IPAS
Intellectual Property Acceleration program for Startups

14 Challenges that Startups Faceand How to Deal with Them:
Lessons from Experiences in Intellectual Property
Strategy Support

IPAS2018-2019
Collection of cases© 2018. For information, contact Deloitte Touche Tohmatsu LLC.

Objectives in Publishing “14 Challenges that Startups
Face and How to Deal with Them: Lessons from
Experiences in Intellectual PropertyStrategy Support”
For startups, new technologies and ideas are the core of their business, and it isimportant that these intellectual property (IP) are strategically protected and leveraged.

However, the challenge in their early years is that core technologies and ideas are
not properly protected because the startup does not have the expertise to protect them orfail to acquire IP rights due to focusing too much on launching the business. Proceedingwith product development, release, and collaboration with other companies without astrategy to protect and to leverage IP will result in the leakage of technologies and ideas,
the release of counterfeit products, and a failure to generate profit initially expected fromthe business. In such a situation, valuable IP would not lead to the growth of the startup.
Given these circumstances, Japan Patent Office has been implementing a program
called IPAS (Intellectual Property Acceleration Program for Startups), an acceleration

program specializing in intellectual property, since FY2018. IPAS has allocated mentoring
teams consisting of business and IP experts to work with 25 startups to develop IP
strategies in accordance with their business in 2 years.
This booklet presents case studies describing the challenges found and the solutions
considered during the 2 years of mentoring the startups in the IPAS program. The casestudies are based on actual examples of IPAS support, but are modified in a way suchthat it’s easier for readers to understand. Although this report does not cover all thechallenges and solutions, we hope that it will help startups, business experts, and IP
experts establish their future IP strategies.

April 2020
Japan Patent Office1

Comments from startups who participated in
IPAS 2018
Sonas, Inc.
The mentor highly appreciated our technology and its social significance and provided us
with proactive support. He also gave us advice based on his extensive experience in thepositioning of IP in our business strategy, filing strategy, negotiation strategy, etc.

Caulis Inc.
In terms of strategy, their advice on funding and HR policies helped us a lot. In addition,
regarding IP, they advised us on prior art research and global judicial precedent.

MDR Co., Ltd.
We are very satisfied. We wish the support would last a little longer so that we could use
their advice for our plans to take shape.

DeepFlow Co., Ltd.
We are very grateful to IPAS for choosing us for this project. It was very helpful for us to hear
the opinions of the experts as we plan to develop our IP strategy and develop our business.

Axelspace Corporation
The mentor had a very deep knowledge and experience in IP, and we truly appreciate not
only their support on IP strategy but also that we understood how to proceed with IP inpractice.

Nanolux Co. Ltd.
Rather than providing formal and superficial advice, we received effective advice from theperspective of experts and experienced professionals on pitfalls that we actually face interms of intellectual property and were able to compile them into actions and management
guidelines to be implemented in our practical business activities.

Kyulux, Inc.
They offered us in-depth discussions and appropriate advice on priority issues with anunderstanding of our company's business structure. They also gave us advice on how we
can improve by analyzing our patent filing standards, the patent portfolio our company andcompetitors, and our filing strategy.

aceRNA Technologies Co.,Ltd.
We really appreciate all your support provided to us in a limited amount of time.

Jiksak Bioengineering Co., Ltd.
We are very satisfied with this IPAS program. It helped us get our IP strategy off the ground.
The IP strategy was supported by a patent attorney who was very strong in drug
development and was very helpful.
In terms of business strategy, we received specific guidance on how to proceed with ourbusiness.

Metcela Inc.
Our mentor gave us specific strategies after the overall review. It was meaningful to havediscussions while relating it to our industry-specific business.

2

Comments from startups who participated in
IPAS 2019 (1st term)
LeapMind Inc.
We were able to realize the necessity of a company strategy for both IP and business. It was agreat achievement to implement those strategies in the company.

AISing Ltd.
We received a wide range of support for specific issues and advice on negotiations with othercompanies, including major corporations. Overall, we are very satisfied with the service.

A Star Quantum Inc.
We really appreciate the mentors for their support in preparing for the meetings every time inadvance and explaining the significance and role of patents. We would also like to thank themfor their support in gathering information on IP. We would like to express our sincere gratitude.

Photo Electron Soul Inc.
Supported from the experts, we were able to investigate and discuss the challenges in IP
protection which we had not been able to spend sufficient resources on. We obtained very
meaningful results.

PI-Crystal Inc.
The experts pointed out IP issues we didn't notice and gave us sound advice and a wide rangeof IP strategies and solutions to our existing IP-related issues. They contributed to theimprovement of our company's IP status. We received practical advice on the business side as
well. We would like to express our gratitude.

Space Link Co., Ltd.
We could improve our company's IP policy and the mindset of our technicians towards patents
through the explanations based on our own patents and related patents.
In terms of business, we discussed our company's current internal and external environment
and use them as an indicator for planning our business strategies.

MediGear International Corporation
Through the mentoring, we noticed issues that we were not aware of before. Thank you for thisvaluable opportunity.

Braizon Therapeutics, Inc.
We received useful advice with specific examples. The president of our company also
participated in mentoring, and we realized the importance of intellectual property in a startup
company. Thank you for this valuable opportunity.

Metabologenomics, Inc.
With an understanding of our company's business direction and management approach, they
offered support for our IP and business strategies. We were glad that the support was not justtextbook knowledge and theories but was tailored to our company's corporate culture. We arevery grateful for the very useful advice every time.

Setsuro Tech Inc.
The detailed support regarding business operations was very helpful. When you're on your own,
you tend to postpone issues, but we could examine some extremely important issues. We
would be very grateful if we could consult with the experts from time to time in the future.

3

Comments from startups who participated in
IPAS 2019 (2nd term)
Tsubota Laboratory, Inc.
The mentor worked with empathy, looking at the issues from our perspective. Thank you verymuch.

Alivas Inc.
The mentor was very kind and enthusiastic, and we were able to review and evaluate our IP asa whole and were very satisfied with the result of IPAS.

QunaSys Inc.
We are currently in a phase of accelerated product development and business operation, and it
was very helpful to gain a fresh view of our IP strategy.

BionicM Inc.
We received advice on the challenges of existing IP and actions needed to be taken. We wereable to deepen our understanding through case studies on other companies. We are very
grateful for the opportunity to understand the importance of IP strategies and thinking IP.

UBiENCE Inc.
The mentor helped us sort out the issues and identified challenges from the perspective ofdifferentiation from our competitors. In biotechnology, IP accounts for a high percentage of ourstrategy, and the lessons gave us a big boost. The mentoring was beyond our expectations.
Thank you very much.

Column１Intellectual Property Rights

The main IP rights include patent rights,
design rights, trademark rights, and copyrights.
The following is a brief introduction to thecharacteristics of these rights.

1. Patent Rights
A patent right is a right granted for"technology". Technology includes products,
simple methods, and methods of production.
Obtaining a patent allows exclusive use.
However, in order to obtain a patent, thecontent of the technology must be disclosed.
Therefore, depending on the content of thetechnology, it is important to carefully consider
whether you should obtain a patent or keep it
secret as know-how.
2. Design Rights
A design right is a right concerning the"design" of an object. For example, even if
there are no technically new features, if thedesign is new, you may protect your product byobtaining a design right.

4

3. Trademark Rights
A trademark right is a right to use a nameand symbol for products and services. A
symbol is very important and represents acompany's product or service. In recent years,
it has become more common for third parties toobtain trademark rights in foreign countries for
trademarks that are famous in Japan. For thisreason, it is important to consider theacquisition of trademarks in Japan and abroad
based
on
your
company's
businessdevelopment.
4. Copyrights
A copyright is a right granted automaticallyby creating a "work". For example, the sourcecode of a program is also a copyrighted work. It
should be noted that open source code, which
has been attracting a lot of attention in recent
years, is generally not copyright-free.

Table of Contents
１ What is IPAS?

