In this section the relationship between the IP system and economic growth was examined. We focused on three measures: i) the introduction of the patent system for substances in 1975, ii) the advancement of policy for patent licensing in 1998 and iii) the enactment of the Basic Law on Intellectual Property in 2002.
As a result of the introduction of the patent system for substances in 1975, the number of granted patents, R&D expenditures and technology trades in the pharmaceutical industry have increased.
As a result of the promotion of the policy for patent licensing in 1998, the number of contracts entered into under the advancement of policy for patent licensing has increased. Additionally, the economic impact of promoting the policy was reported.
As a result of the enactment of the Basic Law on Intellectual Property in 2002, Japan’s competitiveness ranking has risen.
According to the data before and after the introduction of these measures, the number of granted patents, R&D expenditures, technology trades and licensing contracts increased, showing that it is possible for a relationship to exist between the IP system and economic growth.
3. Case Studies on Companies utilizing the IP System to Develop Business or Increase Economic Activity
3.1. Comparison of Company Data in Major Industrial Fields
The number of patent applications filed annually with the Japan Patent Office has remained high at more than 400,000 since 1998 (Fig.9). The number of applications in all technical fields has remained
approximately the same.
If all the company data were shown in one figure, no trends would appear. Therefore, it is necessary to divide the data by technical field as follows.
Fig. 9.Recent Patent Applications
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3.1.1. The Pharmaceutical Industry 67
Patents for substances tend to have a significant economic impact because the invention of substances can usually be applied to many other technologies. Therefore, IP strategy is very important for pharmaceutical companies.
Five major companies in the pharmaceutical field were selected. Their royalties have increased since around 1999 (Fig.10). This trend seems to have been caused by a change in IP policy, giving priority to utilizing rather than obtaining patents.
Takeda Pharmaceutical Company Limited is one of the IP-based companies in this sector in Japan.
The technological level in the pharmaceutical field is changing rapidly because biotechnology is playing an important role in the development of new medicines and Takeda is applying many biotechnology patents. The company has combined its intellectual property and research divisions in order to plan an effective IP strategy; it has advanced strategic patent applications and the utilization of intellectual property, which have provided it with important royalties. Intellectual property has been one of the most important factors in the company’s current success.
3.1.2. The Information Technology and Manufacturing Industries
The manufacturing industry is growing and the IP system could be contributing to this growth because the royalties in this industry have been increasing.
Five major companies in the IT and manufacturing fields were selected. The royalties of companies in the former sector have increased since around 1999 (Fig.11). IP policy has changed to give priority to utilizing patents rather than obtaining them and the trend in royalties seems to have been partly as a result of this IP policy.
Fig. 10.Royalties of Five Pharmaceutical Companies
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Sony is one of the IP-based companies in the IT field. Economic growth here has been very strong
because of the diffusion of digital technology. Sony is actively utilizing intellectual property and selecting IP strategy from self-utilization, licensing and cross-licensing in certain cases. Recently, the company
collaborated with Samsung in the utilization of intellectual property. Sony’s IP strategy includes a so-called
“patent portfolio”, which has been applied to its Organic Electroluminescence (EL) display. This strategy also includes a so-called “patent pool” as many patents tend to be included in one product. Intellectual property has been one of the most important factors in Sony’s current success.
Canon is one of the IP-based companies in the field of manufacturing precision instruments. Many patent applications tend to be filed in this area because manufacturing technology covers many technical fields.
Canon is one of the companies applying multiple patents. It has traditionally given a high priority to intellectual property as part of its culture and it has encouraged researchers to apply for patents as well as to produce scientific reports: there too, the IP section has combined with that of R&D. Management of intellectual property has been one of the most important factors in Canon’s current success.
3.1.3. The Automobile Industry
Five major companies in the automobile industry were examined and it was found that their R&D expenditures have increased since around 1999 (Fig.12). This means that new technology was being aggressively created in this field. Companies apply for a high number of patents because of the competitive nature of the industry.
Fig. 11.Royalties of Five IT and Manufacturing Companies
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Toyota is one of the IP-based manufacturers in the automobile industry. Their patent applications are of high quality, and this is a stable trend in this industry: R&D expenditures show the same pattern as patent applications. Toyota’s IP strategy includes a so-called “patent portfolio”, which has been applied to many models because they comprise many types of intellectual property. Toyota is furthering important selected fields by analyzing patent application trends. Intellectual property has been one of the most important factors for Toyota’s current success.
3.2. Results of the Analysis
The annual number of patent applications filed in Japan has remained relatively unchanged at more than 400,000 since 1998. If all company data were displayed in one figure, there would seem to be no apparent trend. Therefore, it is necessary to divide the data by technical field.
In the pharmaceutical field, the royalties of five major companies have increased since around 1999, and this appears to have been the result of an IP policy. Intellectual property strategy is very important for pharmaceutical companies because patents tend to have a significant economic impact. Takeda is representative of the pharmaceutical field, involved in strategic application and utilization of patents.
In the IT and manufacturing fields, the royalties of five major companies have increased since around 1999, and this appears to have been the result of an IP policy: Sony is representative of the IT field and promotes a patent pool.
In this industry, the companies’ expenditure on R&D has increased since around 1999, showing that much new technology was and is being created. Toyota is representative of the automobile industry and
promotes a patent portfolio.
All the major technological fields showed their own characteristics, related to each company’s IP strategy.
Fig. 12.R&D Expenditures of Five Automobile Companies
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