7 New Framework for Protection andManagement of Knowledge
Amid the rapid progress in industry and technology in Asian countries such as China, South Korea andTaiwan, it is time for Japan to drastically reform its conventional industrial structure, which is based on costcompetitiveness through mass production. In order to survive fierce global competition, Japanese companies
need to create technologies of an extremely high level that are unrivaled in foreign countries and makearrangements to prevent foreign companies from easily imitating their technologies.
Under such circumstances, various policy measures have been implemented in the intellectual property
area. For further development of the Japanese industry, companies should make a choice, from a strategic
perspective, between obtaining exclusive rights for their technologies by filing patent applications that are boundto be published, and applying tight control for their technologies as trade secrets and keeping them confidential.
There is also a need to create an environment that enables a flexible response to companies’ intellectual property
strategies. This study is conducted by a committee consisting of experts from academic and industrial circles inorder to discuss a new framework for protection and management of knowledge, focusing on the prior use
system.

Ⅰ Introduction
Under Section 79 of the Japanese Patent Law,a person who has commercially exploited aninvention claimed in another person’s applicationor carried out preparations therefor prior to thefiling of the application (prior user) shall have anon-exclusive license based on prior use (prioruser right). In response to warning notices orinfringement actions, the party targeted by theallegation often defends itself by arguing that it
has commercially exploited the invention or madepreparations therefor prior to the filing of theapplication and therefore holds the prior user
right.
Some companies choose to keep theirinventions secret as know-how, rather thanactively filing patent applications, and theyfrequently take security measures to prepare
evidence to prove prior use.
The prior use system is criticized as not
being very accessible to users because it is noteasy to prove the existence of prior use and thecontents of the prior user right are unclear. In
particular, many such parties that intend to takesecurity measures to obtain the prior user rightpoint out the difficulty and heavy burden in
preparing evidence to prove prior use.
Additionally, in accordance with the firstto-file principle under which the person who has
filed the first patent application shall be entitledto have an exclusive right, it is necessary toconsider how to design a system to create abalance between the person who has created an

IIP Bulletin 2006

invention first of all but not yet filed a patentapplication and the person who has filed a patentapplication and obtained a patent right withrespect to that invention.
From this basic viewpoint, we discussed a
new framework for the protection andmanagement of knowledge.

Ⅱ Prior Use System in Japan
The prior user right guaranteed under
Section 79 of the Patent Law is a non-exclusive
license given as an exceptional relief undercertain conditions to the person who hascommercially exploited another person’s patented
invention or made preparations therefor prior to
the filing of the patent application (“prior user”),
so as to enable the prior user to continue thecommercial exploitation. The prior user right iseffective only as a defense against a patent rightthat subsequently comes into existence, and it
does not give any title or status to the prior user
beforehand.
The prior use system was first adopted
under the 1909 Patent Law. The 1921 Patent Law
adopted this system from the former law andprovided for it in Section 37. This provision isconstrued to clearly state that the prior user rightis a statutory license that is granted to correct
the defect in the patent system under the
first-to-file principle whereby a patent right shallbe granted to the first applicant. Under the 1959
Patent Law, the provision on the prior user right
was moved to Section 79 and revised to make the● 50 ●

following changes: “bona fide” changed to“without knowledge of the contents of an
invention claimed in a patent application, hasmade the invention by himself or has learnt theinvention from another person who has made theinvention”; “business to exploit the invention”
changed to “business in which the invention is
exploited”; “equipment” changed to “preparation.”
Subsequent revisions have not changed themeaning of the prior user’s right at all.
The commonly accepted meaning of the prioruser right is based on the “equity theory”
adopted by the Supreme Court in the Walking
Beam-Type Heating Furnace Case (judgment of
the Supreme Court of October 3, 1986).
Unlike a non-exclusive license granted underan agreement, the prior user right is effective
against a third party even if it is not registered,but it may also be secured by registration. It may
be transferred together with the business inwhich the invention is exploited or in the case ofinheritance or other general succession.

appropriately. However, under the existing
system, there is no option but to “file applications
or disclose technology” in order to protect
inventions that have yet to reach the stage ofcommercial exploitation from the “risk of being
claimed in competitors’ later applications.”