６

１ Formulation of IP strategy in accordance with the business environment

６

２ Mentoring team system

６

２ Challenges found in the program and their solutions

７

Introduction: Startup challenges found during the program

7

Challenge 1: Narrowing down and prioritizing tasks

9

Challenge 2: Clarifying the customer value of products and services

11

Challenge 3: Creating effective licensing businesses

13

Challenge 4: Using IP to raise funds

15

Challenge 5: Determining between patent and know-how protection

17

Challenge 6: Dealing with rights ownership based on university or joint

research results

19

Challenge 7: Utilizing IP such as algorithms in software

21

Challenge 8: Strategic planning to prolong patent exclusivity

22

Challenge 9: Dealing with core technology not sufficiently protected by patents

24

Challenge 10: Understanding the patent landscape around your technology
and taking necessary actions

３

26

Challenge 11: Thoroughly considering agreements and terms of service

28

Challenge 12: Clarifying your questions to experts

30

Challenge 13: Sharing IP information within your company

32

Challenge 14: Teaching the necessity of IP strategy in your Company

34

Conclusion

35

Columns
Column１: Intellectual Property Rights

4

Column２: Procedures and Timeframe for Obtaining IP Rights

23

Column３ : What to do when disclosing your invention prior to filing30

5

1 What is IPAS?
1 Developing IP strategy in line with businessIn a startup founded on innovative technologies and ideas, the technologies and ideas
themselves are important assets. Thus, it is important to formulate an "intellectual property
strategy" that includes policies and systems for acquiring rights, accumulating know-how,and obtaining licenses, etc.
However, there is an issue that in the early phase, startups are often too focused onlaunching the business, causing a shortage in resources to protect know-how and securing
rights, resulting in inadequate protection of technologies and ideas.
Thus, in the IPAS program a mentoring team comprising business and IP experts wascreated to help diagnose appropriate business models and seeding strategies for startup
businesses and to develop IP strategies.
Point!
Procedures of IP
Strategy Formulation

Diagnosis and creation ofbusiness models, seeding
strategies, etc.
Define customer
image and thevalue provided

Filing strategy
support for
immediate patentingof technology seeds

IP strategy formulation
supportDefine competitive
advantage anddevelopment policy

Know yourcompetitors andcreate IP strategy

Extract yourtechnology
elements

Expected results

Develop technologies, products
Gain technical credibility toand services that reflect
leverage fund raising andcustomer value
collaboration with large companies

Select techseeds and install
processes to securerightsIncrease options forcollaboration(e.g. licensing)with large companies

2 Mentoring Team System
IPAS mentoring team consists of a business expert and an IP expert. In many cases,
startups in their early stages need to refine their business and brush up on their businessmodel. They can formulate an IP strategy that will help the startup company grow withmentoring provided by both business and IP experts.

Startup

Mentoring from business and IP perspectives

Business mentorAbusinessmentorprovides advice to astartuponbuilding
business models andseeding strategies.

Mentoring teamBusiness mentor

IP mentor

6

IP mentor
An IP Mentor provides
advice on developing IP
strategies
and various
support in filing.

2

Challenges found in the program and their solutions

Introduction: Startup challenges found during the program
In the IPAS program, we found the following 14 challenges that startups often face.
The following pages will provide details of the challenges and case studies of mentoring tofind solutions.
If you find an issue that your company faces, visit the corresponding page.
Case

Issue

Diagnosis and creation of business models,seeding strategies, etc.

Challenge 1:

Narrowing down andprioritizing tasks• Deciding on the top priority field to enter based ontechnological strong points and the concerns ofprospective customers• Determining the core business by clarifying therelationship between technical developments andbusiness to be created across multiple projects

Page

☞p９

IP Strategy Formulation Support

Challenge 2:
Clarifying the customer
value of products andservices• Reaching out directly to prospective customers tohave a good grasp of their concerns• Considering the whole value chain to know whereto position your company

Challenge 3:
Creating effective
licensing businesses• Considering licensees based on the structure of
the industry and the licensee’s sales capabilities• Preparing multiple schemes such as licensing
businesses in collaboration with other companies☞p13

Challenge 4:
Using IP to raise funds• Explaining to investors your issues in IP and how
you will address them
• Paying attention to how you illustrate the market
when explaining a customer acquisition scenario☞p15

Challenge 5:
Determining between
patent and know-how
protection• Using the help of experts and determining whether
to keep technology confidential or to acquire rights• Paying maximum attention to what parts to be kept
secret in manufacturing contracts with foreigncompanies☞p17

Challenge 6:
Dealing with rights
ownership based onuniversity or joint
research results• Taking measures to exclusively use the rights
acquired for a previous employer• Clarifying the IP rights of your company in acontract when conducting joint research☞p19

Challenge 7:
Utilizing IP such asalgorithms in software• Filing
patentapplications that embodies
applications in relation to specific inputs andoutputs☞p21• Prolonging the period of exclusivity by acquiring
rights in phases

☞p22

☞p11

Challenge 8:

Strategic planning toprolong patentexclusivity

7

2

Challenges found in the program and their solutions

Introduction: Startup challenges found during the program
Issue

Case

Filing Strategy
Support

Challenge 9:
Dealing with coretechnology not sufficiently
protected by patents

Challenge 10:

Understanding the patent
landscape around yourtechnology and taking
necessary actions

OthersChallenge 11:
Thoroughly consideringagreements and terms ofservice
Challenge 12:
Clarifying your questions
to experts
Challenge 13:
Sharing IP information
within your company

Challenge 14:
Teaching the necessity of
IP strategy in yourCompany• Strengthen the protection of your coretechnology by filing patents on peripheraltechnologies• Filing a divisional application to strengthen
protection for your technology in order toprotect current MVP(*)s• Responding calmly to a competitor’s patentfiling by accurately understanding theapplication status and reasons for rejection• Deciding on a course of action based onyour relationship with right holders of any
existing patent• Being aware of the theory of contract
negotiation before negotiating with large
companies

Page

☞p24

☞p26

☞p28

• Consulting with experts and preparing terms
and conditions that fit your services• Having an expert review technology to see ifpatent requirements are met• Utilizing experts to obtain a patent with awide scope of rights☞p30• Effectively managing the large number ofpatents you own• Creating a methodology to pick up and findtechnologies of which rights can be acquired☞p32• Creating an internal environment to help
others understand the necessity of an IP
strategy☞p34（*）Minimum Viable Product:

8

The simplest product with minimal features

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 1: Narrowing down and prioritizing tasks (1/2)
The technology can be applied to any field, but how can we know which field to focus on?
Would narrowing down the options be better in considering entry in more than one business field?

Points• Consider the marketability and maturity of the business based on whether there is “a good
match” between the strength of your technology and the prospective customers’ concerns,
in order to make it easier to narrow down the business field to enter.
• Rank the importance of multiple businesses you wish to enter by preparing a diagram of
the relationship between technology development and business plans.
Case Study①

Deciding on the top priority field to enter based on technological strong points and theconcerns of prospective customers
1. Challenges of the Startup
The startup‘s technology was AI-related based on superior algorithms. For this reason, thisstartup’s technology could be used in a variety of areas, and various customers entrusted thecompany to undertake contract development projects.
In this situation, this startup decided to aim for further growth and not to rely only on thecontract development business. That's when they decided to focus on the licensing business byutilizing their own technology.
However, they were unable to formulate a concrete plan for the licensing business because
they hadn't yet narrowed down the areas to enter, and they couldn’t have an image ofprospective customers and value chain.
2. Support from IPAS
In response to the above challenges, the mentoring team decided to do brainstorming with thestartup to produce ideas for the business.
Next, the team decided to narrow down the ideas that came up from a certain perspective.
In this case, they started by “matching” the strengths of the startup's technology with theconcerns of the prospective customer and then further narrowed down the list from theperspective of marketability and business maturity.
● Match the strengths of technology with the concerns of prospective customers,
taking into consideration the environment where the technology becomes effective.
-Strengths of our technology--Environment where techbecomes effective--Potential industries-

DurablePoor operating
environment

Heavy machinery industry

Low-cost

Fierce price war

Home appliance industry

3. Key factors in this case
Customer value should be
the starting point

In order to narrow down to the right businessfor your company, it's important to consider
not only the strengths of your technology, butalso whether those strengths will solve yourprospective customers' problems.

