Intellectual property rights

IP protection for software

Which intellectual property rights are available to protect software, and how do you obtain those rights?

Software may be protected by copyright or patent, or as a trade secret.

Computer program software can be protected by copyright under the Copyright Act of Japan (the Copyright Act) as a 'work of computer programming' without the need to undergo any application procedure if the computer program has the requisite creativity.

Under the Patent Act of Japan (the Patent Act), if the information processing by the software is concretely realised by hardware, a patent for the software-implemented invention may be obtained by filing an application with the Japanese Patent Office. Business methods by themselves are not patentable, and must be tied to a computer or computer network systems to be eligible for patent protection.

If the software meets the requirements of a 'trade secret' under the Unfair Competition Prevention Act (UCPA), which is, in essence, that the software is non-public knowledge, contains useful information and is kept secret, it may be protected as a trade secret without the need to file for registration.

IP developed by employees and contractors

Who owns new intellectual property developed by an employee during the course of employment? Do the same rules apply to new intellectual property developed by contractors or consultants?

Under article 15 of the Copyright Act, the employer is the author of any work created by an employee while performing his or her duties for the employer and that otherwise meets the legal requirements. Therefore, the copyright and moral rights to the work are retained by the employer as the author, unless separately agreed upon.

Under article 35 of the Patent Act, an invention made by an employee is deemed to be an 'employee invention' if it falls within the scope of the employer's business, and the act that led to the invention is part of the employee's current or past duties at the employer. If the employer has not established separate rules regarding the right to obtain a patent to an 'employee invention', the right will vest with the employee. If the employer has established rules that give ownership of the right to obtain a patent to 'employee inventions', the right will belong to the employer. In that case, the employee has a statutory right to receive reasonable compensation for the invention.

Independent contractors and consultants who are not employees are usually entitled to copyright and patent rights for works they create and inventions they develop, unless otherwise contractually agreed upon.

Joint ownership

Are there any restrictions on a joint owner of intellectual property’s right to use, license, charge or assign its right in intellectual property?

Under article 65 of the Copyright Act, if a work is created and each creator's contribution to the work cannot be separated and used individually, the copyright is held jointly. If one of the joint copyright holders wants to assign, license or use the work, he or she can only do so with the consent of all the other joint copyright holders. Under article 73 of the Patent Act, when a patent is held jointly, each of the joint holders may use the patent independently. However, the consent of the other joint patent holders is required for the assignment or license of the patent to a third party.

In the event of infringement of copyright or patent rights, injunctive relief and claims for damages may be brought independently.

Trade secrets

How are trade secrets protected? Are trade secrets kept confidential during court proceedings?

Trade secrets (including confidential information) can be protected by the Unfair Competition Prevention Act (UCPA). Under article 2 paragraph 6 of the UCPA, a protectable trade secret is defined as: (1) production methods, sales methods, and other technical or business information useful for business activities; (2) that are kept secret; and (3) are not publicly known. A court may, in a legal proceeding upon the motion of a party, issue a protective order, including prohibiting a party and its agents from disclosing the relevant trade secret to any other persons.

Branding

What intellectual property rights are available to protect branding and how do you obtain those rights? How can fintech businesses ensure they do not infringe existing brands?

Brands may be protected by a trademark under the Trademark Act of Japan (the Trademark Act . A trademark may be registered if an application is submitted to and approved by the Japan Patent Office. Applications can be submitted online. In addition, brands may be protected under article 2 paragraph 1 item 1 and 2 of the UCPA, regardless of whether or not they are registered, provided that it can be proven that the relevant product, or the product’s indications, is well known or famous.

In order for fintech businesses to ensure that they do not infringe existing brands, they must conduct research on existing trademarks. They can utilise J-PlatPat, the database operated by the National Centre for Industrial Property Information and Trading, to conduct the initial screening.

Remedies for infringement of IP

What remedies are available to individuals or companies whose intellectual property rights have been infringed?

The holder of the intellectual property rights can claim actual damages arising from the infringement. As this is difficult to do in practice, the Patent Act, Copyright Act, Trademark Act, and UCPA each provide provisions that presume damages, such as reasonable royalties. The holder of intellectual property rights can also seek injunctions against infringing third parties, as well as actions required to prevent the infringement. In addition, they may seek relief to restore honour or credit. For example, under article 115 of the Copyright Act, a copyright holder may petition the court to issue an order compelling the infringer to issue a public apology. Infringing third parties may also be subject to criminal penalties as provided under the respective statutes.