Ⅲ Actual Status and Problems ofProtection and Management ofKnowledge at Companies

The following opinions were presented inregard to problems with the existing prior use
system.

The following opinions were presented inregard to the actual status of protection andmanagement of knowledge such as know-how.

(1) From the viewpoint of electric machinery
manufacturers
A problem with the existing prior use system
is uncertainty of the scope of permissible changes
in modes of operation of inventions. Anotherproblem relates to who may claim prior use as ameans to strengthen business groups and proceedwith corporate transformation through M&A. The
Supreme Court allows a party other than the prioruser to claim prior use if it exploits the invention“as an organ of the prior user.” However, whether
this can be applied to the prior user’s subsidiaries
or affiliated companies is an important issue.

(1) From the viewpoint of electric machinery
manufacturers
Measures that they implement to protect
their technologies can be divided into “legal
protection”
and“self-reliant
protection”
measures. Legal protection includes protection
based on patent applications or copyrights, aswell as protection based on the prior user right or
under the Unfair Competition Prevention Law orprotection as trade secrets. On the other hand,self-reliant protection means protection bymeasures other than legal ones, such asprotection steps for corporate secrets.
(2) From the viewpoint of electronic parts
manufacturers
The outflow of confidential know-how
through the publication of patent applications has
become an urgent issue. An effective measure tocope with this issue is to separate the inventions
for which patent applications should be filed toobtain rights from the know-how that should be
used as secret technology, thereby protecting andmanaging inventions as intellectual property(3) From the viewpoint of pharmaceuticalmanufacturers
According to the actual status of protection
and management of knowledge based on the prioruser right in the pharmaceutical industry,
pharmaceutical manufacturers do not select theoption to keep candidate drugs themselves secret
for the purpose of claiming prior use against apatent obtained by a third party. They also hardly
choose this option as a means to protect thetechnology for manufacturing drugs. However,they claim prior use in rare cases where theyreceive warning notices from competitors thatexercise patent rights for raw materials andpreparations of drugs.

(2) From the viewpoint of electronic parts
manufacturers
There are three major problems with theexisting prior use system: (i) the prior user rightcannot be exercised where the invention has not
yet been exploited or preparations therefor have
not yet been made; (ii) even where the person
has exploited the invention before a third party
files a patent application with respect to theinvention, the person is required to prove that theinvention is being exploited at the time of thefiling of the third party’s application; (iii)international harmonization of rules has not yet
been achieved with respect to prior use.

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(3) From the viewpoint of pharmaceuticalmanufacturers
Pharmaceutical manufactures are unlikely toclaim prior use, and therefore there is no
particular problem with the existing prior use
system and the use of public notaries in thisindustry.
The following opinions were presented inregard to the clarification of details of the existingprior use system and the relaxation ofrequirements for claiming prior use.
(1) From
theviewpointofelectric
machinery manufacturers
For the purpose of making the prior use
system more accessible so as to facilitatebusiness activities, it is necessary to clarify andraise awareness of the current status regarding
the modes of operation and the parties who may
claim prior use. If the need to review the system
arises from the perspective of strengthening
industrial competitiveness, appropriate measures
shouldbe
immediately
consideredandimplemented. The requirements for claiming
prior use should not be relaxed to the level where
mere ideas can also be protected, which would
lead to the first-to-invent principle.
(2) From the viewpoint of electronic parts
manufacturers
The requirements for claiming prior use
should be relaxed so that the exploitation of an
invention at the stage of development orexperimentation will also be regarded as
exploitation based on the prior user right (on thecondition that the invention is completely
created). It is impossible to defend know-how,which has been obtained as a result of R&D, until
it is actually employed in the mass-production
process. To avoid such risk, there is currently no
option but to disclose the technology or filedefensive applications.
(3) From the viewpoint of pharmaceuticalmanufacturers
The details of the prior use system should beclarified in order to increase accessibility to
public notaries for the purpose of proving prioruse. The requirements for claiming prior use
should not be relaxed, or in other words, a new
system to grant a license to a prior inventor
should not be introduced, because such a system
would lead to the tendency to register any
inventions only for the strategic purpose of

