Present Status of SMEs I

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1 Yosuke KAWASAKI Assistant Director Information Dissemination and Policy Promotion Division Japan Patent Office December 16th, 2011 Regional Workshop for the Least Developed Countries of Asia and the Pacific Region on the Use of Intellectual Property for Enhancing Economic Competitiveness and Development Present Status of 1

2 Present Status of I number approx. 4.2 million and comprise over 99% of all corporations of Japan. Percentage of patent applications of is steady at 10-12% of annual total. Large corporations 0.3% Number of businesses in Japan (Approx million firms) 99.7% Approx. 10% Number of applications (Approx. 350,000 in total) Large corporations Approx. 90% Source: 2009 White Paper on Small and Medium Enterprises in Japan, Japan Patent Office Annual Report 2009 Definition of small and medium-sized enterprises () In manufacturing, corporations with capital below 300 million and less than 300 regular employees. Reference: Foreign Patent Applications by Annual total approx. 6,500 (PCT applications 2,500; Paris Convention priority 4,000)(in 2009) Note: Reasons for foreign applications (07/12 survey) Anti-counterfeiting (66%), market penetration (56%), competitor measures (38%), licensing (32%) 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% Patent Application % Year LEs SME percentage of annual total of patent applications is steady at 10-12% (33-35 thousand cases/yr). SME percentage of total number of applicants annually is 55-57% (11-13 thousand applicants/yr). Note: While utility model applications by larger corporations comprise less than 10% of annual total, apps. By approx % (3-4 thousand cases/yr). SME percentage of applicants is approximately 50% ( thousand applicants/yr). As compared with larger corporations, the SME utilization rate of patent is higher. The number of patent applications by is low because strictly select applications. As long as obtain application rights, they tend to exploit them effectively. Proportion of Patent Utilization by Proportion of Patent Utilization by Larger Corps 62.5% 46.4% Source: Based on the FY2007 Survey of IP Activities, 2008, Japan Patent Office. Note: Utilization is the sum of the Self-Utilization and Other-Utilization of the Domestic Utilization. 2 Present Status of II 60% 50% 40% 30% 20% 10% 0% TM Application % Year LEs 地域団体商標 ( 地域ブランド ) Regional TM (Regional Brand) SME percentage of annual Started in April registered as of June30, total of trademark Responses are nationwide. applications is steady at 52-53% (48-62 thousand cases/yr). Hokkaido Tohoku Kanto LEs Note: A large number of trademark applications are filed by very small enterprises so it Koshinetsu Hokuriku Tokai can t be determined whether the majority of enterprises are. SME percentage of total number of applicants annually is 65-70% (21-26 thousand cases/yr) Kansai Chugoku Shikoku Kyushu Okinawa Other Design Application % 参考 Note 70% 60% 50% 40% LEs LEs 30% 20% 10% 0% Year SME percentage of annual total of design applications is steady at 32-35% 35% (9-10 thousand cases/yr). SME percentage of total number of applicants annually is 55-58% ( thousand cases/yr). Regional Differences in Applications Applications for all types of IP are concentrated in urban areas. <Breakdown of Applications in Top 5 Prefectures> Patents: approx. 85% Design/TM: approx % Regional Differences in IP Experts Number of Patent tattorneys Approx. 60% in Tokyo Under 5 in 11 of 47 prefectures 3

