JPRS ID: 9488 JAPAN REPORT

• Document Type: CREST
• Collection: JPRS
• Document Number (FOIA) /ESDN (CREST): CIA-RDP82-00850R000300070023-6
• Release Decision: RIF
• Original Classification: U
• Document Page Count: 48
• Document Creation Date: November 1, 2016
• Sequence Number: 23
• Content Type: REPORTS

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JPRS L/9488
15 January 1981
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CFOUO 3/81)
Fg~$ FOREIGN BFtOADCAST INFORMATION SERViCE
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JPRS L/9488
- 15 January 1981
JAPAN REPORT
(FOUO 3/81)
CONTENTS
' POLITICAL AND SOCIOLOGICAL
Japan Issues Interim Report an Evacuation From Iran, Iraq
(YOMIURI SHIMBUN, 18 Dec 80) .................................o. 1
ECONOMIC
' JAPAN TIMES' Views Economi.c Tes t Awaiting Reagan
(Editorial; THE JAPAN TIMES, 26 Dec 80)....o 2
'YOMIURI~ Views 1981 Draft Budget, Raps Tax Hikes
(Editorial, Yomiuri Shimbim; Tf~E DAILY YOMIURI, 23 Dec 80).... 4
'MAINIQiI~ Views 1981 Draft Budget, Raps Tax Hike
(Editorial; MAINI QiI DAILY NEWS, 24 Dec 80) 6
Strategy for In tein ational 'Patent' War Discussed
(NIKKEI BUSINESS, 20 Oct 80; NIIiON KEIZAI SHIMBUN,
1 Sep 79) .............................................o.o.o... 8
Offensive, Defense Strategies ~
Japanese Patent System
- Briefs
= Shandong Coal Production Sharing 43
Loan to Bangladesh 43
Yen Loan to Zhailand 43
PRC Business Cboperation Agreement 44
Normalize T~es With~:~~raq 44
PRC Coal Liquefaction Plant 44
SCIINCE AND TE(~~10LOGY
Briefs
Semiconductor Technology 45
- a - [III - ASIA - 111 FOUO]
. . .
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POLITICAL AND SOCIOLOGICAL
JAPAN ISSUES INTER~M REPORT ON EVACUATION FROM IRAN, IRAQ
. OW190531 Tokyo YOMIURI SHIMBUN in Japanese 18 Dec 80 morning edition p 2
[Text] The For eign Ministry on 17 December issued an "interim report on evacuation
and rescue activities for Japanese during the Iran-Iraq war." This report comes
, at a time when the Iran-Iraq war has brought the question of protecting overseas
Japanese to the fore. It proposes that protection of Japanese overseas be regarded
as part of Jap an's comprehensive national security and that the government have
its own aircraf t ready at all times for use in an emergency evacuation.
According to the report, when the Iran-Iraq war broke out on 22 September, there
were 1,735 Japanese in Iran and 4,110 in Iraq. As the conflagration spread, they
were successive ly evacuated. As a result, by the end of November, their number
had dwindled t o 530 in Iran and Z,660 in Iraq.
In the early s t ages, the evacuation was marred by considerable confusion arising
from Japanese working on construction projects wanting to return home as soon as
possible, while the host countries wanted them to stay so that construction could
be continued. As a result, evacuation of the Japanese was delayed. Japan was
partially responsible for the hitch because it lacked measures to cope with this
kind of emergen cy. The interim report points out the following two factors which
impeded the evacuation: 1) Contacts between the Foreign Ministry and the embassies
in the field we re not as smooth as they should have been due to the disruption of
communications. 2) There was confusion in mapping out evacuation routes and
- securing means of transportation,
For this reas~ n, the interim report stresses the need to "clearly define the pro-
tection of over seas Japanese as part of the nation's comprehensive security policy."
- As concrete mea sures to implement this policy, the interim report calls for study
'j of inethods of evacuating overseas Japanese by government planes, installation of
I shortwave co~nunication equipment in embassies, and conduct of paper exercises in
; dealing with cr ises by link~ng the Foreign Ministry to its field agencies overseas.
The idea of th e government having its own aircraft for emergency use was once
proposed during the days of. the Fufuda cabinet in 1977 but was not adopted. Since
the use of self -defense force planes is subject to constitutional restrictions,
the interim rep ort suggests that the government study the desirability of having
its own aircraf t exc].Yisively for emergency use.
COPYRIGHT: Yom~uri Shimbunsha 1980
CSO: 4105
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ECONOMIC
'JAPAN TIMES~VIEWS ECONOMIC TEST AWAITING REAGAN
OW270109 Tokyo THE JAPAN TIMES in English 26 Dec 80 p 14
[Editorial: "A Test of Reagan's First 100 Days"]
[Text] The United States economy is considered so sick that some advisers to
President-elect Ronald Reagan are prodding him to declare a national economic
emergency as soon as he takes office. The action is compared to one launched by
President Franklin D. Roosevelt at the start of the New Deal in 1933.
They urge that Mr Reagan request the Congress to debate and act expeditiously an
emergency economic stabilization and recovery program in the first 100 days of his
administration.
Whether the conditions of the economy warrant such emergency action or not is
debatable, but it d~es make sense politically that Mr Reagan shauld come up with
some dramatic measures to inspire confidence during the early days of his adminis-
tration while he has still maximum political leverage.
Such measures should bring about some tangible change in the life of the average
American who longs for a"new beginning" as promised by Mr Reagan during the
campaign. They probably include the first installment of the three-year personal
income tax cut (the so-called Kemp-Roth plan), incentives for businesses including
depreciation speed~ip and unilateral administration actions to alleviate regulatory
burdens and an across-the-board cut in government spending.
The objectives are to control inflation and revitalize the private sector. And
for this purpose, budgetary restraints and tight money alone won't be enough.
- Mr Reagan plans to put an element of "supply side economics" in his program by
injecting a pattern of vigorous growth in the policy package. He is not satisfied
with the conventional method of curbing inflation by arresting the economy. The
package is intended to spur production, employment and growth and, above all, to
lower inflationary expectations. That part of the package most vulnerable to whims
of economic winds would be one calling for a massive cut in personal income tax.
This may prove highly inflationary unless accompanied by substantial spending cuts
which will be by no means easy to achieve.
