Japanese IP reform

So, I would start talking about the Japanese IP reform that the Koizumi Administration is currently working on. Here is what I think is important or interesting about the IP reform.

As I wrote before, the Koizumi Administration has started this reform in February 2002, and is aiming to accomplish major changes by 2005. When you look at the Basic Law on Intellectual Property (passed in December 2002, enacted in March 2003) and the Strategic Program for the Creation, Protection and Exploitation of Intellectual Property (decided by the Intellectual Property Policy Headquarters in July 2003), you will find that this proposal is a very ambitious one. You will sense that the reform puts more energy on patent systems than copyright. This is because one of the main figures of this proposal is Mr. Hisamitsu Arai, who is a former commissioner of the Japanese Patent Office and now is the secretary-general of the IP strategy office under the Cabinet.

The introduction of the Strategic Program tells you the motivation of this reform. From here (especially the paragraph titled "Aiming at Making Japan an Intellectual Property-based Nation"), you can tell that it's strongly motivated and influenced by the US' policy from the mid 80s. Although the Strategic Program says “this does not mean that it will suffice to simply introduce the U.S. system to Japan,” it is clear that the basic idea is to gear up the protection of IP.

The basic idea of the Japanese IP reform are these:

1) Support the creation of IP
As for patent, encourage researchers in the universities and other institute to invent and apply for patents (see Chapter 1: Creation). As for copyright, also encourage people to be a creator and produce many copyrighted works (see Chapter 4-1: Creating Attractive Contents).

2) Expand the protection of IP
This includes expansion of the scope of rights, pushing stronger enforcement, and changing judicial procedures in favor of rights holders.
Listed in the proposal are: expeditious examination of patent applications; promoting flexible patent examinations; expanding the scope of IP rights (which includes broadening the scope of utility models, design patents, trademarks and trade secrets; granting more damages and setting high standard of criminal penalties for IP infringement); having more IP focused court systems and ADR (alternative dispute resolution) systems; promoting internationally harmonized IP (including global patents); and expansion of copyright protection. It proposes to expand the duration of copyright; create new rights to control imports of records and second-hand market of game CDs; and broaden anti-circumvention regulations, for example.

3) Promoting the exploitation of IP
Chapter 3 writes in detail about reforms to prepare IP-exploitation-friendly environment. Included are: educating companies for more IP-focused management; pushing Japanese technologies to be international standards; supporting patent pools; changing trust laws for IP-based finance; encouraging venture business; stabilizing license agreements under bankruptcy; and supporting open source software licenses. They also have proposals for copyright exploitation. Included are: supporting broad band technologies, supporting the development of database for searching and licensing, stimulating discussions among rights holders to solve the rights clearance problems.

4) Raising IP lawyers and educating people about IP rights
Chapter 5 is about raising IP lawyers (by teaching IP law and IP management in universities, especially in law schools that will be starting this April) and educating school children, students and the public in general about how to respect IP rights.

As you can see, it IS an ambitious proposal, and it requires very intensive efforts and lots of wisdoms to wisely accomplish these reforms by 2005.

The largest concern of mine is that, the government might rush to meet the deadline and may not spend enough time and consideration required. As we all know, IP rights has to keep a proper balance between the rights holders and the users, and it is not easy at all to strike a proper balance. However, in this reform proposal, you see little attention paid for such a balance.

I can see the dream picture here. It's like this: "It would great if we could encourage people to invent and create lots of IP rights. These rights holders will exploit their rights in the market (both domestic and international) to earn more money. That would stimulate Japanese economy, and we all become rich and live happily ever after."

Well, the reality won't go easily like that. If you expand the scope of rights, or change procedures in favor of rights holders, some rights holders would surely enjoy the benefit from such reforms. However, expanding rights of one person means increasing burdens on freedoms of others. People in the IP business all knows that even a big company with many IP rights cannot avoid concerns of infringing others' patents and copyrights. After all, you are only the right holders of the *specific* patents and copyrights that you created, and others (including, of course, foreign entities) can also have lots of patents and copyrights. Goods cannot be made based on one patent and works cannot be created without relying upon others' creation. Therefore, too broad IP rights or too strong enforcement would increase the risk of infringing other people's rights, and thus put heavy burden of rights clearance. If you fail to clear rights, someone can sue you with large amount of damages based upon such broad IP rights!!

I am not saying that all of the proposals are bad. There are some good ones (like promoting the cooperation between universities and business sectors, stabilizing the effects of licenses under bankruptcy, promoting technology developments for information distribution, or raising IP experts, among others). My point here is, there are proposals that would clearly put lots of burden on the society, and it is very strange that the government mentions little about this point. For example, it proposes establishments of new kinds of copyright, but it does not refer to any need of exemption clauses to protect legitimate interests of users. Of course, they are proposing some supports for rights clearance. However, the problem is, whether such supports are good enough to lower the burdens and strike the balance, and I feel it is not.

I guess this is getting really long, so I will go deep the analysis of these proposals later.