3 Relationship between Corporate Performance and IP Activities by Per-employee employee operating profit for Japanese in possession of patents are greater than those Japanese without patents. Per-Employee Profit (In thousands of JP Yen) Overseas Patent Possessing 2,020/employee Patent Possessing w/o Patents 1,800/employee 1,370/employee that developed their own patented products through independent R&D activities tend to achieve higher operating profits. Furthermore, protection ti that t includes overseas rights prevents patent t infringement i and contributes to even higher profit rates of. Relationship among Patent Types in Per-Employee Profits 人当たり営業利利益 ( 百万円 ) ( million) Per-Employee ee 1.5 Operating Profit 従業員特許保有企業 SME w/ Protection SME 非保有企業 w/o Protection 海外特許保有企業 SME w/ Int l Protection 海外特許非保有企業 SME w/o int l Protection 海外特許保有企業 SME w/ Int l Protection 国内特許のみ保有企業 SME w/ only Domestic Protection SME 非保有企業 w/o Protection (1) Protection 1 特許保有の有無別比較 vs Non-Protection (2) International 2 海外特許保有の有無別比較 Protection vs Non Int l Protection 資料 Source: : 特許庁平成 Based on IP 19 Activities 年知的財産活動調査再編加工 Survey 2007, Japan Patent Office, ( 年 ) Notes: 1. A protected SME is an SME with all or some internationally and/or domestically patented products. 2. A non-protected SME is an SME without any patented products. 3. An internationally patented SME is an SME with all or some internationally patented products. 4. An internationally non-patented SME is an SME with all or some domestically patented products and without any internationally patented products. 5. The statistics used in this analysis are the combined statistics of and manufacturers Effect of Acquisition of IP Property Rights on Benefits of Acquisition of Patent Rights in - Reliability was raised. - Able to stop similar goods at customs. - Won new clients. - Succeeded to sell their products (technology) to big companies. - Product became well known. - Loan became easier to obtain. - Public recognition of company increased. - Grants-in-aid were awarded. - Employee morale increased. - Able to hire promising human resources etc. Aggressive patent acquisition increases SME recognition and helps in sales expansion. This effect is particularly apparent in venture businesses in which IP activity exists from an early stage. Effects of IP Acquisition iti for Hit Products The smaller the scale of operation, the higher the proportion of feeling enlarged credit and easier to obtain new clients Under 人以下 ~50 人 ~100 人 ~ 人 300 Over 人超 % 価その他Easier Monopolized Easier がto Enlarged Captured Increased 達得Products Funding Enlarged Others No change to sell にthe market 占purge 類き得のアなを提は可credit new clients public 有す似たるっらbecame became がbusiness 開ピが高容っproducts imitations/similar 携な能products たrecognition れwell-known easier scale た(e.g. cooperation 利品拓等たwith いother corroborations?) に資金調特に効果新規顧客働いた模倣品他社との市場を独信用力を対外的な易になができたブランドことがでことにつ効果が幅が広がの排除につなが格づけったールることのSource: Questionnaire survey relative to market penetration and IP strategy, Mitubishi UFJ Research & Consulting, KK, Dec めるった事業Note: 1. Hit product was defined as new technology, product or service developed which contributed significantly to your organization within past 10 years. 2. Percentile figure may exceed 100 because of multiple responses. 5

4 Awareness of Intellectual Property (IP) among (IP in general) With regard to IP, have various worries and expectations of official assistance. Worries about IP y g (1) think IP is difficult to understand or they have nothing to do with it. What lies at the base of their perception is the high initial hurdle. (2)Even if they are willing to deal with IP, they have the following worries: Expectations ti of fofficial i lassistance Answers from 620 (surveyed in Dec. 2009) <Due to lack of professional and technical knowledge> For example, they lack the following knowledge: How to patent their inventions. How to search prior art invented by other companies. How to fill in application papers. How to find a good specialist such as a patent attorney. <Due to lack of personnel and funds> Expenses for patent application such as patent attorney s fees are prohibitively expensive. Do not know to establish office regulations on employee inventions. Do not know how to deal with warning letter. <Issues associated with the lack of awareness of IP> Methods for educating management and employees. Preventing the leakage of technical information on joint R&D and clients. 6 Framework and awareness of concerning IP Small- and medium-sized enterprises have a weak framework for intellectual property. In the present state, awareness and knowledge concerning intellectual property is not always high. Eliminating the intellectual property divide is important. IP Management Framework The IP management framework of small- and medium-sized enterprises that have applied for 5 or more cases (Approx responses in Sep study) Number of IP Representatives: Average 0.9 (Overall average 3.7) Operation expenses: Average of 9.8 million yen (Overall average of 96 million yen) IP Awareness Approx. 84% of small- and medium-sized enterprises have an interest in intellectual property. (1074 responses in Dec study) However, the reasons for disinterest given by uninterested smalland medium-sized enterprises (165 enterprises) are: No technology or idea to protect (36%) Insufficient knowledge of the IP system (32%) Considers IP irrelevant to business operation (29%) IP management framework of small- and medium-sized enterprises with limited application experience. (1052 responses in Dec study) Enterprises with IP personnel: Approx. 39% Approximately 25% of small- and medium-sized enterprises have IP strategy planning experience. (360 responses from enterprises that used small- and medium-sized enterprise support plan - Nov study) Experience of IP strategy planning Experience 25% No experience 68.5% No response 5.6% 7