It is possible that Mr Reagan, for all his commitment to the Kemp-Roth plan, will
be tempted to forego the personal income tax cut just as it was the case with Mr
Carter in 1977 when he was forced to give up the $50 rebate part of a stimulus
packa.ge.
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_ If there is anything that best char~cterizes U.S. economic developments over the
past four years, it is that the p~;ll of inflationary forces prov~d stronger than
recessionary ones. The Carter administration, far from being spendthrift, has
consistently underestimated the str.ength of inflationary pressures, a costly
- mistake that contributed to its undoing. .
The 9.9 p~rcent plunge of the economy in the second quarter of 1980 can be con-
~ sidered an aberration caused by tight credit control the Federal Reserve Board
(FRB) imposed on both cons~imers and bcsinesses to curb their borrowings. A specter
of hyperinflation left the FRB no other option. Once the credit squeeze was lifted
after the threat of hyperinflation receded, however, the economy quickly bounced
back to register a 2.4 percent growth in the third quarter. After all talks about
signs of incipient recession, the fourth quarter growth has been estimated to have
reached 4 percent. This took place in spite of resurgence of interest rates
which saw the prime rare rise from 10.75 percent to 21.5 percent in a matter of
four months.
Nevertheless, an overall picture of the present state of the economy still looks
typical of the end of an expansion and the beginning of downturn. Sales of goods
R~ve slowed faster than production and as a result unwanted stocks have built up
in ractories and store shelves. New orders for goods have dropped sharply.
Businesses have been forced to borrow more money even at r2tes in excess of 20
percent from banks to allow them to carry a3ded inventori~s. The Federal Reserve
. Board deliberately created a crunch to brake the rapid expansion in money and
credit and wipe out expectations of more inflatioi~. There has, however, been less
of pani..cky reaction this time since *he FRB unlike in March stopped short of a
direct curb on credit.
Without going that far, the high rate of interest alone has effectively restrained
the growth of money supply. Falling rates in the bonds market quickly led to a
lower prime rate. The deflationary effect of the high interest rate policy seems
less devastating in the latest instance than last spring. But it has done little
so far to blunt inflation. Consumer prices kept advancing one percent a month for
the past three months.
~ Much of today's inflation is built into the structure of the economy so that it
does not lend itself to any quick fix. Only a sustained, multisided approach has
any ~.hance of success. Tight reins on money supply, cuts in government spending,
and promotion of investment and productivity should go hand in hand.
COPYRIGHT: The Japan Times 1980
CSO: 4120
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- ECONOMIC
'YOMIURI' VIEWS 1981 DRAFT BUDGET, RAPS TAX HIKES
OW251130 Tokyo THE DAILY YOMIURI in English 23 Dec 80 p 2
[Editorial by Yomiuri Shimbun on 23 December: "Why Accent Tax Hikes"]
[Text] The Finance Ministry's draft budget for fiscal 1981 o~ves the clear impres-
sion that major tax increases have been given the priority over trimming government
expenditures.
- 'I'he ministry intends to carry out a tax increase of an unprecedented 1,390 billion
yen by boosting L~he corporation tax and all commodity taxes, including the liquor
and motor vehicle tax. Moreover the government and liberal-demor,ratic party
reportedly plan to introduc:e a general excise tax of 3 trillion yen in estimated
, yield in fiscal 1982.
We do appreciate the decision to restrict the growth of general expenditures to
4.3 percent. But we are dissatisfied with thQ ministry's budget. It is unclear
how much saving has been accomplished by cutting expenditures and how much effort
was made.in combining and abolishing subsidies, cutting administrative expenses
and reducing the deficits of the Japanese national railways, the rice program and
_ health insurance.
Pledge Appears Abandoned
However, it appears that the government has abandoned its promise to put its own
fiscal house in order.
Although the determination to slash expenditures was timid, nevertheless vested
- interests are already complaining loudly and pressure groups are at work to rein-
state budget cuts. W,e urge the Finance Ministry to resist such pressures and.to
study if there is room for even more trimming in the final budget.
The general account budget in the draft budget is 46,788.2 billion yen an increase
~f 9.9 gercent over fiscal 1980's and the treasury loan and investment program is
19,063.8 billion yen, up 4.9 percent. The planned issuance of government bonds
is 12,270 billion yen down 2~illinn yen from fiscal 1980.
' Defense Boost Held Down �
The growth rate in defense appropriations is restricted tc 6.6 percent. Prime
Minister Suzuki has ~tated that defense spending could not be given special treatment
4
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and he has given assurances that it would not hurt U.S.-Japan relations if defense
spending did not increase by 9.7 percent.
The reduction of the bond issues and single-digit growth rate of the general
account budget do at finance. We agree with this effort and agree also with the
- efforts to seek a proper balance between expenditures for social security and
national security.
The boost in appropriations ta counter the energy shortage and for foreign aid
are correct decisions too. However, we protest against the harsh treatment of
education and social security in the draft budget.
We urge the Finance Ministry to look for other expenditures which could be cut
instead of weakening social security and education in this country.
COPYRIGHT: The Daily Yomiuri 1980
CSO: 4120
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ECONOMIC
'MAINICHI' VIEWS 1981 DRAFT BUDGET, RAPS TAX HIKE
OW251135 Tokyo MAINICHI DAILY NEWS in English 24 Dec 80 p 2
[Editorial: "Draft Budget for 1981"]
[Text] The government at an extraordinary cabinet session on Monday adopted the
fiscal 1981 draft budget compiled by the Finance Ministry, featuring what it ,
calls austerity measures and a record tax increase. The general philosophy under-
lining the draft budget, however, completely betrayed our expectations.
We have repeatedly insisted that there are three important options to be decided
in compiling the state budget, one of which should be adopted while the other two
should not. In other words, we emphasized that the proposed cut in deficit-
covering national bonds amounting to two trillion yen should not be covered by
an increase in taxes, and that we sh.~uld not depend on any natursl increase in
revenues resulting frem the runaway inflation. The only choice lef t is to cut
expenditures by implementing a drasti:.~ reform of existing systems that have ceased
to function since the end of the era of high economic growth.
