An invention is the product of inspiration, endeavor and innovation on the part of one or more researchers. Breakthrough inventions may enrich human life and enliven economic activity. One such example in Japan is a semiconductor diode that transmits blue light when electricity is passed through it.
This device, which was considered impossible to create in the 20th century, is an invention worthy of a Nobel Prize. The inventor, Mr. Shuji Nakamura, professor at the University of California, Santa Barbara, is a bright star in the firmament of science. He is having trouble, though, securing his rights concerning his invention, including patent rights. In a lawsuit he filed against his former employer, Nichia Corp., the Tokyo District Court on Thursday rejected his request that the company give the patent rights back to him. The interim ruling said there was a tacit agreement between him and the company that the patents belonged to the latter.
However, in a move that indicated the importance of protecting the rights of employee inventors, the court called for a further examination of whether the amounts the company paid him were adequate. On this score, Mr. Nakamura may yet win the trial, though he has lost his fight for the patents.
In Japan, employees who have produced inventions have received only token payments from their companies because of the widely held belief that patents belong to companies. The Nakamura suit is an open challenge to this practice. How the case will be settled, therefore, is of great concern.
As the ruling points out, companies must make reasonable payments for employees’ inventions in accordance with principles set forth in the Patent Law. Indeed, it is only natural for researchers who have contributed materially to inventions to demand rewards commensurate with their achievements.
Manufacturers in post-World War 11 Japan grew by improving Western technologies. As Japanese technology approached top levels in the world, however, the need to develop original products increased. As a result, corporate fortune depended crucially on the capacity for research and development.
The role of R&D is even more crucial today, yet employee inventors, by and large, continue to receive rewards that are much less than they deserve. In past cases, inventors are said to have received only token amounts ranging from several thousand yen to tens of thousands of yen.
Medicines that reduce excess fat in the blood, which have been sold worldwide under various trade names, bring in 1 trillion yen in annual sales. The first of these drugs was developed by a researcher with a Japanese pharmaceutical company. The inventor, it is said, received no payment for his creation.
Mr. Nakamura, who produced the blue-emitting diode on a commercial basis, developed nearly 100 patents until he left Nichia in 1999. The company’s sales expanded markedly, but he received only 20,000 yen per patent. This came as a big surprise to researchers in the United States, where respect for individual rights is institutionally established. Some nicknamed him “slave Nakamura.”
In the past several years, however, an increasing number of Japanese companies have begun paying large sums, apparently to alter the traditional practice that gives companies virtual monopoly on patents. Some inventors are said to have received tens of millions of yen each.
Still, questions remain as to whether even these amounts are adequate and whether payments should be determined unilaterally under internal regulations. In May last year, the Tokyo High Court ruled that companies must pay “reasonable” amounts in accordance with the Patent Law.
Most patent applications are filed by companies that have acquired employees’ patent rights. Mr. Nakamura, who made his invention almost single-handedly, represents a rare case. In most cases, patents originate with a group of researchers. Nevertheless, patent suits like this one are likely to increase.
The bottom line is that reasonable payments should be made for patents that have generated profit. To make sure this happens, ground rules should be established to define relationships between researchers and their companies regarding patents and other rights. Such standards should be worked out by the two sides on an equal footing.
In July, the government drew up strategic guidelines governing intellectual property to bolster the international competitiveness of Japanese industry. Moreover, basic legislation on intellectual property is to be enacted in due course. The Nakamura case is likely to accelerate these moves. The basic need is to improve the lot of researchers and create conditions conducive to free thinking and originality.
In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.