Managing an IP team of approximately 40 people in Japan along with regional IP counterparts in Germany, the US, China, Singapore and South Africa, Masaki Kataoka had his hands full when he joined Lixil in 2018. It was seven years after the creation of the company through a merger of five Japanese businesses which were leaders in the domestic housing equipment and building materials industry. Following the merger, Lixil acquired Permasteelisa, an Italian developer of curtain walls, and Grohe and American Standard, which are both major sanitary fittings and bathroom fixture companies.
“There were a lot of post-merger integration issues, not only for business practices but also for IP practices, especially in resolving issues arising out of managing conflicts between cultures,” says Kataoka. For instance, to ensure that Lixil had a comprehensive database of all the IP records, it first had to consolidate records managed by five different businesses into a single IP platform. Also, the IP team needed to have a new global and proactive mindset, to re-build various IP practices as Lixil.
High in the rankings
Lixil has been active in filing utility and design patents to protect its IP. It has filed around 500 such applications in Japan annually on average since the company was established, bringing the business to number six in the top design patent filer rankings in Japan in 2018. “In our industry, the scale of filing is still manageable, which allows you to closely monitor what other companies are filing,” says Kataoka. He says that this is unique compared to some other industries like consumer electronics where a much higher volume of utility patents are filed annually.
The manageable scale of filing allows the company to keep track of what competitors are doing. But this is a completely alien concept in the modern consumer electronics industry, says Kataoka, who used to work at Sony. “It would be very challenging or even virtually impossible for you to avoid all the problematic patents in the consumer electronics industry as there are numerous relevant technologies protected by a lot of competitors and also technical standards with thousands of standard essential patents, so any IP strategy should be built on that norm,” says Kataoka.
Being able to keep track of what competitors are doing in the IP field is a good opportunity to better manage IP risks and build a more concrete IP strategy to move ahead of competitors. “I also can bring insights from what other industries have done historically, including various strategic initiatives,” says Kataoka.
Turning to Japan, one of the trends that Kataoka observes is that the Japan Patent Office (JPO) has been active in improving patent enforcement. Under the revised patent law, which will come into force in 2020, technological experts conduct on-site inspections of suspected infringers to improve the evidence collection process so that the cases are more easily enforced.
Increased damages for patent infringement litigation under the revised law could help increase the value of patents in the Japanese market. According to Kataoka, the JPO has looked into historical statistics to see whether higher damages in infringement cases correlate with more incentive to make IP investments, but it is unclear whether this is the case.
While it will take time to see the actual impact, Kataoka says that changes to the patent law are positive for patentees in Japan. From stronger enforcement to higher damages, the batch of changes is aligned with the JPO's goal to ensure that patent owners are getting more value for their patent investments.
Another direction that the JPO is focused on is helping companies by reinforcing the protection of good product designs. With the partial revision of the Design Act which will come into effect in 2020, the scope of designs subject to protection is expanded to cover interior and exterior designs of buildings.
A much needed area for improvement in Japan would be helping startups with their IP protection. Kataoka says that while those in countries such as the US have a much easier time getting venture capital investments if their IP is protected, startups in Japan do not have this luxury, partly because there is a lack of resources and experience to protect and leverage patent protection. However, he says that the JPO is putting more effort into capacity building for IP education to help businesses realise how important IP can be in helping drive growth. For instance, since 2018, the JPO has been investing in an IP acceleration programme for startups.
Preparing for the IoT
Looking ahead, the internet of things (IoT) is an emerging area that Kataoka is monitoring. “Typically the products Lixil produces don’t have capabilities like wireless communication, but these products are emerging, especially those targeted at smart homes,” says Kataoka. Examples are devices that control home equipment such as windows, doors, post boxes and water leakage detection devices that can be remotely controlled by smartphones. He says that the housing equipment and building materials industry inevitably needs to take care of potential IP issues associated with the IoT and sees similarities with the automotive sector, which has had to transform quickly. “We have to move ahead and be prepared,” Katoaka concludes.