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securing prior inventor’s licenses. In that case,patent applicants who have made large
investments at high risk would be easily
surpassed by competitors with prior inventor’s
licenses, and unable to enjoy a monopoly under
their patents.

Ⅳ Results of the Questionnaire
Survey(1) More than 80% of the respondent companies
have received warning notices or sales pitches
relating to intellectual property, and one-third ofsuch companies claimed prior use upon receiving
warning notices or sales pitches. Thus, the prioruse system is used relatively often. The numberof companies that have claimed prior use inlitigation is smaller, suggesting that in most cases,
disputes are settled through compromises or
licensing before they are brought to court.
(2) A relatively large number of companies faceddifficulty only when claiming prior use, and about
20 companies did not find any difficulty with theprior use system because they had secured
enough evidence and due to the existence ofindustry rules. On the other hand, those that
faced difficulty pointed out the burden imposed by
the need to collect evidence of exploitation or
preparations therefor when claiming prior use,
and the uncertain scope of the invention or of theobjective of commercial exploitation when
responding to the claim of prior use.
(3) Various measures are being taken to proveprior use. They differ significantly, and it isdifficult to find the most appropriate measuresamong them. Many companies have founddifficulty in proving prior use, mainly because of
the difficulty in establishing the date of evidence,
the non-existence of evidence, and the unclear
scope of evidence that should be retained. On theother hand, a relatively large number ofcompanies retained evidence to prove prior use inadvance, by taking a variety of measures.
(4) About two-thirds have used a third party
agency for preparing evidence to prove prior use,mostly for the purpose of providing proof for the
exploitation of the invention at the time thepatent application is filed as well as the technicalcontents of the invention. A popular third party
agency employed is public notaries, which arefrequently used to obtain a date of notary effectand less frequently used to obtain notarial deeds
of fact observation.
(5) Only a very limited number of companies orabout 2% filed patent applications with respect to● 52 ●

know-how, which they had actually sought to keep
secret, for the purpose of preventing a third party
from obtaining patent rights.
(6) Although a large number of companies
agreed to the view that a new prior use systemshould be implemented by a public agency or the
JPO should take charge of implementing such a
new system, subsequent interviews with suchcompanies suggest that most of them have notconsidered this issue in detail but simply believethat such a new system would be helpful.
(7) Based on their requests regarding the prioruse system as a whole, they hope that the parties
who may claim prior use will be clarified; however,most of them consider that a balance between theprior user and the patent holder should bemaintained.

Ⅴ Court Precedents on Prior User
Rights in Japan
1

Supreme Court Judgments on Prior User
RightsImportant rulings by the Supreme Court onprior user rights are the Walking Beam-Type
Heating Furnace Case (judgment of October 3,1986) and the Globe-Shaped Transistor Ratio
Design Case. In the former case, the Supreme
Court pointed out the requirements for claiming
prior use, namely, “completion of the invention,”“preparations for commercial exploitation,” and“change or scope of the modes of exploitation.” In
the latter case, the court determined the scope ofparties who may claim prior use.
2