The basic principle of fiscal reform is to match expenditures with revenues, not
vice versa. The draft budget compiled by the Finance Ministry however, seems to
have matched revenues with expenditures. This bureaucratic concep t is indeed ~
something beyond our comprehension. ~
The Taxation System Research C~uncil earlier recommended that an increase in tax
revenues, equal to 3 percent of the GNP, i.s needed to meet growing expenditures
during the coming four years of fiscal reconstruction aimed at reducing the flota-
tion of national bonds.
Of the 3 percent, 1 percent can be covered by a natural increase in revenues, but
the remaining 2 percent must be covered by a tax increase, the council said. So,
the government simply went ahead with the record tax increase to "make both ends
meet." The proposed 1,390 billion yen tax increase is deplorable.
Under this situation, the government will have to keep on increasing taxes or
introduce the much-ballyhooed excise tax in compiling the budget fo r fiscal 1982
and thereafter if a balanced budget is to be maintained. The actual state of
_ affairs surrounding the nation's taxpayers has been completely i~nored. We are
at a loss to find suitable words to describE the government's action. "Frightening"
is inadequate.
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_i
~ The question cannot be solved by merely holding the taxation council responsible.
The most important thin.g is to call for th~ attention of the financial authorities
- concerned, the government as whole and the people. Fiscal reconstruction ia bound
to become synonymous with an endless 'bicious cycle" always victimizing the tax- _
~ payers. ~
The only way to end this vicious cycle is to reduce expenditures drastically. The -
' draft budget set aside 46,788 billion yen for general account expenditures, repre-
senting an increase of 9.9 percent over the initial fiscal 1980 budget. This was
~ the first single-digit rate of increase in 22 years and the smallest since the 8.2
percent in the fiscal 1959 budget. The budget scale as shown by the Finance
Ministry, however, is far from satisfactory since the nominal economic growth rate
for next fiscal year was estimated at 9.1 percent, far below the increase rate of
the general account.
A vast increase in taxes will invariably destroy household economies and business
management. The nation will become disinterested in politics in general and in
government promises, since there have been no ~fforts toward administrative reform
_ or to review budgetary items.
One consoling factor is that the financial authorities have proposed an appropria-
_ tion of 2,377 billion yen for national defense, a ma~or subject of debate in the
process of budget compilation, showing a rise of 6.6 percent as compared with 6.5
percent in the current fiscal year.
We hope that the government will further slash expenditures in the course of the
, negotiations as this is the only way to gain the unders.tanding of the nation.
Ministries concerned and various pressure groups are expected to start bargaining "
over the 180 billion yen set aside for r~storing spending programs. For recon- -
structing the national finances, however, the fiscal authorities concerned should
' maintain a firm stand. ,
i
COPYRIGHT: Main ichi Daily News 1980
- CSO: 412~
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ECONOMIC
STRATEGY FOR INTERNATIONAL 'PATENT' WAR DISCUSSED
Offensive, Defense Strategies ~
Tokyo NIKKEI BUSINESS in Japanese 20 Oct 80 pp 44-58 ~
[Text] Patent-related friction has begun to intensify among business firms at home ,
and abroad. It is caused by the fact that worldwide business firms have begun more
than ever to make active use of patents as operational strategic weapons in the low
innovative phase of technology.
In order to avert the patent offensive from abroad, we must develop new technology of ~
our own and acquire the legal exclusive rights called patents as soon as possible.
This becomes powerful security for management.
- To this end, top managers themselves should possess the strategic awareness to free- ,
ly use patents defensively and offensively. Patent strategic skill, or the lack of
it, influ~nces even the fate of the enterprise.
Offensive and Defensive Strategies for Patent War ~
Patent Department of Asahi Chemical Industry. The department head, Yamada, and
approximately 50 staff inembers are engaged in reinforcing an emphasis on "lia3~son
function." In military terminology, liaison is a comQnunication f unction connecting
the frontline with the General Staff headquarters.
"Patent-related disputes are spreading worldwide. How to cope with a new situation
in the on-going international 'patent war?' In order to solve the problem, the ~
patent department cannot help but to reinforce its function as a liaison officer by
necessity" (Dept I~ead Yamada). If we assume the managerial conference consisting of
a company's officers as the general staff off ice, then the research laboratory and
factory that actually handle technical development are the frontline. Standing
between the staff and the front, the liaison functions at the pater.t department
stage include the collection of information on other firms' research and development
trends, the legal defense of research achievements of its own firm, and the direc-
tion of managerial strategy. ~
Asahi Chemical.Industry is not alone. Toshiba Corporation, Ricoh, A~inomoto, Hita-
cini, Ltd.... Recently, patent departments of many firms have all been strengthening
their character as a strategic force. The situation is such that they h~d to come
out of the conventional, mainly control-oriented, patent clerical work and reinforce .
their structure for an immediate response to emergenci~s and the assumption of a
fighting posture.
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Worldwide Battleground
The tr~nd toward increased disputes over patents forms the background. According -
- to a Patent Agency survey, the number of cases claiming misuse against the patents
of other companies were 432 in 1976, 495 in 1977, 523 in 1978, and 554 in 1979.
Moreover, such figures and disputes in courts are a mere drop in a bucket, and ~
friction betwPen the Japanese firms and foreign firms ~n Europe and the United -
~ States has become increasingly noticeable...." (Mifune, Patent Dept Head, Teijin).
Let us see an example.
Dupont, a gigantic chemicals manufacturer in the United States, took Nippon Gakki
Co., Ltd. [musical instrument manufacturer] to the Tokyo District Court at the end
of March with the charge of infrizgement of a patent for the manufacturing process
of a new building material resembling marble. While at it, t:.ey took Tei~in to
court in London in mid-July with the charge of infringement of a patent for the
manufacturing process of polyester fiber. Several years ago, Hitachi Chemical Co.
, was brought to court regarding photoresistant film for printed circuit boards, and
they are still in court. Japanese firms are not the only targets of Dupont. Since
last year, Hoechst and Enka of West Germany, ICI of England, etc., have been sued
for patent infringements one after another. The battleground has extended world- -
wide.
