Overview of Employee Inventions

Inventions made at academia/research institutions are almost always employee inventions (where the rights holder is the institution, not the individual). This document summarizes the key points to be aware of.

Please note: This content is mainly for a Japanese audience and has been machine translated. Please refer to the original Japanese for accuracy. For overseas firms, doing business in Japan typically requires Japanese-speaking staff or local support.

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Table of Contents

• What are Employee Inventions?
• Initial Ownership
• Reasonable Remuneration
• Key Points for Researchers
• Flow from Invention to Application
• Utilizing TLOs

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What are Employee Inventions?

An "employee invention" is defined under Article 35 of the Patent Act as an invention that meets all three of the following requirements. Most inventions in universities and public research institutions fall into this category.

• 1. Invention by an Employee, etc.:
  The invention was made by an employee of a university, a researcher at a public institution, or a similar personnel.
• 2. Within the Employer's Scope of Business:
  The nature of the invention falls within the scope of the research and educational activities of the affiliated university or institution.
• 3. Related to the Employee's Duties:
  The act of creating the invention pertains to the researcher's present or past duties (e.g., research theme, assigned tasks).

Reference: Guidelines based on Article 35, Paragraph 6 of the Patent Act, Japan Patent Office
https://www.jpo.go.jp/support/startup/document/index/shokumuhatsumeiseido.pdf

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Initial User Ownership

The 2015 amendment to the Patent Act allows institutions to clearly adopt an "initial user ownership" model. By stipulating in advance in regulations, etc., the institution can directly acquire the rights to an invention from the moment of its creation. This provides clear and stable ownership, and most universities and research institutions have adopted this model.

Reference: Application of Article 35, Paragraph 3 of the Patent Act in Universities, etc., Japan Patent Office
https://www.jpo.go.jp/system/patent/shutugan/shokumu/document/shokumu_university/11.pdf

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Reasonable Remuneration

In return for the institution acquiring the rights to an invention, the law guarantees the inventor the right to receive "reasonable remuneration."

Types of Remuneration

While many companies offer only a one-time payment of a few hundred dollars, some academic and research institutions have systems for distributing a portion of licensing income to inventors as "compensation" or royalty sharing. Be sure to check your institution's regulations.

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Key Points for Researchers

Disclosure of Invention

If you have made an employee invention, you typically file an invention disclosure with your institution's IP division. Be aware that publishing a paper first will result in a loss of novelty.

Researcher Mobility (Job Change)

When a researcher moves to a new institution, the handling of an invention is, in principle, based on the rules of the institution where the invention was completed. However, issues can arise if most of the research was conducted at the previous institution, so caution is advised.

Reference: Basic Guidelines for Handling Research Outcomes with Researcher Mobility, Cabinet Secretariat
Issues and Proposals Concerning the Attribution of Intellectual Property with Researcher Mobility, Kyoto University

Conflict of Interest Management

When starting a business based on an employee invention, a potential conflict between the researcher's personal interests and the institution's interests may arise. It is essential to follow institutional rules, consult with the conflict of interest committee, and manage the situation appropriately.

Reference: Basic Approach to Conflicts of Interest in Universities, etc., MHLW

Joint Research with Companies

When conducting joint research with companies or other institutions, it is crucial to conclude an agreement *before* starting the research, clearly defining the following points:

• Scope of existing IP brought by each party
• Ownership of newly created inventions

Reference: Open Innovation Portal Site, Japan Patent Office

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Flow from Employee Invention to Application

This is the general process when a researcher makes an invention.

STEP 1

Disclosure of Invention

When an invention is completed, the researcher promptly reports it to the head of the institution through their supervisor.

→

STEP 2

Decision on Rights Assignment

The institution, through an invention committee, decides whether to take ownership of the rights to the invention and notifies the researcher.

→

STEP 3

Patent Application

If the institution decides to take ownership, it proceeds with the patent application process.

Reference: Regulations on Employee Inventions at National Testing and Research Institutes of the MHLW (Articles 4, 5, 6), MHLW
https://www.mhlw.go.jp/hourei/doc/hourei/H160401K0020.pdf

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Consult with the IP Division (TLO)

Universities and research institutions have IP divisions within their industry-academia collaboration departments (TLOs). In some institutions, filing an invention disclosure triggers the assignment of a TLO representative to provide support. For all IP matters, it is best to first consult with your institution's IP division (TLO).

Reference: University Technology Transfer (TLO), Ministry of Economy, Trade and Industry
https://www.meti.go.jp/policy/innovation_corp/tlo.html

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