for small and medium size firms toreceive exemption from investment made for commercializing technologies transferred from universities.

3. University Inventions
3.1. 1977 Science Council Draft Report
The Japanese Bayh-Dole Act primarily relates to intellectual property rights resulting from government contract research projects. Thus, intellectual property
rights resulting from research and developments conducted by university professors, as course of their regular responsibility, are outside the scope. Even if university professors are government employees and theirresearch is conducted by publicly funded researchfunds and facilities, their intellectual property rights
usually belong to the inventors (professors andresearchers), instead of their employers (universities).
Japanese universities follow a MEXT notice, clarifying a policy regarding how to handle patents and other29

T. Takenaka

intellectual property.45 The notice was based on a draft
report prepared by the Science Council in 1977.46 In
determining the ownership of university inventions,the council focused on the goal of promoting researchand education, and maintaining the freedom of study.47
Also, when the draft report was published, it was very
unlikely that scientific research done by university
professors resulted in subject matter of intellectual
property rights because computer and biotechnology
industries had not fully developed in 1977. Thus, theCouncil paid very little attention to the commercialization of inventions developed by university professors.
As a result, the Council adopted an approach that limits the opportunities for universities to obtain ownership of inventions from their professors.
3.2.

Ownership Rule under the 1977 MEXT Draft
ReportThe 1977 draft report made clear the principle thatprofessors should retain ownership of their inventions.
The Science Council interpreted the employee invention provision in the Patent Act and clarified whichinventions constitute the definition of the employee
invention.48 Japanese Patent Law prevents employers
from contracting with their employees to transfer ownership of inventions before completion, unless suchinventions fall into the definition of “employee invention.” 49 To qualify as an “employee invention,” aninvention must be within the scope of business and theemployee’s act that results in the invention as part ofthe employee’s duties. The Science Council viewed
professor duties to include teaching and supervising
student research projects and engaging their own
research projects, but did not view making inventions
as part of their duties. Thus, unless any special circumstance exists, university inventions do not qualify
for employee’s invention.
The Council set forth two types of inventions that
results from such special circumstances: (1) inventions
resulting from research activities funded by a special
research budget from the Japanese government with a
specific research topic given by the government inapplication technology50; and (2) inventions resulting
from research activities conducted in special researchfacilities owned by the government, such as a nuclear
reactor and fusion reactor, with a special topic givenby the government in application technology.51 Thus,
university professors and researchers retain the ownership of inventions developed under the ordinary courseof research activities and educational instructions.
However, these professors can offer to transfer ownership of such inventions if they prefer.

30

3.3. Procedure under 1978 MEXT Notice
In 1978, MEXT adopted the ownership rule under the
1977 draft report and sent out a notice to national universities.52 This notice was effective until it lost influence when national universities acquired independent
legal status as of April 1, 2004. The notice requires
universities to prepare rules and procedures for handling intellectual property rights in university inventions.53 Such rules and procedures must impose a duty
on professors to report the inventions that fall under
the two categories of employee invention to the headof universities. It also requires universities to organize
an invention committee to determine whether the government should retain the ownership of the inventions
developed by the university professors. The duty ofreporting an invention applies not only to inventions
that clearly fall into the two categories of employee
inventions, but also to those which appear outside thetwo categories so the invention committee can decide
whether an invention falls into the two categories.54
An invention committee’s responsibility includes not
only a decision of ownership by the government, butalso a decision of patent and other intellectual property
procurement. Since Japanese patent law follows thefirst-to-file principle, which requires the novelty of theinvention as of the application date, it is necessary to
decide whether to file an application with the JPO
before invention publication. To proceed to the decision quickly, MEXT’s notice suggests: (1) creation of
an invention committee for each department, center,and program; (2) development of a simple form toreport an invention; (3) frequent meetings of the committee upon submission of the invention report andother necessary measures to accelerate filing process if
it is necessary to file quickly.55
Although the rule and procedure in 1978 MEXT
Notice applies only to national universities, most private universities adopted the same rule and procedurefor handling university inventions. However, despitethat the notice encourages frequent meeting of invention committees, Japanese universities seldom held
invention committees, and thus the mechanism forhandling intellectual property in university inventions
did not function as aimed by the 1978 notice.56
The rule and procedure in the 1978 MEXT Noticedoes not apply to students. Because students are not
employees of professors or universities, their inventions are outside the scope of employee inventions.
Thus, professors and universities can contract withthem to transfer invention ownership before invention
completion.

