We summarized important changes of the Japanese Patent Law revised in 1998 and 1999. Our suggestions or useful tips regarding the revisions follow:

1. PROSECUTION / ACQUISITION
   
   
   1. Novelty (effective from January 1, 2000)
      
      (1) Under the previous patent law, if an invention has been publicly known or publicly practiced only in a foreign country, the invention was deemed to be novel. However, under the revised patent law, even if an invention is publicly known or practiced only in a foreign country, the invention is not novel, like an invention described in a publication distributed only in a foreign country. 
      
      (Our Tips)
      a) In case that you disclose your invention to any third party including your customer because of business need prior to filing a patent application, even if such disclosure is made only outside of Japan, it is necessary for you to have a written non-disclosure agreement (NDA) executed by the third party.
      b) Even if you can enjoy Grace Period for the invention practiced in the U.S., the novelty of the invention is lost by the prior disclosure. Therefore, when you plan to file a patent application in Japan, please file the patent application (provisional application) first in the U.S. prior to disclosing or practicing the invention in public.
      
      (2) An invention publicly available for use in Japan or a foreign country through an electronic transmission channel (for example, publicly available for access through internet) is not patentable under the revised patent law, like an invention described in a publication distributed in Japan or a foreign country.
      
      
      (Our Tips)
      Prior to filing a patent application in Japan or prior to a Convention priority date, please do not release the invention on your home page.
      
      (3) Public disclosure of an invention in Japan or a foreign country through an electronic transmission channel also satisfies the requirement for the exception to lack of novelty.
      
      (Our Tips)
      a) We do not recommend using the grace period provision of exceptions to lack of novelty, because the exception is only applicable to limited situation and conditions, contrary to the U.S. grace period.
      b) Please note that the filing date of a patent application for an invention to which the exception to lack of novelty is applied is not retroactively the date of the disclosure of the invention. That is, if, prior to your patent filing, a third party filed a patent application for the same invention as the invention for which you file a patent application and to which the exception to lack of novelty is applied, the patent application filed by the third party is the first filed application and therefore you are not entitled to the first applicant. Further, the application by the third party is also rejected because of your earlier disclosure.
      
      
   2. Earlier Laying-Open Application (effective from January 1, 2000)
      
      Upon request of an applicant, the application may be laid open for public inspection before one year and six months from the filing date. According to the new laying-open system, the applicant can establish earlier a right to demand the payment of compensation equivalent to what the applicant would normally be entitled to receive for the practicing of the invention.
      
      (Our Tips) 
      a) If the applicant plans to practice the invention for which a patent application was filed within one year and six months from the filing date, there is the possibility that a third party may pirate the invention through the practice by the applicant. If this is the case, we recommend you request earlier laying open for the application. After the earlier laying open, a warning letter is sent to the third party who is practicing the invention so that you are entitled to the right to demand the payment of compensation, which will work out after patent granting. 
      b) In case that you request earlier laying open for the application, you should review carefully the claims and the specification, and amend the claim(s) within the scope of the disclosure in the original specification, if necessary (for example, drafting a claim copying the product of the third party within the original disclosure).
      c) An earlier laid open application establishes an earlier publication date for the purpose of novelty / inventive step (unobviousness), rejecting a later patent application for an invention which is the same as the laid open invention or an invention which could easily have been made by a person skilled in the art on the basis of the laid open invention. 
      d) However, since this system of demanding the payment of compensation does not effectively work, we rather recommend you use the expedited examination system after conducting prior art search in order to evaluate the invention, together with claim amendment, if necessary, in view of prior art located.
      
      
   3. Request for Examination (effective as of October 1, 2001)
      
      The term for requesting for an examination will be shortened from seven (7) years to three (3) years after the filing date.
      
      (Our Tips)
      We recommend you survey / predict the trend of potential markets and assess at an earlier stage the value of the invention in order to meet the timing of request for examination. The earlier you request for examination, the longer you can enjoy the patent term.
      
      
   4. Extension of Patent Term (effective from January 1, 2000)
      
      The patent law was revised to eliminate one of the requirements for patent term extension, i.e., that a patentee could not practice the patented invention for more than two (2) years. 
      
      (Our Tips)
      We recommend you use the registration of an extension of a patent right relating to medicines or agrichemicals in order to increase your revenues, even though the period for which you could not practice the patented invention is short, for example, six months. You can extend the patent term by corresponding six months.
      
