USA-JAPAN / PATENTS / PATENT FLOODING

IDEA, The Journal of Law & Technology, Vol 40 No 3, 2000

Patent Flooding in the United States and Japan

Sri Krishna Sankaran

According to a report by the General Accounting Office, cited by the author of this article, patent flooding is a technique by which one company files a multitude of patent applications claiming minor, incremental changes to the core technology of another company and, by "surrounding that technology with new, limited innovations", restricts the target company’s room for commercial manoeuvre. The technique is perhaps encouraged by the Japanese patent system, which tends to favour the grant of a relatively large number of narrow or incremental patents as against a smaller number of broader and more substantial patents. Use of the technique puts a certain pressure on the target company, which may feel compelled to cross-license the core technology in exchange for the marginal technology contained in the patent flood. The author examines the Japanese system and the effects of the patent agreement between the United States and Japan in 1994, which was directed towards facilitating applications by US companies for Japanese patents but may have made it harder for those companies to combat patent flooding themselves. The author also examines the extent to which patent flooding is possible under US law and, in particular, the case law, such as CyberOptics Corp v Yamaha Motor Co, Minigrip Inc v AMI Inc and Salomon SA v Alpina Sports Corp. He offers advice on how to avoid being a victim of patent flooding, but emphasises that a clearer legal definition of patent flooding is required, since there must be some differentiation between legitimate and competitive attempts to improve existing technology and practices which amount to an abuse of the patent system. [20034]