Technology Licensing and University Research in Japan

3.4. Proposed Changes for University Inventions
In 2002, MEXT organized a working group on intellectual property, and published a report to clarify thepolicies relating to intellectual property rights in university research and developments.57 Reflecting thechanges in circumstances surrounding universities andthe policy announced by the Japanese Government on
national intellectual property strategies, the Working
Group redefined university missions. It made clear thatthe contribution to society by commercialization ofuniversity inventions is one of the missions forJapanese universities. University professors must contribute to this mission through, not only developmentof inventions but also protection and commercialization of their inventions. Commercialization of inventions also brings funds for engagement of further
research and developments.
Reflecting this mission, the IP Study Working Group
concluded that the current rule to give ownership to
professors does not work well for commercializing
university inventions. 58 This is because the recent
enactment of the Japanese Bayh-Dole Act and the
TLO Promotion Law made it possible to establish amechanism within a university to procure and manage
intellectual property. The group proposed to adopt arule to give ownership of inventions to universities sothat universities can use their mechanism to manage
intellectual property and promote transfer of technologies to industry through licensing. This view wasendorsed by IP Headquarters in Cabinet. Thus many
Japanese universities adopted the IP ownership policy
suggested by the Working Group.
In short, it is likely that Japanese universities will
shift to the US model where each university adopts it
own intellectual property policy and clarifies the scopeof inventions that fall into the defini-tion of employee
invention. 59 As part of an employment contract
between professors and universities, such scope should
be clarified.60 Through transfer of ownership in university inventions, universities should procure and manage intellectual property in these inventions under auniform policy adopted by the university, to not only
fulfill the duty under Patent Law Article 35, but also togive incentives to professors to develop inventions.
Universities should adequately compensate professors
for their inventions.61
Further, with respect to inventions made by students,
the group also suggests to manage their inventions if
the invention results from research activities supervised by professors or engaged in university facilities.62 If a student is employed by the university, theuniversity should contract to transfer the ownership of

the invention as an employee invention.63 If a student
is not employed by the university, the university
should contract with the student for an assignment of
the invention outside the scheme of employee invention.64
3.5. National Laboratories
Inventions made by researchers-employees of national
laboratories fall into employee inventions. 65 Eachnational laboratory adopts its own rules for handling
employee inventions and clarifies the scope of duties
and compensation for invention transfer.66 For example, the National Institute of Advanced Industrial
Science and Technology (AIST)67 adopted rules forhandling employee inventions, which makes it clearthat the government owns a right in an invention that
falls within the definition of an employee invention.
The rules require inventors to report such inventions totheir supervisors. When a report is filed regarding an
employee invention, a right to obtain a patent to theinvention is transferred to the government. The AIST
compensates the transfer of employee invention
according to the same scheme as the MEXT summary
for compensating their employees.68

4. Impact of the Bayh-Dole Enactment
Although it is too early to make an impact assessment
from the enactment of the Japanese Bayh-Dole Act,
MEXT’s statistics indicate a significant increase in thenumber of collaborative research projects between universities and industries in 2000 and 2001.69 There is aparticular increase in the field of biotechnology after
the enactment of the Bayh-Dole Act, furthermore, thenumber of invention reports, as well as patent applications filed with a private institute have drasticallyincreased after the enactment. The number of patentapplications filed by Japanese universities has significantly increased since the enactment of Japanese
Bayh-Dole Act,70 particularly, the number of applications filed by technology licensing organizations has
increased from 16 in 1998 to 699 in 2001.71

5. Technology Transfer Organizations
5.1. University/Academic Technology Transfer
Japan’s METI and the Japanese Patent Office (JPO),
provides a variety of measures to encourage procurement and management of intellectual property on fruits
resulting from research and development activities inuniversities and academic research institutions. In
addition to the advantages provided under the TLO

