6 Fee System Methods for Industrial Property Rights based on
the Economic Situation, etc. in Japan
Under the strict economic situation in Japan, there is a need to revise the fee system for small- andmedium sized companies, etc., which have a limited intellectual property related budget. On the other hand,
there are indications that even if fees for requesting examinations and annual fees for patents are reduced,
small- and medium-sized research and development type companies, etc. cannot enjoy those effects
sufficiently due to the complexity and difficulty of the request procedures.
The content required for the procedures and the fee system related to existing industrial property
rights has changed along with promoting a revision of the patent system from the perspective of promoting
innovations, and the revision of the trademark system in order to improve its convenience for business
operators to facilitate improvements of brand strength. Therefore, the need to investigate overall
procedures concerning industrial property rights has arisen.
This research study is an investigation, and an economic analysis, into “the way to find an
appropriate fee system based on the revenue curve of the products that use patents” and “the transition ofthe fee system and its impact.” In addition, as to “the method of the reduction or exemption system,” “themethod of basic fees and charges for claims” and “the payment method of trademark fees by installment,” aquestionnaire survey of system users and oral interviews were conducted and investigated based on theirresults.

Ⅰ Introduction

introduction of the License of Rights System(preparatory licensing system) was summarized.
However, since the patent system has beenreviewed from the perspective of promoting
innovations and the trademark system has beenreviewed in order to improve its convenience tobusiness operators who wish to increase theirbrand capabilities, the content of the requirementsfor procedures and the fee system for existing
industrial property rights has changed; therefore,
it is necessary to review the overall procedures
concerning industrial property rights.
Consequently, this research study wasconducted to research and analyze companies’
business conditions, the actual conditions ofresearch and development, or the need, etc. inJapan for the method of procedures and fees forindustrial property rights and to create basematerials as necessary for new systemdevelopment in consideration of small- andmedium-sized companies, etc.

The “global financial crisis” has become
more serious and we are in the most significant“worldwide recession” of the post-World War II
era. Under such circumstances, the Japanese
economy is also facing a rapid shrinkage of its
export market and a strict financial environment.
To respond to this situation, the Japan Patent
Office has introduced an “deferment of paymentof fee for request for examination” as anemergency measure to reduce companies’
financial burden. Under this system, payment of
examination fees may be deferred for one year
only from the submission date of the written
request for examinations that are conducted on
April 1, 2009 and thereafter. However, there is aneed to review the fee system further for smalland medium-sized companies, etc. with a limited
intellectual properties related budget. On theother hand, there is an indication that even if
examination fees and patent fees (for the first tothird years) are reduced, small- and medium-sizedresearch and development type companies, etc.
cannot enjoy the effects due to the complexityand difficulty of application procedures.
With regard to financial management, feesystems, and fee measures in various countries
and new fee measures that have not been adopted
in Japan, the “Desirable Financial Policies and Fee
Systems for Industrial Property Rights” wasconducted last year and the need, etc. for theⅡ Appropriate Fee System Method
based on the Revenue Curve ofProducts that Use Patents
The fee system under which companies may
feel their burdens are reduced is examinedaccording to the revenue curve of products thatuse patents and an appropriate fee system method
which takes into consideration the purpose of thepatent system and the funding ability, etc. of each
● 1 ●IIP Bulletin 2010

applicant is surveyed and analyzed.
1

individual interests (producers’ surplus) andsocial interests (consumers’ surplus) andmaximizes social welfare.

Results of surveys and analyses

Ⅲ The Method of the Reduction orExemption System

The five revenue curves obtained from oralinterviews with 2 large-sized companies, 2 smalland medium-sized companies, and 1 institution(university) gave very different results in theperiod until profit is maximized, the period whenprofit is maintained, and the amount of profit,respectively. The results were not uniform; it wastherefore difficult to investigate a common fee
system, under which companies, etc. may feel
their burdens reduced based on their revenue
curves.
It is considered that companies withabundant funds feel that their patent fee burden iscomparatively light even if a certain time isrequired for an invention to obtain a patent and becommercialized. Meanwhile, companies with poor
funding ability may feel their burden even withthe payment of the initial patent fees, which are
set at low price, and they cannot always maintainthe patent right that they have managed to obtain.
As a system under which companies with poor
funding ability can obtain patents for theirinventions and pay patent fees for their futurebusiness without anxiety, it may be possible toestablish multiple fee systems that consider acompany’s funding ability, etc., but not theexisting uniform fee system that does not take
into consideration the funding ability of patentright holders or applicants. One of measures thatcan contribute to industry development is to havea patent holder or an applicant select one ofmultiple fee systems, to reduce their patent fee
burden, and thereby to provide circumstanceswhere they can commercialize their inventions
comfortably.
In order to promote the publication ofinventions, an exclusive right must be granted to
an invention. Therefore, there is an aspect ofdamaging social welfare, such as when aninvention is dominated for a certain period andthe working of the invention by a third party is
inhibited due to the domination. Consequently, it
is essential for today’s Patent Act to be designed
to take sufficiently into account the balance
between the individual interests and social
interests of applicants or patent right holders.
The fee system to impose patent fees onapplicants or patent rights holders also functions
as an effective policy means to adjust thosebalances. It is preferable to establish a patent fee
system which considers the balance between

The method of the reduction or exemption
system that is currently applied to examination
fees and registration fees for Japanese patents issurveyed and analyzed through document
investigation in Japan, questionnaire surveys andoral interviews with small- and medium-sizedcompanies and universities, etc.
1

