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Research Activity Summary of FY2004

1. Desirable Forms of Divisional Patent Application System and Patent Amendment System

   The review of the amendment system and the divisional application system was discussed at the Working Group on Patent Strategic Plan Issues established under the Patent System Subcommittee of the Intellectual Property Policy Committee of the Industrial Structure Council, from the perspective of achieving international harmonization, improving equality among applicants in the processing, helping front-runners' strategic or multilateral efforts to obtain patents, and reducing burden on applicants as well as the Patent Office in the process of obtaining or granting patents. In October 2004, the working group compiled a report titled "Direction of the Review of the Amendment System and the Divisional Application System," presenting existing issues to be studied and pointing out additional issues needing further study.

   This study conducted analysis and examination on the relaxation of the restrictions of the divisional application system in terms of the time limit and the contents of division, and also discussed the introduction of the continuation-in-part application system and the one-year grace period from the United States to Japan. It also conducted more concrete review and analysis, from various perspectives, as to the period of response to the notification of reasons for refusal and the relationship between the divisional application system and the system of appeal against the examiner's decision of refusal, and made specific proposals.

   It is hoped that this study will be the basis of the future discussion and designing of specific measures to improve the Japanese patent system.

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2. Desirable Ways to Examine and Implement Use Inventions

   There is a growing need for claims regarding use inventions along with the progress in technology development in pharmaceutical and other technical fields and diversification of technical fields. This study aimed to categorize problems extracted from the previous year's study and sufficiently discuss desirable ways to examine and implement use inventions in Japan, thereby contributing to the process for revising the Examination Guidelines.

   Use inventions are described with diverse claim expressions. The novelty of a use invention described by a product claim may be determined by distinction by use or distinction by form. Study was conducted as to "a claim of a raw material defined by the use thereof" and "limitation by use and property in the alloy field." As for a medical use invention that may not be described by a process claim, it was deemed to be appropriate to determine its patentability on the condition that either the product defined by the process or the use defined by the process is acknowledged as being novel. Study was also conducted regarding how to satisfy the description requirements including the enablement requirement by submitted pharmacological test data. Analysis was also conducted from the perspective of international comparison and of legal matters.

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3. Procedures for the Establishment and Transfer of Industrial Property Rights and Requirements for Such Rights to Have Effect against Third Parties in Major Countries and International Organizations

   As economic activities become increasingly global and borderless, how to strengthen the international competitiveness of Japanese industry is being actively studied. Among others, speeding up the registration procedures for industrial property rights is an important task.

   The existing Japanese patent and trademark systems seem to have problems such as requiring certificates that are stricter than those required in other countries. To clarify such problems, it is necessary to investigate the foreign procedures for the transfer of rights.

   Furthermore, as the license registration system is rarely used in Japan, the transfer of a patent right due to bankruptcy affects the legal status of non-exclusive licensees whose license is not effective against third parties.

   For the purpose of speeding up the procedures, the Japan Patent Office currently considers providing registration information on line, but it has almost no reliable references on the legal requirements and effects under the patent and trademark systems in other countries.

   This study, aiming to harmonize the Japanese systems with foreign systems, investigates the intellectual property systems in major countries and international organizations (18 systems in total), from the perspective of the material fact theory, and also examines information management systems in such countries and organizations.

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4. Desirable Examination System for the Registration of Trademarks for Retailing as Service Marks and the Introduction of the Consent System

   A research study committee was formed to discuss the "introduction of the consent system," "registration of trademarks for retailing as service marks," and "necessity to make a specific review of the current examination guidelines" in relation to the former two issues in Japan. As for the introduction of the consent system, a conclusion was reached as follows: (1) a quasi-complete type consent system should be introduced by operation; (2) consent should be allowable only regarding Section 4(1)(xi) of the Trademark Law; (3) it is necessary to review the Examination Guidelines for Similar Goods and Services and reinforce the application of the provision of the principal sentence of Section 3(1). As for the registration of trademarks for retailing as service marks, a conclusion was reached as follows: (1) the Trademark Law should be revised so as to provide that retail services shall be treated as services under the Trademark Law; (2) retail services should be defined as offering consumers the convenience of purchasing goods, such as provision and display of an assortment of goods, excluding sale of goods; (3) starting protection only in respect of "general retail services" should be considered; (4) along with the enforcement of the ninth edition of the Nice Classification, the registration of trademarks for retailing as service marks should be put into force in respect of applications filed on January 1, 2007 and thereafter.

