Support program for SME IP activity in Japan Naohiko YOKOSHIMA WIPO forum on intellectual property and small and medium-sized enterprises 13 September 2007

2 SME policy and patent policy are planned and implemented by the same ministry. SME policy and patent policy coordination Japan Patent Office

3 SMEs are the economic base of the industrial value chain and the underpinning of the Japanese economy. 99.2% of all businesses are SMEs (5.7million entities). SMEs have provided a safety net by covering 70-80% of total employment. 60% of SMEs have direct or indirect transactions with large enterprises in the manufacturing industry. Brief background of Japanese SME policy

4 SMEs pursue more R&D in new areas. Brief background of Japanese SME policy Japan SME Research Institute, 2002

5 New SME policy is to support self-help efforts for innovation… Previous SME Basic Act (1963) Rectify the gap between large enterprises and SMEs. The New SME Act (1999) Supporting self-efforts for business innovation SMEs have potential in the Creation of New Business, Promotion of Market Competition, Increase of Attractive Job Opportunities and Vitalization of Regional Economy Brief background of Japanese SME policy

6 With a high number of patent applications and a surge of requests for examination… Brief background of Japanese patent system

7 Backlog of examinations increases and first action pendency becomes longer.

8 Brief background of Japanese patent system Although an acceleration plan foresees shorter pendency… Examiners 1,105 (2002) 1,468 (2006) FA actions 215,288 (2002) 243,548 (2006) Patent prosecution highway from 2007 FA pendency 26 months (2005) 11 months (2010) Outsourcing patent search to the private sector (from 2005) Additional special measures are necessary to support innovative SMEs.

9 Outline of comprehensive support for SMEs SMEs need support in each stage of the IP cycle.

10 Support for strategic R&D and application Education on the IP system and an advanced search environment helps to seek strategic R&D. 700 IP seminars annually Free consulting services (4,000 cases annually) at the patent office 2,500 Regional IP Advisory Counters Free prior art searches for SMEs (3,100 in 2006) Online (1998-)/Internet(2005-) application (94%)

11 Special measures in patent procedure The financial burden for application and request for examination is crucial for SMEs. until 2004 from 2004SME exemption Application Fee \21,000 US$180 \16,000 US$140 Examination Fee \84,300+ US$730+ \168,600+ US$1,470+ \84,300+ US$730+

12 Special measures in patent procedure Examination fee reduction/exemption are targeted to innovative SMEs and start- ups. Exemption Non-corporate SMEs reporting no profit 50% reduction Corporate SMEs reporting no profit, or innovative SMEs with; More than 3% of profit invested for R&D Innovative management plan Fundamental manufacturing technology Joint innovative business with diverse industry The last three conditions are verified by authorities.

13 Special measures in patent procedure The fee system may support strategic consideration with search support… And time is money… Half of the examination fee will be refunded if a request for examination is withdrawn before the first action. All SMEs may request free Accelerated Examination. Average first action pendency is about 2.4 months, compared to 26 months in normal procedure.

14 Support for patent exploitation Patent fee reduction helps SMEs to maintain their potential rights... yeartill 2004From 2004SME Exemption 1-3\13,000+\2,600+\0 for no profit individuals \1,300 for innovative SMEs 4-6\20,300+\8, \40,600+\24, \81,200+

15 Support for patent exploitation Matching SMEs patents and potential users is difficult, yet crucial. Patent Licensing Advisors (106 in 2006) Patent Licensing Database (21,000 licensable patents stored in 2006) Patent Business Market Contracts through matching measures 130 (1999) 2,024 (2005)

16 Public relations with SMEs Reaching SMEs is an initial step for support and for the patent office to know its users. SMEs addresses can be obtained from patent applications. 86% of applications are made through patent attorneys (7,000 in total). Direct mailings to SMEs and patent attorneys introducing support. Annual survey of SMEs.

17 Additional information can be found on the JPO website: Thank you.