October 20, 2006

In what is being referred to as a “landmark ruling” in Japan, the Japanese Supreme Court upheld a lower court’s decision to award royalties to an employee for intellectual property created during his employment and owned by his employer. Seiji Yonezawa, the creator of technologies regarding reading CDs and DVDs that were the subject of at least three patent applications filed by Hitachi in the 1970s, was initially paid 118,000 yen (approximately US$1,000) for his inventing efforts. Mr. Yonezawa then took Hitachi to court after retiring from the company, claiming that he was due royalties based on products sold that incorporate his inventions. A 2004 court agreed with him, and on Tuesday, the Japanese Supreme Court ordered Hitachi to pay him 163 million yen (approximately US$1.4M) in royalties. According to the International Herald Tribune, this is not the first such decision awarding high royalty amounts to employee inventors in Japan, noting that earlier this year Toshiba settled a similar lawsuit filed by an inventor for 87 million yen, and Japan’s Nichia Corporation settled a case in 2005 with the inventor of the blue light-emitting diode (LED) for 840 million yen (approximately US$7.1M) after a lower court decision awarded 20 billion yen (approximately US$168.6M) to the inventor.

International Herald Tribune News Article: LINK
Forbes.com News Article: LINK
Asahi Shimbun News Article: LINK
Supreme Court of Japan Website: LINK


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