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5. Exceptions to and Limitation of the Effect of Patent Right

   This study investigated and examined the current situations in twelve countries regarding exceptions to and limitations of exclusive rights based on a patent right, especially focusing on the exception of "experiment or research" and the compulsory licensing system (equivalent to arbitrary license in Japan). The primary purpose of this study is to study how these countries cope with the situations where patent rights granted for inventions of upstream technology that is highly versatile and less substitutable are likely to cause adverse effect on commercial activities of others or R&D activities of the next generation, and where the owner of a patent right for the technology indispensable to standardization, without participating in the standardization process, claims excessive royalties or alleges patent infringement. From an international perspective, revision of the TRIPS Agreement is being discussed, because, even if a WTO Member allows a patented product that is necessary for the protection of public health in other countries to be used without the authorization of the patent owner, the provisions of the TRIPS Agreement prevent the use or export of the patented product. This study focused on the progress in discussion and measures taken by WTO Members on this issue.

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6. Study on Promotion of Use of Patent-related Statistics

   The "Intellectual Property Strategic Program 2004," which indicates concrete measures toward making Japan an "intellectual property-based nation," desires that comprehensive and interdisciplinary research on intellectual property (IP) be promoted based on various approaches including law, technology, and economics, and that the IP-related statistics, which serve as the basis for planning and proposing IP policies, will continue to be broadly utilized to help develop policies that meet diverse user needs.

   As a follow up to the "Economic Analyses of Statistical Data Relating to Patents" of the previous fiscal year, this report contains the empirical analyses of corporate IP activities based on the Survey of Intellectual Property-Related Activities implemented by the Japan Patent Office (JPO). In this report, study was made to identify clearer relationships between a company's IP activities and the characteristics of the company's industrial field, technical field, as well as products, while giving consideration to the status report of IP activities by the persons responsible in the IP divisions of manufacturers. Furthermore, the report proposes indices for showing the status of IP activities and discusses future tasks for promoting use of patent-related statistics.

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7.   Study on "Problems Concerning Creation, Protection, and Use of Intellectual Property in Universities"

   In this study, examination was made on various problems concerning IP creation, protection, and use in universities from broad perspectives. Firstly, the significance of IP management for universities was confirmed, and the ideal style of efficient and effective IP management was discussed by introducing examples of actual measures taken by universities and also focusing on development of IP experts. Secondly, accounting-related problems that arise from IP management by universities were discussed. Specifically, budgetary considerations and accounting systems were identified, and tax considerations concerning patent transfer or other technology transfer were reviewed. Thirdly, examination was made on problems related to the patent system, namely problems concerning application of the exception to lack of novelty and problems concerning the attribute of research findings in universities. Lastly, problems concerning joint research were discussed. Specifically, problems in joint research between a company and a university, problems in concluding a nondisclosure agreement with students, and points to consider when concluding an agreement with a foreign company were examined.

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8.  Foreign Situations of Design Protections

   It is indisputable that the design system plays a central role in protecting designs as a result of intellectual creation activities, however due to the multiple aspects of designs, a single design product may also be cumulatively protected under laws and regulations other than the design law. In order to proceed with concrete deliberation on modalities of the design system in Japan, for the purpose of ensuring more appropriate protection for designs, it is indispensable to correctly understand how design products are protected under intellectual property systems including design systems in Japan as well as in foreign countries.

   With the objective of contributing towards such an understanding, a working group of experts was established for this study to overview the basic frameworks of design systems, as well as to analyze court cases obtained from local contributors and reference materials, thereby clarifying specific principles, criteria, and methods for determining substantial issues of design protection, such as objects of protection, requirements for protection, and scope of effect, in the European Community, European countries, the United States, and China. Efforts were also made to analyze the situation of the application of various legal systems that may also function as a means for protecting designs, including copyright laws, trademark laws, and unfair competition prevention laws, in accordance with court cases, wherever possible.

