Without strong startups, it is impossible for Japan to win in this intense innovation competition and see economic growth. To support companies facing such challenges from an intellectual property standpoint, the Japan Patent Office (JPO) established the Startup Support Team last July, and have released startup support measures in rapid succession.

Intellectual property strategy

At the end of August, executives of startup companies gathered in Kasumigaseki in Tokyo’s Chiyoda Ward. They were from 10 companies that were selected to receive support from the JPO’s IP Acceleration Program for Startups (IPAS). All were companies gaining attention for their original technologies and business models such as Axelspace Corp., known for the design and development of microsatellites and aceRNA Technologies, which has developed a cell sorting technology.

IPAS was launched to support the startups in building IP strategies for accelerating their businesses. Specialists from various fields formed IP Mentoring Teams and were sent to companies for a given period of time.

In order to develop businesses based on technology or business models and exercise competitive superiority, various intellectual property strategies are needed, such as filing and obtaining patent rights or protecting against imitation by keeping the information within the company, as well as accumulating know-how at the same time.

In addition, appropriate management of intellectual property could lead to recognition for collaboration with large corporations and fundraising.

However, compared to foreign startups highly aware of intellectual property management, quite a few startups in Japan are unable to take concrete actions due to limited management resources, in spite of recognizing the need for intellectual property management.

To address this, the program aims to grow businesses by bringing companies and specialists together to build strategies in which management and IP perspectives are integrated.

“It’s necessary to improve supporting measures focusing on venture companies and create an environment where innovations will constantly take place,” according to the government’s Intellectual Property Promotion Plan adopted last June. It noted that “existing support measures for small and midsize businesses do not sufficiently deal with challenges unique to venture companies.” As to the future direction, the plan also mentioned the need for new supporting measures dedicated to startups.

Realizing speedy reviews

What are challenges unique to startups? How they can acquire rights with the necessary speed to keep up with technological evolution constitutes one factor to provide rapid and flexible management.

As one of the measures to accommodate needs “to secure acquisition of rights before anyone else,” in July 2018, restrictions were eased for “super-accelerated patent examinations,” which allow for faster office action processing than regular accelerated examinations.

Although this system requires that a patent applicant must have an application already filed with a foreign patent office, it has been modified for startups to use the system when the invention is in practice or commercial use, without the submission of a foreign patent application. With this system, initial processing of office actions, which used to take an average of nine months in fiscal 2017, are expected to greatly shorten to an average of 0.8 months.

At the same time, to support startups with limited experiences in patenting for an early acquisition of rights, a new system went into effect. This system offers an interview with an examiner who is able to give detailed advice for patenting during the process of regular accelerated examination. Through this system, initial office action processing in fiscal 2017 was completed in an average of 2.3 months.

IP community for startups

The JPO has come up with innovative support measures such as IPAS, super-accelerated examinations and compiling collections of intellectual property strategy examples.

What they envision after these series of measures is the formulation of a “startup intellectual property community.” In December, a membership networking site IP Base was launched as a base for various activities and to encourage social interaction among startups, venture capitalists, accelerators and IP experts such as patent attorneys and lawyers.

For participants including startups and relevant people, as well as specialists, it plans to host study sessions in different themes such as artificial intelligence and biotechnology.

“We want Aizu to produce global enterprises like Google LLC and Apple Inc.,” said Masayuki Hisada, director of Aizu Laboratory Inc., based in Aizuwakamatsu, Fukushima Prefecture, at a Japan Patent Office symposium on IP, information technology and startups, held at his alma mater, the University of Aizu on Jan. 22.

His company developed a service to monitor the elderly using blockchain technology, as well as a system to control electricity via smart plug. The firm is now involved in a test of self-driving cars on public roads in Namie, Fukushima Prefecture. Though Namie’s evacuation order was partially lifted at the end of March 2017, progress in returning the residents remains slow.