9

Narrow down the businessby adding other perspectives
Once businesses are found that match thestrengths of the company’s technology andthe concerns of the potential customers, it isimportant to narrow down the list byconsidering marketability and the maturity ofthe technology.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 1: Narrowing down and prioritizing tasks (2/2)
The technology can be applied to any field, but how can we know which field to focus on?
Would narrowing down the options be better in considering entry in more than one business field?
Case study②

Determining the core business by clarifying the relationship between technicaldevelopments and business to be created across multiple projects
1. Challenges of the Startup

The startup was looking to diversify its business with their own technological capability.
With the start-up's technological capabilities, it looked like various businesses can expand,but given the limited human and financial resources, there were concerns that starting
businesses concurrently would result in delays in development and launching the business due
to a lack of resources, as well as the depletion of working capital due to concurrent development.
However, the startup couldn't decide which businesses to prioritize and focus on.
2. Support from IPAS
In response to the above challenge, the mentoring team organized the startup's roadmap forthe next 5 years to "visualize" the priorities of the projects.
The mentoring team asked the startup to draw plans for future development of technology, IP
rights, and business for each business. Next, the team organized each plan in chronologicalorder by asking questions and prepared a roadmap with arrows showing how each is related to
one another.
This showed the business that the arrows converge on is the core business for the startup.
● Image of the roadmap

Business A

2020

2021

Selection ofcompanies tocollaborate with

Development A1

2022

Business C

Dev elopment
B1

Dev elopment
B2

Dev elopment
C1
Dev elopment
C4

Dev elopment
C22024
B w ill be
the corebusiness

Development A2Business B2

Business B1

Business B

2023

Dev elopment
C3

Business plan

Development plan

Business B3

Business C1

Acquisition of patent

In addition to narrowing down the core businesses mentioned above, a perspective fromworking capital is also important when determining business priorities. For example, it is also
important to prioritize business that can generate stable income early in the launch period, anduse the funds obtained from those businesses to start other businesses that will take a longer
time to develop.
３．Key factors in this caseFirst, focus on business that will
generate a steady income

Draw a roadmap
By drawing a roadmap, you can organize
which business to focus on the most and will
be able to visualize priorities among multiple
projects.

In order to promote projects that require timeand capital for development, such as drug
discovery, starting with businesses that cangenerate stable sales is an effective approach.

10

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 2: Clarifying the customer value of products and services (1/2)
How can we have a good grasp of the characteristics of expected products/services (value
chain, etc.), customer needs, and the value of our products/services to the customers?

Points• In addition to developing your products/services, understand your customers, their needs,
and the value your products/services offer.
• Identify your company's strengths within your business.

Case Study③
Reaching out directly to prospective customers to have a good grasp of their concerns

1. Challenges of the Startup
The startup had great technology but was so focused on developing the technology that they
didn't have enough opportunity to think about who their customers were and what value theircustomers would find in their products.
For that reason, the startup was unable to identify which technical elements they should
protect, and from who they should protect it from. Thus, they could not take effective actions
regarding IP.
2. Support from IPAS
The mentoring team realized from discussions with the startup that they were unclear about
the needs of potential customers and helped develop material for interviews to potential
customers to investigate their needs. In addition, the team introduced potential clients to thestartup.
In preparing the interview material, the mentoring team kept in mind: “to clarify the differences
between our technology and that of other companies" and “to explain clearly what we can do
now and what we need to be able to do in the future.
● Adapting your technology to the market

Have technological seeds,
but customers are unclear.

Preparation of interview material
and introduction of potential clients

Identification of prospective
customers

３．Key factors in this case
Talk to a business expert

Reach out to prospective clients

To make your technology valuable to yourbusiness, it is important not only to focus ondeveloping the technology but also toprovide opportunities for VCs, consultants,
and other business experts to take a goodlook at your technology.

To understand the concerns of prospective
customers, it's important to interview themwith sales materials and not just sit in frontof the desk and think about it.

11

Diagnosis and creationof business models, etc.

Filing strategy support

IP Strategy Support

OthersChallenge 2: Clarifying the customer value of products and services (2/2)
How can we have a good grasp of the characteristics of expected products/services (value
chain, etc.), customer needs, and the value of our products/services to the customers?
Case study④
Considering the whole value chain to know where to position your company
1. Challenges of the Startup

The startup had technology to do business, but they didn't have a clear idea of where theirstrengths lay in terms of business strategy. Also, they didn't have a clear understanding of
where the core business patent was positioned in their business and what value they had andto which players in the field the strengths had value against.
2. Support from IPAS
The mentoring team believed that the cause of the above challenges was that the company
had not sorted out which part of the value chain (flow in a business from development tosales) the company should take part in. Therefore, they prepared a diagram of the value chain

for the business that the startup was working on. Next, the team identified which players wereoperating in each step in this flow, and in which of those steps the startup's technology would
have a competitive advantage.

Lastly, they considered whether the players in the process where the technology had acompetitive advantage could be viewed as collaborators or customers, or as competitors.
● Specific image of the company's positioning in the value chain
Develop-ment

Value chain ofother companies
Startup’s expectedvalue chain

Product
planning

Parts

Designmanufacturing

Component
manufacturer

Finished Product
Manufacturer

Compete orcollaborate

Compete orcollaborate Component

manufacturer

Startup company

Procure-ment

Assembly

Finished Product
Manufacturer

Distribution/
sales

Distributor

Finished ProductDistributor
Manufacturer

Process where the company has advantages over finished productmanufacturers and others in terms of technological level and cost

３．Key factors in this case
Draw a value chain
By drawing a value chain diagram of theindustry structure of the business you arethinking of entering, you can identify the steps
and prospective customers where yourtechnology has an advantage.

12

Prepare an alliance strategy with othercompanies

If your technology has a competitive
advantage in a certain process, think carefully
about whether you want to collaborate orcompete with other companies operating in
the process.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 3: Creating effective licensing businesses (1/2)
How can we know whom to license to, what licensed business model patterns
are available, and how to compare multiple business model patterns?

Points• After understanding the industry structure and identifying potential licensees, decide on
a licensee based on a comprehensive view, including factors such as each candidate's
sales capabilities.
• Consider multiple schemes, such as the licensing business in collaboration with othercompanies and develop the most advantageous business scheme for your company.
Case study⑤
Considering licensees based on the structure of the industry and the licensee’s sales
capabilities
1. Challenges of the Startup

The startup had a patent on a reagent kit, but they didn’t have a plan to sell its own productand thought that licensing the patent would provide a steady stream of income. However,
because they had no practical experience in the licensing business, they didn't know effective
ways to license a patent or to whom they should license it. For this reason, the startup
envisioned licensing only to manufacturing plants they had a relationship with.
2. Support from IPAS
The mentoring team interviewed the startup and laid out the structure of the industry andplayers in a diagram. As a result, it became clear that besides the manufacturing plants,
distributors of this reagent kit could be their candidate licensees.
The mentoring team then proposed that it would be better to license it to distributors. Thiswas because they assumed that the market for the product needed to be expanded in the
future, and distributors would have a network of laboratories and university laboratories thatwere the main potential customers.

● Consideration process to decide on a licensee

Marketinformation
Collection of information
about the market and players

Analysis

Strategy formulation

Decide on a licensee

Chart the industry
structure based on theinformation collected

Narrow dow n the candidates
based on the characteristics
of each player

Decide on a licensee

３．Key factors in this caseOrganize the industry structure
in diagrams

Narrow down candidates from acomprehensive perspective

When considering who to license, it would
be helpful to prepare a diagram of how thetarget industry is structured and what kind ofplayers are there.

When narrowing down candidate licensees, it
is important to consider their network ofpotential customers, expected sales, etc. froma comprehensive perspective.

13

Diagnosis and creationof business models, etc.

Filing strategy support

IP Strategy Support

OthersChallenge 3: Creating effective licensing businesses (2/2)
How can we know whom to license to, what licensed business model patterns
are available, and how to compare multiple business model patterns?
Case study⑥
Preparing multiple schemes such as licensing businesses in collaboration with othercompanies
1. Challenges of the Startup
The startup was a company with advanced AI technology and was looking to enter the
licensing business with that technology.
However, because their main work had been undertaking contract development business,they were not able to create a clear scheme for the licensing business. Thus, they were not able
to make progress in their efforts to realize the licensing business.
2. Support from IPAS

The mentoring team advised it was possible for the startup to prepare multiple licensing
business schemes.
To be specific, there were two types of schemes. One was to license to a manufacturer ofcomponents using the company's technology, and the other was to license to the manufacturerof finished products that use the components using the company's technology. The features ofeach scheme were presented.
In the latter case, product sales were higher than in the former one, and license fees werehigher, but it was necessary to work together with component manufacturers to improve thevalue of the components furnished to the finished product manufacturer, so a more strategic
approach was required.
● Understand the features of the licensing scheme and examine strategies
Scheme A

License
MethodOur
Technology

Adv antage

Disadv antage

LicenseSchemeB…

Scheme B

SchemeA

Product using
our technology
Extract licensing schemes

Sort the features of each scheme

Choose who
to license

３．Key factors in this case
Consider licensing businesscollaborating with other companies

Prepare multiple schemes
There are more than one scheme of"licensing businesses". It is important tochoose the most appropriate scheme,
considering the company's technologicalsuperiority, sales of potential customers(licensees), and resources available to thecompany to operate the business.

