22 Succession of Right to Obtain a Patent in Private
International Law – In the light of the Supreme Court Decisionin the Hitachi Case – (*)
Research Fellow: Miho ShinThis research intends to examine the following issue from the perspective of privateinternational law: by which country’s law should the legal issues arising from cases where rights
to obtain patents in domestic or foreign countries are succeeded in an international context begoverned? Now we have the Supreme Court judgment with regard to the compensation forsuccession of rights to obtain foreign patents concerning an employee’s invention; however,various opinions shall be examined regarding its significance, the validity of the underlying
theory, its applicable scope, etc., for which a final evaluation has yet to be determined. Many
unsolved questions remain.
This research begins with an analysis of the judgment of the Supreme Court and relevant
doctrines, etc. It then examines which country’s law should be applied for various issues derived
from the International Succession of rights to obtain patents through an examination concerning
the Territoriality Principle and considerations from the perspective of comparative law, etc.

I

Introduction

When an invention is completed, it isnecessary to obtain a patent right in order togain the right of an exclusive monopoly overthe invention. It does not, however, always
mean that no rights are created concerning
the invention before the registration ofpatent rights. There is a right called the“right to obtain a patent” that is supposed.
For example, in Japan, it is considered toresemble
the
right
to
requestanadministrative disposition, such as grant of apatent from the national government, as wellas an aspect of property rights that may
themselves become subject to a transaction
between private citizens like a patent right.
The right to obtain a patent has in fact beentransferred through various means including
contracts.
While the rights to obtain a patent, theplace of invention, the parties involved, acause of change of rights, and all otherrelative factors still remain in Japan, if a(*)

dispute arises, a resolution may be foundthrough interpretation of Japanese laws. In
recent years, however, with the expanding
globalization of economic and businessactivities, cases that reach the international
level have an increasing number of factors
surrounding them, such as cases where there
is a succession of foreign patent rights or theright to obtain a patent in a foreign country
or cases where there is the succession of aJapanese right over a national boundarywith another party in a foreign country.
When a dispute arises over patent rights, etc.
between private citizens with international
factors involved and resolution of the disputeis requested through a lawsuit, a judge, due
to the particularity of a case involving
multiple countries, must first decide whichcountry’s laws are to be applied to resolve
the dispute before making a judgment on theconcreterelationshipofrightsandobligations. The provisions of each country
concerning the right to obtain a patent differ
greatly, especially regarding an employee’s

This is an English translation of the Japanese summary of the report published under the Industrial Property
Research Promotion Project FY2007 entrusted by the Japan Patent Office. IIP is entirely responsible for any errors
in expressions or descriptions of the translation.
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IIP Bulletin 2008198 ●

invention. Choosing which country’s laws
to apply is extremely important for resolving
these issues.
Within this international
context, this paper aims to consider thefollowing issue from the perspective ofprivate international laws: when ownershipof the right to obtain patents in Japan andoverseas, the possibility of succession, theform of succession, the right to claim
monetary
compensationsuchasconsiderationforsuccession
and
its
calculation are in conflict, there is a question
concerning which legal theory and the lawsof which country will help resolve theconflict (hereinafter succession of a right toobtain these patents in Japan and overseasthat has international factors will bereferred to as an “International Succession”,
and the problem of determining a governing
law for such International Successions will
be referred to as (a problem of) a “Resolutionof a Conflict of Laws”).
In Japan, issues over Resolutions of a
Conflict of Laws concerning International
Succession of the right to obtain a patent
have been actively discussed using several
court precedents.
In these precedents,
there is some dispute over the question ofwhether Section 35 (3) of the Japanese
Patent Act, which stipulates payment of a“reasonable compensation” for the successionof an employee’s invention, applies to aforeign right.
Focusing only on theirconclusions, the theories are generally
divided into two categories: whether it may
be considered that a single law can govern
several rights to obtain patents collectively
for a single invention regardless of thecountry where the application was filed andin some cases where the real right aspects of
the right may be included (theory of
integrated regulation); or whether there areno other choices to regulate it than by
applying each country’s laws in each country(theory of multiple regulation).
Under these circumstances, the Supreme
Court decision in the Hitachi case (Judgmentof the Supreme Court, October 17, 2006,(2004 (Ju) No.781, Saiko-saibansho Minjihanreishu [Supreme Court of Civil Report],●Vol. 60, No.8, p.2853; The Hanreijiho[Judicial Report] No.1951, p.35)) provided
the conclusion that Japanese Patent Act,
Section 35 (3) may apply (via analogicalapplication) to the right to obtain a patent in
a foreign country. It could be said that theargument was settled by this judgment, atleast in practical terms.
However, thevalidity of the theory that led to thisconclusion has often been questioned and itis hard to say that this theory has
unanimous support.
In addition, thejudgment does not directly address initialownership or succession of the right itself,
the possibility of succession, effectivenessagainst a third party, and other issues inwhich this paper is interested and which are
not made clear in the theory applicable tothese issues.
This paper starts with the analyses of
the Supreme Court holding in the Hitachi
case,takingintoaccount
theabovementioned circumstances and thearguments in the theories that concern it,
and then considers how International
Succession of a right to obtain a patent istreated under private international law.