Nippon Gakki, enjoined to pay compensation of approximately 100 million yen and to
suspend manufacturing, and Teijin, which was sued not in Japan but in England, both
assert that Dupont's patents are invalid, oppose them head-on, and are prepared _
for a long fight. "Dupont has recently been very nervous about patents to the point
of eccentricity. Aside from the propriety of their assertion, we are awed by the -
, severity of our opponent...." (Patent Dept Head Mifune, Teijin, Ltd.). Over 40
years ago, Dupont established patents for nylon and currently possesses over 25,000
patents worldwide. They are a typical example of EuroAmerican business firms that
deploy "dry" strategies with patents as a weapon. In contrast to Japanese firms,
which are fearful about suing or being sued, they are makin~ full use of patents as
an offensive weapon.
Surely, patents are effective weapons. Once a patent iight is established through
~ application and examination, an exclusive right of monopoly unreachable by anti-
trust laws can be roaintained for 15 years (in Japan). MQreover, a characteristic
of this weapon is that it is not limited to a defensive line of securing the free-
dom of b usiness activities. If patents are given, royalty income is obtainable.
~ It is also possible to give the patent free of charge to another company, thus
making them liable to purchase the firm's products, or to acquire the right of
operation of a new technology of other firms with a cross-license contract. Having
sole patent rig~?ts, a company can suspend the manufacture of a product by a compe-
titor. With respect to business strategy, it can become a powerful weapon having
both defensive and offensive aspec~s. �
Counterattack Against Japanese Flood
Thus, the effective key to survive the worldwide "turbulent age of technology" is
how well one can make use of this weapon. The reason for the recently intensified
patent off ensive against Japan by the EuroAmerican firms is nothing other than this
fact.
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Without even referring to the changes in income and expense from royalties, it is
a known fact that Japan imported important technologies from EuroAmerican firnes over
the years of 1950-60's. Based on these technologies, she developed improved tech-
nology and is now about to overtake the originators in fields such as automobiles,
= machine tools, semiconductors, etc. As a result, Japanese exports rave suddenly
increased. In order to suppress this tlow, some EuroAmerican firms are now deploy- _
ing a counterattack strategy using basic patents as their weapon. One of the hot
fronts of the world patent war is seen here.
One example is machine tools, which are recently showing a rapid increase in exports.
Ten manufacturers of major machining centers (MC) such as Makino Milling Machine
Co., Hitachi Machinery Co., and Yamazaki Tekkosho [Iron Works], were recently sud- _
denly handed a contract for patent use. The opponent is the major conglomerate,
Litton Industries. The sub stance is "in effect the demand that 0.4 percent of the
price per unit be paid as a royalty when exporting to the United States." (Shimizu,
president of Makino Milling Machine Co.).
Th~ basis of their claim is that the Japanese manufacturers have infringed upon
their basic patent for exchanging tools by holding the spindles at a fixed position.
In any event, the Japanese parties have no alternative but to comply with the de- _
mand. (President Shimizu).
Why are they claiming royalties all of a sudden? Part of the reason is that they
have concluded patent disputes in the United States with Kearney & Trecker and Ex-
Cell-0 in the same trade. However, the fact that cannot be overlooked is the spec-
tacular growth of machine tools made in Japan. It is said that few of the basic
technologies of the Japanese group were developed on their own, but the majority of
them are copies of EuroAmerican products. The view of the business concerns is that _
the Japanese machine tool manu`acturers were hit right at their weak spot in the
midst of increasing exports to the United States. Had they possessed patents based
upon their own superior technology, they could have turned to an exchange of rights
for patent use (cross-license). But, without them, they have no alternative but to
comply with the payment of royalties. In the field of machine tools, disputes occur
frequently. Warner-Swasey of th e United States also sued Tsugami and Miyano Tekk~-
sho last year for patent infringements.
~ Such disputes related to trade f riction are not limited to machine tools alone.
Signs are also beginning to appear with semiconductors in the field of leading tech-
nology, which are said to be the focus of friction in the 1980's. Last year, U.S.
Motorola claimed payment for royalties from Japanese semiconductor manufacturers who
have no cross-license. On the o ther hand, U.S. groups such as IBM, Texas Instru- .
ments, etc., are making strong demands for patent disclosure of technology developed
by th e Super-LSI Technical Research Association, a Japanese national projecz. "Had
the Japanese party not complied, the U.S. party would not have hesitated to take
_ away the right to use the semiconductor basic patent" (Patent Dept, Japan Texas _
Instruments). With such pressure, the.7apanese party had no alternative but to
finally comply with the total disclosure.
Change Toward "Technological Friction"
In the case of VTR, where the technology from development to production is practical-
ly monopolized by Japan, RCA last year demanded royalties from major Japanese manu- _
facturers as exports to the United States suddenly inc;eased. "The fact that VTR
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_ equipment contains circuits for ~roadcasting waves infringes upo~t the RCA patent,"
they claim. (Toshiba Patent Dept Head Ozu). The Japanese party has been cornered
to agree to the demands of RCA, which holds the basic patent for color television.
Recently, "one senses an indication that trade friction is changing to 'technologi-
- cal friction' related to patents" (Ozu). .
~ Increasing intervention by the U.S. ITC (International Trade Commission) into patent
disputes verifies this fact. ITC is an independent organ that primarily arbitrates
- dumping suits, etc. Through an amendment of the co~ercial law in 1974, however,
that changed, and "an abatement order, such as a ban on imports, is possible by _
authority of the ITC (previously reco~ended only to the President), by regarding
the import into the United States ~f products manufactured in other countries with �
unauthorized use of U.S, patents as constituting unfair competition." Since then,
patent infringement suits brought before the ITC have increased noticeably. More-
over, this law was further strengthened last year, and the length of investigation
- and settlement was shortened to 12 months.
U.S. firms take their patent disputes, which were previously fought in the courts,
to the ITC. The cost is lower than for court suits, and a c~nclusion is obtainable
in a short period of time. When infringement is recognized, export produ~ts such -
as those from Japan can be banned immediately, right at the waterfront. "On the
other hand, because of the short (1-year) period allowed, countermeasures such as
disclosure procedurES are extremely difficult for Japanese firms. Clearly, it is
the U.S. defensive policy to use patents as a weapon" (Patent Agency examiner).
