Table Speech

US-China Intellectual Property War and Challenges for Japan

Mr. Hisamitsu Arai
Intellectual Property Analyst

 Every day mass media is reporting heated dispute between the USA and China. President Trump published a book in 2012 entitled “Time to Get Tough” and revised it for the Presidential election in 2016 in which he wrote, “China is a master of stealing trade secrets and technology by corporate spying and more recently by cyber spying. The USA is vulnerable for protecting intellectual property. So, I’ll impose a 25-percent-tariff on all Chinese products to save jobs for our citizens. Let’s make America great again!”.

 When the USA became independent in 1776, their technology level was lower compared with European countries. Therefore, the Constitution written in 1787 included the clause that the Congress would protect the intellectual property. Three years later, the Patent Law was enacted and the first Director of the Patent Office was Thomas Jefferson, the third US President. The first President George Washington also loved invention and their inventions are displayed now in the Smithsonian Museum. Abraham Lincoln was granted a patent for a device for “Buoying Vessels Over Shoals” and emphasized that if protected by patent, many geniuses would be motivated to invent. As a result, Thomas Edison and many other invented electricity, machinery, airplanes, etc. Around 1900, the USA became the patent superpower and towards the end of WWI the most powerful nation in the world. President Trump believes that the USA has kept that status for 100 years since then.

 While in Japan, Prime Minister Korekiyo Takahashi, who was assassinated at an attempted coup d’état on February 26, 1936, had been much impressed in the USA where he had travelled as an exchange student towards the end of the Edo Period. He highlighted that “invention, trade mark and copy right were the three most important intellectual properties in the USA.” Upon his return to Japan, he studied about patent and intellectual properties and became the first Director General of the Patent Agency. It was over 150 years ago. Now in Japan, nobody thinks much about intellectual property.

 The USA has kept its top position as the superpower in intellectual property and technology, but now China is pushing back and insists that “with the most advanced technology we built the Great Wall more than 2000 years ago. Thanks to the four great inventions of ancient China, Compass, Gunpowder, Papermaking and Printing, the world civilization developed.” Defeated by Great Britain in the Opium War and by Japan in the Sino-Japanese War, China suffered a 100-year-humiliation dominated by the world powers till the end of WWII. The Chinese government now focuses on the Revival of the Great Chinese People. By 2049, 100 years after the establishment of the People’s Republic of China, they want to reclaim their top position in the world by reinforcing their military capability and economic power and aim at becoming an intellectual property superpower.

 The number of patent applications in 2018 was 300,000 in Japan and 600,000 in the USA, but 1.5million in China, which was 5 times more than in Japan. Lawsuits for infringement of the patent was 200 in Japan and 4,000 in the USA, while it totaled 16,000 in China. They established the Supreme People’s Court, equivalent to the Supreme Court for intellectual properties.

 30 years ago, when anti-Japanese sentiment escalated in the USA, Japan was the No.1 patent superpower of the world. Under the Koizumi Administration, the Basic Law of Intellectual Property was adopted as well as the Intellectual Property Headquarters and the High Court for Intellectual Property were established with the goal to enhance competitiveness of the Japanese industry and to strategically protect and utilize the outcome of research and creative activities. However, it didn’t work well. Under the slogan of “Selection and Concentration”, enterprises concentrated more on conventional work rather than risky research and development and advanced their business operations overseas rather than developing technology in Japan and dismissed many engineers.

 The USA and China believe there is a national border for technology, whereas Japan thinks there is no such border for technology, so we can buy technology from overseas based on the so-called “technology is commodity” theory. However, under the current circumstances China and the USA are saying they wouldn’t sell their technology. “No Security without Technology” is a key phrase of this age. Now technology is indispensable for national security and counts much more than natural resources. In Japan, there are superb researchers such as Professor Tasuku Honjo who was awarded the Nobel Prize for immunotherapy. Professor Honjo as well as Mr. Konosuke Matsushita or Mr. Soichiro Honda are all remarkable individual inventors. If given more incentives, they will produce more valuable intellectual properties.

 Besides, I am much concerned that Japanese technology is leaked so easily overseas. If you go to karaoke bars in the evening in the neighboring countries, there are many dismissed Japanese engineers. They have nothing to do in Japan, but they are given attractive working conditions overseas. University professors who approach retirement age are also targets of headhunting.

 Cyber security is a pressing issue now, as our technology is lagging behind the USA, China, Russia and North Korea. The military defends against cyber-attacks in collaboration with the police and the intelligence service (FBI or CIA) in other countries, but in Japan the Self Defense Forces (SDF) are not able to do so, as it is not mandated in the SDF Law. Just like countermeasures against natural disasters, cyber security should be added to the mandates of SDF. Otherwise technologies developed in Japan are vulnerable and will leak so easily to other countries.