      
2. ENFORCEMENT
   
   We recommend you take an enforcement action including infringement litigation against patent infringement, because of recent pro patent climate allowing adequate compensation for damage caused by patent infringement. 
   In the Tokyo district court, the number of judges assigned to patent infringement litigation has been increased and the number of sections which handle the litigation has been increased from one section to three sections. Therefore, the pendency of the litigation has been shortened. For example, in the case of preliminary injunction, a final decision is made within 6 months (40 days at the shortest). In a regular patent infringement litigation, a decision is expected to be rendered after 1 year - 2 years.
   In Japan, the validity of a patent is not reviewed by the court, but by the trial board of the JPO. Even if the patent is likely to be invalid, the court usually does not take it account. In the past, if the judges had some doubt of the validity, the case was suspended. Nowadays, because of the time pressure of short pendency (especially in the case of preliminary injunction), the court usually does not suspend the case, even if the patent is likely to invalidated. Thus, a preliminary injunction is a very powerful tool for a patentee, but a notorious to a defendant. We recommend a preliminary injunction, if you have a valid patent.
   
   
   1. Year 1998 Revision (effective from January 1, 1999)
      
      (1) Introduction of a rule for calculating an amount of damage
      
      A new system for calculating an amount of damage is employed. A patentee may receive adequate compensation for infringement damage suffered by the infringement, even considering the situation where business efforts by infringers is substantial, or the infringing articles can be substituted by the other articles, or the patentee was not able to sell all the amount of the infringing articles which the infringer sold.
      The following methods are used to calculate an amount of damage:
      
      (i) An amount of damage can be calculated as an amount of money obtained by multiplying the amount of profit per unit product by the patentee in the absence of infringement, by the amount of infringing articles which the infringer sold, or disposed free of charge. However, the amount of damage is limited by the amount corresponding to the ability of practicing by the patentee. 
      (ii) If for any reason the patentee failed to sell an amount of articles corresponding to all of the infringing articles, the amount used for the calculation can be deducted, if the infringer proves his efforts in business or other circumstances.
      
      (2) An amount of damage corresponding to a reasonable royalty is awarded, as taking real circumstances into consideration
      
      Under the previous patent law, a patentee may demand an amount of money which the infringer is entitled to receive usually for the practice of the patented invention, as an amount of damage suffered by the infringement. However, in this case, each fact under the circumstances is not likely to be taken into account when calculating the damage. Therefore, an amount of damage in patent infringement litigation would have been low, since the court awards compensatory damage equivalent to the minimum royalty in Government patent contract in most cases. For this reason, ÅgusuallyÅh was deleted from the provision, and a patentee shall recover a reasonable royalty by considering individual circumstances.
      
      
   2. Year 1999 Revision (effective from January 1, 2000)
      
      (1) Simplified Way of Proving Infringement 
      
      (i) In order to simplify proof of infringement in an infringement litigation, the defendant has to explain their acts and prove non-infringement, when the defendant denies the assertion of the plaintiff (patentee). In the past, the burden of proof of infringement was on the side of plaintiff (patentee). According to the new practice, the defendant is required to prove non-infringement in order to negate infringement.
      (ii) The court can order the defendant to submit documents necessary for the plaintiff to prove the infringement. If the court judges the defendant has a reasonable reason for refusing submission of the documents, evidences are disclosed under in-camera procedure.
      
      (Our Tips)
      The in-camera procedure is different from the protective order. Therefore trade secrets are not completely protected by the in-camera procedure.
      
      (2) Introduction of the ÅgCalculation Expert WitnessÅh System
      
      In order to determine an amount of damage, a Ågcalculation expert witnessÅh system was introduced. Both the parties are obligated to cooperate with such an expert witness.
      
      (3) Simplified Way of Proving Damages
      
      The judges can determine a substantial amount of damages by considering not only evidenced facts but also facts having high probability.
      
      (4) Strengthened Hantei System 
      
      (i) Hantei System provides advisory opinions on the technical scope of a patented invention, i.e., whether or not the accused product (process) can be read on the claim(s). In order to realize an early resolution of patent disputes, Hantei System introduced the civil procedure such as the examination of evidence.
      (ii) When the court requests the JPO to provide advisory opinions on the technical scope of a patented invention, three trial examiners of the JPO prepare advisory opinions.
      
      (Our Tips)
      Since the trial judges do not know actual business situation in depth, it could be risky to rely upon only the advisory opinion by Hantei in order to resolve patent infringement disputes. Importantly, the validity of the patent is never considered in the Hantei System, even though the validity is seriously questionable. 
      In a patent infringement dispute, it is more important to first obtain validity / infringement opinion from an experienced patent attorney. 
      
      
3. JPO FEES
   
   
   1. Annual Fees
      
      (1) Annual fees were revised so that the annuities after the tenth year until the expiration of the term would be fixed amount (effective from June 1, 1998).
      (2) Annual fees for the additional claims were reduced by 25% (effective from June 1, 1999).
      
      
   2. Request Fees for Examination
      
      Fees for requesting for examination for the additional claims were reduced by 25% (effective from June 1, 1999).