31

T. Takenaka

Promotion law,72 the JPO send, at their expense, intellectual property advisors to facilitate establishment oftechnology license offices in universities and research
institutions.73 Intellectual property advisors are those
who worked in patent and legal departments ofJapanese companies and have experience in procuring
and licensing patents and other intellectual property.
These advisors train staff in technology transfer offices
regarding patent application preparation, conduct
prior-art searches, and develop a system within theuniversities to discover patentable subject matter andfile patent applications. Further, the JPO also send, attheir own expense, patent attorneys who give legal
advice in licensing and litigation.
In addition to the discount of patent annual fees andexamination official fees under the TLO promotion
law, the JPO accelerates application examination from
the MEXT and METI approved TLO without charge,
if a petition explaining the necessity of prompt examination is filed. However, this system has not been
extensively used.74
The JPO frequently sponsors seminars on procurement and management of intellectual property andencourage universities to develop IP curriculum inboth legal and other departments.75 It sends their examiners to lecture in these universities and speak at theseminars. Further, it distributes a variety of publications to promote technology transfer between universities and industries.
TLO in Japanese universities are classified into fourtypes based on their organization. The first type isestablished as a corporation (Kabushiki Kaisha) or
limited corporation (Yugen Kaisha), which are incorporated based on investments by university professors
and researchers. Many TLOs for national universities
adopted this type of organization.76 The second type isjoint venture between universities and private sectors.
The third type is existing corporations which expanded
their business to start technology transfer. The fourth
type is an organization within universities.
An example of the first type is CASTI, which handles intellectual property in research and development,
developed by faculty members and researchers at the
University of Tokyo. 77 CASTI’s business includes
intellectual property procurement, and licensing andtechnology consulting relating to the transferred technology. In addition, CASTI collaborates with Recruit
Japan, a private technology-licensing corporation andmarket their technology nationally and internationally.
An example of the second type is Kansai TLO,
which was established to serve universities andresearchers in the Kansai region (great Osaka/ Kyoto

32area).78 Members are faculty and researchers of national and private universities in the Kansai area, including
the University of Kyoto (National), University ofOsaka (National), Ritsumeikan University (Private),and other universities. Kansai TLO business goesbeyond intellectual property procurement and management, and facilitates technology entrepreneurship.
Working with Kyoto Research Park Corporation and agroup of venture capitalists, Kansai TLO helped university faculty members and researchers to start a technology startup and transfer technologies to these startups.
The Tokyo Institute of Technology (TIT) TLO is an
example of the third type.79 TIT’s TLO is based on thealumni foundation for the Tokyo Institute ofTechnology and obtained TLO approval to start technology transfer. The Waseda University TLO is an
example of the fourth type.80 Approved TLOs and thenumber of licenses to transfer technology are as follows: Indicated in the previous page.
5.2. Business to Business Technology Transfer
The METI and the JPO also promote business-to-business technology transfer and created the Japan
Technomart foundation in 1985.81 Technomart facilitates business-to-business technology transfer througha registration system where a party, who wants tolicense a technology, registers his intellectual property
rights. However, to obtain a license of these registeredrights, a party must subscribe for membership and pay
annual fees. Thus, Technomart encourages technology
transfer only to a group of parties who can afford to
pay the annual fees.
To extend technology transfer opportunities, METI
and the JPO adopted a policy for promoting patent distribution in 1997, and provide a variety of support topromote businesses, which include academic-to-business as well as business-to-business.83 A survey conducted by the JPO in 1999, revealed that 69%(660,000) of all Japanese patents have never been
exploited by the patent owner, and in 51.5% (340,000)of the unexploited patents the patentee is willing to
grant a license. To reduce the number of unexploited
patents, the JPO dispatched patent distribution advisors to match a party who needs a certain technology
with a party who can provide the technology and facilitate technology transfer between the parties. The
number of licenses executed through the facilitation oftechnology transfer by patent distribution advisors has
increased from six in 1997 to 1478 in 2001.84 Amongthe parties who provide technologies, TLOs in universities and national laboratories occupy 41%, which isTechnology Licensing and University Research in Japan
Table 2.
Year of
Approval
1998

’99

’00

’01

’02

Name of TLO

Affiliated Universities License82

Center for advanced Science &Technology Incubator（CASTI）

University of Tokyo

43

Kansai TLO

Kyoto University
Ritsumeikan University

28

Tohoku Techno Arch

Tohoku University and otheruniversities in Tohoku area

56

Nihon Univ. Int’l Industry
Technoligy Business Center

Nihon University

9

Institute of Tsukuba Liaison Co.Ltd.

