Protecting IP Ownership and Rights in Japan: 8 Things Employers Need to Know


Jun 8, 2023

Doing business in Japan—a country rich in technology and innovation—presents unique opportunities and challenges, particularly when protecting intellectual property (IP). Japan’s distinctive IP landscape is governed by the Japanese Patent Office (JPO) and embedded in the Japanese government's commitment to fostering innovation.

If you’re a foreign business expanding into Tokyo, Osaka, and other Japanese cities, you must understand Japan’s unique intellectual property rights (IPR) landscape. Without proper attention to these laws, overseas firms can inadvertently expose their precious IP assets to risk. Let’s delve into the complexities of Japanese IP law so employers like you are empowered with crucial knowledge for safeguarding their IP rights in Japan.

Before we move forward, keep in mind that our guide is for informational purposes only—it isn’t intended as legal advice.

1. The scope of intellectual property rights in Japan goes beyond patents

In Japan, IP rights extend beyond patents, encompassing copyrights, trademarks, design rights, utility models, and even protection against unfair competition. These rights are not merely legal jargon. They are the foundation of your business's innovation, making their protection crucial. Ensure your IP agreements cover all these aspects, and be aware of the distinctive laws, such as the copyright law and the trademark act that govern them.

2. The Japan Patent Office is the principal authority on IP rights in Japan

The Japan Patent Office (JPO) regulates patents, utility models, designs, and trademarks. Aligning with the JPO's guidelines and keeping abreast of any amendments in the patent law or trademark rights can significantly bolster your IP protection strategy. The JPO also assists with international patent applications through the World Intellectual Property Organization (WIPO), helping businesses secure exclusive rights to their innovations globally.

3. Japan runs on a “first-to-file” patent system

Navigating the world of patents in Japan can feel like walking through a maze. The rules are guided by a “first-to-file” system. Therefore, taking swift action is essential in securing your patent rights, including the exclusive right to your patented invention. This system also applies to utility models, which protect smaller, incremental innovations. While they may not seem as grand as patents, utility model rights are vital and often overlooked. They can provide a robust shield for your business's competitive edge. 

It's also worth noting that the Patent Act outlines the detailed provisions and requirements for patent applications. So, it's wise to familiarize yourself with it or seek advice from a local patent attorney to avoid any potential pitfalls.

4. Secure IP rights with IP agreements

Whether it's about an innovative plant variety in the agribusiness sector or a new software algorithm in the telecommunications industry, the foundation of IP protection in Japan is a well-drafted IP agreement. These agreements dictate who—the employee or employer—holds the IP rights. Precision and local relevance are key in these documents. Engaging a Japanese patent attorney for localizing these agreements can significantly fortify your IP protection.

5. The Unfair Competition Prevention Act (UCPA) protects trade secrets in Japan

The Japanese Intellectual Property Law enshrines the protection of trade secrets under the Unfair Competition Prevention Act (UCPA). The act deters the unlawful acquisition, disclosure, and usage of your trade secrets, shielding your business from unfair competition. In Japan, trade secrets are often synonymous with exclusive processes or proprietary knowledge that gives your business a unique edge. 

Whether it's an advanced coding technique or a secret ingredient, incorporating non-disclosure clauses and other protective measures in your IP agreements will enhance your business's safeguarding strategy against unfair competition.

6. Leverage international IP protection mechanisms

International conventions like the Patent Cooperation Treaty and the Paris Convention for the Protection of Industrial Property offer businesses an extended layer of IP protection. These treaties, which Japan is a part of, provide mechanisms for international patent protection and help protect industrial designs. It's prudent to seek professional advice to navigate these conventions and ensure your IP rights are well-protected worldwide.

7. Stay aware of district court and supreme court decisions

Court decisions in Japan can impact the interpretation of IP rights and agreements. District courts adjudicate patent infringement cases, and appeals go to the Intellectual Property High Court. Staying updated with these decisions can provide insights into the evolving landscape of IP law in Japan.

8. Pay special attention to IP in the telecommunications and pharmaceutical sectors

The telecommunications and pharmaceuticals sectors are hotbeds of innovation in Japan. These industries often involve complex considerations of IP protection. For instance, amendments to Japan's patent law provide patent term extensions for pharmaceuticals, preserving the exclusivity of a patentee's rights for a longer period.

In the telecommunications sector, a challenge might arise regarding the patentability of software algorithms, which can involve the principles of the laws of nature, as defined in the Patent Act. For instance, the first instance of an algorithm may not be patentable, but its applications might be. Specialized knowledge of these considerations, perhaps with assistance from IP professionals, can ensure that your IP strategy is tailored and robust in these sectors.

Frequently asked questions about IP law in Japan

Who owns IP in Japan: employee or employer?

Typically, the employer holds the IP rights unless specified otherwise in the employment agreement. However, it's recommended to clarify this in your IP agreements.

What is an IP assignment agreement?

An IP assignment agreement is a legal document that transfers IP rights from one party (assignor) to another (assignee). In Japan, these agreements are often used to assign IP rights from employees to employers.

How does the Patent Cooperation Treaty benefit Japanese businesses?

The Patent Cooperation Treaty allows businesses to seek patent protection for an invention simultaneously in multiple countries. It streamlines the process of filing patents outside Japan.

How does the Paris Convention aid in IP protection in Japan?

The Paris Convention is an international agreement that aids Japanese businesses in seeking IP protection in other member countries, and vice versa. It provides a “right of priority,” enabling businesses to apply for protection in other member countries within a certain period.

What is a utility model, and how does it differ from a patent?

A utility model in Japan is a right granted for inventions of a lesser degree of inventiveness than required for patents. They usually have a shorter protection period but are quicker and less expensive to register.

What is the significance of the Copyright Act in Japan?

The Copyright Act in Japan grants protection to the authors of creative works. This includes not just the economic rights of the author, but also their moral rights, like the right to be identified as the author.

How important is trademark registration in Japan?

In Japan, trademark registration helps businesses secure the exclusive right to use a certain mark, logo, or name, preventing others from using similar ones that could lead to confusion. It's a crucial step in protecting your business identity.

What does the Design Act in Japan cover?

The Design Act in Japan provides protection for the aesthetic aspects of a product. It's essential for businesses that prioritize not just functionality, but also the look and feel of their products.

What happens in the case of patent invalidation?

A patent invalidation in Japan occurs when a patent is declared null and void by the JPO or a court. This typically happens when it's proven that the invention didn't meet the necessary requirements when the patent was granted.

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Rippling and its affiliates do not provide tax, accounting, or legal advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for tax, legal, or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any related activities or transactions.

last edited: May 11, 2024

The Author

Carissa Tham

A British Columbia-based tech content strategist and writer, Carissa has lived and worked in Singapore, Taiwan, and Canada. Carissa lends her unique global perspectives to growing Rippling’s brand in the Asia-Pacific region and beyond.