Study of Court Precedents on Prior User
Rights: Focusing on the Scope of Effectsof Prior User Rights(1) Time of the filing of a patent application
If the patent application has priority under
the Paris Convention, the date when the first
application is filed in another country of theUnion, or in other words, the date when priority
is claimed, should be the reference date. In thecase of division of an application, the date of filingof the original application should be the referencedate.
(2) Preparations for exploitation
The prior user right shall necessarily bedenied if the products relating to the prior use
claim that are manufactured or sold before thedate of filing of the patent application cannot berecognized as products in which the patented
invention is exploited.
Regarding exploitation, a problem arises as
to the extent of preparations that would be
regarded as “preparations for commercial
exploitation” under Section 79. Based on thegeneral trend in court precedents, preparations
for commercial exploitation are likely to berecognized where at least trial models have beencreated or specific investment has been made forthe invention.
(3) Scope of the invention and commercial
exploitation thereof
Where the prior user continues to employ
the mode of operation that has been employed at
the time of the filing of the patent application,such an act should never constitute patent
infringement. The question is whether anallegation of patent infringement can be avoided
by claiming prior use even where the prior user
has changed the mode of operation. The Supreme
Court indicated a specific criterion for this issue:
where the invention utilized in a product for
which commercial exploitation (or preparations
therefor) has been underway at the time of thefiling of the patent application (Invention A) is
identical to the patented invention (Invention P),
the effect of the prior user right shall extend to
the whole scope of the patented invention,
whereas in the case where Invention A is
identical to only a portion of Invention P, theeffect of the prior user’s right shall extend only tothat portion.
(4) Scope of parties who may claim prior use
Since the prior user right under Section 79
is provided for as a non-exclusive license, inlight of the language of the provision, it may betransferred only together with the business inwhich the invention is exploited or with theconsent of the patent holder, or in the case ofinheritance or other general succession (Section
94(1)).
It should be noted that parties other than theprior user may claim prior use without obtaining
the prior user right. More specifically, (i) parties
engaged in manufacturing as subcontractors of
the prior user engaged in the manufacture andsale of the invention, or (ii) parties engaged inoperating the invention by purchasing products inwhich the invention is exploited from the prioruser engaged in the manufacture and sale of theinvention, may claim prior use.

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3

Study of Court Precedents on Prior User
Rights: Focusing on Means to Provide
Proof of Prior Use(1) Since there are only two cases in which thesubstantially probative value of the principal
evidence of the existence of prior use has been
directly challenged, it is difficult to study thenecessary means to provide proof of prior use indetail based only on the available court
precedents.
(2) In the case of a product invention, documents
exchanged with or disclosed to a third party, suchas design drawings, written contracts, receipts
and research reports, are admitted as evidential
materials relatively broadly and recognized ashaving substantial probative value. Tangible
materials other than such documents are also
regarded as having probative value as to the dateof manufacture if they are handled under a certain
kind of management system.
On the other hand, whether internal
documents have substantially probative value is
uncertain because there is no past precedent
where they were admitted or denied as direct
evidence.
In addition to evidential materials mentioned
above, individuals inside or outside the company
may be often admitted as personal witnesses but
the content of their testimony has not been
disclosed in court precedents available so far.
(3) In the case of an invention of the
manufacturing process for a product, sample
products manufactured using the process anddrawings used for the manufacture wererecognized as having substantial probative value.
(4) In the case of a simple process invention,
there is no court precedent addressing the prioruser right.

disputed, the prior user right was recognized in
48 of the 92 cases in the period following the
Globe-Shaped Transistor Ratio Design Case,
whereas it was recognized in 41 of the 68 cases in
the period following the Walking Beam-Type
Heating Furnace Case, indicating that the rate ofcases where the prior user right is recognized has
been increasing. This upward trend may be
because in accordance with the reasoning givenby the Supreme Court in the Walking Beam-Type
Heating Furnace Case, prior use can be claimed
as an appropriate defense and reasonable
judgments are also made by the courts.

