The National Association of Manufacturers (NAM)

The National Association of Manufacturers, based in Washington D.C., is the largest and oldest industry trade association in the United States. 14,000 companies of all sizes participate in the NAM. Its mission is to enhance manufacturers’ competitiveness and improve living standards for American workers through US legislation and regulation.[97]  

The NAM was one of the organizations forming the “21^st Century Patent Coalition,” which favors international patent harmonization. The members consist of such large companies as IBM and Microsoft. Hence, the NAM supports the global standard patent system. In past legislation, the NAM supported a “20 years patent term” and “early publication” because of concern over the “submarine patent” which had cost each NAM member up to $17 million.[98] The NAM also viewed the lack of publication after 18 months as disadvantageous to its members. Foreign firms’ applications were shielded from the US firms indefinitely, while those from US firms in other countries were publicized to foreign competitors. The NAM favors “prior user rights,” since it solves the situation in which separate parties independently come up with essentially the same technology, with one seeking a patent but the other deciding to maintain a trade secret. If the latter party could demonstrate that it was actually practicing the technology in the US one year before the patent in question was granted, it would have a defense against a claim of infringement.[99]  

The NAM would support the adoption of a “first-to-file” system since “first-to-file” harmonization would greatly simplify US law and would affect only a small number of second-to-file inventors who might otherwise eventually prevail, after a costly contest, as the “first-to-invent.”  

Japanese companies are able to join the NAM and shape US legislation by lobbying the Congress.  

US multinationals, or members of the NAM that market abroad, already operate on a “first-to-file” basis in the United States. This is because they must ensure against publicly disclosing the invention before filing patent applications with the USPTO, in order to remain qualified for foreign patents. Adoption of “first-to-file” encourages companies to file quickly and establish their priority date under the Paris Convention. Subsequently, it encourages US companies to acquire foreign patents.[100]  

Department of Commerce/The United States Patent and Trademark Office (USPTO)

The Department of Commerce is one of the agencies of the US government. The Department of Commerce works with business, universities, communities and workers in order to create US jobs, improve living standards for American people, and promote economic growth and sustainable development. The Department’s objectives are to:[101]

1.            “Build for the future and promote US competitiveness in the global marketplace by strengthening and safeguarding the nation's economic infrastructure.”

2.            “Keep America competitive with cutting-edge science and technology and an unrivaled information base.”

3.            “Provide effective management and stewardship of the nation's resources and assets to ensure sustainable economic opportunities.”

The USPTO (United States Patent and Trademark Office) administers the laws related to patents. It is a non-commercial federal agency, one of 14 bureaus in the Department of Commerce. Its major function is the examination and issuance of patents and the examination and registration of trademarks.[102] On October 20, NEED YEAR in the speech at the annual meeting of the American Intellectual Property Law Association (AIPLA), the then USPTO Director, and Under Secretary of Commerce for Intellectual Property in Clinton Administration NEED FIRST NAME Dickinson, said that “we must begin the dialogue for “interference,” and that is, the potential question of transforming from a “first-to-invent” to a “first-to-file” system.”[103] The USPTO might be interested in adopting the “first-to-file” system, since doing so would eliminate the cumbersome interference proceedings, and would simplify the method of determining priority over an invention.  

Under the “first-to-file” system, the USPTO can search for prior art easily and accurately. The USPTO is only required to compare dates of filing between rival applicants.    

Other Stakeholders  

European Union/EPO

At the 1998 October bilateral trade meeting, the Transatlantic Economic Partnership (TEP) was announced by Presidents Clinton and Santer.[104] This partnership was formed despite the fact that at the US-EU summit in May 1998, the US had rejected the EU’s proposal to change the US patent system from “first-to-invent” to “first-to-file.” The EU opposed the US system because it too easily led to claims that inventions were developed by parties other than those who had first filed for patent.  

EJBDRT (EU-Japan Business Dialogue Round Table)

The EU-Japan Centre for Industrial Cooperation was established jointly by the European Commission of the EU (Directorate General for Enterprise) and METI. The EU-Japan Business Dialogue Round Table is an industrial initiative backed by the EU Commission and the Japanese government. It is co-chaired by the former vice-President of the EU Commission Viscount Etienne Davignon and the Chairman Emeritus of NEC Corporation Tadahiro Sekimoto. EJBDRT has an annual meeting, participated by chief executives from 44 EU and Japanese enterprises, to review the factors affecting trade and industry and to make policy recommendations to the EU and the Japanese government. In this annual forum, members develop recommendations to public authorities on industrial policy issues of common interest between the EU and Japanese organizations. EJBDRT recognizes the desire to harmonize intellectual property rights, in particular the “first-to-file” and “first-to-invent” discordance.[105] Although the EJBDRT favors the “first-to-file” principle, no action is taken.