Results of surveys and analyses

When comparing the procedures of the
reduction or exemption system and theprocedures of other support measures for smalland medium-sized companies, it is found that therequirements of “being an employee invention”
and “the employee invention is succeeded byreservation” are added substantially to the
reduction or exemption system. If theserequirements for procedures are deleted, smalland medium-sized companies may apply forpatents for inventions that were made by others,
including large-sized companies, etc. It istherefore likely to lead to patent applications thatare far removed from the original purpose of thereduction or exemption system. Consequently, it
is not found in the procedures that the reduction
or exemption system is restricted when comparedto other support measures for small- andmedium-sized companies, etc.
In this document investigation, therequirements for subject persons and proceduresof the reduction or exemption system were notvery different from other support measures forsmall- and medium-sized companies, etc.
There is room to review the reduction or
exemption system and to examine whether it
provides a sufficient response to the protection ofuseful inventions.
First, there are requests to expand thepersons subject to the reduction or exemption
system for small- and medium-sized companies
and to simplify application procedures; however,since a large divergence was not found with othersupport measures for small- and medium-sizedcompanies or other reduction or exemption
systems, there is no necessity to ease the systemat this moment.
On the other hand, when looking at students,● 2 ●IIP Bulletin 2010

etc. it is considered to be necessary to introduce a
specialized reduction or exemption system forstudents, etc. in order to promote thedissemination of the system and to provide
support, etc. for preparing application documents.
Moreover, in order to prevent persons withpoor funding ability from giving up filing patentapplications or from abandoning their patentrights since they cannot afford the fees until theinvention is commercialized, it is necessary toconsider including the application fee in thesubjects of the reduction or exemption system in
addition to the expansion of the reduction orexemption amount.

large impact on the number of applications for
trademark registration are not changes in theapplication fee for trademark registration or the
economic situation, etc., but the reform of thelegal system, etc.

Ⅴ The Method of Basic Fees andCharges for ClaimsWith regard to the method of basic fees
concerning examination fees and charges forclaims, the fee system that users, who are patentapplicants, desire is surveyed and analyzed
through questionnaire surveys and oralinterviews.

Ⅳ Transition of the Fee Systemand its Impact

1

Based on the transition of various fees bymeans of fee reform and the transition in theusage situation of patent system, etc., such as thenumber of patent applications and requests forexamination, etc., the impact of fees on the usage
situation of each system is surveyed andanalyzed.
1

The number of claims when requesting anexamination for patent application and the numberof claims necessary for patent rights amount toapproximately ten claims. In terms of the patent
fee system, it is found that users prefer to keep
the basic fee low and to increase charges forclaims.
With regard to the method of basic fees andcharges for claims, most users expressed their
desire to keep the current system, followed by“the prescribed number of claims or less shouldbe free and specified fees should be charged foreach claim that exceeds the prescribed number ofclaims” and “fees should be charged
progressively for the number of claims.”
From a different perspective, there are moreusers that agree with the fee system whichcharges extremely expensive fees when thenumber of claims exceeds the prescribed number.

Results of surveys and analyses(1) Patents
It is considered that patent application fee
reform has not affected the number of patentapplications.
According to the results of analysis byexperts of the correlation between research anddevelopment costs and the number of patentapplications, it is found that research anddevelopment costs have a significant influence on
the number of patent applications. If research anddevelopment costs increase by 1%, it is estimatedthat the number of patent applications increases
by approximately 0.34% to 0.39%.
On the other hand, it is estimated that one of
the causes of the largest impact on the number ofrequests for examination is the examination fee.

Ⅴ The Method of Payment ofTrademark Fees by Installment
Based on questionnaire survey and oralinterviews with companies, etc., changes in therights holding period for right holders and impacts
on a company’s brand strategy from thesechanges are surveyed and analyzed, in cases
where the frequency payment of fees by
installment under the trademark fee system isincreased from the current frequency of twotimes every 5 years, when the cost balance with alump sum payment is changed.

(2) Designs
It is estimated that the causes that have alarge impact on the number of applications fordesign registration are not changes in theapplication fee for design registration or the
economic situation, etc., but the reform of thelegal system, etc.

1(3) Trademarks
It is estimated that the causes that have a

Results of surveys and analyses
In cases where the fees for the first and● 3 ●IIP Bulletin 2010

Results of surveys and analysessecond terms are set to be the same amount asthe fees in cases of a lump sum payment of tenyears, it becomes apparent that the number ofpeople who want to use the fee system willincrease.
In cases of creating differences in fees bymaking the fee for the first term less and the fee
for the second term more, the number of people
who do not want to use the fee system decreases
and the number of people who are not certain
whether they will use the system increases.
Moreover, with regard to increasing theinstallment frequency more than the current
frequency of two times, more than 60% of peopleindicated that they do not want to use that system.
On the other hand, there are people who want to
use the system since it will shorten the holding
time and reduce the maintenance cost of
trademarks for which the period of use is short,for example 1 to 2 years, or trademarks that wereapplied for and registered but for which it wasdecided that they were not to be used. Thatmeans the increase of installment payment
frequency provides an advantage to themaintenance of trademarks that are not always
important for companies.
With regard to the impact of the increase ofinstallment payment frequency on companies’
brand strategies, when considering that acompany’s brand strategy is generally an activity
to use the company’s most important trademarks,
such as a corporate brand (trademark) or a major
product or service brand (trademarks), and toestablish a better company image from along-term perspective, it is considered that anincrease of in installment payment frequency thatprovides advantages only to trademarks with ashort life will not impact a company’s brandstrategy.
In addition, it is found that an installment
payment system which sets differences in fees by
setting low first term installment payments andhigh second term payments and other installment
payment systems for which the frequency of
installment payments is increased are effective
systems for users with very small-sizedbusinesses.
(Senior Reseacher: Sanae KAWAHATA)● 4 ●

IIP Bulletin 2010