5 Comprehensive Support Measures for 8 Present Status of IP Support Measures for Foreign IP Support for foreign IP applications Foreign IP producers Before the application/examination request Industrial Property Digital Library (IPDL) Placement of PCs to support online applications Survey of patent applications and technological trends Examination request, examination, appeal and registration System for postponing payment of examination request fees Reduction of examination request fees and patent fees System for refunding examination request fees Accelerated examinations and trial examinations Interview examinations (Circuit Interview examination) Regional interview proceedings/circuit trials TV interview examinations Commerc cialization Support for utilization IP activ vities of SM MEs HR development & consultation Regional IP Advisory Conyers Regional Patent Office of the Bureau of Economy, Trade and Industry Consultations regarding the industrial property rights systems in foreign countries Briefings on the IP system (for beginners; for IP personnel; sessions on law amendments) Industrial Property Rights Specialists One-stop support Comprehensive IP Support Counter Extensive support from conception of an idea to business development Patent Licensing Information Database Energetic Companies with IP 9

6 Reducing Measures Including Patent Fees The fee reducing measures including patent fees are available. For poorly-funded, R&D-type, and manufacturing, reduction in examination request fees as well as patent fees are available With the ease of requirements and the simplification of procedures to promote the use of this program, the use of the reducing measures has been on the rise Utilization of the reduction or exemption of examination request and fees Utilization of the fee-reducing program increased dramatically after its introduction Support for Free Prior Art Searches <Ended in FY2010> -At the request applicants, private research companies conduct prior art searches free of charge. This program offers information for making a decision on whether to make a request for examination of applications. - can save examination request fees for patent applications unlikely to become patents. -JPO can eliminate useless examinations devoid of novelty and progress, thus contributing to speedier and more appropriate p examination and processing. 7,000 Prior Art Search Program(Utilization Records) 6,000 5,000 4,000 3,000 2,000 1,

7 Accelerated Examination System For wishing to obtain a patent as soon as possible, an easy-to-use system is available. Time required for the notice of the initial screening results: 2.0 months from the application for accelerated examination (normally 28 months) Is the application made by a SME, individual, university, public research organization or TLO? 中小企業中小企業個人個人大学公的研究機関大学公的研究機関 TLO TLO による出願ですかによる出願ですかす? No Yes Yes Is the application 外国関連出願ですか for foreign application?? No Is the application for working 実施関連出願ですか or energy-saving related? application? Yes No You can apply 早期審査の申請ができます早期審査の申請ができます for the accelerated examination. You cannot apply for the 早期審査の申請はできません accelerated examination. Please submit a statement of reason for the accelerated 早期審査に関する事情説明書を特許庁へ提出してください examination 早期審査に関する事情説明書を to the Patent Office. 特許庁へ提出してください 12 Grant for Foreign Applications It is crucial to accelerate innovation by encouraging foreign applications. By taking advantage of regional SME support centers, it is possible to realize a finely-tuned response to regional characteristics, an appropriate judgment on business potential, and the upgrading of regional policy making. <Scheme> JPO Bureaus of Economy, Trade and Industry Addition of Design and Trademark Applications since FY 2010 Support from Japanese Law Firms (ex: Foreign Agents and Translators) The Government revised the scheme on November 22nd, 2010, making it possible for more SME Support Centers (managed by local l governments) to implement the scheme as an Emergency Economic Measure Governmental Funding (Half of the Total Expenditure) Patent Applications: Maximum 1.5 Million Yen Design and Trademark Applications: Maximum 0.6 Million Yen Prefecture SME Support Centers Area s <As of Fiscal Year 2011> <>26 local governments have implemented this scheme Request Eligible Expenditures: Limited to expenditures required to file applications such as foreign- patent-office-filing filing fees, attorney fees, translation fees, foreign-agent fees. Limited to expenditures incurred within the fiscal year Eligible Applications: Applications filed to foreign patent offices that claimed priority based on having filed for patents, designs, or trademarks to the JPO. To provide efficient and effective assistance, this program is focused on the following viewpoints. Selecting patent applications that have a high chance of obtaining patents overseas A support system that conducts technology evaluation (prior art search) and market evaluation by setting up a panel of experts The status of foreign applications is confirmed in an ex-post report (ex-post follow-up) 13

