5

Evaluation of Intellectual Property Strategies to Improve
International Competitiveness of Japanese Companies-- Examples of Intellectual Property Strategies --With the development of a global and borderless economy, Japanese companies havetransformed themselves from being “catch-up” companies into “front-runner” companies. To
maintain and enhance the newly gained competitiveness, the management of each Japanesecompany needs to coordinate its business strategy and research and development strategy with
its intellectual property strategy. In order for a company to implement an intellectual property
strategy in coordination with the other two strategies, the company needs to make such decisions
as how to increase the efficiency in making inventions, how to detect and protect inventions, how
to exploit these inventions, and what system and environment to build for efficient patent
management.
The purpose of this study is to illustrate important points to take into consideration in eachof the three phases, i.e., the creation, protection, and exploitation of an invention. This study
also aims to examine the “category-based” patent management method that classifies inventions
according to the products and technical fields to which they pertain, and the system andenvironment that need to be established within each company in order to devise and implementa sophisticated intellectual property strategy in coordination with its business strategy andresearch and development strategy.

Ipursue short-term growth but mid- andlong-term sustainable growth, which is a
specialty of Japanese companies, and would
efficiently
generate
profits
fromits
long-accumulated technical knowledge.
Promotion of innovation is an important
policy in other countries as well partly
because innovation is indispensable forcompanies
tosurviveintensifying
international competition. In order to better
compete with other countries, especially withthe fast-growing Asian countries, Japan,
faced with a declining population, must hone
its technology management skill andpromote innovation and transform itself frombeing a “catch-up” country intoa“front-runner” country in the field of
research and development.
It is useful for companies to collectinformation on their own and competitors’
intellectual property such as patents as ameans of monitoring the outcomes of theirresearch and development strategy. Such

Introduction

Today, company managers need to makefull use of the results of technology-related
research and development in combination
with other managerial resources. Thosemanagers also need to enhance the ability tostrategically carry out research anddevelopment activities with the futurebusiness operations in mind. This importantabilitycould
betermedtechnology
management
skill.
More
specifically,
corporate managers who lead research anddevelopment activities should be fully awareof the possibility of using the outcomes of
those activities in their business or in thebusiness of any other company. Furthermore,
the managers should treat those outcomes asintellectual property and manage and exploit
them as such in order to efficiently generate
profits from the intellectual property.
A company equipped with suchtechnology management skill would not
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a field where inventions have short life
cycles. Therefore, companies need to collectupdated technical information from technicalpapers and research institutions such asuniversities and from business partners in
the course of transactions and make use ofsuch information as well as conventional
patent information. Each company needs todetermine the direction of its research anddevelopment activities in consideration of
the patents owned by other companies
because no company is permitted to obtain apatent on the same invention.
Even after determining the subjects anddirection of its research and development
activities, a company needs to monitor the
progress in close coordination with its
research and development department inorder to appropriately manage its inventions.
If a company notices that the expected
outcome of its ongoing research anddevelopment activities is likely to overlap
with the invention patented by anothercompany, the company needs to: (1) makefurther inventive effort in the research anddevelopment process to make an inventiondifferent from the one patented by the othercompany, (2) obtain the right to exploit thepatented
inventionbyconcludingacross-licensing agreement or license-inagreement, (3) make an alliance with thecompany or acquire the company, (4)purchase the products or parts produced byuse of the intellectual property or purchasethe intellectual property itself, or (5) give up
the research and development activity inthat technical field, etc.

intellectual property information would help
companies accelerate unification of theirbusiness strategy, research and development
strategy, and intellectual property strategy.
By unifying those strategies, companies
would be able to prevent overlapping inresearch,
investment,
andpatentapplications. This would promote efficient“selection and concentration” of research anddevelopment activities and business fields,
therebystrengtheningthetechnology
management skill.

