Heisei 16 (Ne) No. 962, No. 2177
Appellant (Incidental Respondent): Nichia Corporation
Respondent (Incidental Appellant): Shuji Nakamura
1.Purport of Recommendation of Compromise
Respondent performed the Patented Invention (patent No. 2628404 "Method of Depositing Nitride-based Compound Semiconductor Crystal Layer,' the "404 Patent') in 1994, while in the employ of the Appellant, and then afterwards performed several important patented inventions (patent No. 2540791 "Method of Manufacturing P-type GaN Compound Semiconductor' (annealing method), patent No. 2141400 "Method of Crystal Growth for Gallium Nitride-based Compound Semiconductor' (low temperature buffer layer deposition method) and other many valuable patented inventions (inventions relevant to double hetero structure light emitting device, quantum well structure light emitting device, transparent electrode device, LED by combination with phosphor and blue LED and other) (including the joint inventions, likewise in the following). The rights to receive patents relevant to these service inventions (including the rights to receive utility model registration) were assigned to Appellant and the same acquired numerous patents, etc., (including a total of 195 Japan patents and registered utility models, along with foreign patents corresponding to the same), and retains know-how.
However, this Lawsuit is a demand for reasonable remuneration under Article 35 of the Patent Law relevant to the 404 Patent, and requests for reasonable remuneration with respect to the aforementioned numerous service inventions by the Respondent other than said Patent are not the subject of this Lawsuit.
The Court considers in this Lawsuit that it is extremely important and meaningful for both parties concerned to strive for a complete resolution by settlement concerning the reasonable remuneration for assignment by the Respondent of the rights to receive patents for all service inventions by the foregoing, before making judgment as to the reasonable remuneration for assignment of the rights to receive the patent for the 404 Patent, and hereby recommends settlement of a total resolution, including future disputes, with respect to the reasonable remuneration for the assignment of the rights to receive patents for all service inventions from during the time the Respondent was employed at the Appellant.
2.Concerning the "reasonable remuneration' in Article 35 of the Patent Law
"Reasonable remuneration' in Article 35 of the Patent Law must be calculated in consideration of the "profits employers, etc., should receive due to such invention' and "the degree of employee contributions, etc., to making invention,' and the amount must be in accordance with the purpose of Article 1 of the Patent Law, which is, "to encourage invention' and "to contribute to the development of industry.' In other words, the amount of reasonable remuneration for the assignment of the right to receive a patent on a service invention should be sufficient as an incentive for invention by employees, etc., and, at the same time, should be something that makes it possible for the companies, etc., to overcome severe economic situations and international competition, and develop in the midst of the same, so it is reasonable to think that the said possesses characteristics naturally different from the amount of profits the joint operators of companies bearing the various risks receive under favorable economic conditions.
3.Concerning "reasonable remuneration' for the Assignment of the Rights to Receive the Patents for All the Service Inventions by the Respondent
The Court figured out, as per the attached sheet in the light of the aforementioned purport of Article 35 of the Patent Law, the profits the employer, etc., should receive due to all the service inventions while the Respondent was employed in the Appellant and contribution level of the employer, etc. Settlement money as to the "reasonable remuneration' for the assignment of the rights to receive the patents for all service inventions by the Respondent should be calculated on the basis of the total sum of the amount on the attached sheet, 608,570,000 yen (rounding down to 10,000 yen).
There have been two examples up to now of cases where the reasonable remuneration for assignment of the rights to receive patents for service inventions exceeded 100,000,000 yen in precedent cases ((i) Tokyo High Court Hitachi Ltd. Case Decision: reasonable remuneration 165,164,300 yen, provided, the employer' contribution ratio was 80%, contribution level of the Plaintiff among the joint inventors was 70%, (ii) Tokyo District Court Ajinomoto Co., Inc. Case Decision: reasonable remuneration 199,350,000 yen, provided, the employer' contribution ratio was 95%, contribution level of the Plaintiff among the joint inventors was 50%), and it is obvious that these two examples are exceptional cases among the numerous service inventions for which the contribution level was extremely high. The aforementioned reasonable remuneration for assignment of the rights to receive patents for all service inventions by the Respondent greatly exceeds even the amount of these two examples. The Court highly appraises the magnitude of the contribution level of the Respondent to the overall service inventions by the same as being highly unprecedented, however, at the same time, nevertheless, the Court judges that the "reasonable remuneration' must be calculated based on the aforementioned amount in the light of the aforementioned purport of Article 35 of the Patent Law and aforementioned two judicial examples.
