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Patent applications require stamp fees such as examination request fees and patent fees (annuity fees). These costs can be particularly burdensome for startups and small businesses.
The "reduction and exemption system" has been established to reduce this burden. Due to the system reform on April 1, 2019, the procedures have been significantly simplified, making it easier for more companies to use it.
Please note:This article is based on system information as of April 2019 enforcement. The requirements and reduction rates for the reduction/exemption system are subject to change, so please check the Official website of the Japan Patent Office for the latest information.
The biggest change in the system revision in April 2019 is that submission of exemption application forms and certificates is no longer required.
In the previous system, it was necessary to prepare and submit various certificates in order to receive exemptions, and the problem was that the procedures were complicated. Under the new system, exemptions can now be granted only through self-reporting, greatly reducing the effort required to apply.
Main improvements of the new system
Venture-based corporations and sole proprietorships can receive significant reductions by meeting the following requirements.
| Target expenses | Reduction rate |
|---|---|
| Examination request fee | Reduced to 1/3 |
| Patent fee (1st to 10th year) | Reduced to 1/3 |
The requirements for receiving this reduction are different for sole traders and corporations.
| Division | Requirements |
|---|---|
| Sole Proprietor | Being in business for less than 10 years |
| Corporate |
(1) The company has been established for less than 10 years, and the amount of capital or total investment is 300 million yen or less (2) Not controlled by a large company (a corporation with a capital amount or total investment of more than 300 million yen) |
Even if you are a corporation or sole proprietor who does not meet the requirements for a venture (e.g., established 10 years or more), you can receive a 1/2 reduction if you meet the conditions such as number of employees and capital.
| Target expenses | Reduction rate |
|---|---|
| Examination request fee | Reduced to 1/2 |
| Patent fee (1st to 10th year) | Reduced to 1/2 |
The requirements for each industry are as follows. Either the number of employees or the amount of capital must be met.
| Division | Industry | Number of employees in constant use | Capital amount or total investment amount |
|---|---|---|---|
| A | Manufacturing, construction, transportation, and other industries | Less than 300 people | 300 million yen or less |
| B | Wholesale | Less than 100 people | Less than 100 million yen |
| C | Service industry | Less than 100 people | Less than 50 million yen |
| D | Retail | 50 people or less | Less than 50 million yen |
| E | Rubber product manufacturing industry (excluding automobile/aircraft tires, etc.) | 900 people or less | 300 million yen or less |
| F | Software industry or information processing service industry | Less than 300 people | 300 million yen or less |
| G | Hotel industry | Less than 200 people | Less than 50 million yen |
Notes on self-reporting system
The new system does not require the submission of certificates, but it is assumed that the requirements are met. Please note that if you make a false declaration, your exemption may be cancelled.
In order to effectively utilize the reduction/exemption system, please keep the following points in mind.
At our office, we handle many patent applications from start-up companies and small and medium-sized enterprises, and we also provide guidance on how to utilize the reduction/exemption system. Please feel free to contact us regarding the details of the procedure and whether it is applicable to your company.
AUTHOR
Takefumi SUGIURA （杉浦 健文）
EVORIX Intellectual Property Law Firm Managing Patent Attorney
Supports clients across IT, manufacturing, startups, fashion, and medical industries, covering patent, trademark, design, and copyright filings through trials and infringement litigation. Specialized in IP strategy for AI, IoT, Web3, and FinTech. Member of the Japan Patent Attorneys Association (JPAA), Asian Patent Attorneys Association (APAA), and Japan Trademark Association (JTA).