II

Promotion of Ingenious Inventions

1

Strategic use of intellectual property
information
In order for companies to carry out theirintellectual property strategies and strength
their technology management skill, theyneed to keep making ingenious inventions.
This is in line with the primary purpose of
the patent system, which is to protect
ingenious inventions to promote industrial
development.
Companies use information on their own
and competitors’ intellectual property suchas patents as one of the reference tools thatare useful and important in making theirresearchanddevelopment
strategies.
Companies may use such information to
analyze the level of their technology and toselect the areas of research and development.
Moreover, it is extremely beneficial forcompanies to use intellectual property
information to get more out of their researchand development activities by wisely
choosing
subjects
ofresearchanddevelopment and fine-tuning the direction of
those
activities
even
after
the
commencement of the research anddevelopment on the chosen subjects so thatthey can focus on the fields still untouchedby other companies.
In the meantime, since information on apatent is not open to the public until 18
months have passed since the application
date, the patent information tends to be
obsolete when finally disclosed, especially in

2

Optionof
joint
researchanddevelopment and introduction of newtechnology
For successful business operation or
product development, it is often a good idea
for a company to find a partner for joint
research and development to increase theefficiency of its research and development
activities. Joint research and development iseffective especially in a case where acompany
has
technical
orfinancialdifficulties in carrying out those activities
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through “visualization.”

alone.
In an effort to pursue efficient “selection
and concentration” of business, a company
needs to adopt the principle of “selection andconcentration” in their research anddevelopment investment as well. In thissense, it is sometimes inefficient for acompany to rely solely on its research anddevelopment capabilities to solve all thetechnical issues that must be resolved toenhance its business operations. In such acase, the company needs to consider
concluding a license-in agreement for apatent or acquiring another company inorder to introduce the technology of thatcompany.

2

Decision as to whether to patent aninvention or protect it as secretknow-how
One way of protecting an invention is topatent it. A company that is eager to patent
its inventions usually has a system torecognize and manage internally developed
technologies as assets. A number of suchcompanies automatically patent internallydeveloped technologies without considering
the downside of the patent application,
which is that the information disclosed in its
patent application documents will be
publicized and accessible from othercountries after the patent publication
although the patent is effective only within
the country where the patent application
was filed.
In the case of “technology that no othercompany could easily develop on its own” or“technology that the patentee would havedifficulty in finding infringements thereof,”
it is sometimes more desirable to avoid apatent application and keep the technology
as secret know-how. Any company thatchooses the latter option should consider
obtaining a right of prior use. Careful
evaluation of those options is necessary
especially for a company that belongs to anindustry where the risk of leakage of suchknow-how is high (an industry where
production sites need to be open to othercompanies or an industry that has a highturnover rate) or that engages in global
business.
The enforcement of a new system for theregistration of utility models since April 1,2005 has broadened the scope of applicationof the utility model registration system.

III Strategic Protection of Inventions
1“Visualization” of inventions
There is a consensus that inventions
made by companies in the course of
day-to-day
business
operations
areimportant assets. For appropriate protection
and management of those inventions,companies need to establish internal systems
to identify, report, and reward inventions.
The intellectual property department of
a company should take the initiative in
identifying inventions. This would greatly
benefit the company, especially when the
research and development department andinventors are not aware of the importance ofintellectual property. In a company that hasestablished and made full use of theinvention reporting system, no invention
would remain unnoticed because theinventor of an invention is obliged to report
the invention to the intellectual property
department. Since the inventor fails torecognize his finding as an invention in somecases, it would be useful for a company tostep up its invention identification effort andinvention reporting system and to combine
these endeavors with a reword system forinventions in order to detect inventions
internally created in the course of day-to-day
business operations and to appropriately
protect and manage those inventions

3

The purposes of acquiring patents
When an invention is made in a company,
the company seeks to obtain an intellectual
property right such as a patent right on theintellectual property mainly for the purposeof “(1) optimizing the profits generated by its
business operations” and “(2) obtaining
direct profits from the intellectual property
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number of patent applications for inventions
that would neither give them an advantage
over competitors nor exclude competitors
even if patented or that do not involve
sufficient inventive steps. Those companies
prompt other companies to scramble toobtain unnecessary patents and to spend
wasteful research and development costs andintellectual property management costs tomake unpatentable or useless inventions.
Such inefficiency would ultimately go beyond
being an issue for just those companies andhinder the development of the Japaneseindustry as a whole.
Furthermore, it would damage themorale of researchers and intellectual
property managers of companies if they areforced, day in and day out, to makeinventions seemingly for the sole purpose offiling patent applications and to register
those patents. Such a demoralizing work
environment would leave them with little
time and energy left for their original tasks
such as making innovative inventions andstrategically managing intellectual property.