Ⅵ Prior Use System in Foreign
Countries
We conducted research on prior use systems
in foreign countries. The major research results
are as follows.
1

The prior user right is stipulated in Section
64 of the Patents Act. In order for a prior user
right to exist, the person who claims prior use isrequired to exploit the invention or makepreparations therefor prior to the priority date of
the invention. The prior user may expand thebusiness based on the prior user right and maychange the mode of operation if such a change
does not affect the essence of the invention. The
prior user may assign or transmit his right on
death (or in the case of a body corporate, on its
dissolution) to any person who acquires that partof the business. Prior use may also be claimed by“any partner of the prior user for the time being
in that business.”2

4

Analysis of Cases Involving Prior User
RightsWith the objective to understand to what
extent prior use has been claimed in litigation andwhat judgments have been made regarding prioruser rights, we extracted cases involving prioruser rights and conducted a statistical analysis on
such cases.
Based on the statistical analysis, both thenumber of infringement cases and the number ofcases in which prior use is claimed as a defense
have been increasing. Comparing the number ofcases where the prior user right was recognizedwith the number of cases where prior use was

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United Kingdom

Germany

The prior user right is stipulated in Section
12 of the Patent Law. In order for a prior user
right to exist, the person who claims prior use isrequired to be in the course of exploiting theinvention or making preparations therefor upon
the filing of a patent application. The prior user
may expand the business based on the prior user
right. Regarding whether the mode of operation
may be changed, the dominant opinion considers
such change permissible. The prior user right“can only be inherited or transferred together
with the business”. The prior user may“authorize another party’s plant or workshop to
use the invention.”● 54 ●

3

China

The prior user right is stipulated in Article
63 of the Patent Law. In order for a prior user
right to exist, the person who claims prior use isrequired to make the identical product or use theidentical process or make preparations therefor
prior to the filing date of a patent application. The
prior user is not allowed to expand the businessor change the mode of operation based on theprior user right. The prior user right can only betransferred together with the part of the company
that owns the prior user right. What party otherthan the prior user may claim prior use is notclear due to a lack of court precedents.
4South Korea

The prior user right is stipulated in Article
103 of the Patent Law. In order for a prior user
right to exist, the person who claims prior use isrequired to be in the course of exploiting theinvention or making preparations therefor upon
the filing of a patent application. The prior user
may expand the business based on the prior user
right, and may change the mode of operation to
the extent that those skilled in the art are
expected to employ the changed mode. The prioruser right can be transferred together with thebusiness, in the case of inheritance or othergeneral succession, or with consent of the patent
holder. Prior use may be claimed by a party thatserves as an organ of the prior user.
5

TaiwanThe prior user right is stipulated in Article
57 of the Patent Law. In order for a prior user
right to exist, the person who claims prior use isrequired to exploit the invention or makepreparations therefor prior to the filing date of apatent application. The prior user is not allowed
to expand the business based on the prior user
right, but is allowed to change the mode ofoperation to the extent that the invention has
been exploited. The prior user right can betransferred together with the business. What
party other than the prior user may claim prior
use is not clear due to a lack of court precedents.
6

FranceThe prior user right is stipulated in Article613-7 of the Intellectual Property Law. In order
for a prior user right to exist, the person who

claims prior use is not required to exploit theinvention or make preparations but required topossess the invention upon the filing date orpriority date of a patent application. The prioruser right can be transferred “together with thebusiness, the enterprise or the part of theenterprise to which it belongs.” Prior use may beclaimed by companies of a business group thatowns the prior user right.
7

Belgium

The prior user right is stipulated in Article
30 of the Patent Act. In order for a prior user
right to exist, the person who claims prior use is
not required to exploit the invention or makepreparations but required to use or possess theinvention prior to the filing date or priority dateof a patent application. The prior user right canbe transferred “only together with the business.”
Prior use may be claimed by companies of abusiness group that owns the prior user right.
8

United States

The prior user right is stipulated in Section
273 of the Patent Act. . In order for a prior user
right to exist, the person who claims prior use isrequired to exploit the invention before theeffective filing date of a patent application. The
prior user may expand the business based on theprior user right, and may also change the mode ofoperation within the scope of the subject matterof the invention. Transfer of the prior user right isallowed in cases where it is transferred to thepatent holder, it is transferred to the prior user’s
subsidiaries bona fide, or it is transferred
together with the business as a whole. What party
other than the prior user may claim prior use is
not clear due to a lack of court precedents.