The number of patent infringement cases instituted with the ITC was about 15 both
in 1978 and 1979, but it has already reached more than 30 cases this year. One of
the companies sued is Hitachi, Ltd. "In addition to our company, Westinghouse took
action against Siemens of West Germany, among others, for infringement of a patent
on a gas cutter" (Patent Dept Head Ta'~ahashi). While the issue is patent infringe-
ment, their demand is only to ban imports. This suggests that the U.S. aim is
unmistakably to block imports.
Solidifying Independent Technology First
Sparks of friction are beginning to fly in areas other than disputes related to such
trade friction. One example is the field of genetic engineering, which is attract-
ing attention as a future technology. Microorganisms created by the manipulation of
genes had been excluded from patentable subject matter in the United States, but it
has been recently decided to recognize them for patenting there. On the other hand,
"although it is a patentable subject in Japan, research in the field cannot be
carried out freely because of the strict guidelines of the Council for Science and
Technology" (Patent Dept Head Mangyo, Mitsubishi Chemical Ind., Ltd.). Hit [with
the news], the Japanese firms stirred slowly, but in the meantime, EuroAmerican
concerns such as ICI, GE, and the Pasteur Institute have applied one after anoth~r
for patents related to genetic manipulation in Japan. Of the 23 cases announced up
to this May, 16 cases were held by the EuroAmerican force. Since this is a leading
field, the strengthened patent applications of EuroAmerican firms in Japan cannot ~
be overlooked. '
In the field of chemistry, patent applications by EuroAmerican firms in Japan (cases
published in 1979) numbered 516 cases by Bayer of West Germany, 323 by Ciba of
11
F(1R (1FFT('.TAT. TiSF, nNLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL USE ONLY
Switzerland, and 152 by Dupont of the United States. In all cases, the figures sur-
pass the number of overseas applications by Japanese firms in the same trades. And
it is not merely the number. "Recently, qualitaCive c~hanges have also been signifi-
cant in the Japanese applications by EuroAmerican firms" (Dept Head Ozu, Toshiba).
During th e years from 1960 to 1970, patent applications in Japan were made inciden-
tal to appl~cations in Europe or the United States. Consequently, the application
proceedings were left almost entirely to Japanese attorneys. Naturally, the patent
specifications were less than perfect. "Thus, the Japanese firms could easily pass
through their patent nets" (Ozu, Toshiba).
In th e past several years, however, EuroAmerican firms such as TI and Motorola with
semiconductors and Phillips with electrical machinery have all set up a patent
department in their offices in Japan, and while they are strengthening their rela-
tionship with the outside attorneys' offices, they are beginning to expand the~r
Japanese staff. There is also talk that "recently, scouts from foreign capital
firms have been bringing job offers at 15 million yen per year (junior examiner at
_ the P atent Agency). EuroAmerican firms are apparently building a paten~ strategy
steadily aimed at the turbulent age of technology. In the past several years there ,
have been cases of Japanese firms sending their patent department staff abroad.
However, virtually no firm employs local staff abroad who are well informed in
patent work.
How should Japanese firms response in the future to EuroAmerican firms who make full
use of patent strategy at the backdoor? "Many of the royalty payments currently
made by Japanese firms to EuroAmerican firms result from patents filed for regis-
tration with relative ease more than 10 years ago. They are now beginning to make
full use of the power of patented technology. Improper measures may invite serious
situations in the future" (Dept Head Ozu, Toshiba).
Needless to say, the important premise is to develop our own technology and solidify
- our legal rights as soon as possible. The new idea now being demanded is how to
make active use of a patent once ob~ained as a strategic weapon. We shall examine
next the recent patent strategies of various firms.
12
FOR OFFICIAL USE ONLY
i
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
~ FOR OFFICIAL USE ONLY
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FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
FOR OFFIClAL U5E (x~LY
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FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL .IJSE ONLY
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FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
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15
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL USE ONLY
Establish Right of Qwn Technology Potential
In the background of the international patent war, the role of the "patent strategy
department" has been enlarged.
In order to establish the right of a firm's own technology potential, the new rol~~
of patent departments to take strategic action in various functional phases such as
patent applications, contracts, and information gathering.
- It is not an overstatement to say that the force of the patent strategy department
is proportional to the level of executives' awareness of patents.
Executives--Understanding the Need for a Fighting Force
The "patent department" is a p1acQ where a company clerk writes an application docu-
ment, referring to law books in an odor-filled room.... Such an image is no longer
true. The patent department of a company that is determined to survive the inter-
national patent war is now undergoing substantial changes.
. At Ricoh, which "had been fast as]:eep in ~'~e patent phase" until only three or four
years ago, the activities of the "patent department in action" have recently been
drawing attention. For example, prior to the recent export of a new product, copiers,
to various European countries, two st~ff inembers of the patent department flew to
Amsterdam. Their mission was to gather ia one room lawyers and patent attorneys
from West Germany, France, England, and the Netherlands who had been contracted by
Ricoh and to check, before the fact, whether or not the new product infringed upon
patents of European manufacturers.
Having before them three units of the new product whictr had been shipped in advance,
patent specialists from each country carried out a thorough deliberation for a week.
As soon as the two staff inembers returned to Japan, the patent department took neces-
sary measures such as design changes for different countries or the scrapping of
patents of competitor firms, depending on the country. As a result, "although there
was an expense for advance investigation as a preventive measure, we did not have to
face a suit for patent infringement from the European manufacturers after the
products had been exported, and then end up with a mountain of unsold products"
(Patent Dept Head Itoga). If the territorial survey had not been conducted, "we
might have suffered damages of several hundred million yen" (Dept Head Itoga).
Ricoh began to strengthen the patent department in 1975 when patent disputes with
the U.S. Xerox Corporation had been temporarily settled. At the time, the company
was lukewarm in its thinking toward patents, and this can be blamed as the cause
for this dispute. However, as a result of the heavy patent offensive by Xerox, the
company obtained an awareness that "a patent strategy is nothing more than techno-
logical strategy to establish the right of one's own technology potential" (Dept
Head Itoga). The dispatching of the patent staff to Europe had this kind of think-
ing as the backdrop.