Tsukuba University

3

Waseda University Intellectual
Property
CenterWaseda University

11

Tokyo Institute of Technology TLOTokyo Institute of Technology

25

Keio University Intellectual Property
CenterKeio University

27

Yamaguchi TLO

Yamaguchi University

8

Hokkaido TLO

Hokkaido University

10

The New Industry Research
Organization

Kobe University etc.

11

Nagoya Industrial Science ResearchInstitute

Nagoya University etc.

6

Kyushu TLO Co. Ltd.

Kyushu University

6

Tokyo Denki Univ. TLOTokyo Denki Univ.

0

Yamanashi TLO

Yamanashi Univ.; Yamanashi
Medical Univ.

2

Tama TLO

Kougakuin Univ., Toyo Univ.
Tokyo City Univ. etc.

2

Meiji Univ. Intellectual Property
CenterMeiji University

1

Yokohama TLO

Yokohama National University
Yokohama City Univ. etc.

0Technology Network Shikoku

Tokushima Univ. Kayama Univ.
Ehime Univ. Kochi Univ. etc.

1

The Foundation for the Industrial
Science

Univ. of Tokyo（Research Institutefor the Industrial Science）

8

Osaka TLO

Osaka University

0

Kumamoto Technology and Science
Foundation

Kumamoto University etc.

0Tokyo University of Agriculture andTechnology TLOTokyo University of Agriculture andTechnology

4

Niigata TLO

Niigata University etc.

0

Hamamatsu Science and Technology
Foundation

shizuoka University etc.

0

Kitakyushu Academic Promotion
Foundation

Kyushu Institute of Technology

1

Mie TLO

Mie University−

expected to further increase. 85 Of the parties who
received technologies, 76% are small business firms
and 22% are large business firms.86
Further, the JPO maintains a database listing patents
for which the patentee is seeking a license
opportunity. 87 Any party can register her patent by
posting the technology information and license conditions. A party can also post technology needs. The

database is open to the public on-line so anyone canobtain access to the posted information withoutcharge. The JPO also sponsors a variety of seminars
promoting technology transfer and trains technology
license managers.

33

T. Takenaka

6. Conclusion: Future and Challenges
Japanese Bayh-Dole Act successfully increased thenumber of applications from universities and madeuniversities ready for transferring their technologies toJapanese industry. However, the government does not
see the result sufficiently. Japan’s Prime Minister
Junichiro Koizumi organized Strategic Council ofIntellectual Property and started an extensive review ofcurrent intellectual property protection and system toencourage innovation.88 The Council has its own secretariat, and the secretariat is led by a former JPO commissioner, Mr. Hisamitsu Arai, who achieved an extensive patent law revision, including a revision toincrease patent infringement damages. One of theCouncil’s focuses is technology transfer of university
inventions to encourage creation of new business andtechnology.89
Based on the outlines, on July 8, 2003, the Council
published detailed plans for promoting creation, protection and utilization of intellectual property.90 Amongactions that the government will take to promote creation and utilization of intellectual property rights
developed by universities is selecting research proposals which may result in more intellectual property
rights. The government plans to review activities at theexisting TLOs and concentrate its funding on selected
TLOs. It will also encourage creation of technology
incubator centers within universities. To facilitate
TLOs to file applications for subject matters which arepresented at science meetings in a timely fashion without losing the novelty, JPO follows the example of US
patent law and adopts an expansive grace period andprovisional application.
Despite these supports from JPO and the Japanese
government, none of the Japanese universities’ TLOs
is self-sustaining because the costs for filing and prosecuting patent applications are much more expensive
than revenues earned by licensing their technologies.
Many Japanese TLO officers wonder if there will evercome a time when any of the Japanese TLOs will be
self-sustaining. After all, many of the US universities’
TLOs are not self-sustaining either. They lose moneyby filing applications for inventions that are unable tofind licensees. Since drug patents are the ones thatbring money to the universities, universities whichhave no medical school wonder how they can raisemoney from their technologies to balance the prosecution budget. These Japanese TLOs will face a serious
challenge when the government stops the funding tosupport TLO activities.
However, even failing to balance the budget, the34