II

Conventional Arguments over
International Succession of a
Right to Obtain a Patent

1

Court Precedents in JapanThe decision of the first instance in the
Hitachi case was the first time that a
judgment clearly made reference to a conflictof laws, while there have been several
domestic court precedents in Japan which
passedjudgmenton
succession
orcompensation of a right to obtain a patent in
a foreign country. In this case, with regard
to an invention made by a Japaneseemployee who was employed by a Japanesejudicial person and lived in Japan, thecompensation was claimed for succession of
the right to obtain a patent in a foreigncounty. The first instance held that due tothe Territoriality Principle, various issues
concerning an employee’s invention are
199 ●IIP Bulletin 2008

issues to be governed by each country’s law;
therefore, application of the Japanese Patent
Act for the rights that were filed in foreigncountries was denied. On the contrary, thecourt of appeal held that since a right toobtain a patent concerning an employee’s
invention is not specific to patent rights, it
was out of scope of the Territoriality
Principle and was is rather “a matter to be
decided collectively by the law decided basedon the industrial policy of the country towhich the employer and employee belong.”
Therefore, Section 35 (3) applies. Later inthe similar cases, multiple court precedents
adopted collective resolution, i.e. a Theory of
application of Section 35, while some of themwere still based on a pluralistic resolution,i.e. a Theory of exemption from Section 35.
Under such circumstances, the judgmentof the Supreme Court qualified a matter ofcompensation for succession of a right toobtain a foreign patent concerning an
employee’s invention made in Japan by an
employee of a Japanese company as a matterof contract, and examined whether Section
35 of Patent Act applies to a right to obtain apatent in a foreign country. It then heldthat Section 35 of Japanese Patent Act does
not directly govern a right to obtain a patentin a foreign country; however, according to
the parties’ intentions and other factors
there are cases where this purpose should
enter into effect, and therefore, it should beapplied analogically.
However, from the perspective of privateinternational law, the holding in thisjudgment of the Supreme Court is unclear
due to its underlying logical fault concerningwhether generalization of the theory(whether it applies to cases where there isan international context with conditions
other than the country where the application
is filed) or a bilateral interpretation of it(whether the holding allows a conclusionthat if the governing law of a contract is aforeign law, the matter of a claim ofcompensation is governed only by the foreignlaw, even if it is the case of a right to obtaina patent in Japan, Japanese Patent Act,
Section 35 does not apply) are possible.
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IIP Bulletin 2008

Establishing its scope is very difficult.
Besides the issue of compensation, theholding stated that “With regard to the issueof how the right to obtain a patent subject totransfer is treated in foreign countries andwhat the effects are,“ in light with the
Territoriality Principle, “the laws of thecountry where a patent right is registeredbased on the relevant right to obtain apatent” becomes a governing law. Although
the relevant part is only the obiter dictum,
several issues are present here: whether or
not issues concerning a right to obtain apatent, such as initial ownership, possibilityofsuccession,modeofsuccession,requirements for opposition or for becoming
effective, are included here; how to evaluate
part of a judgment which is not inconsistent
with preceding judgments of the Supreme
Court concerning the relationship between
the Territoriality Principle and privateinternational law.

