Patent Act Article 78: Non-exclusive License
1. Explanation of the Article
What is generally referred to as a patent license is a non-exclusive license. You can "grant" a non-exclusive license to multiple people at the same time. Note that while a non-exclusive license is "granted," an exclusive license is "established."
・As a measure for essay examinations, ① please memorize the requirements for a single organ. Also, ② an exclusive non-exclusive licensee can exercise the right to seek an injunction only in extremely exceptional cases. In an essay examination, please first explain that the right to seek an injunction, which is the general rule, cannot be exercised.
・A non-exclusive license is a right with obligatory characteristics, and it is also said to be the non-exclusive licensee's right to claim non-action against the patentee. In other words, a non-exclusive license is the right not to have the patent right exercised against you by the patentee. Also, while a non-exclusive license is generated by granting, registration is a requirement for the effect of an exclusive license.
・Exclusive non-exclusive license, fully exclusive non-exclusive license, and non-fully exclusive non-exclusive license.
An exclusive non-exclusive license is a non-exclusive license accompanied by a special agreement that no licensing contract will be made with anyone other than the contract partner. A fully exclusive non-exclusive license is a non-exclusive license accompanied by a special agreement that no licensing contract will be made with anyone other than the contract partner, and the patentee themselves will not practice it thereafter. If the patentee reserves the right to practice, it is called a non-fully exclusive non-exclusive license.
・Single organ (Contract, direction and supervision, delivery of all items)
When a contractor who has concluded a contract for the manufacture of patented products with a non-exclusive licensee manufactures patented products, if
(1) there is a contract with the non-exclusive licensee to manufacture for a fee, and
(2) there is direction and supervision by the non-exclusive licensee regarding the purchase of raw materials, sale of products, and quality for the production, and
(3) all products are delivered to the non-exclusive licensee and not sold to others, the contractor is considered a
single organ of the non-exclusive licensee, and the contractor's practice of the patented invention does not constitute an infringement of the patent right.
2. Others
2.1. Presence or absence of the right to sue for infringement (Osaka High Court, June 20, 1986)
(1) Injunction claim
It is interpreted that an injunction claim as an inherent right is not recognized. Even an exclusive non-exclusive license is merely an obligatory right and lacks exclusivity. However, if the patentee has explicitly assumed the contractual obligation to exclude third-party practice and ensure exclusive practice in the contract, it is possible to exercise the patentee's right to seek an injunction by subrogation by applying the concept of diversion of creditor subrogation under the Civil Code (Article 423 of the Civil Code).
(2) Claim for damages
It is interpreted that it is recognized. An exclusive non-exclusive licensee has paid the patentee the license fee necessary for market monopoly and has obtained the position and expectation to be able to monopolize the market and profits. This is because the exclusive non-exclusive licensee's position is harmed and their profits are taken away by the practice of the patented invention by a third party without authority.
2.2. Requirements for intent and negligence in damages (Osaka High Court, December 1, 2000)
(1) Article 103 (Presumption of negligence) is applied mutatis mutandis.
The basis for the presumption of negligence in Article 103 is based on the fact that the existence and content of the patented invention are publicized, not on the fact that whose right it is is publicized.
(2) Article 102, Paragraph 2 (Presumption of amount of damage) is applied mutatis mutandis.
The provisions of Article 102, Paragraph 2 are based on the policy objective of allowing the right holder to recover objectively reasonable lost profits and the recognition of the social fact that the patentee and the infringer can achieve the same sales performance, and there is no difference in these points even for an exclusive non-exclusive licensee. *It is thought that Article 102, Paragraph 1 can also be considered in the same way.
(3) Article 102, Paragraph 3 is not applied mutatis mutandis.
It is a provision that stipulates the amount equivalent to the license fee as the minimum amount of damage to the patentee, and given this nature, it is interpreted that it cannot be applied mutatis mutandis to an exclusive non-exclusive license that does not have the authority to license the practice of the patented invention to others.
2.3. Regarding restrictions on non-exclusive licenses (Osaka High Court, May 27, 1993)
In actual non-exclusive license establishment contracts, various agreements are made regarding raw material suppliers, product standards, sales channels, use of signs, etc. These are not directly related to the practice of the patented invention, but are merely conditions attached to it, and it is interpreted that their violation remains merely a breach of contract.
3. Example of an exclusive non-exclusive license being granted
According to an announcement on August 1, 2019, HEALIOS K.K. has received an exclusive license worldwide for patents and know-how related to iPS cell-derived retinal pigment epithelium (RPE) cells from RIKEN, a national research and development agency, and is conducting joint development with Sumitomo Dainippon Pharma Co., Ltd. in Japan (Source).
Non-exclusive licenses do not require registration, so they rarely appear in public. However, non-exclusive licenses are often granted between group companies.
(Reference)Note that imposing restrictions during a license agreement that prevent the licensee from receiving licenses from other companies may pose issues under the Antimonopoly Act.
https://www.jftc.go.jp/dk/soudanjirei/h13/h12nenmokuji/h12nen06.html
・Patent Act Article 78
(Non-exclusive License)
Article 78 (1) A patentee may grant a non-exclusive license to another person for their patent right.
(2) A non-exclusive licensee has the right to work the patented invention as a business to the extent prescribed by the provisions of this Act or as determined by the act of establishment.
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