benefit of technology transfer to the society is tremendous: creation of new business and employment
opportunities and education opportunities for students
through participation in TLO activities. In short, theJapanese government and TLOs should focus more onthese social benefits from university technology transfer than financial benefits brought by university technology licensing. After all, the university TLOs’ mission should be very much different from license
offices of the industry. Their mission should be to create new technologies and taking over the risk of commercializing technologies, which is unlikely for theindustry due to a grave risk involved in commercialization. At least, Japanese TLOs can take advantage ofthe experience at US TLOs and learn from their failures and successes.

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Technology Licensing and University Research in Japan

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Protection Act), Law No. 83 of 1998.
The Bayh Dole Act and other technology transfer
related legislations were enacted to amend U.S. Patent
Law. For detailed discussion of U.S. Bayh Dole Act
and the U.S. technology transfer system, see Robert
Kneller, University-Industry Cooperation andTechnology Transfer in Japan Compared with theUnited States: Another Reason for Japan’s Economic
Malaise? 24 U.Pa. Int’l Econ. L. 329 (2003); Rebecca
S. Eisenberg, Public Research and Private
Development: Patents and Technology Transfer inGovernment-Sponsored Research, 82 Va. L. Rev.
1671.
International Research Collaboration Promotion Act,
Law No. 57 of 1996. Law of Enhancing Research andDevelopment Structure for Industrial Technology,
Law No. 33 of 1998. Both laws were revised upon theenactment of the Japanese Bayh-Dole Act in 1999.
Id. at Chapter 4: Promotion of Research Activities(Art. 30 to Art. 33).
Id. at Art. 30, Paragraph 1, Item 1.
Id. at Art. 30, Paragraph 1, Item 2.
Id. at Art. 30, Paragraph 1, Item 3.
35 U.S.C., §202 (c) (1).
35 U.S.C., §203.
35 U.S.C., §202 (a). The Act prevents contractors
from taking the ownership of intellectual property
rights if one of three conditions exits.
35 U.S.C., §202 (b) (7) (A).
35 U.S.C., §202 (b) (7) (C).
35 U.S.C., §204. However, a METI’s new model contract for government agencies includes a Japan manufacturing preference clause. Kneller, UniversityIndustry Cooperation, supra note 13, at 426.
35 U.S.C., §200.
Industry Revitalization Law, supra note 1, Art. 1.
Id. Art. 30, Para. 1.
Japanese Patent Act, Art. 35.
See, http://www.mext.go.jp/a_menu/shinkou/
sangaku/sangakuc/030201a.htm.
Id. Art. 2.
Id.
Id. Art. 3.
Id. Art. 31.
Law No. 52 of 1998.
Law No. 132 of 1999.
Law No. 18 of 1999.
Law No. 51 of 1998; Law No. 41 of 1999.
Technology Transfer Promotion Law, Article 1.
Technology Transfer Promotion Law, Art. 2.
Technology Transfer Promotion Law, Art. 3.
Technology Transfer Promotion Law, Art. 4.

