The Japanese government yesterday announced that it would license state-owned patents on computer-related products to the International Business Machines Corp., which could give IBM access to state-of-the-art Japanese computer technology.
While IBM has had cross-licensing agreements with Japanese companies for years, this tentative agreement would mark the first time that it would have access to inventions developed with funds from Japan's powerful Ministry of International Trade and Industry (MITI). IBM was prevented from using those patents because they were held by the Japanese government, which had refused to release them.
IBM Japan, a wholly owned subsidiary of IBM, is Japan's third-largest computer company.
"We had been in negotiations with MITI for several years on this," said IBM spokeswoman Nadine Fletcher.
The announcement of the tentative agreement comes amid Japanese efforts to ease tensions with the United States over the mounting trade imbalance. The Japnese government announced that it would take initiatives to open its markets wider to foreign competition and several Japanese companies have revealed efforts to increase their consumption of U.S. goods.
IBM declined to comment on the timing of the announcement, which was disclosed by the Japanese.
"MITI is such an important force in Japan's high-technology front that I'd say this will be a plus for IBM," asserted William Shattuck, an industry analyst with Montgomery Securities. "There should be enough stuff in there to make this more than just a token effort of accomodation."
Indications from Japan are that roughly 500 patents are involved and that IBM, which would pay royalties on them, is particularly interested in "process technologies" that focus on low-cost means of manufacturing high-technology components such as semiconductors. Japanese companies are highly regarded and innovators in manufacturing process technologies.
In effect, said IBM's Fletcher, the agreement would give IBM the same access to these patents as Japanese companies such as Hitachi Ltd., Nippon Electric Corp., and Fujitsu Ltd. have.
However, it is unclear whether this cross-licensing agreement will be extended to other U.S. companies now operating in Japan.
The agreement extends for five years and is renewable, which could give IBM access to patents coming from MITI's "Fifth Generation" computer project that is intended to enable Japan's computer industry to offer advanced new computer systems.