4.Concerning the Attached Calculation Table
As to the period until 2002, when the Appellant and other companies in the same business executed cross licensing agreements, (i) "profits employers, etc., should receive due to the inventions' was calculated upon the supposition that about half of the sales amount of the Appellant was by the right of prohibition and the know-how for all of the service inventions of the Respondent, and upon calculation that the license fee for all the service inventions of the Respondent was 10% until 1996 and 7% for the portion since 1997 considering the fact that, in the relevant field, technological advances are significant, and (ii) for "contribution ratio by employees etc., as to the invention,' 95% was considered to be reasonable, taking into consideration the aforementioned legislative purport of Article 35 of the Patent Law, the aforementioned two judicial precedents, and the circumstance that the remuneration for this case will be extremely high (as a matter of course, the Court is not denying the judgment on the degree of contribution of the employers in the judicial precedents as referred to in 3. (i) in the above).
As to the period after 2002, when the Appellant and other companies in the business executed cross license agreements, since it is extremely difficult to calculate the total predicted sales amount for multiple licensees and hypothetical license royalty rates for all the service inventions by the Respondent through Lawsuit Documents, calculation was made by multiplying the average values of the amounts calculated as to the period from 1994 to 2002 by 9 years, the average outstanding period for important patents among the service inventions by the Respondent, by the adjustment rate of 70%. Additionally, sales of the Appellant were drastically extended from around 2000 to 2002, however, since this is a technological field in which technological advances are significant, and there is a high possibility of the development and exercise of alternative technology, calculations were done as in the above.
Calculation Method for Reasonable Remuneration for Assignment of All Service Inventions, etc., while the Respondent was Employed (patent (Japan and foreign patent), utility model, know-how)
| 1. Up to Cross License Agreement Execution | 1994 | 1995 | 1996 | 1997 |
|---|---|---|---|---|
| Sales Amount (after deduction of interim interest. Refer to original judgment) | 439,000,000 | 1,755,000,000 | 3,825,000,000 | 8,975,000,000 |
| Sales Ratio by Exclusive license of All Service Inventions | 0.50 | 0.50 | 0.50 | 0.50 |
| Total License Fee Rate | 0.10 | 0.10 | 0.10 | 0.07 |
| 1- Degree of Contribution by Employer | 0.05 | 0.05 | 0.05 | 0.05 |
| Total | 1,097,500 | 4,387,500 | 9,630,000 | 15,706,250 |
| Same in Following | 1998 | 1999 | 2000 | 2001 |
| 14,360,950,000 | 20,876,190,000 | 34,625,200,000 | 45,867,300,000 | |
| 0.50 | 0.50 | 0.50 | 0.50 | |
| 0.07 | 0.07 | 0.07 | 0.07 | |
| 0.05 | 0.05 | 0.05 | 0.05 | |
| 25,131,663 | 36,533,333 | 60,594,100 | 80,267,775 | |
| 2002 | Total | |||
| 71,222,520,000 | 201,973,160,000 | |||
| 0.50 | | |||
| 0.07 | ||||
| 0.05 | ||||
| 124,639,410 | 357,987,530 | |||
| 2. After Cross License Agreement | After 2003 | |||
| *See Note 5 | 250,591,271 | |||
| Grand Total | 608,578,801 | |||
(Note 1) Sales: Settlement is a comprehensive settlement including all services inventions (191 registered patents and 4 registered utility models, 112 patent on application pending at Patent Office, inventions relating to foreign patents and patent applications corresponding to the same, and inventions concealed as know-how, patents not applied for, likewise in the following), thus, sales amount and interim interest deduction method as admitted by the original judgment has been adopted.
(Note 2) Sales with monopoly: sales ratio with monopoly for all service inventions
(Note 3) License Fee Rate: calculated as license royalty rate in case all service inventions were licensed to third party comprehensively
(Note 4) Contribution ratio of employer: the same is evaluated as 95% for all the service inventions
(Note 5) After cross license execution: since it is difficult to predict the total projected sales amount of licensees and the hypothetical license royalty rate, calculation was done by average amount from 1994 to 2002 (one year portion) × 9 years (average outstanding period for powerful patents) × 0.7 (adjustment rate)
Contact information;
Public Relations, Nichia Corporation
Tel:+81-884-22-2311
Fax:+81-884-23-7752