JIN-260 --Reinventing Japan?

J@pan Inc Magazine Presents:

T H E J @ P A N I N C N E W S L E T T E R

Commentary on the Week's Business, Technology and Cultural News
Issue No. 260
Wednesday, February 4, 2004

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@@ VIEWPOINT: Reinventing Japan?

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In the FEBRUARY issue of J@PAN INC magazine:

>> Leo Lewis joins the Blackman family as they return to Japan for the
first time since the body of abducted hostess Lucie Blackman was
discovered in a remote seaside cave. Lewis follows the Blackmans
to the scenes of the crime, Roppongi bars -- and a chilling
courtroom confrontation with the accused.

>> Celia Farber reports from New York: An exclusive interview with
superstar chef Marc Samuelsson, whose latest venture, RIINGO, an
upscale Japanese-American restaurant, opened just two weeks ago in
midtown Manhattan. Farber brings us the inside scoop on the Japanese
chef flown in from Tokyo and his Swedish (!) culinary partner.

>> Meet the uber-confident chief behind Japan's globally dominant
steel industry -- and the head of the ailing IRCJ, designed to save
corporations but suddenly stuck on the sidelines.

>> How bad is Japan's water? Trek with us to a UN forum in Kobe
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@@ VIEWPOINT: Reinventing Japan?

It's suddenly a very good time to be an inventor in Japan -- especially
if you're feeling a little litigious.

We're not talking about wild-haired, Hollywood-style madmen here.
We had the curious fortune last week to squeeze into the Akasaka
lab/office of Doctor Nakamats, an eccentric self-publicist who also
happened to invent the floppy disc. Once we waded through the
unspeakable clutter of his lair, we found a genius -- and a corporate

Nakamats is rich, but not remarkably so. And that is because most of
the innovation that happens in Japan happens within corporations.

Japan-bashers through the ages have always fallen back on nonsense about
Japan copying things originally devised by US or European scientists.
This myth should be promptly exploded: Last year, eight out of the top
ten companies in the world ranked by patent registrations were Japanese.
Certainly, Japanese companies have not always been efficient converters
of patents to products, but at the level of pure inventive creativity,
there is clearly a talent here.

And as it happens, the balance of patent revenues -- that is, royalties
from overseas transactions involving patents, trademarks, registered
designs, copyrights and other intellectual property rights -- in Japan
for 2003 is expected to be positive for the first time ever. And just
look at the companies raking it in: Toyota Motor, Honda Motor and Nissan
Motor are all reaping the benefits of patenting, while Hitachi and
Canon are keeping the electronics and machinery flags flying high.

It was smooth sailing -- until the Tokyo District Court hurled a
large boulder into the idyllic seas of intellectual property.

In a ruling that has staggered the great and good of corporate and
legal Japan, Nichia Corp was ordered to pay 20 billion yen to a former
researcher for patent rights to the blue LED. During the case, it
was revealed that Nichia paid only 20,000 yen to Shuji Nakamura, who
developed the technology while working as an in-house researcher.

Apart from the inventor himself, nobody is terribly pleased with
this ruling. Kakutaro Kitashiro, chairman of The Japan Association of
Corporate Executives, slammed the decision, warning that the ruling
could adversely affect the nation's international competitiveness.

"If companies face enormous burdens, Japan's appeal as a base for
research and development facilities will disappear," he anxiously

Equally doom-laden have been recent editorials in the Nikkei:

"The risk in this case means not only the possibility of huge
compensation payments, but also the fact that R&D activities may
stall or fall into disarray,・its editors gravely wrote.
"Inventions are a basis for growth for engineers, companies and,
after all, the country in which they live. Inventing things must
not become a risky business strategy."

This is very interesting if you look at it from the perspective
of all those turgid little books about Japanese corporate psyche
that engorged CEO bookshelves throughout the 80s. The patent debate
neatly debunks two dangerous myths about Japan and gives us hope
for a critical development.

Gone is the idea that companies care deeply about their human
talent. Gone too is the notion that inventors, like cleaning
staff or accountants, should feel that they are all pulling
towards the greater corporate good.

Could this, we wonder, become the spur for an IP-led boom in
Japanese entrepreneurship?

-- The Editors

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Written and edited by Roland Kelts and
Leo Lewis (editors@japaninc.com)


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