Ⅶ Use of Notarial Methods as a
Means to Prove Prior Use
Major notarial methods available as a means
to prove prior use include obtaining a date ofnotary effect, authentication for private or sworn
documents and notarial deeds of fact observation.
A date of notary effect can be obtained byapplying a seal to photos, operation manuals andproducts, as well as to CD-ROMs that record
software applications. It should be noted that adate of notary effect only proves that the subject
existed on that date, irrespective of the contentsof the subject. Regarding authentication of● 55 ●IIP Bulletin 2006

documents, companies should have relevant
documents authenticated before storing them,including operation reports, research reports, andtechnical experiment reports prepared at thestage of technology development, and establish asystem for securing objective and reliable
evidence for future needs. Notarial deeds of factobservation can be prepared by: (i) stating thefact that the product was purchased on themarket; (ii) observing the invention exploitation
and recording the production process andtechnical details; (iii) recording (on video) the
presentation of the invention.
Regarding the actual use of notarial methods
as means to prove prior use and problems withsuch systems that should be resolved in the future,
notary services have been recognized as aneffective means to deal with the challenges posedby intellectual property and are used more
frequently than before. However, they have not yet
become very popular because many public notaries
are not so familiar with the intellectual property
field. Although the Japan Notary Association has
been making efforts to raise awareness among
companies and promote their use of notarial
methods for dealing with intellectual property
matters, companies have not yet fully grasped thesignificance or importance of such methods. It is
hoped that various measures will be taken in the
future to improve their understanding and promote
the active use of notarial methods, including
development of guidelines (collections of
examples). At present, public notaries areauthorized to observe facts at the notary public’s
office or the Legal Affairs Bureau or District Legal
Affairs Bureau to which they belong. Consideringthat public notaries who are well versed inintellectual property matters are not available insome prefectures, such jurisdiction-related
limitations create a disincentive for companies toactively use notarial methods.

Ⅷ Future Framework of the Prior
Use System
1

Clarification of the System(1) Statement of the issue
Most users positively evaluate the existingprior use system to a certain extent with respect
to the balance between the patent holder and theprior user and the scope of effect of prior user
rights. However, at the same time the system iscriticized for its uncertainties arising frominterpretation of the provisions of Section 79 on

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the following points:(a) To what extent the prior user is allowed tochange the mode of operation, e.g. introducing
a new model;(b) Who may claim prior use in cases where
the prior user authorizes its subsidiaries oraffiliated companies to operate the business inline with business expansion plans;(c) How to interpret the requirement of “at thetime of the filing” when preparing evidence ofthe operation of the business (if thisrequirement is strictly interpreted, it would be
extremely difficult to prove prior use);(d) To what extent preparations for theoperation of the business are required to bemade in order to prove prior use.
(2) Past court rulings and interpretations
While uncertainty of the prior use system ispointed out in terms of how to interpret theprovisions of Section 79 as mentioned above,
court rulings and the prevailing mindset inrelated fields have clarified the details of thesystem.
(3) Major discussion on how to clarify thesystemNegative views were dominant regarding theidea of changing the balance between the patent
holder and the prior user by revising therequirements for prior use. The majority ofparticipants were positive about the idea ofclarifying the prior use system so as to make theexisting system more accessible and morereliable for companies.
(4) Future discussion
It would be most appropriate to analyze court
decisions and academic theories on the points forwhich the provisions of Section 79 are criticized
as being uncertain, and develop guidelines(collections of examples) with cooperation fromthe legal and industrial circles, with the aim toclarify the prior use system. It is also importantto thoroughly publicize such guidelines(collections of examples) while paying attention
to issues and court decisions that may arise in the
future, so as to promote effective use of the prioruse system.
2