STRATEGY PAPER

Preferred Outcome

The protection of patent rights through new legislation that changes the United States Patent system from “first-to-invent” to “first-to-file.”  

Objective  

Introduce an amendment to the US Code Title 35 Section 102 (a) which says that a person shall be entitled to a patent unless “the invention was known or used by others in this country, or patented or described in a printed publication in this or a foreign country, before the invention”.

Recommendations  

In order to achieve the preferred outcome, the following actions must be taken:  

1.            Build consensus between Business and Policymakers in Japan

2.            Build alliances with EJBDRT, NAM, and 21^st Century Patent Coalition

3.            Lobby Congress    

Domestic Strategy  

Though opposition to conducting this policy is unlikely in Japan, it is important to build a strong consensus to make the issue a top priority for Japanese trade policy. In order to do so, the following steps should be taken.  

Consensus Building in Keidanren
Coalition Building with METI/JPO
Coalition Building with LDP 

1. Consensus Building in Keidanren

Though internal consensus on the issue is firm in Keidanren, there is a need to emphasize the importance of affirmative action. This is because Keidanren itself has many committees on different issues, and to speak in one voice, this issue must be a priority. Hence, Chair and Co-chair of Industrial Technology Committee, Mr. Tsutomu Kanai (Hitachi Corp.) and Mr. Rakutaro Kitashiro (IBM Japan) should formulate the opinions of the business community and meet with other committees’ chairs. Then they should consult with President of Keidanren Takashi Imai (Nippon Steel Corp.), who is also in charge of the Committee on Comprehensive Strategy, to confirm that this issue will be at the top of the agenda.  

Targeted persons at this stage are:  

Ø        President of Keidanren and Chairman of the Committee on Comprehensive Strategy: Mr. Takashi Imai

Ø        Chairman of the Committee on Industrial Technology: Mr. Tsutomu Kawai

Ø        Co-Chairman of the Committee on Industrial Technology: Mr. Rakutaro Kitashiro

2. Coalition Building with METI, JPO

It is essential to get Japanese government agencies involved for this strategy to succeed. METI and one of its bureaus, JPO, will need to be involved. Though both METI and JPO are both enthusiastic to harmonize the patent system, a better mutual understanding of interests on this issue is important to formulate one voice.  

In order for Keidanren to start working with METI, It should set up meetings with the following persons.  

Ø        Minister of Economy, Trade and Industry: Mr. Takeo Hiranuma

Ø        Senior Vice Minister of Economy, Trade and Industry: Mr. Nariaki Nakayama

Ø        Senior Vice Minister of Economy, Trade and Industry: Mr Iwao Matsuda

Ø        Parliamentary Secretary for Economy, Trade and Industry:

Ø        Vice Minister for Economy, Trade and Industry

Ø        Vice Minister for International Affairs

Ø        Japan Patent Office Commissioner: Mr. Kozo Oikawa

Ø        JPO International Affairs Division Director: Mr. Yuzo Koike

3. Coalition Building with LDP

Since LDP did not win the majority of seats in the Japanese diet, there is currently a coalition cabinet in place in Japan. However, LDP is a powerful player in Japanese politics. In order for Keidanren to conduct its strategy on this issue, the key person to contact is Representative Akira Amari.  

The LDP Sub-committee on Intellectual Property Rights Policy and the Federation of Parliamentary Members on Intellectual Property Rights regularly holds a joint convention. The convention recognizes the importance of harmonizing a patent system with a “first-to-invent” principle. Hence, the Chairman of the Convention, Representative Akira Amari, who used to be a parliamentary vice-minister of MITI (Ministry of International Trade and Industry), would be the primary person to lobby for domestic strategy. Rep. Amari is also the Vice President of the Policy Affairs Research Council in the LDP.  

4. Hold the meeting with United States Embassy in Japan

The United States Embassy is coordinated and supervised by the State Department to support its relations with other countries. However, most missions have personnel assigned from other executive branch agencies too. In Japan, other executive branch agencies represented include the Department of Commerce, Agriculture, Defense, and Justice. In addition, given the fact that the Ambassador is the political appointee, the Embassy would be a good US government affiliate to initiate in discussion on the issue.  