2

Legal Doctrines in Japan

Theories
concerning
International
Succession of a right to obtain a patent foran employee’s invention are numerous,
including a theory to assign the matter tothe governing law of employment contracts
or the law of a county which has a close
relationship with the employment relation;
one that qualifies Section 35 of the Patent
Act as an absolute mandatory provision andasserts that the Section applies regardless ofthe country where the application was filed;or one that says to apply each country’s law
directly.
A dominant position advocatesapplication of a collective resolution
following the same conclusion as theSupreme Court, including matters ofownership and possibility of succession otherthan those of compensation. However, there
are disputes over detailed conditions such as
its scope. Therefore, opinions based on thetheory of a pluralistic solution are still
strongly defended.
Among these theories, the tendency isoften found to argue from a politicalperspective about which resolution is200 ●preferable for encouraging inventions, apluralistic
resolutionoracollective
resolution, and a method to realize thisposition. Opinions differ greatly not only inarguments over private international laws,
such as which qualification, or allocation
policy or connecting factor is appropriate,
but also over the adequacy of privateinternational law to resolve of this matter.
In other words, these theories are sharply
opposed over the following points: to begin
with, whether Japanese or overseas
provisions for ownership or succession of aright or an employee’s invention apply tointernational cases in courts in Japan. If so,do they apply because they are deemed to be
the most closely connected law under privateinternational law, or due to the territorial
scope of application underlying relevant
provisions, or the intention to apply? The
arguments are still chaotic coupled with thefact that opinions concerning the position of
the Territoriality Principle under privateinternational law have not yet been unified.

3

Comparative Law

Looking at Resolutions of a Conflict of
Laws
in
each
country
concerning
International Succession of a right to obtaina patent, particularly with regard to an
employee’s invention, there are many
provisions that stipulate the employment
relationship between an employer andemployee including issues of ownership, etc.
and law systems that allocate resolution
collectively to laws closely relevant to theemployment relationship.
First, there are law systems that havebilateral conflict rules to allocate issues ofan employee’s invention to a governing lawof employment contract or a law closely
connected to the employment relationship(Austrian private international law, Section
34 (2); Swiss private international law,
Section 122 (3); European Patent Convention,
Section 60, etc.). Second, there are law
systems that have unilateral conflict rules toapply domestic provisions for an employee’s
invention, which is filed in foreign countries,●

in cases where the governing law of an
employment contract is a domestic law (orsuch interpretation has been established)(France, etc.). Third, there are law systems
that deem domestic provisions for employee’s
inventiontobeabsolute
mandatory
provisions which apply regardless of thegoverning laws (the U.K., etc.).

4

Summary

According to the analyses in this
Chapter, it becomes obvious that the matterof Resolution of a Conflict of Laws ofInternational Succession of a right to obtaina patent is also essentially concerns matters,
which have been argued for some time in thearea of international intellectual property
jurisprudence, of how various provisions
stipulating a right to obtain a patent in eachcountry or succession of a patent right,
special intervention provisions for an
employee’s invention, and the Territoriality
Principle are originally positioned under
private international laws. I must say thatconsiderations of individual and concrete
resolutions under a conflict of laws have nosignificance if here is no clarification thatthe matter is included in the area of privateinternational law. Therefore, in order toachieve the aim of this paper to clarify theideal Resolution of a Conflict of Laws
concerning International Succession of aright to obtain a patent, it is essential toconsider provisions in Japan and overseas
for succession of a right to obtain a patentand concerning the position of the
Territoriality Principle, before discussing
determination of a specific governing law.

III Considerations
1

Position of Patent Act under Private
International Law, including the
Significance of the Territoriality
Principle

In general terms, laws in a certain legal
system are assumed to be classified by laws
governing private matters (called private

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laws) and by laws governing public matters(called public laws). Yet the laws that can beapplied thorough choice of law process, inparticular,ofthecurrent
privateinternational law, i.e. bilateral conflict rules,
called Savigny’s model, are only private laws
which govern private legal relationships andwhich is based upon the assumption thatJapanese laws and foreign laws areexchangeable.
On the other hand, whether the publiclaw of a country applies in an international
context depends on the intention of theapplication of provisions of the relevantpublic law (“start from a provision”), and it is
not applied because it is deemed to be thelaw which has the closest connection by
private international law (not applied
through private international law, but
directly).
Meanwhile, the “principle ofnon-application of foreign public law” applies
to foreign public laws and it is considered
that, in principle, foreign public laws do not
apply domestically, except forcases suchas when it becomes an issue as a subsidiary
question.
The patent act is positioned as a publiclaw based on its close relationship withindustrial policy and is often considered not
to be applicable to the process of privateinternational law in determining a governinglaw, in a pure sense. It does not mean,
however, that the intellectual property law isregarded as a sort of public law to which “theprinciple of non-application of foreign publiclaws” applies. At least with regard to a law
governing obligations between private
persons,thepossibilityofdomestic
application is not necessarily denied. The
arguments that have taken place over thissubject state, instead, that since its
territorial scope of application or possibilityof application is determined by the
Territoriality Principle, private internationallaw is unnecessary. Meanwhile, there are
opinions that positions of the patent act as a
private law that can be an applicable law
selected by process of private international
law to determine a governing law, but
determines a governing law in consideration●

