Japanese Inventor Awarded Huge "Reasonable Remuneration" Against Employer

In a recent Japanese court decision, an inventor was awarded more than CDN$252 million as "reasonable remuneration" under Japanese patent law for transferring his rights in an invention to Nichia Corp (Nichia). Shuji Nakamura, now a professor in the US, invented the blue light-emitting diode while employed by Nichia. Estimates are that about 60% of Nichia's annual sales revenue is derived from the invention, now widely used in colour displays on cell phones, personal digital assistants, traffic signals, automobile instruments, and other products. Japanese courts have thus far been reluctant to enforce the employee remuneration provisions in the Japanese Patent Act which include a calculation of "reasonable remuneration" on the basis of the profits and the contribution the employee made to the invention. Despite rumours of legislative reform on patent compensation, some Japanese companies are concerned about the power of courts to vary contractual provisions on compensation. In Canada, an inventor, even an employee, is presumed to own an invention until assigned to the employer. The two exceptions to this presumption are: (a) where there is an express contract to the contrary; or (b) where the employee made the invention in the course of employment. In practice, employment contracts often require that employees assign their rights in inventions developed during their employment, and some provide for bonuses or profit-sharing to reward inventive employees. However, even in the absence of such inducements, employees may be found to have assigned their rights to employers, and it is a question to be determined on the facts whether the rights have been assigned. If the inventor is a contractor (such as an independent consultant), there is less likelihood that an assignment will be implied. For other reports on this subject, visit: http://makeashorterlink.com/?S45D21E47; or http://makeashorterlink.com/?E26D22E47. Summary by: Peter Wang