In addition, the company's recent policy has been for the patent department head
always to attend managerial conferences to determine the direction of future product
development. The top executives' patent awareness is truly high, as exemplified by
the president himself insisting upon confirmation of a patent application at a
17
FOR ~FFTI'.TAT, TTSR ~NT,Y
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~OR OFFICIAL UuE ONLX
conference, etc. Appeals such as "don't develop unpatentable products" are even
tieard. In other wards, in the case of Ricoh, the top executives have come to
_ recognize the importance of patents, and bl~~ssed aith their understanding the
patent department is in the process of chang~~q into a"patent strategy department"
- which plays a central role in managerial strate~;y.
"Patent strategy department" activities have beguia in other firms also. All patent
departments seem to be strategically demonstrating their respective functions for
_ patent applications, contracts, and information gathering. First, let us begin
w~th application strategy....
Application--Based on Area and Proc.ucts
Tc~shiba Corporation has just about established an application strategy for the
United States. The cardinal point is not merely to file a Iarge number of patent
applications, but to establish strong patent rights even with a small number. The
idea stems from the fact, that the company is still torm~nted by the powerful
patents that United States firms applied for in Japan 20 years ago, and they feel
the need for a counterattack againat the United States at this time. Also, once
- a powerful patent is obtained, there is an advantage of being able to use a multi-
ple nu,mber of technologies by cross-licensing with other firms. This is the idea
behind the application strategy of an "excellent few."
On the other hand, unlike applications to the United States, the application
strategy for Europe and Asia is "competition with quantity" all the way. Particu-
larly, the venture into the European market is the future project, and in order
to secure freedom for future activities in market areas, every conceivable patent
must first be filed as soon as possible. In this effort, the company is consider-
ing patent application strategy with matrices by country and merchandising depend-
ing on the mode of venture, such as product exports, technology exports, and local
production.
When the long-term plan for product exports to a certain country is determined,
applications for all related patents begin four to five years in advance in the
market area, with the aim of securing the future exclusive rights to produce and
- sell. Foreign applications cost twice as much as domestic applications. However,
"partly owing to the top executives' for patent understanding of the patent
departments budget has never been cut" (Dept Head Ozu).
In the case of Asahi Chemical Industries as well, the overseas patent application
strategy has been greatly changed. "In the past, when something was invented in
various departments, an application was made immediately. Recently, however, the
target has been narrowed to a certain business area by viewing the future opera-
tional strategies of the company as a whole, and the trend has shifted to making -
a concentrated, collective application in order to further strengthen tha exclusive -
rights of the company's own technologies overseas" (Patent Dept Head Yamada).
Then how has the actual mode of overseas application changed? In the case of
Toshiba, it may be stated that "efforts are being made to consider an even balance
between patents of other companies and to make careful applications, so that
Toshiba technology can demonstrate its exclusive effect overseas 10 and 20 years
hence" (Dept Head Ozu). In fact, at the time the application in the United State~
18
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for the "black stripe" patent for the video cathode ray tube, the company asked a
leading American patent attorney to go over the patent specification carefully.
This patent application not only escaped any disputes with U.S. manufacturers,
but "it is earning royalties from several firms in units of 100 million yen
annually" (Aept Head Ozu).
Nippon Kayaku K.K. also takes special care with its overseas applications. The
reason is the difference in claims (the scope of patent claims) listed in speci-
fications between Japan and the EuroAmerican countries. Consequently, when a -
patent for manufacturing acroleins from propylene was applied for overseas, they
did not mere'ly translate the specification applied to the Japanese Patent Agency
_ into various languages.
In other words, for countries where there is a broader scope of claims, applica-
tions were made with additional statements covering the catalysis technology to
manufacture acroleins. As soon as these applications were approved, licenses
were requested from companies in five countries, including the United States,
Great Britain, and France, to use this catalytic technology for synthesis of
another substance called acronitrile, and royalties amounting to 3.3 billion yen
were acquired. "It is also important to gain an insight into the patent examina-
tion peculiarities in each country." (Patent Section Chief Wada).
The different conception of patents between Japan and the EuroAmerican countries
also extends to the establishment of patent rights. One example is that in the
United States, the rights are estabished based on the day of invention, whereas in
, Japan they are based on the date of application after the invention. In this case,
even though an application is made earlier than other companies in the United
States, a patent is frequently denied. Therefore, Ricoh founded a totally
financed research and development company in the United States in 1979 and began
to take a position toward applications that is suitable to the local system,
and this is showing positive results. "In the future, it will be necessary to
increase collaborative research in the United States and to acquire United States
patents as soon as possible" (Matsui, managing director and Patent Dept Head,
Takeda Chemical Ind., Ltd.).
As described above, the conception for patent application differs greatly between
Japan and overseas countries. Consequently, increasingly more companies place `
resident patent specialists overseas, mainly in the United States, to strengthen
their overseas strategy. In the case of Toshiba, two members of the patent depart-
ment have been stationed in the United States since April of last year. In addi-
tion, the company sends two different members of the patent department every
three months in order to study under an American patent attorney to thoroughly
train them to prepare specifications. Eight members have already been immersed
in this "short-term training system," and they have apparently become the strong
fighting force in the company's U.S. applications.
Contract--Calculations With the Future in Mind
Paralleling the application strategy, the i.mportance of strengthening the patent
contract strategy has increased in the era of the international patent war.
Enterprises in Japan could not have made a high degree of growth without the
technologies introduced from the EuroAtnerican countries up to about 1965. Con-
sequently, "unequal treaty" patent contracts have been swallowed. However, now
19
Ff1R ~1FFT('TAT TTCF (1NT.Y
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that our technological might has come up to the EuroAmerican level, we have
arrived at an era in which patent contracts must al.so be switched to strategic
ones.
Nippon Kayaku K.K. is an example which succeeded in this process. The company
introduceci a patent for manufacturing acrylic acid developed by the U.S. firm
SOHIO (Standard Oil Ohio) in 1963. Meanwhile, the company was one step ahead ~
of SOHIO in developing an improved technique. However, SOHIO, which provided the
basic patent, demanded that Nippon Kayaku "s~ibmit the technolo~y gratis to
SOHIO whenever improved techniques are developed" based on the contract. SOHIO
would not concede, so following some squabbling, the technological power of
Nippon Kayaku was finally recognized and the "unequal treaty" was revised. Nippon
Kayaku is now fully applying the experience of the time. '
In other words, when the company provides over.seas manufacturers with technology,
such as a carcinostatic agent they developed, they always include in the contract
"a statement to the effect that the opponent firm submit, within reasonable limits,
their future technology when developed" (Patent Section Chief Takeda). Now they
are able to use overseas technology in equal terms or more advantageously.
