Patent Filing Cost Reduction Coming For Small Companies In Japan

Japanese small and medium-sized venture companies and micro enterprises will receive a reduction on patent filing costs under the national “Industrial Competitiveness Enhancement Act” as of 1 April.

The relief measures contained in the Act are expected to reduce patent filing costs by two-thirds. For example, fees will be lower for examination requests and patent annuities (for the first to the tenth year) for domestic filing applications as well as for search, transmittal and preliminary examination for international filing applications in Japanese.

In the case of international patent filing applications at the World Intellectual Property Organization (WIPO), the Japan Patent Office will reimburse companies two-thirds of their international filing fee and transmittal fee paid to WIPO.

The reduction of fees is applicable to:

–          Sole proprietorships with less than 20 employees (less than 5 employees in the case of trade and service industry) or has been in business for less than 10 years.

–          Corporations with less than 20 employees (less than 5 employees in case of trade and service industry) or a capital below 300 million yen (USD 3million) and in business less than 10 years in existence.

According to the Japanese Ministry of Economy, Trade and Industry (METI), the proportion of patent applications filed by small and medium-sized enterprises in Japan is 12 percent, less than half of that in the United States. The current average patent filing cost for SMEs is about 600,000 yen (about USD 6,000), and after 1 April it is expected go down to about 210,000 yen (about USD 2,100).

The subsequent cost reduction will render Japan as having the lowest average filing costs compared to the US, China, Korea and Europe, according to METI. The US is planning to reduce search and transmittal fees for international filing applications next year.

The Act, which was enacted in December 2013, is a part of the Japan Revitalisation Strategy, the third arrow of Abenomics. Its aim is to enhance support the competitiveness of Japanese small and medium-sized venture companies and micro enterprises in the field of innovation.

According to the Small and Medium Enterprise Agency, there were 3.85 million SMEs and micro enterprises of all industries in Japan as of February 2012. They still represent 99.7 percent of total enterprises, though the number of these enterprises has been on a decreasing trend since 1986.