IIP Bulletin 2008

with the Territoriality Principle.
Each country, with regard to theprotection of intellectual property in its
territory, in particular the establishment of aright, applies only its own laws and does notpropose to apply foreign laws at all in thesecases. In other words, intellectual property
law in each county applies to the same object(intellectual property), but the law to be
applied is different in each area. Under
such a mosaic, intellectual property law isalways applied by each territory like a publiclaw with regard to the protection of
intellectual property within the country’s
territory. In this view, the Territoriality
Principle should be regarded essentially as aprinciple that limits territorial scope of
application of provisions within the territoryof a country where they belong to. This isfunctionally the same as the territoriality
principle from perspective of a public law,however, with regard to patent act, it is not
led from the fact that it is a public law.
Consequently, with regard to provisions
for obligation between private persons in thepatent act, even if it is a foreign law, it is notalways denied its possibility of application ina domestic court. However, with regard to
the law whose territorial scope of applicationis governed by the Territoriality Principle,
without application of private internationallaw, one must take into account that the law
has to be applied only for matters within the
territory of the country to which the law
belongs. In other words, with regard to alaw deemed to be outside the scope of the
Territoriality Principle and matters governedby them, there is room to consider that they
will be governed collectively regardless of acountry where the application is filed by any
one of the governing laws selected by privateinternational law of the forum country.
Therefore, with regard to International
Succession of a right to obtain a patent, thefollowing must be examined: how the laws inJapan and overseas stipulating them arepositioned under private international law;and therefore, which method of application isconsidered to apply.

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2

Resolution of Conflicts of Laws forInternational Succession of a Right toObtain a Patent

A right to obtain a patent is considered
to have both aspects of private right andpublic right as stated “a right that has boththe aspect of a right to request an
administrative disposition, which is a grantof a patent, to the national government andthe aspect of a property right.”(*1) Therefore,
how this dual nature of a right to obtain apatentispositioned
under
privateinternational law is examined first.
The public right aspects of a right toobtain a patent, i.e. the concrete contents ofa right of patent application or a right toapply for a grant of a patent, are a right or alegal status to request an administrative
disposition, which is a grant of a patent right,of the relevant authorities of the country
where the application is filed. Being so, it
has to be considered that the contents ofinitial ownership of a right, possibility ofsuccession, and substantive or procedural
requirements that are required at the time ofsuccession are left eventually to the laws of
the relevant country where the application
was/is filed and to the administrative
agencies that interpret and manage them.
When some requirements are stipulated for acountry where the application is filed withregard to the succession of a right to apply apatent, if the successor of the right does not
implement them, the successor would not berecognized as a lawful successor of the rightand faces sanctions, for example, thesuccessor will not be allowed to file anapplication initially or the application
becomes invalid. Foreign substantial laws
or conflict of laws other than the country
where the application is filed may not be
involved there.
Namely, provisions stipulating mattersas to whom a right of patent application
belongs, whether it may be transferred, if it
can be transferred, which requirements

should be fulfilled to be deemed as beingtransferred, are also regarded underapplications of the Territoriality Principle.
In other words, matters of initial ownershipand succession of a right for patentapplication, naturally by its nature, or inview of practical aspects such as feasibility,
have to be considered to be governed only by
the law of the country where the application
was/is filed by territorially or pluralistically.
In addition, succession of a right ofpatent application does not have any
meaning if the succession of the right is not
actually approved in the place where theright is executed, i.e. the country where theapplication is filed.
Unlike the context
where an ex post-facto resolution, such as aclaim of compensation for damage against
infringement or rights, is in question, it isnecessary to seek a resolution that offers themost possible feasibility in the country
where the application is filed. In this view,even if a Japanese court passes judgment
concerning the conclusion of a right of patentapplication, it is important to resolve it as it
was been resolved in a country where theapplication was filed.
Therefore, it ispreferable to adopt a method of resolution torefer the law of each country where theapplication is filed including not only
substantial laws, but also unilateral orbilateral conflict rules.
On the other hand, there is no doubtthat one private right aspect of a right toobtain a patent and matters of ownershipand succession of a right of patentapplication are all closely related, andmoreover each country’s laws regulate an
aspect of the right to apply, which is a publicright, and an aspect of property rights,
which are a private right, by identicalprovisions.
Since neither right can betreated separately under positive laws, wemust think that to make stipulations
concerning a law to be applied to ownershipor succession of a right of patent application
is equal to making stipulations concerning a(*1) Nobuhiro Nakayama, Kogyo shoyuken ho (jo) Tokkyo ho , [Industrial Property Law (1 st volume): Patent Act] (2 nd andenlarged edition, 2000) Vol. 1, p.158●