Reduction of difficulty in proving prioruse(1) Statement of the issue
The difficulty and burden imposed by the● 56 ●

requirement to prove prior use are pointed out
because of the fact that what kind of evidence
should be retained to provide proof of the“operation of the business” or “preparations forthe business” and to what extent and how such
evidence should be retained are uncertain.
Although notarial methods are used in somecases as active measures to prepare evidence toprove prior use beforehand, public notaries are
required to be able to grasp the technical mattersin such cases.
(2) Major discussion on how to reduce thedifficulty in providing proof of prior use
The majority argued that guidelines(collections of examples) should be developed toprovide examples of the use of notarial methods.
While there were calls for a new notification
system, concerns were also presented about thisidea, such as a possible increase in administrative
costs and workload and abuse of the systemthrough registration without restriction.
(3) Future discussion
In order to make the prior use system moreaccessible, it would be appropriate to develop
guidelines (collections of examples) that provide
examples of means to provide proof of prior use,
including the use of notarial methods, whilereferring to the means of proof that arerecognized in court decisions or academic
theories or those actually employed by companies,and clarify what kind of proof should be retained
as evidence to prove prior use and to what extent
and how such evidence should be retained.
3

Harmonization of prior use systems(1) Statement of the issue
Along with the globalization of economic
activity, Japanese companies are establishingplants and facilities overseas. However, they facedifficulty in launching stable business operations
overseas because each country has a different
prior use system.
(2) Future discussion
From the perspective of encouraging
Japanese companies to use prior use systems inforeign countries, it is important to harmonize
these systems in terms of the scope of
permissible changes to the mode of operation andthe scope of parties who may claim prior use.
Therefore, it is necessary to approach foreigncountries through various channels in order tobring about rule harmonization.
4

OthersFrom the perspective of reducing difficulty inkeeping know-how secret, opinions have been
aired that a new system should be established to
grant a statutory non-exclusive license to theperson who “possesses the invention”. However,strong opposition has been raised to this idea
among users because such a system wouldchange the balance between the patent holder andthe prior user, and it would be an unusual system
based on worldwide comparisons and run
contrary to the international harmonization ofsystems.
There are also concerns that publication ofpatent applications causes unintentional outflow
of technologies. This is not an issue of systemdesign but relates to each company’s strategy forfiling applications.

Ⅸ Conclusion
The prior user right guaranteed under
Section 79 of the Patent Law is a non-exclusive
license given as an exceptional measure of relief
under certain conditions to the person who hascommercially exploited another person’s patented
invention or made preparations therefor prior to
the filing of the patent application (“prior user”),
so as to enable the prior user to continue theexploitation of the patented invention. If the prioruser right were regarded as giving any title or
status to the prior user beforehand, this wouldchange the existing balance between the patent
holder and the prior user significantly. The idea ofgranting a license to a prior inventor would cause
a greater change to such a balance.
The existing patent system is based on theprinciple that a person who discloses an invention
shall be entitled to have an exclusive right to theinvention. Making changes to the prior use
system as mentioned above would mean changing
the core of the patent system. It is difficult to saythat a consensus has been established for making
such fundamental changes that would weaken thepatent holder’s right or for officially starting
discussion in that direction. It has been reported
that the United States has introduced the
publication system and is likely to shift from thefirst-to-invent principle to the first-to-fileprinciple. A system to grant a license to a priorinventor would be an extremely peculiar system
based on worldwide comparisons.

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Rather, what we should do now is to identify
problems with the existing prior use system froma practical perspective and clarify to the greatest
possible extent the details and features of thesystem that should be noted when using it. In thiscontext, we have concluded that it would bedesirable to develop guidelines and improveunderstanding on prior use. Academic societies
are expected to deepen discussion on a future
framework for the prior use system. Attention
should also be paid to court decisions on thisissue.
Japanese companies need to give sufficientconsideration to whether they select to file patentapplications with respect to technologies thatthey have developed while disclosing suchtechnologies to the public, or keep thesetechnologies as secret know-how, and manage
filing procedures appropriately.
(Researcher: Hiroo MAEDA）

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