Japan's Souped Up Patent System Could Scald U.S. Companies

For years, American companies have complained to Washington about inadequate patent protection in Japan. The standard litany: Patent applications face inordinate delays, products and technologies are copied, and when it all winds up in court, litigation drags on for decades.

Responding to such complaints, Japan is putting the final touches on one of the world's most sophisticated electronic patent systems. Costing nearly $1 billion, the computer system allows instant filing of applications and quick retrieval of any one of 30 million patent filings. Japanese officials say the new system will shave a year off the current 36-month average wait on patent approval by 1995.

Technology alone, unfortunately, can't solve U. S.-Japan patent friction. In fact, says one U. S. government official, "it could make things worse." The problems stem from drastically different approaches to patents. Japanese patents tend to be narrowly focused on specific improvements to technologies, unlike the broad-based U. S. approach. For example, when IBM scientists in Zurich discovered warm-temperature superconductors in 1986, Japanese companies duplicated the results. Within a year, they flooded the patent office with hundreds of related applications. If the technology ever bears commercial fruit, these patents could tie up U. S. companies trying to export to Japan.

NIGHTMARE. From Japan's perspective, "the system helps promote new manufacturing technology," says John Stern, an official at the American Electronics Assn.'s Tokyo office. But to American companies whose patent applications languish while the technology described in the application is copied or improved upon, the system has been a nightmare. A U. S. company whose invention is copied and patented in Japan could end up having to get a license covering its own invention.Computerization, Americans fear, will aggravate patent flooding while doing little to speed up the approval process. Where typed applications used to be delivered in a box, 95% of new applications today are sent over phone lines or on computer disks. "There's no way electronic filing will produce an expedited patent," says Bradford R. Huther, a U. S. patent office official.

Even so, Japanese officials are trying to cut delays in approving patents filed by U. S. companies. The patent office has added 60 examiners in the past two years. Says its head of general administration, Kazuhiko Otsuka: "Machines can't replace human examiners."

FAIRER? Some American executives see evidence that the Japanese system is becoming fairer. Texas Instruments Inc. fought for 29 years, until 1989, to protect basic designs on integrated circuits. Today, TI is back in court, fighting a new attempt by Fujitsu Ltd. to have its patent revoked. But now, TI managers are sure they can get a victory more quickly. Since 1986, says Mel Sharp, a former TI patent counsel who guided the company's three-decade effort, "TI has been given very fair treatment by the patent office and by the Japanese system."

U. S. officials also hailed a recent preliminary injunction by the Osaka District Court favoring Genentech Inc. over rival Toyobo Co. The court ruled Toyobo's version of a heart-attack drug infringed Genentech's patents -- and bailiffs seized inventories of the drug at Toyobo's plant.

Some U. S. executives fear that these are exceptions. Now, Japan's engineering companies are zipping electronic applications into Tokyo's high-tech patent fortress. As the race to file new patents continues, inevitably, so will U. S.-Japan patent woes.

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