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Because of the recent development in IT and other area of technologies, licensing of a utility patent, design patent, and utility models has been becoming more complicated. Responding to this situation, the Japanese patent act was revised. The revisions lifted a requirement of obtaining the consent of a non-exclusive licensee, who directly obtained a non-exclusive license from the owner of the respective utility or design patent or utility model, before filing a request for abandonment or correction in ex parte trial, objection, or invalidity trial involving the patent or utility model at the JPO. The revisions were made in the following provisions:
     (1) for the abandonment of a utility patent, design patent, and utility model, Article 97(1) of the Patent Act, and this provision is applied mutatis mutandis to Article 26 of the Utility Model Act and Article 36 of the Design Act; and
     (2) for request for the correction of a utility patent in ex parte trial, objection, or invalidity trial, Article 127 of the Patent Act, and this provision is applied mutatis mutandis to Article 120-5(9) and Article 134-2(9) of the Patent Act. 

Exceptions:
If an exclusive licensee provides a non-exclusive license to a sub-licensee, the exclusive licensee must obtain the consent of such sub-licensee to abandon the exclusive license (i.e., no revision of Article 97(2) of the Patent Act). 
For trademarks other than those under international registration, consent of a non-exclusive licensee is still required to abandon a trademark (Article 34-2  of the Trademark Act).

Effective date:
The effective date of the revisions of the Patent Act and relevant Acts will be designated by a cabinet order but no later than May 21, 2022. Currently, the revisions are expected to become effective on April 1, 2022. 

With the revisions discussed above, the owner of a utility or design patent or a utility model can abandon it promptly, or an owner of a utility patent can correct the patent promptly.  However, this creates a risk for a non-exclusive license holder, particularly for a holder of an “exclusive non-exclusive license” ¹, such that a utility or design patent or utility model  that is important for the licensee’s business can be abandoned, or revised in the case of the utility patent, without a notice to the licensee.   

The revisions are applied based on the date of filing a request for abandonment or for correction. Thus, utility and design patents and utility models that have been granted before the effective date of the revisions may be subjected to the revisions.   

Since April 2012, recording of a non-exclusive license has not been required, and a non-exclusive licensee can fight against an injunction request or the like filed by a person to whom a patent owner assigned the patent after granting the non-exclusive license. Thus, a non-exclusive license has become more valuable. However, after the revisions of the Patent Act discussed above, it would be necessary to include a provision in a non-exclusive license agreement that the patentee or his/her successor will notify the non-exclusive licensee a reasonable time prior to filing  a request for abandonment of a utility or design patent or utility model or for a correction of the patent, in order to avoid the abandonment or correction being done without the knowledge of the licensee. It would be useful to discuss with your client such risk if you receive a question about the revisions of the Japanese patent act .  It would be useful to negotiate with the patent owner to include in the agreement, a provision requiring the non-exclusive licensee’s prior consent for filing a request for abandonment or correction of the patent.

¹ An “exclusive non-exclusive license”  is a non-exclusive license having a special provision that the licensor will not provide a non-exclusive license to another. The licensor may or may not practice the patent or utility model depending on the license agreement. An “exclusive non-exclusive license”  is not recordable, and recording is not required.