Intellectual property: A neglected resource

Fujio Mitarai, Chairman, Nippon Keidanren (Japan Business Federation), The Asahi Shimbun, Tokyo

The world is experiencing sharply increasing movements of goods, services, capital and people across national and regional borders. For those of us in the business community, this heralds an era of mega-competition, along with the need to arm ourselves for the tumultuous times ahead.

When I talk about "arming ourselves," of course I am not suggesting militarizing in any sense of the word. Rather, my reference is to patents, copyrights and other such intellectual property rights.

With the exception of a handful of Japanese companies that have excelled overseas over the years, Japan's awareness and understanding of intellectual property right protection is meager at best when measured against that in the United States and other industrialized countries.

Let's take the Disney animated feature film The Lion King as a high-profile case in point. When it was pointed out by those in the industry in Japan that this story resembled that of "Kimba the White Lion,' the comic-strip creation of the late cartoonist Osamu Tezuka, the reaction was low-key to say the least. Tezuka Productions, the company in charge of the works of that famous author, said it felt "honored" by the comparison, and did not cry foul or press charges of any kind.

Tolerant or peculiar? While this might be seen as tolerance, the general opinion of the world is that such a reaction is quite peculiar. What's more, although this story is nearly a decade old, I have seen no substantial change in this passive attitude over the ensuing years.

The conceiving and developing of an idea, followed by the crafting of new products from that vision, involves investment of massive time and money. In the case of my own company, Canon Inc., the total development spending channeled into a single product is in the hundreds of billions of yen. The blatant imitation of such accomplishments, therefore, renders it impossible to recoup that capital investment.

We use patents to establish rights for the fruits of our own wisdom and ingenuity, and to protect ourselves from counterfeiting. In the business world, there could be no more natural course of action. The emerging information technology (IT) environment, in which orders can be placed over the Internet from most anywhere on Earth, is a domain where infringement of intellectual property rights is fairly simple.

The industrial and economic onslaught by China, meanwhile, can be expected to continue for another 20 years. Against this backdrop, the labor-intensive sectors of Japanese domestic industry will see their home and overseas markets whisked away to the regions offering the cheapest labor costs. This is the natural trend of the times, and should not be blocked even if such action were possible.

For Japan, the only viable course is to continue to turn out products with high added value. To create a solid premise and infrastructure for such added value, meanwhile, it will be vital to deploy systems that reliably protect intellectual property rights.

The level of scholarship is extremely high in Japan. However, even when university professors make new discoveries and announce them in the form of academic papers, they rarely bother to go the extra mile to obtain a patent to protect their ideas. Thus, though they may write a superb treatise and come up with a revolutionary new concept, their efforts effectively end with the publication of the findings.

Patents, meanwhile, cost money to acquire and maintain, while the procedures involved are highly complex. Besides this, I also understand that because professors will largely be evaluated on the basis of the papers they write, the pressures support the system of publishing those papers as the final objective.

I would like to see scholastic research in Japan empowered with greater rights, and have the fruits of that work circulated to the industrial community as well. Yet, many scholars take affront at such a suggestion. They declare that the pursuit of learning is not a moneymaking pursuit. In fact, however, it is extremely scholarly research that those of us in the business world expressly hope to see universities advance.

Japanese industry holds an abundance of patents. Last year, Canon acquired the second highest number of patents in the United States. In years past, Canon has topped this category twice. The great majority of these are applied patents. In that sense, it deserves to be noted that those of us in the private sector only pursue ideas that will be profitable.

For that matter, we can only afford to proceed with work that will generate returns over the short term. By their very nature and background, businesses are incapable of engaging in pure scholarship. This is a pursuit that only the universities can undertake, and an area in which we really want to see those schools shine. In an ideal world, they will forge dramatic breakthroughs in technology that the private sector will not, and cannot, accomplish. Research that paves the way to basic patents is the domain of national investment, and is terrain that should be cultivated by the academic and public sectors as a team.

Within the process of creating new ideas, advancing research and bringing the work to fruition in product form, there are certain stages that are shared in common. First, there is the exhilaration of spawning new ideas. Next comes the limbolike period, known as "Death Valley" by insiders, when research plods ahead without any clear vision of what products may or may not result. Finally, there is the point in time when the concept does in fact emerge in product form.

Examining this flow, I would like to see the job of conceiving new ideas handled by the universities. The "Death Valley" stage could be supported by the government, from the perspective of investing in national infrastructure. Lastly, the work right up until the product launch would be guided and coordinated by the industrial community. In this way, a trilateral system of collaboration would be forged between the business, government and academic sectors. I think that this would be an ideal arrangement.

For its part, the Japanese government has established the Intellectual Property Policy Headquarters, passed the Intellectual Property Basic Law, and is nurturing an approach that incorporates university reforms as well. In fact, I am one of the members of this Policy Headquarters.

There is much to be done. For starters, the two to three years required for patent examinations is just too long. In the current day, in which technological innovation literally advances on a daily basis, the period of time that any specific technology can hold its competitive edge is limited. In that sense, it is not so farfetched to compare today's technology to fresh foods. I would like to see decisions handed down on patent applications within one year at the longest.

I also favor efforts to draft shared international rules for both the acquisition and guarding of intellectual property rights. Although the work to create such rules is currently being advanced by the World Intellectual Property Organization (WIPO) and other bodies, the job has only just begun.

Clearly, if a patent obtained in one country were honored internationally, companies around the world would reap major savings in the time and cost needed to acquire those rights. The funds freed up by such reform could be redirected into investment in research, clearing the way for more efficient technical development and enriching the lives of the world's people. direction.

Fujio Mitarai became president of Canon Inc. in 1995.