The recent test run of self-driving cars is meant to lead to the swift recovery of public transportation services, while providing a new means of transportation to local residents.

Shinichi Kaneyama, chief and assistant director of Namie’s Planning and Finance Division, said, “We want to attract more companies through providing various innovation test fields.”

Aizu Laboratory conducts business that uses innovative technologies to solve social issues. Key in the choice of Namie for the company’s location was the emergence of a local startup ecosystem.

The University of Aizu specializes in computer science and is giving birth to startups and venture companies in various areas, including advanced technologies such as the “internet of things” and virtual reality.

Those enterprise challenges are boosted by an alliance between industry, the government and academia. Aizuwakamatsu’s industrial promotion policy through information and communications technology is also behind this trend.

Hiroyuki Oka, a senior associate professor at the University of Aizu’s Revitalization Center, is involved in IP management for local companies and academia-business collaboration support. On temporary assignment from the Japan Patent Office to the university, Oka stressed the importance of IP-conscious company management.

“IP is a lubricant and driving force for the locale, companies and universities to collaborate and proceed to the next stage,” he said. Evidence of this can be seen as new industries are now sprouting up throughout Fukushima Prefecture.

Patents as ‘weapons’

Some manufacturing companies are using patents as “weapons” to succeed in entering growth areas.

One example is Syntec, headquartered in the city of Iwaki. Originally involved in the development of memory devices for industrial computers at Hitachi Ltd., Syntec President Kazumi Akatsu established his technology venture in 1996, employing about 20 people. Syntec has been aggressive on IP strategy as it has submitted 15 domestic patents to date, of which 12 have already been registered.

The company had been earning stable profits from cellular phone antennas and radio wristwatch antennas. However, an incident occurred in the mid-2000s after they had successfully developed a unique antenna technology, following a consignment from a major partner to do so. The technology leaked during the mass production phase and the business partner decided to produce the antenna on its own. This resulted in Syntec suddenly losing its orders. Akatsu regretted placing too much priority on development and not acquiring patents beforehand.

After this bitter experience, Syntec began conducting an IP-oriented approach to business. It entered the medical equipment field by capitalizing on its unique twisted wire processing technology to develop dental braces and medical internal fixation cables connecting bones and other parts of the human body, such as artificial tendons.

Syntec was hit by the Great East Japan Earthquake shortly after it began research and development on medical equipment. Although its facilities were destroyed in the disaster, Syntec restarted its plant two months after the earthquake, and established an industry, government and academia collaboration together with Fukushima Medical University among other partners.

“I cannot deny that in the beginning we blindly submitted patents, and I realize that doing so was inefficient,” Akatsu said.

Currently, Syntec seeks advice from patent attorneys and other specialists and receives multifaceted support from the initial stages of R&D and product planning, in addition to the support when they submit a patent. By using a “patent map” that sorts out and analyzes patent information, the company is able to keep its R&D focus on areas where it has few competitors.

Encouraging the birth of IP

In Fukushima, conditions are ready to facilitate the emergence of IP. In the Hamadori area, the Fukushima International Research and Industry Development Project (Fukushima Innovation Coast Framework) that seeks to nurture the robot and energy industries, as well as the Fukushima Renewable Energy Institute, which belongs to the National Institute of Advanced Industrial Science and Technology, play central roles in putting next-generation technologies into practical use.

IP is essential to innovative technologies and making IP adequately into an exclusive right is expected to lead to further innovation. The test run of Aizu Laboratory’s self-driving car in Namie is also subsidized with money allocated in line with the Fukushima Innovation Coast Framework.

The government thinks the power of local small and midsize corporations is just as integral as research institutions and large companies to help promote the Fukushima Innovation Coast Framework. Patent registration fees for small and midsize companies in the Hamadori area will be reduced a further 25 percent to a quarter of the regular fee, from April, to help such companies with their business.

Upon establishing an environment for true independence and reconstruction of the disaster-affected areas, IP’s potential is growing.