Abstract
Under the patent Law of Japan, an inventor has a right to demand the remuneration as monetary compensation for the employee invention (Article 35). If the inventor is dissatisfied with the amount of compensation they have paid, the inventor can file a lawsuit. When the inventor wins the lawsuit, the court can intervene in the level of the remuneration which has been agreed in advance and orders the employer to pay extra profit as a reasonable remuneration. In order to calculate this extra payment, the court takes the amount of profits that the employer will make from the successful invention and the contribution made by the employer and inventor into consideration.
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- 1.
The Japanese employee invention system guarantees the right to patent belongs to the inventor. Thus, when the right is devolved to the employee, the employer needs to pay ‘reasonable remuneration’. Inoue (2015) explains the Japanese employee invention system in more detail.
- 2.
One of the most famous trial is the Nakamura versus Nichia Corp case. in this case, Nakamura went to court in order to claim ‘reasonable remuneration for blue light-emitting diode technology. As a result, Nichia paid 840 million yen to Nakamura. Mochizuki (2004) gives a detailed description of this case.
- 3.
Schmitz (2012) assumes that limited liability constraints means the rewards to the agent are non-negative.
- 4.
\(i^{FB}\) is interior solution because of the convex function \(\psi \).
- 5.
Schmitz (2012) focuses on the influence that limited liability has on the optimal contract.
- 6.
We can consider the case where to get tangled up in legal action by the inventor costs the employer much time, court costs and a high reputation.
- 7.
- 8.
Assumption 15.2 guarantees that the right-hand side is positive. Therefore,\(\mathrm {\, }i^{B}\) is an interior solution from the assumption of the cost function, \(\psi \).
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Kumagae, K. (2018). Remuneration Rule for Employee Inventions, Moral Hazard, and the Hold-Up Problem. In: Hosoe, M., Kim, I., Yabuta, M., Lee, W. (eds) Applied Analysis of Growth, Trade, and Public Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-1876-4_15
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