Although there are hurdles to clear, it may be
useful to license to completed productmanufacturers a product combined withanother company's product to achieve greater
sales.

14

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 4: Using IP to raise funds (1/2)
How can we effectively appeal our company's intellectual property to investors to raise funds?

Points• Clearly explain to investors your issues in IP and how you will address them.
• Identify the value of your technology and prepare a business plan that will increase yourmarket share in line with that value.

Case study⑦

Explaining to investors your issues in IP and how you will address them
1. Challenges of the Startup
The startup was looking to raise Series A funding soon but was unable to prepare a spot-on
presentation because they didn't know how to explain to investors about IP, what investors
were looking for, etc. As a result, it seemed likely that the amount of investment might notreach the target amount.

2. Support from IPAS

The mentoring team, having a business expert as a core member, advised on the investor's
perspective and response.
The startup had received an exclusive license for a patent from the university, but theyrealized through mentoring that the patent alone was not sufficient to protect the startup's
current core technology.
In the above situation, the mentoring team advised the startup to explain “they had received
an exclusive license from the university" and that “they were aware of the IP issues and have
prepared specific measures to address those issues".
● Sort out the situation so that investors can decide to invest
Clarificationon thefeatures

Situation where
only researchers
can understandSorting
relationship ofrights

Sorting information and making
explanations easier to understandSituation where
investors understandand can decide to invest

Comparison with otheralternative technologies
３．Key factors in this case
● Clearly explain the issue s and how toaddress them●
Licenses are better with exclusive
rights

It is effective to explain to investors that you
are aware of your issues and that you have aclear plan to deal with them.

When receiving a license such as patent fromanother company, if possible, it is important tohave an exclusive license because investors
may look to see if there are any otherlicensees.

15

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 4: Using IP to raise funds (2/2)
How can we effectively appeal our company's intellectual property to investors to raise funds?
Case study⑧
Paying attention to how you illustrate the market when explaining a customer
acquisition scenario

1. Challenges of the Startup
The startup was looking to explain their customer acquisition scenario to investors using amarket share segmented by using common factors.
To be specific, they explained “we will capture 5% of active seniors in three years and 8% of
all seniors in five years“. However, the investors were concerned that the acquired market sharemight not be as large as they thought, considering the innovative technology the startup had.
2. Support from IPAS
The mentoring team advised the startup that the criteria for segmentation should be more inline with the value that the company offered.
The startup was producing machines that could powerfully assist people over a long periodof time. Therefore, the team advised it to narrow down the target market to "active seniors whowant to be active in sports with a large amount of exercise” and to explain that it would acquire
a 50% share in that specific market.
● Narrowing down the market in accordance with the company’s strong points
Narrowing down the market
in accordance withthe company’s strong points

Segmentation with
common criteria
Target market

1. Interest in sports
with a large

amount of exercise✓ Vague…
✓ Not specific…

2. Active seniors

３．Key factors in this caseTarget the market based on thevalue of your technology

Aim for a high market share by
narrowing down the target segment

By targeting a market based on the value of
your technology, you will be able to express
the characteristics of your technology toinvestors in a straightforward manner.

It's important to identify a customer profilethat matches the features of your technology
and to explain to investors your strategy toincrease your share in that market.

16

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 5: Determining between patent and know-how protection (1/2)
How can we decide whether to keep technology confidential as know-how or
to acquire rights when outsource processes such as manufacturing?

Points• When deciding whether to keep the company's technology confidential or to acquire
rights, it is necessary to consider the nature of the company's technology and the
manufacturing process of its products.
• Even in the case that you prefer to keep information confidential, discuss it with aprofessional to prevent leakage of the technology.
Case study⑨
Using the help of experts and determining whether to keep technology confidential orto acquire rights
1. Challenges of the Startup
The startup was preparing to outsource mass production of the product to a domestic
manufacturing contractor.
The startup was aware of the risks of reverse engineering by the outsourced contractor andknew that protecting the technology by keeping it confidential and acquiring rights was
effective, but didn’t know how to identify the know-how to be kept confidential and what rights
to acquire, and thus, they could not proceed with the outsourcing agreement.
2. Support from IPAS

The mentoring team reviewed the list of manufacturing processes prepared by the startup
and decided to keep those parts of the process that could not be easily copied by othercompanies confidential, such as processes that were fine-tuned by employees based on theirintuition.
●

Determining whether to keep technology confidential or to acquire rights
Required set of components

Assembly procedureFine-tuning

Acquire rights for parts of theprocess that can be copiedComplete！

Keep parts of the process that cannot
be easily copied confidential

In addition to the above, they advised that it is general practice to acquire rights oftechnology that can easily be revealed, and to keep technology that can only be performed by
specific engineers confidential as know-how. They also advised that all three requirements,“secrecy management”, “usefulness" and “non-public domain" must be met to protect thetechnology as a trade secret under the Unfair Competition Prevention Act if they want to keep
the technology confidential.
３．Key factors in this case

Discuss with an expert
Whenconsidering
measuresfor
confidentiality and rights acquisition andcountermeasures against technology leaks,
it is important to consult with an expert
because specialized knowledge is useful.

17

In principle, acquire rights oftechnology that can easily be copied

Particularlyinmanufacturing,itisfundamental to acquire patent rights where
technological contents can be easily copied.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 5: Determining between patent and know-how protection (2/2)
How can we decide whether to keep technology confidential as know-how or
to acquire rights when we outsource processes such as manufacturing?
Case study⑩
Paying maximum attention to what parts to be kept secret in manufacturing contracts
with foreign companies
1. Challenges of the Startup
The startup had a plan to outsource manufacturing to an overseas factory.
The initial plan was to have the contractor procure and manufacture all necessary components.
However, in foreign countries, we should expect an environment where perfect prevention
measures for reverse engineering do not exist. The concern was that the startup's technology
would easily leak out with this type of outsourcing.

2. Support from IPAS
The mentoring team considered the situation and proposed that we review the outsourcing
scheme.
Specifically, the mentoring team proposed to procure the components related to the coretechnology of the startup’s product in Japan and supply it to the contractor.
In addition, the team proposed that the placement and spacing of the key components of the
product would be kept confidential as their know-how. Such measures are expected to reduce
the quality of counterfeit products because even if the design drawings are leaked, since imitators
would not understand the reasons for such placement and spacing, and thus may not be able toaccurately copy the product.
The team also advised that even when procuring in Japan, the name of the supplier should not
be revealed locally, and that measures should be taken to prevent the leaking of drawings
submitted to government agencies for approval to local competitors.

● Countermeasures to reverse engineering in overseas manufacturing
Select manufacturer

Assembly
procedure

Necessaryset of parts

Only core com ponents
are supplied from Japan

Fine-tune

Complete!

Keep parts of the process that
Acquire rights for parts of theprocess that can be copied cannot be easily copied confidential

Even if the design drawings are leaked,
a perfect copy can be avoided.

３．Key factors of this case
Leave room for domestic procurement

Even if you outsource manufacturing to aforeign company, parts relating to the coretechnology should be manufactured or
procured domestically, which will deter
reverse engineering.

18

Do not explain the internal structure of the
product or why it is structured that way
Particularly in foreign countries, design
drawings can easily be leaked, so to prepare
for the leakage, it is important not to explain
the inner workings of the product or thereasons, or to make it a black box.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 6: Dealing with rights ownership based onuniversity or joint research results (1/2)
How can we avoid disputes in ownership and licensing of rights
based on university or joint research results?

