Interesting People mailing list archives
IP: Holding the Right Cards in Japan -- another view
From: Dave Farber <farber () central cis upenn edu>
Date: Fri, 08 Mar 1996 12:02:20 -0500
Date: Thu, 07 Mar 1996 10:58:21 EST From: BBCW52A () prodigy com ( THOMAS FLANNIGAN) To Peter Kirby: It was interesting to read your opinion that Japan's ministries "have not been doing a very good job" of protecting the high-tech sector in Japan. I suppose I must be hallucinating when I walk into a computer store here in Chicago and find almost everything made in Japan or crammed with Japanese components. How do you explain Japan's dominance of key links in the industrial food chain if industrial policy has been such a flop? Most American companies with long standing market presence in Japan were forced to trade their technology for market access. You state that "TI used their technology as a weapon to obtain a wholly owned corporation in Japan." For the record, Japan prevented foreign ownership of more than 50 per cent of the voting shares of a domestic corporation until well into the seventies. TI had to wait more than two years after this regulation was "repealed". TI, like IBM, was forced to license much of its technology to its Japanese rivals in order to set up shop in Japan. Perhaps you should check this point with TI, as I have, but I advise you to hold the telephone well away from your ear if you take the trouble. TI scientist Kilby invented the semiconductor, but the Japanese patent office took 29 years to grant the patent application. As usual, Japan was the last nation in the world to give patent protection to an American company's invention. A large Japanese electronics company crows that the Kilby patent expired years ago, because the Japanese Patent Office sat on the application for 3 decades. How can you possibly say that TI used technology as a "weapon"? Do you think it is a coincidence that Compaq computers finally got shelf space in Akihabara at the same time Compaq threw in the towel and started making a Japanese computer with an American name on the box? The Compaqs sold in Japan have Japanese DRAM chips, hard drives, keyboards and power units, coupled with Intel chips made in Taiwan. The modest sales of these machines may benefit American shareholder elites, who can be enlisted to join in Japan's public relations campaign, but such sales have almost no benefit to the American worker, the trade deficit, or the future of this country. Amway is a perfect example. Hardly anything Amway sells in Japan is made in the US. Meanwhile, Amway is an enthusiastic supporter of Japanese trade policy. Shareholder elites make some cash but the jobs continue their inexorable migration to East Asia. For years, I have read the Nikkei Weekly's annual report of the top five companies, measured by market share, in 12 key industries. Year after year, IBM Japan is the only foreign company to crack the sweet sixty. Japanese companies lag foreign competitors in pharmaceuticals and consumer nondurables to name just two. But Japanese producers in these and other fields are shielded from foreign competition by government-sponsored cartels. The Japanese market is something like a Venus fly trap for American companies. It is enticing, and they feel they must enter, but once inside they are trapped in an environment where their technology lacks meaningful protection, and the best they can hope for is an orderly fight over the table scraps. Thomas Flannigan Attorney in Chicago
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- IP: Holding the Right Cards in Japan -- another view Dave Farber (Mar 08)
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