Employee inventions and 'reasonable value'


Ryo Maruyama

A court decision concerning the “reasonable value” received by an employee as compensation for employee inventions is again in the spotlight in Japan.

Patent Law Article 35[3] provides that when the employer asserts a right to file an application for an employee invention, achieved by acts categorised as a present or past duty of the employee, the employer should pay reasonable value to the employee in accordance with an agreement, employment regulation or any other stipulation.

In 2004, in a lawsuit initiated by Professor Shuji Nakamura against Nichia Corporation, the court decided that Nichia should pay ¥20 billion ($245 million) to Professor Nakamura as compensation for the invention of the blue-colour light-emitting diode.

At that time, ex-employees of big companies also brought actions against their ex-employers, claiming compensation for inventions in cases including ‘aspartame’ against Ajinomoto Co., Inc. and ‘optical disk’ against Hitachi, Ltd. The court ordered both companies to pay their ex-employees substantial compensation for their inventions.

Inventions, Patent Law