42
43

44
45

46

47

48
49
50
51
52
53
54

55
56

57
58
59

60
61
62
63
64
65
66

Technology Transfer Promotion Law, Art. 6.
Industry Revitalization Law, Art. 32 and Art.
33.Technology Transfer Promotion Law, Art. 12 andArt. 13.
Law No. 18 of 1999.
MEXT, Notice regarding How to Handle Patents andOther Intellectual Property Rights in inventions andother subject matter developed by professors and othermembers of universities, 1978. For IP ownership rules
and procedure regarding industry-university collaborative-research under this notice, see Kneller,
University-Industry Cooperation, supra note 13, at
365.
Science Council, Draft Report for Handling Patents
and Other Intellectual Property Rights in inventions
and other subject matter developed by professors andother members of universities, June 1977.
For the process to prepare the report see, Yoshinobu
Someno, “The Criterion of Employee’s Invention” forthe Scientific Researches and its Basic Character,
Japan Association of Industrial Property, 4 Annual ofIndustrial Property Law, 125 (1981).
Patent Act, Art. 35. See infra at note 29.
Patent Act, Art. 35, Para. 1.
Id. Criterion, Art. 4 Para. 1 (1).
Id. Criterion, Art. 4 Para. 1 (2).
1978 MEXT Notice, supra note 47, at Art. 1.
1978 MEXT Notice, supra note 47, at Art. 2.
Study Group Regarding How to Handle Outside
Funding for National Universities etc. Laws Forms
and Materials Necessary for Research Collaborations
between Universities and Industry, 69 (4ed., 2002).
1978 MEXT Notice, supra note 47, at Art. 2 (3).
Japan Society of Kansei Engineering, IP Study Group,
Employee Invention and Intellectual Property National
Strategies, 185 (2002).
Report available at : http://www.mext.go.jp/b_menu/
shingi/gijyutu/gijyutu8/toushin/021101.htm.
Id. the MEXT working group report, Section II.
A summary proposal prepared by the working groupavailable at : http://www.mext.go.jp/b_menu/shingi/
gijyutu/gijyutu8/toushin/021102q.htm.
Id. Summary II, 2 (1).
Id. Summary II, 2 (2).
Id. Summary II, 2 (4).
Id.
Id.
IP Study Group, Employee Invention and Intellectual
Property National Strategies, supra note 56, at 161.
For technology transfer from national laboratories, see
Kneller, University-Industry Cooperation, supra note
13, at 409.

35

T. Takenaka

67
68
69
70
71
72
73
74

75
76

77

36

Information on AIST available at: http://www.
aist.go.jp/index_en.html
MEXT Summary, supra note 45.
See, http://www.mext.go.jp/a_menu/shinkou/
sangaku/index.htm
JPO, 2002 Patent Administration Annual Report, 61(2002).
Id. at 62.
Supra note 37.
JPO, 2002 Patent Administration Annual Report, 63(2002).
Less than 1% of applications filed by the approved
TLOs requested accelerated examination in 2001. Id.
at JPO Annual Report, 64.
Id. at JPO Annual Report, 65.
National universities adopted this type due to the complexity of ownership issues and restrictions on government employees. However, as of April 1, 2004
Japanese national universities have become a type of
independent administrative agency, which broughtchanges to the ownership and TLO structures. See,
Kneller, University-Industry Cooperation, supra note
13, at 404.
CASTI’s English home page is at: http://
www.casti.co.jp/e/ index-e.html

78
79
80
81
82
83
84
85
86
87
88
89

90

Kansai TLO’s home page is at http://www.kansaitlo.co.jp/
TIT TLO’s home page (Japanese only) is
http://www.titech-tlo.or.jp/index_m4.html
Waseda TLO’s home page (Japanese only) is
http://www. waseda.ac.jp/gakugai/index1.htm
Information of Technomart available at: http://www.etechnomart.jp/
The number of licenses executed as of July, 2002. JPO
Annual Report, supra note 57, at 64.
Information on the policy available at:
http://www.jpo.go.jp/ ryutue/ryutue.htm
Annual Report, supra note 57, at 70.
Id.
Id.
The database address is: http://www.ryutu.ncipi.go.jp/
db/ index.html
http://www.kantei.go.jp/foreign/policy_e.html
Intellectual Property Policy Outlines available at:
http://www.kantei.go.jp/foreign/policy/titeki/kettei/020703taikou_e.html
Strategic Promotion for the Creation, Protection, andExploitation of Intellectual Property. English translation is available at: http://www.kantei.go.jp/
foreign/policy/titeki/kettei/030708f_e.html