Intellectual property rights (IPR) is a hot issue in Japan. The government has implemented a series of related legal and institutional reforms aimed at protecting and tapping the economic benefits of Japan's vast IPR portfolio. The rapid introduction of these reforms and innovations belie pervasive perceptions of policy paralysis and political gridlock.
As the second leading holder of patents behind the US, accounting for some 24% of the global total, Japan has belatedly awoken to the potential of these assets. Clearly, the prolonged recession has stimulated firms to more aggressively assert their rights and reap economic benefits therefrom. Certainly the government is concerned about the $4 billion IPR trade gap with the US and is aware that US firms generated $37 billion in royalties and licensing fees in 1999. Overall, the US enjoys a $27 billion surplus in its IPR trade account.
Hitachi has been one of the most successful Japanese firms in managing and exploiting its patent portfolio, earning some $400 million per annum in recent years. Throughout corporate Japan, according to Quentin Vaile, there is an increasing emphasis on generating revenues from IP royalties and licensing fees. In addition, firms are more inclined to pursue IPR-related litigation.