203 ●IIP Bulletin 2008

law to be applied to aspects of a private rightof a right to obtain a patent, such as its
ownership and succession.
However, this does not mean, withregard to the International Succession of aright to obtain a patent, whether it is an
employee’s invention or a free invention,
general succession or limited succession, or amatter between the parties involved or amatter with a third party, to view any ofthese problems as lying within the scope of
the Territoriality Principle and assign themto laws of each country where theapplications are filed.
In the context where the relationshipwith the third party or with country where
the application is filed does not become aquestion, such as in cases where theinvention is implemented as know-how, or anissue of obligation between parties, there isroom to govern collectively by a single
governing law through private internationallaw as a matter outside the scope of the
Territoriality Principle. In Japan, collective
succession of rights, which does not specify
the country where the application is filed
based on one law and which is often
undertaken between an employer andemployee, may also be considered to beeffective at least in terms of obligation
between parties.
Therefore, it is notnecessarily
meaninglesstoconsiderallocating it collectively to any one single
law as a matter only of internal
relationships between parties, without
making reference to each country’s law at
the stage whether or not the application is
filed has not yet been determined (however,provided
that, in cases
where
the
relationship with the country where theapplication is filed or that with the third
party comes into question, since the laws ofeach country where the application is filed
apply regardless of the governing law, it
should be judged by each country’s laws).
Therefore, the issues involving theinternal relationship between parties are
positioned outside the scope of the
Territoriality Principle, and there is room toallocate them to any one of governing law via●

IIP Bulletin 2008private international law. In concrete terms,
since there is a logical issue in qualifying it
as a contract matter, as the holding stated, I
would like to propose an opinion that
allocates it incidentally to the governing lawof employment contracts between parties as
determined by Tsusoku ho, Section 12.

IV Conclusions
The conclusion of this paper is outlined
as follows:
Initial ownership and succession of an
invention or right to obtain a patent, as longas they appear in the terms of theapplication for a patent, should be inevitably
governed by the law of the country in whichapplication was/is filed. When we deal withthese issues in an international context, weshould refer not only to the substantive lawofthecountry
but
also
to
its
unilateral/bilateral conflicts rules; in otherwords, we should decide such issues as if wewere in the country where the application
was filed. Neither the parties nor the privateinternational law of the forum country canchose the single applicable law whichgoverns whole issues including the transfer
of a right to obtain a patent right.
On the other hand, even in a context where
initial ownership and succession of a right ofobtain a patent are at issue, the internal
relationship between the parties can begoverned by the single applicable law even if
the application was/is filed in several
countries. Especially with regard to an
employee’s inventions, many countries havesome special mandatory rules in addition to
the general rules for contracts. It leads me tosuppose that it would also be inappropriate
to adopt party autonomy at the level ofconflicts law. In this paper, the discussion
included material such as cases where people
use an invention as a type of know-how
without applying for a patent in any country
or cases where rights to obtain a patent inseveral countries are collectively succeeded.
In the author’s opinion, it seems that issues
derived from an employee’s inventions, ineither case, should make accessory reference
204 ●to the governing law determined by Section
12 of the Japanese new conflicts rules Act(Tsusoku Ho).
Consequently, Section 35 of the Japanese
Patent Act is classified as a mandatory rule
which governs the transfer of a right toobtain a patent in Japan on the one hand,and as a mandatory rule in the sense of
Section 12(2) of Tsusoku Ho which can beapplied by means of an employee’s
manifestation of intention on the other,governing the internal relationship between
employer and employee when the place of
employment
issituatedinJapan,
irrespective of the country/countries where
the application was/is filed. However, thecollective succession of rights to obtainpatents under the Japanese Patent Act,
Section 35 without identifying the countries
of application has only the inter partes effectin the basic sense. If one of the countries
where the application is filed provides some
substantive/procedural requirements for the
succession of a right to obtain a patent, theright shall not be construed to be transferred
unlessthese
requirements
aremet.
“Reasonable compensation” as provided forin subsection (3) can be calculated by taking
the benefit derived from patents which
belong to the employer at last into
consideration no matter what the protecting
country is.

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