right.”In addition to such primary purposes
described in (1) and (2) above, patentacquisition would also motivate employees tomake inventions and enhance the image ofthe company and products produced by useof the patented invention.
(1) Optimization of the profits from its own
business operations
A patent, which is an exclusive right,
cannot be exploited by any party other thanthe patentee without the consent of thepatentee. Therefore, any company thatobtains a patent can enjoy the advantage ofbeing the only one to conduct business byusing the patented invention. In other words,
a company maintains and manages patents
for the purpose of “optimizing the profits
from its own business operations” on thepresumption that, without patenting atechnology that it has invented, the company
would not be able to prevent other companies
from freely conducting the same business byusing the invented technology. It isreasonable for a company to presume that if
the company succeeds in creating a newmarket as a result of carrying out awell-devised
businessstrategy,othercompanies would hope to conduct the samebusiness (enter the market).
(2) Profits directly gained from patents
A company can gain profits directly fromits patents by licensing or selling them toother companies. No company would hope toconclude a patent license agreement orpurchase a patent unless it considers thatthe exploitation of the patented invention
would contribute to its commercial successand would bring the company profits larger
than the royalties or purchase price that thecompany would have to pay for the patent.
Therefore, it is important for companies toobtain patents for which other companies
would be willing to pay royalties andpurchase prices.
From outsiders, some companies seem toforget that they originally pursued theabove-mentioned purpose (1) and to startseeing the patent application itself as a goal.
For example, some companies file a great

4Strategic public disclosure
A company would greatly suffer ifanother company obtains an infringing
patent because such a patent acquisition
would destabilize the business of thecompany whose patent was infringed. Since
the stability of business is the mostimportant issue for companies, it isextremely important to prevent such
infringing patent acquisition.
Some companies think that the mosteffective prevention is mere publication of
information on their inventions through suchchannels as the Journal of Technical
Disclosure and actively take such preventive
measures based on this understanding.
Those companies consider it more effective todisclose invention information as early as
possible through such publications as the
Journal of Technical Disclosure than to filepatent applications in terms of cost, speed,
monopoly power, etc., as a means ofpreventing other companies from obtaining
patents.
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IIP Bulletin 2007

(4) The countries where the products
produced by use of the patented invention
are and will be produced by other companies;
and(5) The current and future intellectual
property environment of each country.

However, those companies should beaware of the downside of such early
disclosure of their invention data. For
instance, there is a risk that, if a company
decides to file a patent application for an
invention that has been disclosed in the
Journal of Technical Disclosure, thedescription presented in the Journal ofTechnical Disclosure might be cited as aprior art. There is also a risk that a company
that has opted for mere publication of its
invention data would be considered to havevoluntarily and completely renounced its
right to patent the invention. They need totake into full consideration the future patent
strategy and the value of the invention
before choosing the option of mere
publication of their invention data.

In reality, many companies file patentapplications for inventions in order of theimportance of those inventions from theperspectiveofmanagement
strategy
including business strategy and research anddevelopment strategy. Those companies
should be aware that this method of patentapplication in other countries would end
with disclosure of their management
strategy to competitors. Indeed, analysis of
the overseas patent applications filed bycompetitors is one of the techniques for
identifying the competitors’ strategies.

