The Tokyo High Court rendered a court decision
on an appeal case which has been a matter of
great concern and interest to intellectual
property departments of firms.

Case No. Heisei 11 (Ne) 3208, Case of Appeal for
Claiming Compensation (Original Decision: Tokyo
District Court Case No. Heisei 7 (Wa) 3841) (The court
decision rendered on May 22, 2001)

    This is an appeal against an original decision
rendered in connection with the following case:
    The Plaintiff in the first instance court was an
employee hired by the Defendant in the first instance
court. With respect to an employee's invention made
by the Plaintiff when he was such employee, the
Plaintiff sued the Defendant in the first instance
court for payment of reasonable remuneration therefor
pursuant to Section 35, Paragraph 3 of the Japanese
Patent Law. Although the Plaintiff's claim in the
first instance court was partially admitted in the
original decision, both of the parties hereto were
dissatisfied with the original decision and appealed
against it.
    The Tokyo High Court has rendered a judgment as
summarized below.

The Judgment rendered by the Tokyo High Court

1.Nature of the Defendant's stipulation
    If the employer, etc. may unilaterally stipulate
a remuneration for assignment of a patent right, etc.,
and such stipulation should be binding on the employee,
etc., this would be partial to interests of the
employer, etc., and thus, contradictory to the
above-mentioned purport of the legislation.
Accordingly, in the event that an amount of the
remuneration computed in the above-mentioned
stipulation is thought to be below a reasonable
remuneration pursuant to Section 35, Paragraphs 3 and
4 of the Patent Law, it should be construed that the
employee, etc. may claim that the employer, etc. pay
"a reasonable remuneration" pursuant to the same
paragraphs, regardless of the amount computed by the
employer, etc. based upon the above-mentioned
stipulation, unless there is any special circumstance
like such a circumstance in which the employee, etc.
validly has relinquished the right to claim a
remuneration.

2. "Reasonable remuneration" in this case

    (1) The subject invention is a dependent
invention of the Morokuma invention. The Morokuma
invention was a primary object of the negotiation with
each of the firms, whereas no emphasis was placed upon
the subject patent and the patent from the divisional
application. Considering the above points altogether,
it is deemed that there is a rationality in the original
decision which determined that an amount of profits
which the Defendant in the first instance court should
make from the subject invention is assessed at fifty
million yen.  (Refer to Section 248 of Code of Civil
Procedure, Section 105ter of the Patent Law)

    (2) The content of a proposal of the Plaintiff
in the first instance court was substantially changed
by proposals made mainly by persons in charge of the
patent working with the Defendant in the first instance
court. From the content of the original application,
it is impossible to say that this is worked by the
pickup device of each of the firms. The above-
mentioned change results in the content which makes
it possible to evaluate that this is worked by a portion
of the pickup device of each of the firms. The subject
invention is closely related to the technical field
for which the Plaintiff in the first instance court
was responsible.
    In the light of the above-mentioned
circumstances, there is a rationality in the
evaluation of the original decision which determined
that a degree of contribution to the making of the
invention by the Defendant in the first instance court
as the employer is assessed at 95 percent. (Refer to
Section 248 of Code of Civil Procedure, Section 105ter
of the Patent Law)

3. Whether the extinctive prescription has been
acquired or not.
    An amount of a revenue from the industrial
property right to be used as a basis for assessment
was not necessarily clear until a date when a
remuneration at the time of obtaining the revenue from
the industrial property right was paid to the Plaintiff
in the first instance court. It was uncertain what
is an amount of a remuneration which the Plaintiff in
the first instance court could have received from the
Defendant in the first court instance. In view of such
circumstances, it is appropriate to presume that it
was impossible to expect that the Plaintiff in the
first instance court would enforce the right to claim
a reasonable remuneration until the same date. Thus,
it is appropriate to construe that there is no progress
of the extinctive prescription until the same date.

    Next, our comment follows.
    First, since the purport of Section 35 of the
Patent law lies in protection of the employee, etc.,
it is appropriate to judge that in the event that an
amount of a remuneration prescribed in a service
regulation or other stipulation is below a reasonable
remuneration pursuant to Section 35, Paragraphs 3 and
4 of the Patent Law, the employee, etc. may demand a
reasonable remuneration from the employer, etc. The
remuneration paid in this case relates to transfer of
the right to obtain a patent. However, it can be said
that a value of each invention after patented is
unpredictable at the time of the transfer. It is
natural that the employee, etc. should be permitted
to claim an additional payment in the event that a
remuneration at the time of succession in title is not
"reasonable" in view of actual results thereafter of
the patented invention.
    Next, as to a degree of contribution evaluated
in assessing the consideration, it is now understood
that importance attached to a patent right which is
an object of a license agreement differs individually,
and thus, contents of the agreement must be carefully
examined from the standpoint of protection of an
employee, etc. when executing a license agreement
which relates to a plurality of patents collectively.
    Finally, as to the extinctive prescription for
the right to claim payment of consideration to an
employee or other, etc., it is a fine reasoning to judge
that there is no progress of the extinctive
prescription unless "a reasonable consideration" is
found out.