The Economic section of the US Embassy to Japan coordinates with other sections in the Embassy on all aspects of US-Japan economic relations. The Economic section is responsible for the extensive report and analysis of Japan’s economic and trade policy. The section is interested in advancing American economic interests in Japan, especially identifying and eliminating market access problems facing American companies in Japan.

International Alliance Building Strategy

Coalition building is critical for sending strong messages from the business community to policy makers. A strong tie with the American trade organization is a key stage towards achieving the preferred outcome. This is mainly because Keidanren, or Japanese nationals, are prohibited from political activities like the Political Action Committee (PAC) establishment in the United States.  

Lobbyist Recruitment
Consensus Building in EU-Japan Business Dialogue Round Table (June)
Coalition Building with EU/EPO
Japan-US Business Summit (July)
Alliance Building with National Association of Manufacturers
Alliance Building with 21^st Century Patent Coalition
Lobbying Strategy  
Meet with Alliance for American Innovation

1. Consensus Building in EJBDRT

EJBDRT has an annual meeting participated by chief executives from 44 EU and Japanese enterprises. The purpose of this forum is to review the issues affecting common interests of trade and industry, and to make policy recommendations to the EU and Japanese governments. Though EJBDRT countries agree on the importance of the US adopting the “first-to-file” system, the issue should again be emphasized to involve the EU in this strategy. To bring the patent issue on the top of the agenda, Keidanren should contact with the following Chairmen of the EJBDRT:  

Ø            Former vice-President of the EU Commission Viscount Etienne Davignon

Ø            The Chairman Emeritus of NEC Corporation Tadahiro Sekimoto  

2. Japan-US Business Summit

Every year, business leaders from the US and Japan meet at a three-day conference. This year the 38^th Summit is expected to be held in the United States in July. In the previous Summit, 90 company presidents and chief executive officers from major enterprises in both countries participated in the Tokyo meeting. Though the biggest current issue between businesses is the interconnection rates charged by NTT (Nippon Telegraph and Telephone), patent issues are also ripe for discussion. Keidanren should raise the issue of patent harmonization in the next Summit meeting in the United States.  

3. Alliance Building with NAM

The Technology Policy Committee is chaired by Donald K. Peterson, President and CEO of Lucent Technology. The Committee develops NAM policy, and establishes and advocates the NAM positions on legislative and regulatory issues related to technology. Under this committee is a Working Group on intellectual property. Chairman Roger May, President of Ford Global Technologies, Inc., is the key contact to build an alliance with NAM for the successful strategy on this issue.[106]  

In addition, some Japanese manufacturers are members of the NAM. Senior Vice President of Toyota Motor North America, and Senior Vice President and General Manager of Honda of America Manufacturing, Inc. are members of 2001 NAM Executive Committee. Those members as well as Chairman of the Board, Vice Chairman of the Board, and President of NAM should be targeted for alliance building.  

Ø      Chairman of the Board W.R. Timken, Jr.

Ø      Vice Chairman of the Board Arthur D. Wainwright

Ø      President of NAM Jerry J. Jasinowski

Ø      Members of 2001 NAM Executive Committee:

-         Senior Vice President of Toyota North Motor Dennis C. Cuneo

-         Senior Vice President and General Manager of Honda of America

Kathy H. Jones

Ø      Chairman of Technology Policy Committee Donald K. Peterson

Ø      Chairman of Working Group on Intellectual Property Roger May  

4. Alliance Building with 21^st Century Patent Coalition

NAM hosts the 21^st Century Patent Coalition. In this coalition, member associations work to ensure effective functioning of USPTO.[107] Keidanren could forward its strategy by asking NAM to encourage other interest groups from the 21^st Century Intellectual Property Coalition to impact US legislation.  

Matsushita Electric Corp. of America (Panasonic) and Sony Electronics are members of this coalition. Since both companies are members of Keidanren, Keidanren should utilize these two companies’ membership to build an alliance with this coalition. Key persons at this stage are:  

Ø     Paul Schomburg (Matsushita Electronics Corp. of America)

Ø     Jason Farrow (Sony Electronics)

5. Meet with Alliance for American Innovation

Once lobbying efforts become successful and new legislation is introduced, the opposition’s lobbying efforts must be weakened. In this respect, supporters of “first-to-file” should set up a meeting with the Alliance for American Innovation. The message that new legislation will be beneficial to small entities should be pushed, since AAI represents independent inventors and small businesses with concerns that the “first-to-file” system disadvantages them.  

