Author: Shun Matsuura, Attorney at Law

1. Introduction

If a company can create a situation where its developed products and services cannot be easily imitated by third parties and can be carried out semi-exclusively, the company can significantly increase its competitive advantage.
As readers of this column are aware that such a situation can be created by utilizing intellectual property rights, such as patent rights and trademark rights.
However, during recent consultations with our clients, we have come across cases where many clients through various information sources understand the importance of acquiring intellectual property rights and some clients have actually acquired these rights, but have failed to gain a competitive advantage due to errors in the methods or content of obtaining these rights. (in other words, the intellectual property rights obtained by these clients are meaningless).
Therefore, in this column, we will explain how to consider acquiring intellectual property rights that protect your products and services and lead to business growth.

2. Product/Service Protection and Patent Rights

When inventing a groundbreaking product or service, the first intellectual property right that comes to mind is a patent right. To explain briefly, a patent rights grant the inventor of advanced technology the exclusive right to use that technology for a certain period of time.

By acquiring a patent right, you can build a strong competitive advantage by exclusively utilizing the invention. Therefore, you should consider the possibility of obtaining patent rights for any invention, and in fact, many people aim to acquire patent rights.

However, although those who have obtained patent rights are aware of the importance of obtaining patent rights for the core technology of the invention, as they have consulted with patent attorneys when filing applications, there are frequent cases where the perspective of whether you can exclude third parties if they copy/imitate your ideas, or in other words, whether you can prove that a third party has infringed on your patent, is missing in such applications.

For example, if you acquire a patent right for a certain program, and release a service using that program, similar services may be successively released by competitors. In this case, even if the competing service is infringing on your company’s patent rights, all that can be observed externally is the software’s user experience, and it is extremely difficult to determine what kind of program is being used (and whether it infringes on your patent rights). While recent legal amendments have introduced a certification system to address this to some extent, this system can only be used after filing a lawsuit, meaning you may be forced to decide whether or not to file a lawsuit, without being able to judge your chances of winning—essentially leaving the outcome to your luck.

In order to avoid such a situation, it is essential to consider whether it is possible to exclude similar services by examining whether the technology that is represented by the function can be included in the scope of patent protection.

Additionally, for patents related to manufacturing methods as well as patents related to programs where it is difficult to judge infringement from the external perspective at the first glance, it is important to consider whether or not patent rights can be obtained in a form that can be identified externally, in order to effectively monopolize the technology.

3. Prevention of Counterfeits and Intellectual Property Rights

(1) Many people understand the importance of registering trademarks when developing products to enhance the brand value of the products and prevent the distribution of counterfeit products.

For example, as of the date of writing this column, Starbucks has registered as many as 338 trademarks (including those pending registration) to prevent free-riding on their brand value, indicating that they place great importance on maintaining and building their brand value.

Therefore, to prevent counterfeit in all forms, it is necessary to consider registering trademarks in different combinations of characters and logos, rather than just registering the trademark in standard characters actually used by your company. Of course, registering multiple trademarks will incur significant costs for registration and maintenance, so it is necessary to consider various factors, such as what the core brand value is, the types/classes of designated services to be included, expected counterfeit products, the amount of investment involved, and other factors to determine whether you can build and maintain your company and product’s brand value.

(2) Additionally, many counterfeit products are often sold with slightly altered names, and except in cases where it is clearly obvious, it becomes necessary to contest the infringement of the trademark in court, which takes time to stop the sales activities of the counterfeit products, resulting in a lack of effectiveness.

In such cases, design rights can be useful. Design rights protect the appearance/design of industrial products, and since the counterfeit products have the same or similar designs, even when the identity or similarity of trademarks is not immediately clear, it is possible to request an injunction to stop sales or prevent imports at customs based on this right.

In this way, by combining and utilizing trademark rights and design rights, it is possible to significantly increase effectiveness. Therefore, it is necessary to properly examine how to protect your brand value.

4. Conclusion

Although the need to acquire patent and trademarks has become widely knows due to the ease of obtaining information through social media and other means, , but there are numerous cases where the intellectual property rights have become meaningless as a result of a lack of perspective on the effectiveness of protecting rights and brands.

What are your company’s goals? Do you just want to obtain and advertise trademarks or patents for promotional purposes? or is your goal to genuinely brand your products and services and earn significant profits by monopolizing the market? The matters to consider will differ depending on your answer.

If your goal is the latter that is to truly build and maintain the brand value of your products and services, you must determine what kind of intellectual property rights are necessary and beneficial for building and maintaining your brand value, taking into account the costs required for acquiring and maintaining intellectual property rights, the effectiveness of each right, and the content of the rights to be acquired.

This decision-making process is a management decision in itself and it is necessary to make an integrated judgement based on various factors such as legal knowledge, management strategy and branding. Therefore, you should consult with a professional who has a deep understanding of your business.

At our law firm, we not only handle intellectual property lawsuits but also receive a wide variety of management consultations from many of our clients, and our attorneys with patent attorney qualifications also handle intellectual property application services.

If you are already troubled by counterfeit products, or are unsure if your current intellectual property rights are sufficient, or if you are wondering where to start when developing new products or services, please feel free to consult us, as we will propose a service that is just the right size for your company’s size and goals.