5

Patent application in other countries-- Global strategy -Even if a company obtains a patent on
an invention in Japan, the patent is noteffective in other countries. This means thata competitor may exploit the invention for
free outside Japan. To prevent such abuse,
the company needs to obtain a patent inother countries as well. However, it would beunrealistic and irrational for companies tofile patent applications for all of theirinventions in all the countries that havereasonable patent systems. In reality, eachcompany needs to devise an intellectual
property strategy to increase the efficiency ofoverseaspatentapplication
throughcollaborative efforts between the intellectual
property department and the operation
department.
Each company needs to take thefollowing factors into account to determine
which country to file a patent application in:(1) The countries where the products
produced by use of the patented invention
are marketed;(2) The countries where the products
produced by use of the patented invention
will be marketed;(3) The countries where the products
produced by use of the patented invention
are and will be produced by the company;

IV Patent Value Lying in Exploitation
1

Exclusionofcompetitors
andprevention of new entrants
In this day and age, no companies caneasily retain a dominant position. Theirprimary goal is to maintain and expand theirbusiness in a sustainable manner. A key toachieving this goal is not to lose theircompetitive edge. Acquisition of a patent,
which is a legally approved exclusive right, is
an important means of ensuring thepatentee’s business advantage for many
years to come. Furthermore, patents may be
used as a useful tool in many ways. One wayof exploiting a patent is to take advantage ofthe exclusivity of the patent to exclude othercompanies without licensing the patent.
A basic corporate business strategy aims
toincrease
profitsbymarketingadvantageous products that would defeat
competitors. In order to make effective use ofpatent exclusivity, companies need to makeadvantageous inventions and obtain valid
patents thereon.
2
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IIP Bulletin 2007

Strategic licensing
In contrast to the companies that takeadvantage of the exclusivity of patents, somecompanies have chosen to actively license
patents to other companies. Such licensing is
usually conducted by a company as a part ofits strategy aimed at (1) Expansion of themarket to which its patented technology
pertains and (2) Diversification and transfer
of risk in commercialization.
(1) Expansion of the market to which its
patented technology pertains
If a company takes advantage of the
exclusivity of a patent, the company could
monopolize the profits from the patented
invention. However, such exclusive use of thepatented invention prevents the growth of amarket for products produced by use of theinvented technology. As a result, theinvented technology could lose the market toothertechnologies.
Therefore,itissometimes more profitable to adopt thestrategy of expanding the market bylicensing the patent as much as possible at areasonable royalty rate.
(2) Diversification and transfer of risk incommercialization
In recent years, companies have been
trying to identify their specialty fields andfunnel their management resources into
those fields in order to increase theprofitability of their business and reduce
their business risks. Against this backdrop,
it is not necessarily wise for a company to
exclusively commercialize every invention
made as a result of its research anddevelopment activities even if the invention
has been patented. It is often the case that,even if a company that has made aninvention decides not to commercialize theinvention, the invention could be important
for the business of other companies. In otherwords, through a technical alliance or
licensing, a company can make effective useof an invention that it has decided not tocommercialize. By using this strategy, acompany can diversify or transfer the risk inthe commercialization of a patented
invention, while gaining profits directly fromthe patent at the same time.

3

High degree of freedom in business
Even if a company obtains a patent
related to its business, it does not necessarilymean that its commercial activities(exploitation of the patented invention) do
not directly infringe a patent owned byanothercompany.
Based
on
this
understanding, some companies use patentacquisition as a means of ensuring a highdegree of freedom in business.
This is how it works. If a company does
not have a patent useful in the business thatthe company plans to undertake while
another company has such a patent, the“patentless” company is likely to be obliged
to pay a certain amount of royalties to thepatentee. Even worse, the “patentless”
company may be unable to conduct thebusiness entirely. However, the company isleft with the option of concluding across-license agreement if the company has apatent related to the business of thepatentee company. The conclusion of across-license agreement would enable eachparty to avoid the risk of receiving an
injunction from the other party and also to
use the technologies of the other party in its
own business, raising the degree of freedom
in business.
Companies should be fully aware that
this strategy of ensuring a “high degree of
freedom” would work only if such reciprocity
exists between two companies, i.e., one
company has patents or technologies that theother company hopes to exploit and viceversa.
4

Enhancement of brand value
Sometimes, companies use such words
as “invention” or “new technology” toadvertise their products for the purpose ofgivingcustomersaprogressiveandpreferable image of the products by notifyingthat the products were produced by use of
new technologies. The term “patented
product” is also used for the same purpose.
It is important for every company toincrease its corporate value in the stock
market and the financial markets in order tocarry out its business operations smoothly.
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schedule with the intellectual property
acquisition schedule;(9) increase the efficiency in their selection
and concentration of patents and costs; and(10) promote information sharing andcommunication between their intellectual
property department and other departments
because information classified by category is
manageable and useful as a tool for efficient
information sharing.