Similarly, Shin-etsu Chemical Industry Co., Ltd., which has many worldwise achieve-
ments to its credit with technical exports of vinyl chloride resins, and Nippon '
Steel Corporation, whose iron manufacturing technology is at the world's highest _
level, "always demand returns for their technical exports" (Kanagawa, director
of Shinetsu Chemical Ind.; Tomiura, technical control manager of Nippon Steel
Corp.).
Aside from the return supplies of improved technologies, having a strategic inten-
tion in advance of signing patent contracts with foreign firms can yield great
results. Let us examine the case of Takeda Chemical Industries, Ltd.
In 1971, the above company obtained a patent in West Germany concerning "sydnone
imine" derivatives used as cardiac agents in the circulatory system. Soon ~here-
after, Boehringer, which had been conducting similar studies, offered joint
development, and a cross-license contract was concluded between the two companies.
However, Takeda Chemical Industries had a certain calculation working at that time.
In other words, when Takeda develops products using their own technology, they
are caught in Boehringer's patent network in various countries when exporting to
the world market. In order to avoid this, they decided that cross-license con-
tracts would be effective.
At that time, however, this product by Takeda was limited to domestic sales. Sub-
sequently, however, they received a request from Cassella A.G., a subsidiary of
Hoechst, for a license to sell this product in the world market, and they
promptly consented. In this case, too, the cross-license with Boehringer was
effective, and the royalty from Cassella did not have to be totally carried away
by Boehringer. A"patent contract strategy with the future in mind" such as
this (Patent Dept Head Matsui currently brings the company an annual profit of
approximately 80 million yen from Cassella.
2~
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Information--Prevent Infringement Beforehand
In order to survive in the international patent war, information strategy is
indispensable along with application and contract strategies. Aside from learn-
ing the research trends of rival firms from information supplied in patent appli-
cations of business firms both at home and abroad, infringemenC of patent rights
of other firms must be prevented beforehand.
Ajinomoto Company began its own information classification based on WPI (see 22
Sept issue), a data base that includes the patent information of 27 countries
throughout the world. For example, classification is made not only by products
and technology but by countries of invention, business firms, and so forth,
in detail, and the necessary information is circulated as to each research depart-
ment "Patent Survey News."
In the case of Ricoh, the patent information b ased on a data base is being used
to the fullest extent strategically by further digging. Like Ajinomot~, the
company classifies patent information into the company's pattern and prepares
"patent maps." What is unique is the fact that Ricoh has been using the informa-
tion obtained from the patenC classification by business ar~d inventors to actually
find technologists. "The personnel department is also grateful for the usefulness
of the patent map" (Patent Dept Head Itoga).
In addition, the patent information of business firms both at home and abroad, as
classified in the above patent map, is "used by this company to look for partners
for technical agreements or business purchases" (Dept Head Itoga). The informa-
tion strategy of a patent department is expected to have a radar function that
is indispensable in the international patent war.
In the meantime, each company is making gradual progress in systematizing a"patent
strategy department" that carries out respective functions for application,
contract, and information. Kobe Steel Works, Ltd. sends two technicians at a time
from various iron foundries and business departments to the patent depar~ment for
two years to have them learn patent strategies. At Ajinomoto Co., also, "members
of the p atent department are regarded as a kind of armament. Having too many
is a burden, but we are formulating a structure with a minimum checkmate force in
a ready state at all times, which can be supp lemented in an emergency" (Ajinomoto
Patent Dept Head Hayashi). Toyo Rayon and Asahi Glass are also training their
own "patent strategy department members."
At the same time, some firms are beginning to hire within the patent department
many qualified attorneys who are well informed about the overseas state of
affairs. The fighting force of the "patent strategy department is found to show
an increase that is in direct proportion to the increased patent awareness on the
part of top executives.
21
~nn nF~Trrer i1CF nt~.V
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6
FOR OFFICIAL USE ONLY
Changes in technological trade in Japan (equivalent receipts/equivalent payments)
' ~t~~l~~~ta~~ft~o~~~(~tt~~e~e~.~t~7~#~~)
eoc%~ .
~ , (1) ~ :
so
so ~ -
)
~at
o , . . ~ , '
30~tl~ 35 40 45 46 47 48 49 50 51 52 53 54 _
~g~ atR~-~r~t~~t~-~m~~_~n~~~-c~�am~t. #~.m~o~~~, ittr~. M~~~~~u
~4~ t'n~~~:3r_~i
Key:
1. Prime Minister's Office
2. Bank of Japan
3. JFY 1955, 1960, 1965, 1970, 1971-1979 -
4. Note: Difference between the Bank of Japan data and the Prime Minister's
Office data is caused by different ways of handling taxes, tabulating methods,
and the scope of survey subjects.
22
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-00850R040340070023-6
; ~OR OFFICIAL USE ONLY
; ~l~o~~=,~~x~;~ L2~ s~t~~.~~_
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3'
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n~.2oo t~~so ~13-
1.625 26.482 18.979+~ 1193~ 6. ~ 1 tt L
~ ~ 10.447~E 333~ ~~1)
238 1.705 372 32 ~ ~ ti ~
657 39
175 2.405 355 105 ~ 1 ?1 L -
285 120 _
849 10.325 3.273 ~E 52 ~t 0 2 (15 ~~t#fiit~~
~ ~ - _
- 218 2.796 ~.456~ 300~ 0 1 ~11.
1.088 ~ 80 ~ _
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800 5. 500 3. 200 200 AF1f ~
2,443 16.646 10'927 2�002 4(ilE~3 ~p ~i L
13.786 ~.oi5 a~~) ~16) (14 _ -
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_ , 550 4. 700 1.800 380 3 ~ . -
166 2.086 489 68 ~ > >i L
113 1.262 ~'40q 355 0 0
223 4.529 3�884#f 166~ 0 1 fi L .
~ ~ _
817 11.131 694 968 p 1 (1(f fi L
5g2 958.
