341. First of all, this delegation would like to thank the distinguished delegation from US for summarizing the discussion in the previous year. And this delegation would like to review that discussion briefly as well. Throughout 2018, we shared each experience and national or international policies, and not only developed country Members but also developing countries provided empirical data and case studies showing positive impact of IP on innovation. As we have seen in the discussion, to certain extent, we have the common perception that IP contributes to improving the quality of life and creates essential condition for SMEs and start-up to succeed. This delegation believes that recognizing common experiences and views helps us to properly understand the role of IP system and to find appropriate direction of its future development.
342. This delegation would like to share our experience and national policies regarding publicprivate collaboration in innovation. Especially, we would like to focus on ownership of patents in the collaborative R&D project funded by government and show you some survey results in Japan.
343. First, we will show you the collaboration framework in R&D project funded by government in Japan. In general, it is said that private sector tends not to invest sufficiently under the high uncertainty situation. This delegation believes that public sector can play a key role in encouraging and supporting private sectors in such a case. Japanese government implements commissioned R&D projects in order to complement underinvestment on the R&D projects by using public fund. And commissioned R&D projects involve private companies so as to achieve the maximum use of outcomes of R&D projects.
344. In this projects, ownership of patent rights should be considered with the view to promote effective utilization of the results of such a R&D project. Who should own patents obtained through commissioned R&D projects? Article 19 of Industrial Technology Enhancement Act in Japan stipulates that the national government may decide not to accept patent right pertaining to the result of R&D entrusted by the government from that entrusted party.
345. Therefore, government may decide whether government owns patents or trustees' own patents.
346. In this slide, this delegation briefly shows you two different scenarios regarding to commercialization process.
347. First, in case where trustees' own patents, trustees will engage in the commissioned R&D projects and conduct continuous R&D after projects with expectation of return of R&D investment and secure profit by exclusive implementation.
348. On the other hand, in case where government owns patents, trustees will engage in the commissioned R&D projects in expectation of obtaining know-how and first-mover advantage, and after the project, not only trustees but also third parties will consider pros and cons to challenge the commercialization of the outcomes. And each company exerts their respective strengths to utilize the outcomes of the project in diverse form of applied products and services. Competition among companies will provide inexpensive products and services as well.
349. In both scenarios, outcomes of R&D project will be returned to the whole society through supplying products and services based on the technologies established in the commissioned R&D projects.
350. According to the survey, utilization rate of patents owned by trustees are larger than that of patents owned by government. It reveals only 2.5% of patents owned by government are utilized, while 20.4% of patents owned by trustees are utilized. And even definition of term "utilized" in case where trustees' own patents includes present and future self-implementation and license, 8.0% out of 20.4% patents are utilized in "present" self-implements or license.
351. Therefore, the survey indicates clearly that the mechanism of making it possible to own patents foster utilization of patents of the industrial commissioned R&D project.
352. Finally, this delegation would like to show you main factors affecting the utilization rate of patents.
353. In case where trustees' own patents, possibility of owning patents incentivizes trustees to deeply engages in the commissioned R&D project and enhances an trustees' incentive for acquiring patents with a view of commercialization and ensures an incentive for commercialization after the end of commissioned project. In addition, trustees who own patents are likely to utilize the outcomes of R&D project efficiently, that is partly because they are able to streamline technology transfer by licensing patents in along with relevant know-how and technical guidance.
354. On the other hand, in case where government owns patents, patent applications are likely to be filed without a view of commercialization, and when government license patents, usually relevant know-how and technical guidance are not available for licensees.
355. In summary, this delegation would like to emphasize again that the mechanism of making it possible to own patents incentivizes trustees to engage in R&D project funded by government and to commercialize with continuous investment by themselves, and it improves the utilization rate of patents and promotes commercialization of outcomes from commissioned R&D projects. This delegation hopes that its information helps other delegations create their own domestic policies. And this delegation looks forward to hearing your active inputs on this agenda item.