As a part of its efforts to achieve this goal, it
would be beneficial for the company topublicize an intellectual property report.
In a broad sense, all of these measurestaken are brand strategies aimed to enhance
the company’s reputation.

V

Creation of Patent Portfolios

1Management of intellectual properties
by category
Japan is the largest country in the worldin terms of the number of patent applications.
Some people have pointed out the practicalproblem that Japanese companies, whichhave obtained a great number of patents, areso overwhelmed by the huge pile of patents
that they are no longer able to manage themappropriately. To improve this situation,some companies classify their patents(including pending applications) roughly into
groups. Such classification allows for patent
management according to the purposes ofpatents.
The system, method, and purpose of
category-based patent management varyfrom one company to another. Manycompaniesthat
have
adoptedthis
category-based
patentmanagement
approach have found this approach very
beneficial because it enables them to:(1) grasp the relative value of each invention
at a glance;(2) compare their technical levels with thoseof other companies;(3) identify technologies that they should
concentrate their resources on;(4) systematically patent inventions inassociation with both upstream anddownstream technologies in connection withbasic patents;(5) file patent applications for all thenecessary technologies related to the coretechnology;(6) determine whether a patent unimportant
for them is essential for other companies;(7) make effective use of their unexploited
patents;(8) coordinate the research and development

Even if a company has adopted acategory-based
intellectual
property
management system, which seems to be thebest system currently available, this would
not necessarily prevent the company fromfiling patent applications as extensively as
possible just for the sake of it. Such patentapplications irrelevant to the original
purpose would swamp the company with too
many patents to exploit appropriately,
causing an increase in the intellectual
property management cost as a result insome cases. It is therefore necessary forcompanies not to forget the purpose of
category-based patent management so thatthey would not pursue category-based patent
management just for the sake of it.

2

Introduction of portfolio management
Intellectual
property
portfolio
management enables each company tomanage its intellectual properties in themost efficient manner and to devise anappropriate management strategy to makefull use of those properties.
As described above, a company that has
adopted a “category-based” intellectual
property management system classifies its
intellectual
properties
into
categories
according to their characteristics in order tomanage those properties efficiently. On theother hand, “portfolio” intellectual property
management means that these categories
are established in such a way that best
meets the purpose of “category-based”
intellectual property management.
Companies are in different phases interm of the introduction of category-based
intellectual property management. Generally,
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upon placement of the relevant products on
the market or completion of the relevant
research and development activities. Eachcompany needs to continue improving its
portfolio as long as it stays in business.
The value of the intellectual property
portfolio of a company goes beyond thefunction of maximizing its existing business.
For instance, a company could use its
intellectual property portfolio to develop new
business or build the portfolio into assets
assignable to other companies. This meansthat companies can create intellectual
property portfolios that are independent
from their business strategies and researchand development strategies. In the end, theportfolios themselves will be consideredhighly valuable assets

it progresses through several phases asfollows:(Phasesofcategory-based
intellectual
property management)
Phase 0: No category-based intellectual
property management has been introduced(individual management)
Phase 1: Collection of necessary information(classification)
Phase 2: Analysis of the current status of thecompany (visualization)
Phase 3: Establishment of patent categories(intellectual property categories) in such a
way that best suits the future vision of thecompany (future vision)
By moving up these management phases,
each company can benefit more from theintellectual property category-based (patentcategory-based) management system. For
example, a company can coordinate its
intellectual property strategy with businessstrategy and research and develop strategy,
develop new business, and use patents asassets assignable to other companies. It
would be effective for a company that plans
to introduce the “category-based” intellectual
property management system not to startwith an advanced phase but with an initial
phase with focus on a cost-effective field.