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120 247
- - - - -----f-~~r- - ~
535 6.060 670~ 730~ 1(7vihi) 2 ~15~&~~d`i�~~#,
~ � 520+~ 790~
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-
1,000~ 5,700~ 2,100 300 1 ~18~ 3 ~
2,400 300 ~T3�itf11.FlL7)
23
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL USE ONLY ~
(continued)
a~,~~~t+~r~ ~t~~r~~~ ;~~~~~r ~~t 1er~~~o~~t~;~ ~
54$1~ ~it mP9 54~ 54~ ~dFf~~ (#f~t)
~50~ 50~
22 410 275 90 p 2 rt L
162 54
1.562 57 1 276 352 2(i1~~1. 14 '~iM~lt~~
- ,ss~ as,(19)a~~,~ c,~ c15)
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57 323 177 31 ~ ~ --~i L
152� 61
223 4,558 774 178 ~(;1 4 - ~i_L _
845 138~
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88 75
250 70 ~ 5 ?t L
1,900 3,900 190 95
36 80 0 ~ ~ .
403 58 58 ~ 14 ~
541 217 ~a L
150 8.900 955 ~ 385 ~ 5
1.352 113 ~ ~ ~i ~ -
345 2.282 1.345 89
1.100 3'710,000 3.400 160 1(vs��rt~~F~~ 6 -~ll
2.700 410+~ 7) T~
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1.285 45 ~ 0 ~
845 4,662 ~ ~ ~6 31
90 900 155 g ~ ~ ----~i L.-
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140 19 ~ - ~
50 420 ~40 ~4
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1 3 5 0
-
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24
FOR OFFICIAL USE ONLY
APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL USE ONLY
Key:
1. Number of patent cases in possession 11. 1(Washington), trainee
2. Number of patent cases applied 12. Treated as an executive
3. Overseas resident staff; trainees 13. 7(6 in U.S.; 1 in W. Germany) _
4. Patent attorneys (lawyers) 14. None
5. Patent department head who is also 15. Serves also as a director
serving on the board of directors.
16. 4(3 in U.S.; 1 in W. Germany)
6. 1979
17. 1 (Washington)
7. Cumulative total
18. 1 (Duesseldorf)
8. Domestic (1979, 1975)
~ 19. 2(1 in U.S.; 1 in W. Germany)
9. Overseas (1979, 1975)
20. 1 (Munich)
- 10. Approximately
25
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02/48: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02/08: CIA-RDP82-00850R000300070023-6

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FOR OFFICIAL USE ONLY
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FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000300074423-6
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28
FOR OFFICIAL USE ONLY
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APPROVED FOR RELEASE: 2007/02148: CIA-RDP82-44850R000300074423-6
FOR OFFICIAL USE ONLY
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29
Ff1R f1FFT(',TAi, i1SF, ONLY
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Notable Improvement, but Imports Still in Excess
Of 56 major companies, as many as three-fourths have drastically increased their
royalty income from overseas in the past five years.
As a result, the balance of royalty income to expense for various firms has showed ,
an improvement in two-thirds of the firms. It shows the results of independent
technological development by Japanese industry.
However, in comparison to EuroAmerican countries, Japanese technological trade is
still extremely excessive in imports. Strengthened patent rights overseas will
be a force to correct this imbalance.
There has been a shift from the era of exporting products manufactured with imported
Eui�oAmerican technology to an era of exporting the technology itself. Japanese
enterprises are apparently achieving con�ceptual changes. According to a survey
conducted by the Science and Technology Agency, the number of new technological
imports in JFY 1979 was 2,116--the first decrease since JFY 1975. At the same
time, the Japanese royalty balance, which has been showing receipts at 20-22 per-
cent of payments in the past several years, increased in JFY 1979 by S points from
the previous year, indicating a big grawth to the 27 percent level.
This trend is clearly visible when we look at individual business firms. When a
questionnaire survey of 56 major companies was conducted concerning royalty income
and expense, 40 percent of the firms had royalty receipts in excess of payments in
1979; this was the same level as in 1975, but the substance of the balance has �
greatly improved.
In particular, the percentage of companies who have drastically increased their
royalty income from overseas reached 75 percent. Notably, Sumitomo Chemical Co.,
Ltd. and Nippon Kayaku K.K., whose domestic income exceeded overseas income five
years ago, reversed the ratio in JFY 1979. Overseas income and expense, which
account for royalty payment overseas, also showed an improved balance in approxi-
mately 60 percent of the businesses. Consequently, two-thirds of the companies '
showed a favorable turn in royalty balance, which combines domestic and overseas
accounts.
By type of industry, the steel industry notably shows a favorable trend in the
royalty balance. Early in the year, Nippon Steel Corporation decided to provide
Armco Steel with comprehensive technical know-how. Kawasaki Steel Corporation
also sold the patent and know-how of the continuous casting technology to the
Conecast, Inc. Thus, one after another they have begun to export independent
technology to the U.S. steel manufacturers, their teachers of yesterday. Notably,
the 1979 royalty income of Nippon Steel Corporation was decisively at the top,
being 11.8 billion yen and as much as ten times greater than the expense.
On the other hand, chemistry as a whole shows an improving trend in the income/
expense balance, but in the field of electrical appliances and machinery, many
firms still depend on imported technology.
However, Tokyo Sanyo Electric Co. exported technology related to semiconductor
equipment, the leading technology, and put its income/expense balance into the
30
FOR OFFICIAL USE ONL~' ~
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black all at once. Aiwa Co. also is increasing its royalty income from overseas,
exceeding the domestic income compared to five years ago. Hitachi, Ltd. is also
giving another look at technology itself as a source of earnings. As a result of
positively disclosing patents both at home and abroad, the royalty income/expense
ratio (royalty income divided by royalty payment) improved from 38 percent in
JFY 1975 to 60 percent in 1979.
Thus, the royalty balance of Japanese businesses is gradually improving. However,
when we look at the technological trade of Japan as a whole, receipts are about
one-fourth of payments. In contrast, the United States has receipts which are 9.5
times payments, and both Great Britain and France have receipts in excess of pay-
ments. The development of independent technology and new patent strategies are
sought for these very reasons.
31
Ff1R f1FFTf'TAT. TTSR (1NT.Y
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Breakdown of Royalty Incomes and Payments ~nd Ma~or Destination
of Technology Exports
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