Clay Jacobson Calls It Patently UnfairEric Schine
For 16 years, Clayton Jacobson has been a man obsessed. He claims Kawasaki Heavy Industries took credit for his invention, the jet ski, and deprived him of profits from the popular watercraft. And he's been seeking justice ever since. First, Jacobson sued Kawasaki for patent infringement, settling for $3 million. But Kawasaki didn't stop there. Jacobson asserts that by claiming the jet ski as its own, Kawasaki nearly ran him out of the business he invented.
So he sued Kawasaki again, and in July, a Los Angeles jury awarded him $21 million. Evidence suggests that Kawasaki had deceptively used his designs to snag Japanese patents on the jet ski. And it ran print and TV ads touting its engineers as the inventors.
FLASHPOINTS. Jacobson is savoring his latest victory, but the patent war isn't over. On Aug. 26, Kawasaki will try to upset the verdict or win a new trial. Kawasaki won't comment. In court records, it says Jacobson was well paid for his designs and is now only trying to cash in on its success. "There is not enough money in the world to make Jacobson happy," said Gary Lande, Kawasaki's attorney.
The feud highlights a little publicized source of U. S.-Japanese trade friction: patent systems. U. S. laws are used to protect inventors, keeping ideas under wraps until patents are won. And inventors must disclose similar inventions, dissuading copycats. No such rules exist in Japan. And the laws are used to promote technology-sharing, with little value put on individual ownership (table).
Trade experts say the Japanese system hurts Americans seeking to protect their inventions. In Jacobson's case, Kawasaki exploited the system to spirit away his ideas. Larger U. S. companies, such as Texas Instruments Inc., are also pressing suits against Japanese competitors. And patent issues are becoming flashpoints in trade talks. Says Clyde Prestowitz of the Economic Strategy Institute in Washington, D. C.: "The systematic scouring of U. S. technology is continuing."
Jacobson dreamed up the jet ski 30 years ago. Then, in 1971, after securing a U. S. patent, he gave Kawasaki an exclusive license to make and sell the craft in exchange for royalties. The deal also gave Kawasaki access to his designs.
The day after engineers eyed the designs, records show, Kawasaki, without Jacobson's knowledge, applied for Japanese patents, naming itself as the inventor. It got them--and even won a U. S. patent. Kawasaki parlayed its monopoly on the technology into hefty sales. Since Jacobson's design hit the California surf in 1973, the industry has racked up more than $800 million in sales.
THE KISS-OFF. By 1975, a letter shows, Kawasaki was doing so well with the jet ski that it didn't need Jacobson, and terminated the deal. Jacobson sued for patent infringement, forcing Kawasaki to give up its U. S. patent and freeing him to license his jet ski to competitors. Even so, Honda, Suzuki, and others refused to make the ski or to supply him with parts, which he claims only the Japanese were making. Eventually, Yamaha agreed to make his design, but only if Jacobson would indemnify it against suits from Kawasaki. "They all treated me like I had leprosy," he recalls.
The cold shoulder extended to his son. In 1981, the U. S. Jet Ski Boating Assn.--which Kawasaki backs--banned Jacobson and his son, a top racer, from the circuit. That, insists Jacobson, denied him the exposure needed to woo other prospects.
Despite his winning verdict, Jacobson could still lose the case. The court threw out his claim that Kawasaki conspired with other Japanese companies to cut him out of the market. And playing to anti-Japanese sentiment, as he did with the jury, may not sway a judge. But by taking on Kawasaki in the U. S., Jacobson may push Japanese companies to think twice before they're tempted to exploit someone else's idea.