Points• Pay particular attention in the ownership of rights based on university and joint
research results.
• In the case of joint research, understand the key points of the scope of rights that you
must be aware of.
Case study⑪
Taking measures to exclusively use the rights acquired for a previous employer
1. Challenges of the Startup

The CEO of the startup had patented technology he had invented in a university before hestarted his business, which was registered in the name of the university.
The CEO started a business that uses this technology and needed to negotiate with theuniversity to assign the patent or have it licensed but was unable to enter negotiation because he
did not know where to set the goal of the negotiation and how to negotiate.
2. Support from IPAS
The mentoring team listed options to obtain the patent or have it licensed and laid out theadvantages and disadvantages. Next, the team established an ideal goal and a minimum set of
conditions to be adhered to. Ideally, the goal was to acquire the rights, but since no other company
was expected to be able to use this technology, the startup decided that at minimum it would be
acceptable to obtain a license from the university.
● Options to use other company's patented technology and its characteristics
What ispossible

All rights
obtained

Partial acquisitionof rights

Exclusive
licenseExclusive
license with
sublicense

Exclusive
licenseNon-exclusive
licenseUse thetechnology

Yes

Yes

Yes

Yes

Yes

Yes

Monopoly ontechnology

Yes

Other right-holders
can also use＊

Yes

Basically rightowner can alsouse＊

Basically rightowner canalso use＊No

LicensingYes

Requires consent ofother right-owners＊

Yes

Yes

No

No

Injunction

Yes

Yes

Yes

Basically notpossible＊

Basically notpossible＊No

Remarks

Highestcost of all
options

Sharing rights
creates restrictions

Registration at
the Patent
Office required.
Right-owner
cannot use

Contract
production andlicense businesspossible

Contract
production
and licensebusiness notpossible

Lowest cost of
all options*Note: T his describes a gener al c as e, and s pecialis t c onsul tation is rec ommended depending on the si tuati on.

３．Key factors in this case
Keep investors in mind when setting goals
for negotiations

Receiving only a non-exclusive license from theuniversity may result in a lower valuation frominvestors. If possible, try to purchase the rights
or obtain an exclusive license or an exclusive
license with a sublicense. It is advisable toobtain at least an exclusive license.

19

Obtain exclusive rights if possible

In the case of a non-exclusive license, theuniversity can license the technology toother companies. The license will not allow
the startup to monopolize the technology.
On the other hand, acquiring patents or
obtaining an exclusive license, will enable
monopolizing the technology.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 6: Dealing with rights ownership based onuniversity or joint research results (2/2)
How can we avoid disputes in ownership and licensing of rights
based on university or joint research results?

Case study⑫
Clarifying the IP rights of your company in a contract when conducting joint research
1. Challenges of the Startup
The startup had many engineers and was fully aware of the importance of IP, however,there was a lack of human resources who sufficiently understood the importance of clarifying
rights and obligations of each other in the contract. As a result, they started the researchwithout clarifying who will own the rights of research results or that the result will be jointly
owned. Thus, when there was a development that could be patented, it was not clear if thestartup can own the IP rights or not.
2. Support from IPAS

The mentoring team provided the following four pieces of advice when entering a contract
with joint research.
First, an application should be filed for any content invented solely by the company before
the joint research.
Second, the company should confirm its know-how before the joint research, divide it into
know-how to be used and not to be used in the joint research, disclose only the know-how to
be used as the company's know-how, and make sure to state in the contract that it is thecompany's IP.
Third, the contract should be made in a way such that the results of the joint research will
not be detrimental to the company. (Example of disadvantages in a contract: the other party
acquires all the rights and the company will not be able to use it in the future, etc.).
Fourth, the contract should at least allow the company to file the parts of IP on its own thatwas developed solely by the company in the collaborative research.
● Things to keep in mind when entering a contract with a joint R&D partner
Points in handling contract negotiations

Preparation before contract negotiations
１ File the technology
invented solely by
the company first2

The company's
３know-how used injoint researchshould be stated as
the company's IP in
the contract

The contract
should be drafted
so that joint
research results
will not harm thecompany.

４

Results ofjoint research

Know-how
Contract

The contract
should allow thecompany to file IP
that was developed
solely by thecompany in the
joint researchSoleapplication
Contract

Contract

３．Key factors in this case
Close a contract with others in the case of
joint research and development
In joint research, you and your coresearchers may argue about the ownershipof IP rights to the research results. Therefore,
it is important to agree on the rules in the joint
research and development contract before
the research starts.

20

Own the rights for the results that benefit
your company
The scope of rights to secure in joint researchand development is very important. Make
every effort to secure your own rights toresearch results that are beneficial to yourcompany with the help of experts and others.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 7: Utilizing IP such as algorithms in software
How can we utilize IP in technology fields that are difficult to prove infringement such as software?

Points• Make the process of the algorithm abstract and file with an application that embodies
applications in relation to specific inputs and outputs.
Case study⑬

Filing patent applications that embodies applications in relation to specific inputs andoutputs
1. Challenges of the Startup
The startup wanted to work on a service that uses AI to analyze large amounts of personal
data. However, even if the algorithm was patented, the algorithm cannot be seen from outside,and it is difficult to know if other companies are using the technology without permission whendisclosing the algorithm through patent applications, so they did not know how to protect theirtechnology or idea.

2. Support from IPAS
The mentoring team proposed to claim a patent as an application using the algorithm, notas the algorithm itself.
Specifically, they proposed to file a patent for an application that defined the input, theabstract process of its algorithmic processing, and the output.
● Acquisition of rights in the entire service including the algorithm
Acquisition of rights to the algorithm itself
Ours

Differentiation using input and output

Ours

Other’s

Other’s

Input

Algorithm

Difficult to differentiate

Differentiate
and acquire
rights as anentire service

Output３．Key factor in this case
Focus on input and output
Even if the algorithm itself is patented, you cannot tell whether other companies are using therights. Therefore, it is important to abstract the algorithm processing and to consider obtaining
rights focusing on the input data and the output that comes out from the algorithm processing.

21

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 8: Strategic planning to prolong patent exclusivity
How can we sufficiently implement a strategy to maximize the substantial period of exclusivity ofpatent portfolios in fields such as pharmaceuticals and biotechnology requiring a long R&D period?

Point• In fields where patent validity is very high, such as pharmaceuticals and biotechnology,
it is important to have a filing strategy to secure a long substantial exclusivity period.

Case study⑭
Prolonging the period of exclusivity by acquiring rights in phases
1. Challenges of the Startup
The startup was satisfied with a single patent because they didn't know that they could
extend the substantial exclusivity period of their products by phasing patent application
process, and they missed the opportunity to extend the substantial exclusivity period of theirproducts.
2. Support from IPAS

The mentoring team received an explanation of the status of the product and IP acquisition
from the startup and prepared a current IP portfolio.
In doing so, they identified areas that could still be strengthened and realized that phased
patenting of these could substantially extend the exclusivity period of the product.
In addition, they advised that, in the case of pharmaceutical patent, there is a system toextend the duration of a patent by up to 5 years for the period of time it took from the patentregistration or the start of clinical trials to pharmaceutical approval (the period during which thepatented invention could not be conducted to obtain pharmaceutical approval).
They also established a strategy for future IP rights by organizing the order in which patentapplications should be filed.
● Prolonging the exclusivity period through a phased approach to the acquisition ofrights
2020

2040

2030

2050

2060

Substance
patentUsage patent

Method-of-use/
dosage patent ①

Utilization of patent
extension system

Acquisition ofrightsin phases

Method-of-use/
dosage patent ②

３．Key factors in this case
Prolong exclusivity period
The drug discovery business in particularrequires a large amount of time and funding
for research and development, so we needto secure as long an exclusive sales period
as possible to increase our return on
investment.

22

Consider phased approach foracquisition of rights
Various companies have implemented
phased filing and patenting methods, so
refer to prior application examples of similar
products and consider your company's filingstrategy.

Column2

Procedures and Timeframe for Obtaining IP Rights

In the field of intellectual property, we will introduce procedures and timeframe for patent rights, both
domestic and foreign.

１．Procedure of patent application process in Japan

Flow of processing patent filings

When the JPO receives a patent application, a"form ality exam ination" is done to chec k for any
formality deficiencies.
Next, a request for examination can be made w ithin 3
years from the filing date, and "substantive exam ination"
begins (failure to file a request for examination w ithin 3
years from the filing date w ill cause the patent application
to be deemed w ithdraw n).
Dur ing the “substantive exam ination”, the examiner
examines the prior literature and examines w hether there
are reasons for rejection. If there are reasons for rejection,
the examiner issues a "notice of reasons for rejection".
In response to the notice of reasons for rejection, theapplicant can submit an “opinion in w riting" stating thatthe reasons for rejection are unfounded and an"am endm ent" to amend the scope of the claims.
If the reasons for rejection are successfully resolved
w ith the claim, the examiner w ill issue a “decision ofpatent”, and a patent w ill be obtained by paying thepatent fee. If the reasons for rejection are not resolved,
the examiner w ill issue a "decision of rejection".
The average time betw een the request for examinationand the granting of a patent is normally about 14 m onths.
How ever, in the "Super Accelerated Exam ination",
available to certain companies such as startup companies,
it is possible to obtain a patent in about 2.5 m onths on
average from the time you request for examination.