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9. Research and Study on Reinforcement of Protection of Intellectual Property Based on the Unfair Competition Prevention Law (Protection of Trade Secrets and Measures Against Counterfeit Goods and Pirated Copies)

   In this study, the necessary direction for amendment of the Unfair Competition Prevention Law was indicated in order to reinforce protection of intellectual property under the law in response to such a request in the Intellectual Property Strategic Program 2004. In this process, examination was made on the following points with regard to leakage of trade secrets that are managed in Japan, for the purpose of preventing outflow of know-how and technology of Japanese industry to other countries: (1) misuse/disclosure overseas; (2) malicious misuse/disclosure by a former employee; (3) a secondary participant concerned with a malicious offender; (4) introduction of criminal penalties against the corporation (offending corporation) to which a malicious offender belongs; and (5) the raising of penalty levels. In addition, study was made on the following points for the purpose of preventing inflow of counterfeit goods and pirated copies to Japan: (1) clarification of the definition provision of Article 2(1)(iii) of the Unfair Competition Prevention Law; (2) introduction of criminal penalties to Article 2(1)(ii) and (iii); and (3) application of border control measures (Customs Tariff Law) to goods that infringe the Unfair Competition Prevention Law.

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10. Practical Use of Intellectual Property in Small and Medium-sized Enterprises and Venture Companies

   At present, about 4.8 million small and medium-sized enterprises (SMEs) exist in Japan, supporting Japan's industrial base and playing a significant role in leading the local economy. Meanwhile, there are growing expectations for venture companies from the viewpoint of creating new industries. In order for these SMEs and venture companies to develop and expand based on their technology, intellectual property (IP) serves as an essential management element. However, considering the necessary funds and human resources, it is not necessarily easy for these companies to promote an IP strategy in all areas including IP creation, protection, and utilization.

   In this study, a questionnaire survey was conducted on SMEs and venture companies to investigate and analyze the status of their engagement in IP activities and their problems related to IP. In addition, the existing support measures for SMEs and venture companies provided by various support organizations were identified and studied, while efforts on new support measures that are currently being prepared for implementation were also investigated and examined.

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11. Plants and intellectual property rights in the US, Japan, and Europe
Muriel Lightbourne
Invited Researcher, Institute of Intellectual Property
Research Scholar, Queen Mary Intellectual Property Research Institute, University of London

   On June 29, 2004, the international treaty on plant genetic resources for food and agriculture of the United Nations Food and Agriculture Organization (FAO) entered into force. Thus there is an urgent need to find ways to conciliate its implementation together with that of the Agreement on Trade-Related Aspects of Intellectual Property (TRIPs) and the UPOV Convention for the protection of plant varieties (UPOV).

   Rights protecting plant varieties were not provided for by the Paris Convention for the protection of industrial property. On the one hand, the UPOV Convention was later specifically designed, in 1961, to protect such subject matter, and subsequently modified several times. The adoption of this convention aimed at allowing the breeder (who could be a farmer) to forbid the marketing of his plant varieties without his authorization. This protection was initially covering the seeds obtained by applying methods of selection of specified autogame plants, i.e. those whose flowers are fertilized by their own pollen (coleseed, wheat, barley...). The 1991 version of this convention has broadened the rights conferred to breeders, applies to all plant genera and species and does no longer exclude double protection of plants by plant breeders' rights and patents.

   On the other hand, Article 27 (3) of the TRIPs Agreement states that "Members shall provide for the protection of plant varieties either by patents or by an effective sui generis system or by any combination thereof (…)"

   In this context, it seems necessary to understand and compare the reach of breeders' rights and of patents in the agricultural field in the United States of America, Japan, and Europe, and to assess the "freedom-to-operate" in future breeding programmes. These rights will be compared as to 1) coverage, and 2) conditions of exercise of rights.

   Moreover, for some biotechnological inventions in the field of agriculture, like for other applications of biotechnologies, patent pools may be relevant. The treatment of patent pools under American, Japanese and European antitrust regimes thus has to be rapidly addressed.

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12.  A Comparative Study of United States and Japanese Laws on Collaborative Inventions, and the Impact of those Laws on Technology Transfers
Mary LaFrance
Invited Researcher, Institute of Intellectual Property
William S. Boyd Professor of Law William S. Boyd School of Law University of Nevada, Las Vegas

   This research examines United States and Japanese laws regarding patent rights in collaborative inventions, and inquires whether these laws may impede technology transfers by creating uncertainty regarding the ownership, validity, or enforceability of the resulting patents, or by imposing undue obstacles to the licensing or assignment of such patents. Where the laws of the two countries differ, this paper compares the merits of each approach and also assesses whether the differing approaches could be troublesome for cross-border transactions.