VI Improvement of the System andEnvironmentofStrategicIntellectual Property Management
1

System to promote cooperation
among the intellectual property
department, the operation department,
and the research and development
department of a company
Each company needs to establish theintellectual property management system inconsideration of its size, type and scope ofbusiness, geographical locations of businessas well as research and development,
number of patent applications, etc.
In the case of a small company with alimited scope of business or a company thatfiles a small number of patent applications,
its intellectual property department isusually solely responsible for invention
management (centralized management type).
The advantage of this type is that the
intellectual
property
department
cancentrally manage intellectual properties ofthe operation department and affiliatecompanies and can devise an intellectual
property strategy and manage intellectual
properties in line with the company-wide
policy.
On the other hand, in the case of a large

3

Strategic portfolio management
In most cases, a company adopts a“category-based”
intellectual
property
management system in order to maximize
profits from its existing business operations
by coordinating its intellectual property
strategy with its business strategy andresearchanddevelopment
strategy.
Therefore,
theintellectual
property
categories established for this system havethe function of a portfolio designed toincrease profits from the business. Creationof such a portfolio should not be a transientendeavor. It is important to periodicallyreview the portfolio to reflect the latest
research and development strategy andbusiness strategy. In other words, the role ofintellectual property portfolios does not end
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of intellectual property information to devise
its management strategy including researchand development strategy and businessstrategy, it is important to establish a systemthat allows the intellectual property
department not only to provide information
but also to advise how to use theinformation.
In order to establish and maintaineffective collaboration among the intellectual
property
department,
researchanddevelopment department, and operation
department, it would be useful to holdregular meetings between the research anddevelopment department and the operation
department and to promote communication
through exchange of such documents asinvention proposals and overseas application
requests.
For
example,
the
PDCA
cycle
(plan-do-check-act cycle) is a useful tool for acompany to oversee how its intellectual
property strategy has been implemented
through collaboration among the three
departments.
Toestablish
andimplementanappropriate corporate management strategy,
each company needs to go beyond simply
promotingcooperation
betweentheintellectual property department and theresearch and development department andbetweentheintellectual
property
department and the operation department.
Synergistic collaboration among the three
departments would be necessary.
Topromotethethree-department
collaboration, intellectual property managers
need to take part in the activities of theresearch and development department andthe operation department as intellectual
property experts. At the same time, theresearch and development department andthe operation department need to create anenvironment where opinions of those
intellectual property managers are respected.
Furthermore, it would be beneficial for eachcompany to appoint a CIPO (Chief
Intellectual Property Officer) to expedite thedecision-making process for its intellectual
property strategy. A CIPO is expected to playcompany with a broad scope of business,such a company sometimes has anintellectual property department in each
operation
department(decentralized
management type) in an effort to devise andimplement appropriate intellectual property
strategies in consideration of the businesstype and strategy of each operation
department and of the competition that it
faces. The decentralized management typemakes it easier for each operation
department to manage intellectual property
appropriately by facilitating communication
betweentheintellectual
property
department and each operation department.
The centralized management type andthe decentralized management type areopposite in terms of merits and demerits. In
order to take advantage of the merits of bothtypes and avoid their demerits as much as
possible, it would be a good idea to establish
an intellectual property department in theheadquarters as well as in each operation
department (parallel management type). The
downside of the parallel management type
would be that this type of system requires a
relatively large number of intellectual
property personnel.
For appropriate implementation of astrategic intellectual property management
system, it is important to take special care inpreparing a budget for intellectual property
management. The budget may be allotted toeither the intellectual property department
or the operation department. The advantageof the first case is that the intellectual
property department can control intellectual
property management and earmark a certain
amount of budget for prospective businessfrom a medium- and long-term perspective
irrespective of the amount of budget allottedto the operation department. In the latter
case, each operation department canearmark a certain amount of budget for its
business on its own responsibility.

2

The roles of the CIPO for closer
cooperation
among
three
departments
In order for a company to make full use
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strategy of a company independently
function as important tools to enhance its
technology
management
skill.
By
implementing the two strategies in asynergistic manner, a company can further
strengthen its technology management skill.

the following three roles:(1) Establishment of a basic policy for an
intellectual
property
strategy
andformulation of a management strategy basedon the policy;(2) Establishment of a detailed intellectual
property strategy based on the management
strategy; and(3) Oversight and supervision of intellectual
property-related activities and reporting of
the findings to the management.

