Rieko Nishikawa, Keio University; Akira Rokusha, Keio Law School; Maki Atsushi, Tokyo International University
Abstract: In industrial societies, the allocation of profits from new technology, i.e. inventions, can cause disputes between inventor-employees and company-employers. Regarding employee inventions, the right of invention is ascribed to employees, while firms claim patent rights on employee inventions. When a firm obtains a profit through using an employee invention, the employee may wish to receive a fair share of the profit on top of the agreed-upon salary. Disputes often arise due to differences between the employee and the firm over pecuniary evaluation of the employee invention. Article 35 of Japanese Patent Law admits the right of employees to receive extra compensation from firms. This paper focuses on two cases of employee invention in Japan: one at Olympus and the other at Nichia. The former is important because it is the first Supreme Court judgment on employee invention. The latter is also important because of the huge size of the compensation agreement (20 billion yen (about $200 million)), which the Local Court awarded to the employee for employee innovation. However, the High Court later reduced the amount to 600 million yen (about $6 million) through a conciliatory process. The purpose of this paper is to explore the balancing point between firms and employees over patent rights.
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