Comprehensive IP Support Counter Comprehensive IP Support Counters have been set up in 47 prefectures as integrated IP centers that provide with support regarding IP-related issues Support personnel

- Hope to use our technology for business operations - Hope to properly protect R&D results - Would like an expert to check our patent specification - Need to take measures against foreign copies -

8 Comprehensive IP Support Counter Comprehensive IP Support Counters have been set up in 47 prefectures as integrated IP centers that provide with support regarding IP-related issues Support personnel resolve issues on the spot as well as support IP utilization and commercialization in cooperation with a variety of experts and support institutions. - Hope to use our technology for business operations - Hope to properly protect R&D results - Would like an expert to check our patent specification - Need to take measures against foreign copies - Hope to obtain patent rights effectively based on our business model, etc. IP issues Resolve on the spot Support for issue resolution - Raise IP awareness by explaining the IP system - Advice on IP rights acquisitions and know-how management - Advice on the details of specifications - Explain foreign IP systems and procedures - Provide support through an external team of experts Comprehensive IP Support Counter Support personnel Specialists who are experts in IP, management and technology IP specialists Effective support provided by IP experts using the database of IP support specialists Patent Attorney Navi Database of IP support specialists Lawyers IP Network Coo operation - Determine the IP needs of, etc. - Provide support through an external team of experts - Provide on-site support as appropriate SME support organizations (Organization for Small & Medium Enterprises and Regional Innovation, JETRO, commerce and industry associations, Chamber of Commerce and Industry, financial institutions, etc.) Cooperate with SME support organizations to promote effective IP use in the management systems of 14 Industrial Property Rights Specialist In April 2005, the JPO appointed industrial property rights officials as specialists for IP-related assistance for, offering various kinds of support services in the IP field. Free Support Services Lecturers for IP system and related support measure seminars, study meetings, and training i hosted by IP-related institutions Introducing IP-related support measures at trade fairs Lecturers for study sessions and meetings attended by SME owners. Visiting g and introducing IP-related support programs to them Public Offices Chamber of Commerce Industry & Business community SME Support Centers Industrial support institutions Various industrial associations Gatherings of Branches in Economy, Tr regional Bureau rade and Indust us of try Indu ustrial property rights specialist (JPO) Dispa atch Lecturers for IP seminars and training Lecturers for study sessions and meetings Trade fairs Visits to Upon the request, JPO dispatch a lecturer Dissemina ation and enlighte enment (E asing IP divide e) 15

9 Regional Support Framework Hokkaido [Regional Headquarters for IP Strategy] *Regional IP strategy t promotion program Kyushu Okinawa Thk Tohoku [Regional Patent Office] *Comprehensive IP rightrelated support Chugoku *Promotion and raising Chubu awareness on IP right system Shikoku Kanto Kansai [Prefectural SME Support Centers] *Supporting Projects for SME s foreign application *Provision of IP support [Regional Reference Room] *Installment of Shared terminals for internet applications *Access to the IPDL using a dedicated line 16 Thank you. Ari gato. 17

Intermediate Conversation Material #10

Intermediate Conversation Material #10 OUR AGENDA FOR TODAY At work Exercise 1: Picture Conversation A. Read the dialogue below. 次の会話を読んでみましょう Ms. Jefferson, what s our agenda for today s meeting? Our