4

Development of personnel to promotecollaboration
among
the
three
departments
The fact that intellectual property suchas inventions is made and managed bypeople suggests that personnel development
is important for strategic management ofintellectual property. Each company may
either develop such personnel on its own or
newly employ people who have intellectual
property management skills. To promote
cooperation among the three departments,
intellectual property education needs to beprovided not only to the intellectual property
department but also to the operation
department
andtheresearchanddevelopment department, and even to the
management. Since intellectual property
management requires highly specialized
knowledge and skills, not all the employees
need to gain a high level of expertise. Anycompany that tries to provide the same
intellectual property education to all
employees runs the risk of limiting the study
subjects to “numbers” such as the number ofpatent grants and license balance because“numbers” are easy to teach. In order toenhance every employee’s knowledge andskillsabout
intellectual
property
management, each company needs to provide
tailor-made intellectual property programsfor each section starting from intellectual
property personnel and extending toresearchers, engineers, sales personnel, andthe management according to the roles
required of them.
It would also be beneficial for eachcompany to provide its intellectual property
personnel with training programs not only
on intellectual property but also on othersubjects and to rotate the personnel throughdifferent departments in order to educate
them abut research and development,

3

Linkage between an intellectual
property
strategy
andastandardization strategy
With the advancement of economic
globalization, companies have stepped up
their efforts to standardize their technologies
and promote those technologies as the world
standard. A standardization strategy has
become increasingly important especially for
a company that has interests in standardized
technologies.
Aggressiveinternational
standardization
activities
have
been
observed not only in Western countries but
also in newly industrializing countries
including Asian countries. The Japanese
government has taken various measures incooperation with the private sector tointensify
strategicinternational
standardization activities.
If a company succeeds in spreading its
patented technology as a standardized
technology, the company can benefit directlyfrom the patent in the form of license fees.
Therefore, each company should coordinate
its intellectual property strategy with its
research and development strategy in order
to increase profits. To implement thosestrategies in a coordinated manner, eachcompany needs to carry out its research anddevelopment
activities
andpatentacquisition in parallel with standardization
activities. In this case, it is important for the
research and development department andthe intellectual property department to work
in
very
close
contactwiththestandardization department.
Needless to say, the standardization
strategy and the intellectual property
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For smooth implementation of a systemofmonetary
rewardandofficial
commendation, each company also needs toensure high transparency of the criteria forchoosing award recipients so that every
employee can objectively recognize thevalidity of the choice of award recipients
under the system.
(Senior Researcher: Mitsuhiro SHUNORI)

operations, and management in addition to
intellectual property.

5

Provisionof
incentive
throughmonetary
rewards
andofficial
commendations
In
order
to
promoteinnovative
inventions that contribute to sustainablegrowth, it is important for a company torecognize an employee who has made an
excellent invention and reward him/her
appropriately. In addition to monetary
rewards, a company may provide suchincentives
asofficial
commendations,promotion, or improvement of the researchand development environment to promotefurther inventions.
According to the results of the survey oncompanies
andotherorganizations
conducted by the JPO in January 2006, mostcompanies and other organizations haveestablished employee invention rules thatspecify the provision of a monetary reward at
the time of patent application, registration,
exploitation, licensing, etc.
In some cases, a company makes astrategic decision to protect a developed
technology as secret know-how or to
publicize the technology instead of filing apatent application for it. In such a case, aninternal system to appropriately reward theinventor with a monetary reward or official
commendation would help the company
choose an option other than a patentapplication
without
worrying
about
discouraging the inventor.
A company can benefit from an invention
made by an inventor thanks to many people
such as those who are involved in the processof the patent application and registrationand in the operation that makes profits outof the patent. Therefore, each company
should establish a system of official
commendation and monetary reward not
only for inventors but also for those people
who play important roles in patent
exploitation in order to heighten theirmorale. Such a system would be meaningfulfrom the perspective of fairness among those
involved in inventions.
11
IIP Bulletin 2007