NATIONAL SCIENCE FOUNDATION
TOKYO REGIONAL OFFICE

July 20, 2004

The National Science Foundation's Tokyo Regional Office periodically reports on developments in Japan that are related to the Foundation's mission.  It also provides occasional reports on developments in other East Asian countries.

Tokyo Office Report Memoranda are intended to provide information for the use of NSF program officers and policy makers; they are not statements of NSF policy.

Report Memorandum #04-05

CSTP reviewed unique efforts being exercised across ministries for promoting the use of university-originated intellectual properties. Based on that, CSTP’s Panel for Intellectual Property Strategies compiled the following strategies and released them when they convened on May 26, 2004. The strategies can be summed up as follows:

- Not only the patents, but also research materials and digital contents are to belong to the organization and to be managed by the organization.

- The Japanese Bayh-Dole Law is to be expanded to include digital contents and software and the property rights belong to the organizations.

- Guidelines for making good use of patents in research activities are to be established.

- University Intellectual Property Centers and TLOs are to be improved and strengthened. (as of May 2004 there are 43 University Intellectual Property Centers and 37 TLOs.)

- University-oriented venture companies are to be approved for listing on the stock market.

- It should be made clear that the indirect costs included in the competitive research funds can be used to cover the costs needed to obtain and maintain patents.

4. Personnel Fostering: In addition to fostering lawyers and patent lawyers who are versed with handling intellectual properties:

- Make use of Postdocs who are versed with S&T and intellectual properties

- Establish Evening programs or e-learning for company researchers and technicians to gain knowledge about intellectual properties.

Of the above, this report is to focus on the TLOs and University Intellectual Property Centers.

The history of the Japanese government’s efforts for establishing strategies for intellectual properties goes back to 1998, when the Technology Transfer Law was established jointly by MEXT (Ministry of Education, Science and Technology) and METI (Ministry of Economy, Trade and Industry). Stimulated by the “age of intelligence” referred to in an OECD report and in an effort to improve the stagnant economy, the research results dormant at universities were targeted. However, the majority of the research results at universities are oftentimes too pioneering and innovative to be immediately evaluated in the market and risky for companies to make immediate use. In an effort to close the gap and to bridge the practical interests of universities and industries, the government’s intervention was necessary and the Law was created. Under the Law, MEXT and METI jointly established TLOs (Technology Licensing Offices). MEXT was involved in the establishment as all the universities in Japan are under supervision of MEXT, and METI made financial support of five years for one TLO of up to Yen 30 million (ca. $277,000) per year with annual review. The proposals for requesting establishment of TLOs are jointly reviewed by MEXT and METI. The idea of TLO followed exemplary cases in the U.S. whose economic recovery in the 90’s is partially attributed to the establishment of technology transferring organizations.

The number of TLOs in Japan reached 37 as of July 2004 (they are listed below). For some of them, METI’s five-year support has been finished and they are in independent operation. The TLOs can be divided into three types depending on the nature: (1) TLOs established within universities; (2) TLOs established outside of universities, but dealing with only one particular university; (3) TLOs established outside of universities, and dealing broadly with two or more universities. When the first TLOs appeared, the national universities were not independent entities. It was possible at that time for the TLOs to reside in the private university campuses, whereas profit-making TLOs were not allowed to reside in the campuses of national universities. Thus, many TLOs were established outside of universities as independent entities.

Further, in 1999 the enactment of the Japanese Bayh-Dole Act brought the shift of intellectual property rights from the individual inventors to the organizations for which they work. This has prompted the government to think about establishing a center in a university that specializes in protecting intellectual properties obtained at the university. Furthermore, in preparation for this, CSTP established in January 2002 a Panel for Intellectual Property Strategies and in June the Panel compiled an interim report. Based on the report, “Guidelines on Intellectual Property Strategies” was released in July 2002, which was followed by the establishment of the Basic Law for Intellectual Properties in December 2002. It was further followed by the establishment of Intellectual Properties Strategy Center in March 2003, which produced action plan in July 2003. Under the action plan, MEXT invested Yen 2.4 billion (ca. $22 million) in JFY2003 for establishing University Intellectual Property Centers.

The mission of the centers is to strategically implement creation, management and utilization of intellectual properties at universities under the new law that shifted intellectual property rights from individuals to institutions. Also, they function as windows in contracting with companies when university-produced patents are used, in solving problems on matters of conflict, and in advising and enlightening as to how to deal with intellectual properties at universities.

The MEXT project for establishing University Intellectual Property Centers solicited for applications to all the universities, inter-university facilities, and technical colleges from February through April 2003. After review, 43 universities were granted an average Yen 50 million (ca. $462,000) per five years with a review in the second year. Each center is allowed to be named uniquely. The 43 centers are listed below.

As for their relation with TLOs, the definition specifies that the Intellectual Property Centers focus primarily on creation and protection of intellectual properties, whereas TLOs focus on making use of intellectual properties. Each TLO is allowed to develop its own unique relationship with each University Intellectual Property Center. In telephone interviews to MEXT and METI, both report that as of now each of the centers and TLOs is aware of its roles and is maintaining favorable relationships with each other. With the change in the status of national universities to independent entities as of April 2004, some TLOs which were established outside the university campuses have moved into the campuses. As the University Intellectual Property Centers are one year old, a little more time would be required to see how University Intellectual Property Centers and TLOs will develop and what relationship they will have, just like the model TLOs in the U.S. took some time to become exemplary cases.

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