   One of the most significant differences between United States and Japanese law regarding joint inventions is in the requirement of consent for certain activities involving a jointly owned patent. In Japan, unlike the United States, all joint owners of a patent must consent to a non-exclusive license of the patent, or to the transfer of a single joint owner's share, while in the United States, unlike Japan, a jointly owned patent cannot be enforced through an infringement action without the consent of all joint owners. Thus, while the consent requirements differ in the two countries, in each case they can present obstacles to the full enjoyment of a joint owner's share of the patent.

   In both countries, the definition of joint inventorship is imprecise, and even honest mistakes in identifying which persons qualify as joint inventors can lead to invalidation. In the United States, such errors can often be corrected without invalidating the patent, but in Japan, no such correction mechanism exists.

   Finally, in light of recent Japanese court decisions on the subject of remuneration for employee inventions, employer allocations of remuneration in the future will need to carefully identify and quantify the respective contributions of all joint inventors. Such precision is generally not required in the United States.

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13. Measurements a Corporate Patent Department Can Use to Report Its Activities
Michael D. Kaminski
Invited Researcher, Institute of Intellectual Property
Partner, Co-Manager, Tokyo Office; IP Operations Chair Foley & Lardner LLP Washington, D.C.; Tokyo, Japan

   The purpose of this research is to attempt to identify what measurements or benchmarks could be employed by corporate IP departments to measure the success of their patent activities. Certainly, senior corporate management is keenly interested in understanding what the patent activities have been. Now, however, other groups like shareholders, market analysts, and investors are just as interested. IP departments need to show the benefit of their activities to these audiences. As a work product of this research, it is anticipated that a catalog of such possible measurements will be developed. Accordingly, the IP department could choose some of these measurements to use in their reports. Some of the measurements can be very simple, such as a total of the patents received or the applications filed over a year's time. However, the possibility of using other measurements exists and these other measurements may be relevant to a particular company's situation. There is perhaps not one set of measurements that will work for all companies, given several factors. Some of these measurements may be too economic to be practically used. However, other measurements will involve quantifying the value of risk avoided through the use of patents. Also, the overlap between a company's patents and its products will be highlighted as a possible measurement.

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14. Study on Intellectual Property Licensing under Antimonopoly Law in the U.S., Europe, Japan and Korea
Jiyoung Han
Invited Researcher, Institute of Intellectual Property
Doctor of the University of Munich, Germany

   In the market economy the intellectual property laws and antitrust law share a common purpose of promoting innovation and enhancing consumer welfare, even though they seem to have a possibility to crash each other. The reason is that the intellectual property rights provide incentives for innovation through giving a monopoly right for a certain period, while antimonopoly law is aiming to prevent misuse of predominant position in the marketplace and concentration of overriding.

   In the field of intellectual property rights the owners make profits through using his right by themselves as well as through licensing contract. The licensing contract is, however, likely to be applied by antitrust law in accordance with under which conditions and restraints a licensing contract is concluded, and herein many complicated constituents get involved. Therefore, countries such as America, Japan and Korea establish their own guidelines in order to assist those who want to predict whether a licensing practice would be regarded as anticompetitive. Especially it is noticed that with its enlargement European Union has published the Regulation No. 772/2004 which came into effect on May 1st 2004 and will have a dramatic impact on technology licensing in the European Union.

   The following article gives an overview of major anticompetitive constituents in the guideline of each country, and inspects legal meaning of guideline and the new Regulation of the EU competition law as well.

