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Deliberate Patent Drafting


The on going amendments to Japanese Patent Laws will increase the size of damages awarded in patent infringement cases by redefining how such damages are calculated.This is a part of the widespread reforms in leading industrialized nations aimed at recognizing the value of intellectual property (IP).According to a 1993 report issued by the Nomura Research Institute, the average damage award in United States IP litigation exceeds 10 billion yen, compared to an average in Japan of only 24 million yen. The primary areas affecting the size of awards in Japan to be addressed by the new amendments include the legal standards used by the courts when calculating appropriate licensing fees.

The ability to generate the capital and technology necessary for manufacturing products and providing services is growing. For this reason, in the 21st century the importance of legal structures to protect IP will grow. To put it simply, IP will play a more important role than ever before.
The increasing monetary value of patent rights will affect the manner in which these rights will be exploited. New patent applications should be drafted with thought given tohow the resulting IP rights are likely to be used.

Because damage awards in Japan have been low, few companies have found it worthwhile obtaining (persuing) compensation for infringement of patent rights. Effort has instead been focused on excluding others from making or selling competing products in Japan. As a result, Japanese patent practitioners have concerned themselves with the scope of protection, with little thought spent on how to draft patent applications with an eye towards maximizing damage awards. This contrasts with the practice in other industrialized nations, such as the United States, where the monetary value of the patent right is immense.

The claims that provide a wider scope of protection are different from those that provide higher damage awards. As a simple example, a patent for a semiconductor device that can be used in a wide range of equipment is often broader than the patent for communication equipment containing the same semiconductor device. Because the profit made by the semiconductor device is much lower than that of the communication equipment, a patent for the communication equipment may result in a greater damage award.

Drafting claims to maximize damage awards requires knowledge of products which will generate a larger profit. This means knowledge not only of product pricing, but also of market size, share, and profit margins. For an invention with potential uses in several different markets, RYUKA can maximize client profits by preparing different patent applications for the different markets. In the same way that the marketing departments of our clients prepare different products for different areas, we draft embodiments specific to the actual business plans of our clients. Many Japanese patent applications are modified when entering the US in consideration of these ideas. RYUKA urges our clients to let us handle the project from the beginning when filing in Japan in order to best exploit the patent process.

As our claim drafting methodology becomes more similar to the approach used when thinking about potential product development and markets, we patent practitioners must have the appropriate skills to analyze the products. To increase our knowledge and skills, when interviewing inventors, we discuss not only the inventions, but also the markets and the products that may adopt the invention. We prefer to meet on the company premises to allow discussion with people from each department, in order to understand the forecasted future business direction. We often cooperate with international consulting companies in order to enhance this process.

Planning an IP portfolio is like fishing. This firm, like all quality IP law firms, is concerned with safely catching the widest scope of the invention by preparing large nets without tears or holes. RYUKA applies modern fish finders, public and not - so - public information about the area, our technical expertise, and common sense to cast our large nets where fish are most likely to be found.

The fact that patent law firms can best serve their clients when they understand more than just the technology involved is already recognized in most industrial nations. To benefit from the knowledge accumulated by those practitioners, Ryuka selects quality overseas associates who will listen to our explanations of the business realities of our Japanese clients.

At Ryuka, we emphasize communication in all directions, and favor face-to-face meetings between our clients and associates. We regularly visit the offices of our overseas associates accompanied by our Japanese clients, in order to help explain the products and profit sources for their particular market. Such visits help unite the thinking of our clients and overseas associates, and foster full understanding between the two.

Networking is a key factor in Ryuka's business plans. Ryuka regularly invites overseas associates to Japan to explain details of their practice, and we actively translate and disseminate material provided by these associates. Our associates gain exposure to the Japanese market, and Ryuka benefits from the exchange of information. This level of cooperation with law firms abroad also allows Ryuka to smoothly and efficiently investigate foreign legal regulations for working, marketing, or licensing an invention outside of Japan.

Our networking also includes establishing relationships with U.S. venture capitalists who are especially skilled at evaluating potential markets for future patents. Our network also includes quality Japanese litigators who can be called on when our overseas clients require litigation in Japan. In essence, we support the total client business approach.

Obviously, the strength of the IP portfolio is not the only concern of our clients, and as a business partner we actively work to reduce the expenses arising from obtaining patents. One way we achieve this is by employing Japanese staff with degrees from U.S. universities. Because there are many Japanese native-level speakers with technical backgrounds in the United States, we can further reduce costs by taking advantage of today's networked age and preparing U.S. style applications in the United States.

The proposed amendments to increase the damage awards are but one indicator of the direction industrialized nations are heading towards in the next millennium. Wherever the legal system develops to protect new technology, it becomes possible for developers to safely allow other companies to manufacture their products. This is a step towards a more global approach to business, a world in which the responsibility of IP law firms will be great. Ryuka's clients will be ready for that world because Ryuka is stepping forward into tomorrow's world today.