Nobutaka Yokota, Managing Partner of FIELDS IP Attorneys

One year and five months have passed since the new opposition system came into effect in Japan on April 1, 2015. On August 19, 2016, the Japan Patent Office (JPO) announced on their English website that the number of Japanese patents which were opposed after the introduction of the new opposition system reached 1001 cases. The JPO also reported on the current status of the new opposition system and some issues with the opposition procedures. (See http://www.jpo.go.jp/torikumi_e/t_torikumi_e/status_oppositions_note_procedures.htm .)

According to the JPO Annual Status Reports and the JPO Preliminary Statistical Data as of August 30, 2016, the figures for granted patents, opposed patents, opposition rate, and invalidation trials for 2002, 2003, 2015, and 2016 are summarized in the following table.

*： The percentage of opposed patents per granted patents

**: These numbers are projections based on the respective figures from January 2016 to June 2016

As shown in the above table, the new opposition system seems to be not so widely used as the old opposition system. Specifically, the opposition rate in 2016 is expected to be drastically lower than those of 2002 and 2003.

While the number of invalidation trials will also decrease in comparison with those of 2002, 2003, and 2015, some of the cases to be invalidated are assimilated as patent oppositions. However, as mentioned above, the opposition rate is expected to drop in 2016.

Why is it that the new opposition system in Japan is so unpopular?

Several reasons can be taken into consideration, but the following three are likely to be material to the unpopularity of the new opposition system.

The first reason is that more people submit third party observations. The JPO statistics indicate that the number of third party observations filed has been increasing from 2003, recently ranging between 6,000 and 7,000 per year.

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In December 2015, the JPO reported that prior art references filed as third party observations were cited in JPO's Office Actions against 73% of the patent applications to which third party observations had been filed. Therefore, users who monitor patent applications and file third party observations are very likely satisfied with the outcome of their actions (third party observations).

The second reason is that, despite straw man opponents being accepted in the new opposition system, patent opposition users tend to attach importance to selecting only qualified agents or persons to act as straw man opponents.

Under the old opposition system, most oppositions were filed with no legal representation under the name of individuals not directly related to a patent firm so that patentees could not recognize the real entity who attempted to have the patent revoked. However, now when patent oppositions are filed with no legal representation under the name of an individual person, the opportunity to file additional Arguments when the opposed patent is amended may be missed. Specifically, under the new opposition system, additional arguments may be submitted when opposed patents are amended, but the prescribed period of time for responding to such amendments is of only 30 days. Further, an invitation to file aditional argumemts is mailed to the individual person's address.

According to J-Plat Pat (the JPO database), most opposed patents have been opposed by a straw man entity, but most of these straw man opponents are patent attorneys or employees of patent firms, or individual persons with legal representation. This indicates that those who utilize patent oppositions consider it important to rely on qualified agents or persons because the opposition procedure is not as straightforward as the old opposition system. Due to the complexity of the new opposition system, feeling that the new opposition system is costly, some users are hesitant to file oppositions.

The third reason is that JPO users, satisfied with the quality of examination, may find it difficult to raise revocation reason(s) against granted patents. The following graph shows the results of users survey on JPO's patent examination quality.

According to the survey, the level of satisfaction ("Satisfied" and "Somewhat Satisfied") with the overall quality of examination of Japanese patent applications has increased in the last four years. It is likely that the fact that JPO users are satisfied with the quality of examination affects the number of opposed patents in the new opposition system.

To summarize, the new opposition system appears to be less widely used as the old opposition system. The increase in third party observations being submitted, the complexity of the opposition procedures, and the increased level of satisfaction with the quality of examination may factor in the apparent unpopularity of the new opposition system in Japan.