A growing number of Japanese high-tech firms are strategizing to protect their patents, viewing intellectual property rights as "the source of competitiveness."
Early in February, Japanese business leaders were surprised to learn that Matsushita Electric Industrial Co. has been engaged in a legal battle with Justsystem Corp. over its alleged infringement of a seemingly minor Matsushita patent.
Matsushita Electric claims the help function of the firm's Ichitaro word-processing software, which provides references to various functions of the software, violates Matsushita's Help Mode function on which the company has obtained a patent. The case is pending at the Tokyo High Court.
Like Matsushita, more manufacturers have come to attach importance to intellectual property rights.
"Patents are the engine for enhancing industrial competitiveness," said Yasuo Sakuta, executive officer and general manager of the Intellectual Property Group at Hitachi Ltd.
Hitachi is one of the most advanced companies in terms of patent strategy.
It established an intellectual property office in charge of patents in 1911, just one year after the company was founded.
In fiscal 2003, Hitachi racked up about 36 billion yen in unconsolidated revenues from patent royalties and its patent-rights balance sheet is 26.6 billion yen in the black.
Behind the increasing protectiveness toward patents is that when it comes to digital home appliances, such as flat-screen TVs and DVD recorders, late entrants to the market can produce high-quality products easily as long as the core components are available.