Patent application
Formalities examination

Publication

Request for examination
Applicant’s
procedure

Substantive examination
Reasons for refusal

JPO’sprocedure

Opinions/
amendments
Decision ofpatentDecision of
rejection

Payment of fees
Patent rights ineffectRegistration of patent

Scan the QR code or visit our website for Super
Accelerated Examination（Source） Japan Patent Office website
Must read if f iling for the first time: How to File a Patent Application

https://www.jpo.go.jp/system/laws/rule/

２． Procedures of an international patent application

Tw o routes are available to file an international application: “direct application route“ and “PCT route”. Int the “direct
application route” the filing is made to each of the countries in w hich you w ish to obtain a patent right. How ever, in thecase of a foreign application claiming the priority right under the Paris Convention, if the application is filed in a second
country (foreign country) claiming priority under the Par is Convention w ithin 1 year from the filing date in Japan, the dateof the original patent application w ill be used for judgment.
In the case of “PCT route”, an international application should be filed w ithin 1 year of filing a domestic application(basic application), and then w ithin 30 months of filing the basic application, the application w ill enter the national phasew here you w ish to obtain a patent.
As you may add claims w ithin 1 year of filing a domestic application, you can monitor the mar ket trend and add claims
and decide w hich foreign country to file your application in 30 months after the domestic application is filed.
Direct application to
the patent office ofeach country

Basic application
Priority date

Country A filing date

Country B filing date
Country C filing date
Country D filing date
Entry into national
phase of each country

PCT International
Application

0 month

12 months

Priority Period
International
Basic application
filing date
Priority date

16 months

18 months

30 months
Country A

International International
publication
SearchCountry B
Country C

The international filing date (x domestic transferdate) will be the filing date for all countries

National phase entry

Save cost by nottransferring it toCountry D

Source: Revised from the textbook "Intellectual Property Rights System Information Session 2018 (for practitioners)

23

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 9: Dealing with core technology not sufficiently protected bypatents (1/2)
How can we better position the rights of our core technology to earn income from othercompanies, protect the company from competitors, or target specific parts of the value chain?

Points• Check if the scope of your rights matches the nature of your business.
• If there are gaps, protect your core technology as soon as possible by getting additional
patents, etc.

Case study⑮
Strengthening the protection of your core technology by filing patents on peripheraltechnologies
1. Challenges of the Startup
The startup believed that its current core technology was already protected by the patents
they had already filed. However, because they were primarily focused on obtaining patentrights when they applied for these patents, they did not examine the content and scope of theirapplications, and their current business has shifted a bit from what they had in mind when they
applied for the patents. As a result, they found that their current business was not fully
protected by the patents they have now.
At the time, the startup was in the process of negotiating a joint R&D contract with a major
company and there was a concern that if this core technology was not protected, thecompany's bargaining power with the major companies would be compromised, and there wasa concern of not being able to conclude contracts in the favor their own company.
2. Support from IPAS

The mentoring team proposed to file new patent applications for the peripheral technologiesof the existing patents and to secure the peripheral patents.
In applying for the peripheral patents, the mentoring team examined the 5W1H of thebusiness and made an adjustment in the business plan, and then identified what parts of thecore technology were not protected by the existing patents.
● Protection of the company's core technology by acquiring peripheral patents
Scope of the existing patentsCore
technology

When
Where
Who

What
Why
How
Core
technology

Scope ofperipheral
patents

３．Key factors in this caseEnvision your business in detail when
applying

File additional applications for the parts
that are not protected

A patent is meaningful only when it is usedin your business, not when it is obtained,
and to try to obtain a patent with a specificbusiness in mind when applying for a patent.

If you realize that the patents you havealready obtained do not protect your current
technology or business, try to file additional
applications to cover the scope of yourbusiness as much as possible.

24Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 9: Dealing with core technology not sufficiently protected bypatents (2/2)
How can we better position the rights of our core technology to earn income from othercompanies, protect the company from competitors, or target specific parts of the value chain?

Case study⑯
Filing a divisional application to strengthen protection for your technology in order toprotect current MVPs
1. Challenges of the Startup
The startup was looking to build their business on the core technology that the president of
the company had acquired at the university. However, when the mentoring team identified the
MVP (Minimum Viable Product: the simplest product with the minimum number of functions),
they found that the existing patents were not sufficient to protect the MVP, and the concern
was that the startup would not be able to compete with other companies that release similar
products.
This was perhaps because the startup was still in the development stage and didn’t have aconcrete vision of the business, and the MVP was not yet clear at the time of filing the patentapplication.

2. Support from IPAS
The mentoring team identified the MVPs based on the value of the technology to theircustomers and what parts of it were not protected with existing patents.
Then, they proposed to protect the MVPs by filing a divisional application for the existing
patents.
●

Examples of measures to protect the MVP (divisional application)
Clarifying
characteristics

Sorting out
rights andinterests

Identifying MVPs
Initial ideas

Comparing with othertechnologies and alternatives

MVP

To protect MVPs…
1. Review licensing
contract with theuniversity
2. Right to appoint apatent attorney⇓
Divisional application

The existing patent was obtained by the president of the company when he was at theuniversity and was under the name of the university.
The expert proposed that the startup enter a licensing contract with the university andinclude a clause in the contract giving the startup the right to choose its own patent attorney inthe event of a divisional application, etc. This would facilitate the formulation of policies fordivisional applications and the handling of patent examinations.

３．Key factors in this case
Always be aware of the scopeof existing patent rights

Prepare an easier environment toreinforce your patents

The core technology required for yourbusiness may be different at the time of filinga patent application and now. Therefore, it isimportant to regularly review the scope ofexisting patents and take the necessary
actions.

If you have a patent license, you will need tonegotiate with the licenser to strengthen thepatent. Therefore, it is effective to takemeasures such as devising a license
contract to ensure that the patent can bestrengthened smoothly.

25

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 10: Understanding the patent landscape around yourtechnology and taking necessary actions (1/2)
How can we utilize search results of cometitor’s patents related to the productor core technology that we plan to develop?

Points• Even if you realize that another company is filing an application for similar technology toyour own, don't give up, but deal with it calmly.
• If a right holder already exists, decide on a course of action considering your relationshipwith them and the damage to your company if the rights are exercised.
Case study⑰

Responding calmly to a competitor’s patent filing by accurately understanding theapplication status and reasons for rejection
1. Challenges of the Startup
The startup was looking to develop a product, but a competitor had already filed a patentthat was broadly conceptualized and had a broad scope. Although the startup did not expect
the full scope of the application to be patented, they were not certain how to plan a patentfiling strategy to differentiate themselves from the valid scope of the competitors' rights.
2. Support from IPAS
The mentoring team first investigated the patent application status and prosecution status ineach country, around the technology areas of the startup.
As a result, they found that patents with a broad scope tended to be rejected in this area oftechnology. With respect to the patent filings of the competitor, the filing with a broad scope
was rejected, and the other filings with narrower scopes were still pending and might not bepatented.
● Grasp the situation accurately even if there is a possibility of infringement andmake it useful to your own filing strategy.
Possibility of infringing
on the rights of others
Scope of other companies’
patent applications

Investigate
facts
Scope of our technology

Consideration on
countermeasures

Accurately grasp thesituation

Waiting
examination

Patentfiling A

Why was the priorapplication rejected?

Underexamination

Patentfiling B
Patentfiling C

Rejected

Reflect it in our filingstrategy

In addition, the startup was looking to obtain patents with as wide scope of rights as
possible, so the mentoring team analyzed the findings and discussed ways to help the startup
obtain patents.

３．Key factors in this case
● Keep calm when another company
files an application●

Even if a patent application has been filed,
we don’t know if it will be granted as it is.
Therefore, it is important to keep abreast of
the prosecution status of patent applications
filed by another company.