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15. Consideration on the General Principles of Intellectual Property Protection Method
Jae Ho Shin
Invited Researcher, Institute of Intellectual Property
Doctor of Laws, Lecturer at College of Law, Hanyang University and In-Ha University, Korea

   The intellectual property system generally has the following functions even though there are some levels of differences in each regulation. i) Protecting the rights of the natural law of producers, ii) promoting industrial development by stimulating the production of intellectual property and iii) maintaining the order of business competition. However, in this paper we understand that the function to protect a privilege of an intellectual property producer is a means to accomplish another function. In other words, on the premise that intellectual property is different from a privilege in natural law and also, it is not there is no such compensation for such privileges in natural law, we approach the way of protecting intellectual property. To introduce the new protection method, the judgment about the necessity of the protection must be precede this first, and this is a judgment in policy to stimulate creation or induce investment and to choose a much better way in comparison between the profit of the public which is created by the establishment of fair competition order and the loss of the public masses by artificial limits which cause the restricted usage of intellectual property. And, the way to protect intellectual property has a close relation with the characteristic of the protection object but, in this paper, we analyze the contents of privilege which are subordinately decided according to the protection method without relation to the protection object and through this way, we examined the general principle in introducing new protection methods unrelated with the protection object. Such principles present the limit regarding the range which can be considered in policy in the case of minimizing the privilege procedure or changing the degree of the protection in a new protection method.

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16. Study on the Doctrine of Equivalents in Patent Infringement―Focus on Laws and Practices Comparison China and Japan
Wen Jun Yan
Invited Researcher, Institute of Intellectual Property
Judge, People's High Court of Shandong Province

   How to define the scope of patent protection rationally is an important problem with regard to the patent system. The doctrine of equivalents plays an important role in defining the scope of patent protection and has already been accepted and applied in both China and Japan. The doctrines of equivalents of China and Japan have areas in common as well as areas that differ. Based on legal provisions and administration of justice, this paper compares the doctrine of equivalents between China and Japan.

   The main content of this paper includes the relevant legal provisions of the two countries, the history of the doctrine of equivalents and an overview of the practice of this doctrine, the requisites of this doctrine, the applications of this doctrine adopted by the court, and the party's burden of proof related to the doctrine of equivalents in action for infringement of a patent.

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17. Basic Considerations on Forms of Information Transactions
-Focusing on Protection and Use of Information Goods in Cyberspace and Related Legal Disciplines-
Ryu Kojima
Long-term Overseas Research Fellow, Institute of Intellectual Property
Associate Professor at Kyushu University Faculty of Law

   Although the emergence of cyberspace brought benefits, specifically, easier information access, easier acts of expression and easier information transmission, it has come to show the possibility of restricting the free exchange and use of information in combination with legal revisions aiming to restrict the circumvention of technological protection measures as well as the prosperity of contract-based private discipline.

   This study carries forward consideration on the forms of future information transactions in the mass market. Major subjects for consideration are (1) relationships with contract doctrine and technological protection measures and (2) relationships between intellectual property law, contract law and price discrimination theory, which is often used to justify information transactions using contracts. While paying attention to these points, this study aims to provide consideration by outlining the entire information distribution process from the viewpoint of fares for information use.

   In terms of free use of information, this study aims to acquire knowledge by making reference to the recent progress in discussion on copyright law and freedom of expression in U.S. law.

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18. System for Comprehensive Protection of Invention ―Through the comparison between the U.S. CIP application system and the Japanese internal priority system―
Atsushi Mizuno
Researcher, Institute of Intellectual Property
Assistant Manager, Intellectual Property Department, Legal Division, Toppan Printing Co. Ltd.

   This report discusses the ideal modalities for the comprehensive protection of inventions. Specifically, the report first overviews the current systems for comprehensive protection of inventions, focusing on the continuation-in-part (CIP) application system in the United States and the internal priority system in Japan. Then, it examines the problems and the ideal modalities in the case where an application system similar to the U.S. CIP application (hereinafter referred to as the "CIP-type application") is introduced in Japan, based on its relation to the system of publication of unexamined applications.

   Positive consideration should be given to allowing the filing of a CIP-type application before the publication of the earlier application in Japan. However, the filing of such an application after the publication of the earlier application would have little merit to the applicant because the Japanese patent system does not have provisions for a grace period as in the United States. At the same time, thorough study should be made on the negative effects, such as an increase in third parties' monitoring burdens and the occurrence of incidences where an applicant repeatedly files CIP-type applications on purpose in order to keep related applications pending for a long time.

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19. Unitary patent protection systems in Europe
Masahiko Matsunaka
Researcher, Institute of Intellectual Property
Senior Coordinator for Licensing Center, Intellectual Property Right Operation Company, Matsushita Electric Industry Co. Ltd.