Media Strategy  

Media strategy should target US lawmakers, and educate them about the discrepancy between the patent systems of the United States and the rest of the world. Media should be sent the message that the US needs to shift its patent system to the “first-to-file” principle. Op-Ed articles are a tool for this strategy. A published opinion may turn out to be a good position paper for distribution to lawmakers.   

Media outlet – Washington Post Op-Ed

Scope of Outreach – Congressmen in Washington D.C.

Target of Coverage – How “first-to-file” patent system is beneficial to the US industry.  

Action Plan

1.      Call the Washington Post and ask for the editor of the op-ed page, who decides which opinion columns appear in the paper and describe the gist of the piece of the issue.

2.      Schedule meetings with the editor of the op-ed page to secure editorials in support of “first-to-file” patent system.

3.      Submit op-ed article to the editor.

4.      Make a follow up call.

5.      Initiate and coordinate campaigning letters to legislators with the Washington Post publication.  

Lobbying Strategy  

Under the Federal Campaign Finance Law, foreign nationals are prohibited from making contributions or expenditures with regards to any US election, either directly or through another person.[108] As a foreign association to the United States, Keidanren is regarded in this category. Japanese subsidiaries in the US and Japanese corporations in the US are also prohibited from establishing a political committee or PAC to make federal contributions. This is why consensus building in both NAM and 21^st Century Patent Coalition is critical.  

Keidanren can, however, hire a lobbyist to work for them. Lobbyists should be familiar with the patent system. Identifying lobbyists is critical for promoting “first-to-file.” Former President George H. Bush is one option given the fact that many executives working for him are now in the current administration. The George H. Bush administration held an Advisory Commission on Patent Law, and the Commission recommended adoption of “first-to-file.”  

Legislative jurisdiction regarding patents is dealt with by judiciary committees in both the Senate and the House. Congressmen to whom we should lobby are:  

Ø        Senate Committee on Judiciary Chairman Orrin Hatch (UT)

Ø        Senate Committee on Judiciary Ranking Member Patrick Leahy (VT)

Ø        House Committee on Judiciary Howard Coble (NC)  

Senator Orrin Hatch and Senator Patrick Leahy introduced the “American Inventors Protection Act of 1999,” which was enacted on November 29, 1999. Rep. Howard Coble introduced H.R. 1907, the House version of the act. The act was designed to amend Title 35, United States Code, providing “prior users rights” and “early publication” among other entities. These three Congressmen are likely to favor the adoption of the “first-to-file” system, and should be lobbied to introduce legislation to rectify the US patent system. Once a bill regarding this issue is introduced, lobbying efforts shift to other members of both the Senate and House Committees on the Judiciary.  

Action Plan

1.        Send letters to Sen. Hatch, Sen. Leahy, and Rep. Coble.

2.        Meet with each of three Congressmen.

3.        Send letters to other members of Senate Judiciary Committee and House Committee on Judiciary to know their position (Op-Ed should be published by this time).

4.        Lobby to the Congressmen who are undecided on the issue.  

Key points for letter to legislators

Ø        Make sure the legislator knows this communication provides benefits to their constituencies.

Ø        Explain how the proposed legislation affects US business and why their constituencies support it.

Ø        Ask the legislator what his/her position on this issue is.

Ø        Ask for the legislator’s support.

BATNA (Best Alternative To Negotiated Agreements)  

In case of difficulty with the proposed strategy, we present another approach to achieve our preferred outcome: a harmonized “international grace period.” Such a grace period would protect independent inventors and small businesses. Restrictions of BANTA are outlined below:  

1.         The grace period is 12 months from the date of publication of the invention, after which the invention will be in public domain

2.         A previously announced invention should not be a “prior art” in the application for patent protection of that invention during the grace period

3.         Any means of announcement by application should be object of a grace period.  

This international grace period will provide relief for university researchers, who have higher priority to publication in academic conference announcements than to filing patent applications. It will also resolve concerns from small businesses, which give priority to new product announcements over the race to file patents. 

Since this issue is not just a bilateral but rather a multilateral issue, it should be negotiated under the auspices of international organizations such as the WIPO and WTO.   

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