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1 October 2012PatentsKenji Sugimura and Rebecca Chen

An important market: software patenting in Japan

Software is one of the most innovative and fastest growing industries in the world, leading corporations to turn increasingly to patents to protect their soft ware-related inventions. Businesses have begun to leverage the value of soft ware-related patents, evidenced by the prolific mobile patent wars and the wave of multibillion dollar patent portfolio acquisitions.

Including Japan in a company’s international patent prosecution strategy is crucial for several reasons. Japan is the third largest economy in the world. Additionally, Japan has the second highest number of registered software-related patents in the world.

These registered patents cover a wide range of technologies including embedded soft ware in consumer goods and appliances and developments in vehicle network technology. Japanese companies also rank among the top patent filers.

As the applicability of software inventions continues to broaden, more opportunities are created for inventors to license their patented inventions to these Japanese companies. Given the importance of the Japanese industry and the opportunities within the soft warerelated technology in the global marketplace, it is imperative for companies to develop international patent prosecution strategies with Japan in mind.

Specifically, foreign companies should be aware of the similarities and differences in prosecuting software-related patents in Japan and in their home countries.

Software patentability trends in Japan

In 1999, the allowance rate for business method patents at the Japanese Patent Office (JPO) reached an all-time high of roughly 35 percent.

Subsequently, the JPO experienced a surge in business method patent filings. This surge was met with a dramatic decrease in the average grant rate of business method patents during the following six years; it lingered around 8 percent between 2003 and 2006 (8 percent is extremely low in comparison to the average of 50 percent across all technical fields). Since 2006, the average grant rate for business method patents has risen to the current rate of roughly 25 percent.

The earlier dip in grant rate was due in part to the business method–related patent boom at the turn of the century. It drove many companies and individuals to draft patent specifications before acquiring an accurate understanding of examination guidelines and other patent rules. During that time there were very few case studies, so even experienced patent drafters were unsure how the JPO would interpret specific rules.

There are various challenges associated with the protection of intangible software-related inventions. Equipped with knowledge gained from numerous cases that have since succeeded and failed at the JPO, Japanese patent attorneys can now draft specifications and claims to avoid rejection.

This phenomenon can be seen in the rising grant rate of business method-related patents. In view of these trends, it is advantageous to understand the intricacies of the Japanese patent practice.

Subject matter eligibility

The Japanese Patent Act defines an invention as a “highly advanced creation of technical ideas utilising the laws of nature”.

Unlike hardware-related inventions, there is no direct link between software-related inventions and the laws of nature. The requisite use of the laws of nature is met when “information processing by software is concretely realised using hardware resources”.

The JPO further clarifies that “information processing software is concretely realised by using hardware resources” when the software and hardware resources are working together so as to realise arithmetic operations or manipulations of information. Therefore, software can be patentable if the information processing by the software is concretely realised using hardware.

The information-processing device and operational method which work in concert with that software, and the computer-readable storage medium on which the software is recorded, are also patentable as software-related inventions. The key here is to ensure that the description of software-related inventions conveys the software and hardware resources “working in concert”.

This allows claims to be amended in the future to show that the software works together with the hardware, which is essential for responding to rejections for non-statutory subject matter.

In addition to the requisite cooperation between software and hardware, the Japanese Patent Act also requires that all patentable inventions be “industrially applicable”. Inventions that may have market or commercial potential can be patentable. In contrast, inventions where practical application is impossible, even if the invention is theoretically operable, are not patentable.

Description requirements

As mentioned earlier, proper attention should be paid in drafting the specifications of softwarerelated inventions to ensure that the description includes a specific or concrete means to carry out the invention.

The Japanese Patent Act requires that the invention for which a patent is sought be clearly defined. Rejections from the JPO based on a lack of clarity in the invention can arise from:

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