26

Learn from prior applications

Analyze the content and status of othercompanies' patent applications in the areasin which your company is filing applications
and make use of this information in your own
applications.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 10: Understanding the patent landscape around yourtechnology and taking necessary actions (2/2)
How can we utilize search results of competitors' patents related to the productor core technology that we plan to develop?

Case study⑱

Deciding on a course of action based on your relationship with right holders of any
existing patent
1. Challenges of the Startup
The startup was an IT company with an advanced algorithm.
They thought patent search and review of patent applications related to its technology they
did were not sufficient but didn't know how exactly to proceed with search and how to respondto the results of it.

2. Support from IPAS
The mentoring team explained, using specific examples, how to do a patent search, andhow to interpret them, including the extent to which they have been granted.
In addition, regarding advanced technologies, patent applications for technologies
commonly used by engineers in this field have already been filed in some cases, so they gave
advice on how to deal with such a case.
In other words, if another company's patent is granted in the future, you may obtain alicense or get away with it by modifying the specifications on the startup side. On the other
hand, if the patent will not be granted, you may not take any action, but you should consult
with experts in detail.
The team advised that which of the above measures to take commonly depends on thelevel of damage the company will suffer if other companies enforce their rights in the future.
They also advised that there are other options, such as setting up a common front to use it bycollaborating with another company that will be affected in the same way or aiming for a crosslicensing.
● Examples of countermeasures in cases where there is a possibility of infringement
on other companies' rights
Possibility of infringing on the rights of others
Licensecontract

Our company Other company
Investigate
the facts

Collaboration,
cross-license

Examples ofcountermeasures
・・・

Infringement?

Decide on countermeasures
based on the possibility of thecompetitor exercising rights
and the possible damage

Avoid by modifying
product specification

Do not takeany action

３．Key factors in this case

Consider changing specifications
If your company's technology is different
from any one of the contents of the claims, itwill not be an infringement in principle, so if
there is a concern about patent infringement,
consider modifying the specifications first.

27

Consider measures based on damage
caused by rights exercised
Regarding countermeasures when there
is a concern of infringement, consider thebest way to deal with them, considering thedamage you may suffer if other companies
exercise their rights in future.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 11: Thoroughly considering agreements and terms of service (1/2)
How can we review the conditions and wording in contracts when receiving orders, contracting,conducting joint research, conducting joint development, etc., and in the terms of service whenproviding our services?

Points• Have a good grasp of the theory of contract negotiations in advance.
• Consult with experts who have expertise in the basics of the contract and terms ofservice.
Case Study⑲
Being aware of the theory of contract negotiation before negotiating with large
companies
1. Challenges of the Startup
The startup was pursuing to conduct a joint development but was having difficulty with thecontract proposed by the other party, which was very unfavorable to the company.
This is a common thing, especially in contract negotiation between a large company and astartup, but it is a challenge that arises due to the lack of practical experience in negotiation.
2. Support from IPAS
The mentoring team gave them the advice to decide how far they were willing to make aconcession, including the theory of contract negotiation. They divided the conditions in thedraft contract provided by the other party into acceptable and unacceptable parts and revised
the wording of the unacceptable parts in a way such that they can make a concession.
As a result of negotiation based on the revisions proposed by the mentoring team, theother party accepted the startup’s terms and conditions and they were able to negotiate while
maintaining a good relationship with them.

● Brush up on contract negotiations by consulting with experts

Unacceptable

Joint development
contract
negotiations
Acceptable

Unfavorable
contract terms

Theory ofnegotiation

Sort out anddetermine whether
the conditions are
acceptable

Revisecontract

３．Key factors in this case
Be aware of the theory ofnegotiation in advance

Consult with an expert

The first draft draft of the contract preparedby the other party will often include
conditions favorable to the other party.
Keeping this in mind, consider the wording
carefully and decide exactly how much yourcompany can concede.

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Consult with an expert who has a lot ofknowledge on points that will cause dispute
later, especially when it comes to contracts.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 11: Thoroughly considering agreements and terms of service (2/2)
How can we review the conditions and wording in contracts when receiving orders, contracting,conducting joint research, conducting joint development, etc., and in the terms of service whenproviding our services?

Case study⑳
Consulting with experts and preparing terms and conditions that fit your services
1. Challenges of the Startup
The startup planned to offer its product (data) to customers on the web, but they werethinking of using a slightly modified version of the terms of service for another service.
However, the content was not appropriate for the company to develop its services.

2. Support from IPAS
The mentoring team reviewed the draft of the terms of service and summarized the points tobe considered.
After the review, the mentoring team checked the method of providing the products andservices with the startup and advised them on things that needed to be modified. The key
points, in this case, were to define the words to be used and organize the ownership of therights of the product generated through the secondary use of data by users.
● Formulation of terms of use that match the company's products and services
beforeafter

Review

Prepare terms ofservice to our advantage

Slightly modified terms andconditions for other services
Concerns/risks➢ It did not fit in the actual
circumstances and did notwork to your advantage.
➢ Potential cause of troubles

Our Goals Terms and Products/
conditions services

Reaffirm your company's
services and prepare termsof service for specific use
cases

３．Key factors in this caseYour terms of use should be appropriate
for services you provide

If you use another service's terms of service
as a template, the wording may be obsolete
or may not fit your service. Check yourcompany's service content and businessmodel again and prepare terms of service
for specific use cases.

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Consult with an expert
It is important to consult with an attorney orother professional, as preparing a contract
requires specialized expertise.

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 12: Clarifying your questions to experts (1/2)
How can we know whether our technology can be patented, and if so, how can we
secure an effective right, and know other matters we should consult with experts.

Points• Know that some of your company's technology can be patented.
• Learn how to create a scope of rights when acquiring rights.
Case study㉑

Having an expert review technology to see if patent requirements are met
1. Challenges of the Startup
The startup did not think that they were able to get patents on these technologies because
they thought their technologies were common.
This may be because the startup had no knowledge on the state of the art and therequirements of a patent (novelty, inventive step, etc.).
2. Support from IPAS
The mentoring team had the startup explain the product and the mechanism of how toprovide their products to users.
In doing so, the mentoring team recognized the patentability of the product provision
mechanism (interface with the users) rather than the product itself and advised them to file apatent in this regard.

３．Key factors in this caseDo a stock take of your technology
with experts
Doing a periodical stock take of yourtechnologies with the help of a patent
attorney or other experts can help you
discover patentable seeds of technologies.

Column3

Explain your technology inan easy-to-understand manner
When you consult with a patent attorney,
you will be able to receive more effective
advice by explaining the features of yourtechnology, market characteristics, businessactivities, etc. in an easy-to-understandmanner.

What You Should Do When You Have toDisclose Your Invention in AdvanceThe contents of the invention are disclosed
before the application is filed…

Countermeasure 2: Using the “grace period”

Inventions that have become publicly know n, publicly
worked, or public ly know n through publication in Japanor overseas prior to filing a patent application cannot bepatented (Article 29(1) of the Patent Act), and thus, if
the contents of the invention are made public prior tofiling a patent application, it w ill be impossible to obtaina patent right.

Inventions that became publicly know n, publicly
worked, or publicly know n through publication against
the w ill of the startup or as a result of their actions w ill
be treated as not hav ing lost their novelty, as long as
the application is filed w ithin 1 year from the date they
became publicly know n, etc. (Article 30 (1) and (2) ofthe Patent Act). How ever, in the latter case, acertificate to show that the exception to lack of novelty
is applicable must be submitted ( Patent Act, Article 30(3)).
How ever, In Europe, even if the invention has been
published by the applicant, the exception to lack ofnovelty is limited to inventions published at public
expositions, etc., and the period mentioned above isonly 6 months. Thus, if you are considering filing apatent in Europe, you need to be particularly careful.

Countermeasure 1: Use of NDA
If the information is disclosed after signing a
nondisclosure agreement ( NDA) w ith investors,
collaborators, customers, and others to w hom you haveno choice but to disclose the infor mation, theinformation w ill not be publicly know n or publicly w orked,
and the novelty w ill not be lost.

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Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 12: Clarifying your questions to experts (2/2)
How can we know whether our technology can be patented, and if so, how can we
secure an effective right, and know other matters we should consult with experts.