   The single European market formed by the ever expanding European Union is one of the strategic markets for Japan, while its member states are also important as states with which patent applications are filed. However, Japanese applicants do not sufficiently understand the details of the recent trend towards establishing a new intellectual property system in Europe, particularly developments concerning the unitary patent protection system, partly due to the considerable uncertainness of the outcome of future discussions. At present, discussions on the Community-level patent protection system (Community patent) and discussions aimed at reducing the translation costs based on the EPC (London Agreement) and unifying the judicial procedure (European Patent Litigation Agreement (EPLA)) are conducted in parallel. This paper reports the results of examination with regard to the strategies by which the EU member states and European companies are involved in a series of discussions, and the way in which Japanese applicants should observe these developments towards the establishment of a new system.

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20. The Effects of the Strength of Intellectual Property Rights Protection on Cooperative R&D between Vertically Related Firms
Akira Ishii
Research Fellow, Institute of Intellectual Property

   This study considers two vertically related industries, intermediate goods producers and final goods producers, and makes an economic theoretical investigation of the effect that the strength of the protection of intellectual property rights (IPRs) has on cooperative R&D between final goods producers and intermediate goods producers. The focus is on the effects of IPRs on vertical cooperative R&D as strengthened IPR protection reduces the degree of R&D spillover. R&D spillover is the use of technology and knowledge by parties other than the inventor without payment of remuneration. The results supported the following conclusions. Vertical cooperative R&D promotes technological improvement regardless of the effectiveness of IPRs at ensuring the appropriability of the technology. However, when IPR protection is strong, R&D investment in vertical cooperative R&D may be excessive from the perspective of social welfare and joint profits of all firms in the two vertical industries. This means that when IPR protection is strengthened, conducting vertical cooperative R&D does promote technological improvement, but does not necessarily increase the joint profits and social welfare.

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21. International Jurisdiction about Intellectual Property Right with Special Reference to "Intellectual Property: Principles Governing Jurisdiction, Choice of Law, and Judgments in Transnational Disputes" by the American Law Institute
Wataru Fukumoto
Research Fellow, Institute of Intellectual Property

   The recent number of actions filed in Japan against international infringement of intellectual property rights is increasing. Under such circumstances, questions arise as to how to determine the applicable law and intellectual jurisdiction in respect of foreign intellectual property rights. In Japan, this issue has been vigorously discussed since the Card Reader System case, and in particular, various academic views have been presented regarding jurisdiction along with progress in the discussion for preparing the draft convention at the Hague Conference on Private International Law. This study report focuses on the draft provisions drawn up by the American Law Institute (ALI). Compared with the draft provisions prepared at the Hague Conference and those drawn up by the Max Planck Institute (MPI) as a revision of the Hague Conference Drafts, the ALI Draft is very unique as it aims to achieve consolidation of proceedings. From a long-term perspective, intellectual property laws will be further unified on a substantive and substantial level, and the necessity of such consolidation of proceedings will increase accordingly. This report discusses noteworthy issues in this respect.

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22. Problems Surrounding Application of Laws Relating to Intellectual Property on the Internet
Mari Nakayama
Research Fellow, Institute of Intellectual Property

   Along with globalization of markets, progress of advanced information and communications technologies, and expansion of communication networks such as the Internet, diversification has been seen in parties sending and receiving information as well as in the types of transmittable information, and information distribution areas have also been dramatically expanded. In line with such changes, intellectual property (IP) has become easily available across national borders, and this has brought about frequent occurrence of transnational IP infringement disputes. Since national borders on the Internet are unclear, it is difficult to specify, by applying the territoriality principle in a strict sense, the place where the infringing act has been committed, and should it be at all possible to specify it, laws of a large number of countries might be applicable. To cope with this situation, various measures are being considered to efficiently and effectively solve IP infringement occurring across national borders by uniformly applying a single law of a particular country, rather than applying laws of individual countries of protection or places of infringement. This report reviews the significance and function of the territoriality principle relating to IP as well as the significance of the principle of the law of the country of protection that has been advocated based on the interpretations of international IP conventions, thereby exploring a reasonable rule of application of laws relating to IP infringement on the Internet, focusing on patent, trademark, and copyright

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