A string of lawsuits concerning treatment of employee inventions are being wound up with corporations ordered to pay huge sums of money

As we reported in our Vol. 4 issue, Japanese companies have so far placed utmost priority on lifetime employment, and have rewarded most of their employees' inventions with "awards" or "bonuses/lump sum payments" or "promotions." We also reported how problems concerning this issue have undergone dramatic changes since last year, and that these changes are heralding the arrival of a new era.

Recently, however, a series of rulings have been issued that order corporations to pay huge amounts of money to inventors in their employ. They are making headline news and becoming a hot conversation topic. At the same time, the situation is showing a dramatic turnaround.

On January 29, a ruling was issued on a lawsuit concerning the transfer of patents for Hitachi, Ltd.'s optical disc. The Tokyo High Court recognized the "cost of the invention" to be 165 million yen and ordered Hitachi to pay out approximately 163 million yen (excluding the approximately 2.3 million yen that had already been paid as actual compensation) to its inventor.

This lawsuit was instigated by a former researcher (now age 65) who developed the technology for reading the information stored on an optical disc and demanded that the company pay the sum of 250 million yen as the price of transferring his patent rights. The above is the ruling by the appeals court.

Then, the following day, on January 30, a ruling was issued by the Tokyo District Court concerning a lawsuit involving the invention of the blue light-emitting diode. The court ordered Nichia Corporation to pay 20 billion yen as part of the cost of the invention. The chief judge recognized the unit cost of the invention to be approximately 60.4 billion yen, and ordered the company to pay 20 billion yen, which was exactly the amount the plaintiff had demanded.

The general public was struck by the large sum of money that Hitachi was ordered to pay, but was even more stunned the following day on hearing that the amount paid easily broke all past records.

The plaintiffs of other lawsuits that are currently being contended, such as those involving Canon Inc. and Ajinomoto Co., Inc., are demanding amounts of one billion yen and two billion yen, respectively. All the managers objected to these rulings in unison, saying that companies would not survive (if ordered to pay such huge amounts of money).

A series of these rulings has put corporations in the situation in which they are forced to seriously and immediately consider measures to deal with employees' inventions and how they are treated.