Case study㉒

Utilizing experts to obtain a patent with a wide scope of rights
1. Challenges of the Startup
The startup was considering filing a patent application based on a brilliant idea.
However, although they had an idea, it was not yet concrete and was not enough to obtainpatent rights. In addition, because they were trying to review and file the application on theirown, they were unable to properly secure the key points such as wording for the scope ofrights, which resulted in a narrow scope of rights.

2. Support from IPAS
The mentoring team had the startup explain their technology and listened to the ideas they
had in terms of what to file a patent application. In particular, the IP experts reviewed thecontent of the patents with the startups, while supplementing their knowledge of the leadingedge fields by listening.
As a result, the team reached a conclusion as to what kind of patents the company should
obtain in order to compete with their competitors, taking into account such factors as"peripheral technologies of the core technology", "differences between the core technology
and the competing technology", and "its effects". The mentoring team then gradually concrete
the ideas and established a broader scope of rights.
The process above led the startup to file a patent application.
● To obtain a patent that can be used to complete with competitors
Patent application
with a narrow
scope of rights

Patentapplication
with broad rights

Discussion
StartupExpertClarification of the patents to be granted and effective
wording in patent application

Sort out peripheral Differences fromtechnologies competing technologies

Effect３．Key factors in this caseTake advantage of expertise
Patents require specialized knowledge andexperience in the use of terminology and inwording unrivaled in the industry, so it isessential to make full use of the expertise ofa patent attorney.

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Flesh out your ideas bydiscussing with experts
When considering filing an application, it iseffective to discuss with an expert in order toobtain the rights that cover your coretechnology to the peripheral technologies andvarious embodiments.

Diagnosis and development ofbusiness models, seeding
strategies, etc.

IP Strategy Support

Filing strategy support for seeds
that need to be patented
immediately

OthersChallenge 13: Sharing IP information within your company (1/2)
How can we let our employees know our important patents and create an opportunity to share them?

Points• Do a stock take of your company's IPs to recognize the importance of andrelationship with each IP and use them in your business.
• Establish a system where you can share information about your IP.
Case study㉓

Effectively managing the large number of patents you own
1. Challenges of the Startup
Although the startup owned many patents in Japan and overseas and assigned an IP incharge, they were not able to carry out effective IP management.
This is because the importance of the patents they owned was not shared between the IP
in-charge and management, making it difficult for them to work in an organized manner.
2. Support from IPAS

The mentoring team provided a format for organizing patents that would be useful for thestartup to share the status of their patent internally.
The startup prepared a list of patents according to the format.
The mentoring team used the list to discuss which of the startup's patents would beconsidered important to its current business, formulated a policy on how to organize thefuture patent, and shared it within the company.
● Stocktaking of patents and visualization of patent status

Management
Not
sharedIP person
in-charge

Number ofpatents

Mentoring team
AdviceManagement and IP in-charge
can now work systematicallyusing the list
List of patents Discussion

３．Key factor in this case
Prepare a format to sort out your patents

When you have many patents, you may not understand the necessity and relationship of eachpatent. Therefore, it is advisable to establish an environment where you can have a good
grasp of the status of your company's IP at any point in time, such as the preparation of a listof your patents.

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Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 13: Sharing IP information within your company (2/2)
How can we let our employees know our important patents and create an opportunity to share them?

Case study㉔
Creating a methodology to pick up and find technologies of which rights can beacquired.
1. Challenges of the Startup
Although the startup was aware of the importance of IP to the company, they didn't have a
specific IP strategy or a place to share information about the IP they own within the company.
As a result, even if there was a technology that could be patented, they were concerned that
it would be buried within the company and we would miss the opportunity to patent it.
2. Support from IPAS

The mentoring team took one of the businesses the startup was considering as an example
and conducted a case study focusing on establishing an IP strategy.
Then, we generalized the case study, organized procedures, such as how to do stocktakingof technology seeds, for example by having monthly workshops, when to consult with experts
about IP, and how much money to spend on patent acquisition and maintenance, etc., andprepared an IP strategy procedure manual, summarizing key points to keep in mind whenestablishing an IP strategy.
As a result, the case study was useful to establish an IP strategy that can be applied not
only to the simulated business but also to other businesses.

● Establishing a system to share information about your IP within the company

Ideas fromengineers

InsufficientManagement
communication

123
4
. . .

Workshops

Procedures toExpertconsultation patent technologies
and maintain them

Loss of opportunity
to patent

３．Key factor in this case

Hold periodical workshops
Arrange monthly workshops to identify technologies that can be patented, investigate trends
in competitors' applications, review the latest cases, and share information within the company.

33

Diagnosis and creationof business models, etc.

IP Strategy Support

Filing strategy support

OthersChallenge 14: Teaching the necessity of IP strategy in your Company
How can we deal with lack of understanding for the necessity within the company, andhow can we create an environment where we can gain active cooperation?

Points• Set up an internal system, such as a reward system, etc.
• Set up a system for a successful business by utilizing IP, such as a licensing business.
Case study㉕
Creating an internal environment to help others understand the necessity of an IP
strategy

1. Challenges of the Startup
The startup had been growing having contracted development as its core business andwas considering developing the licensing business to achieve further growth in the future.
However, employees who had been involved in the contracted development business did
not understand the concept of "business utilizing IP" which caused problems such astechnology often buried away and salespersons in charge of negotiations for contracted
development agreements lacking awareness of IP, etc.
2. Support from IPAS
The mentoring team worked with the IP person in-charge and reviewed measures to foster
a mindset for internal IP. Specifically, the mentoring team prepared concrete proposals toestablish an IP incentive system and other measures to realize the licensing business.
The board members and the IP officers in the startup agreed on the establishment of aninternal IP system and promotion of the licensing business, etc. by summarizing the abovemeasures into a presentation material and proposing them to the board members fordiscussion to foster a mindset for internal IP and to realize this policy.
● Improving the internal environment for a deeper understanding of IP strategy

Discuss measureswith experts
Presentation on
proposed measures

Incentive
systems

Business
proposals

Improvements
In IP mindset

Establish internal systems
and environment thatenable effective use of IP

３．Key factors in this caseSet up an internal system
to foster mindset for IP

Establish an environmentthat enables licensing businessFor example, it is effective to establish asystem where employees will be rewarded
when patents are created as a result of thedevelopment, they are responsible for, sothat employees can relate their daily work to
patents.

To realize the licensing business, it is usefulto allocate necessary human resources inplace and establish an environment that
includes advisory contracts with lawyers andbusiness advisors.

34

3 Conclusion
After IPAS2018-2019（Summary）
Looking back on IPAS 2018-2019, we found three common points were important to protect
and utilize IP effectively. They are as follows:Business

Point

１

Establish an IP strategy that is linked to your business×IP• By examining the prospective customers and needs of your product in detail, youwill have a clearer picture of your strengths in the value chain. Startups should
develop an IP strategy based on this picture, such as the acquisition of rights andlicensing of core technologies.
✓ Who are the prospective customers and what are their needs that match the strengths ofyour core technology, products and services?
✓ To maximize your strength in the value chain, which processes will you be responsible
for, and who do you collaborate with?
✓ Is a patent needed for licensing purposes or to prevent infringement by othercompanies?
Point

２

Be careful of the timing to create your IP strategy• When disclosing your technology to other parties, such as at the launch of abusiness or service, you should carefully consider your IP.
✓ When launching a business or filing a patent, can you determine whether you should
keep it confidential or acquire rights?
✓ When collaborating with other companies or outsourcing production, have you filed
necessary patents, etc., and have you sorted out the confidential information according
to its confidential nature?
✓ Have you filed the patents necessary for the launch of your product or service?
✓ When concluding contracts and preparing the terms of use, do you consider IP clauses
having future business in mind?
Point

３

Consult with experts more proactively• IP and business experts have a lot of expertise, so if possible, consult with them
together regularly.
✓ Consult with the business expert about funding and corporate partnerships.
✓ Ask the IP experts to help you obtain rights to your technology and set up a more
appropriate scope of rights.
✓ When consulting with an expert, explain your current situation and issues, as well as
what you want to achieve and your policies and strategies, etc.

IP Acceleration Program

Collection of case studies

Published in April 2020
Planning and Research Division, General Affairs Department, Japan
Patent Office
Deloitte Tohmatsu Group●Contact Information●
3-4-3 Kasumigaseki, Chiyoda-ku Tokyo 100-8915, Japan
Venture Support Team, Planning and Investigation Division, General
Affairs Department, Japan Patent OfficeTel: 03-3592-2911 Fax: 03-3580-5741

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