Abstract

"Foreign Direct Investment and Longevity of Patent Rights in Japan: How has Foreign Technology affected Industrialization?"

Shigehiro Nishimura, Kansai University (s-nishimura@phoenix.kobe-u.ac.jp)

The patent system was one of the most important systems for Japan to introduce foreign technology, promote industrialization, and achieve economic catch-up. Previous studies analyzed Japanese industrialization from patent and patent related activities. Nicholas (2011) revealed that domestic inventive activities contributed more to technological catch-up than foreign technology transfers. He also pointed out that prize competition – incentive systems other than the patent system – had a positive impact on patent applications (Nicholas 2013). Recently, Imaizumi researched in early use of the patent system by Japanese people and concluded that the Japanese entrepreneurs attempted to patent miscellaneous mundane inventions to gain business opportunities.
However, those studies based on patent registration data and did not use the data that could measure how the patent system was used. The impact of patents can be evaluated by renewal data (Schankerman and Pakes 1986). In this paper I use the data on lapse of patent rights collecting mainly from the Patent Gazette.
The analysis of patent longevity based on lapse data reveal that the life span of patent was longer when held and used by a corporation in an organized manner, regardless of whether they were domestic or foreigners. Among them, that foreign direct investment increased longevity of patents shows the impact of foreign technology which had a greater impact on industrialization. This fact is consistent with the case studies of local patent management of General Electric and Siemens in Japan (Donzé and Nishimura 2022). Furthermore, the fact can contribute the discussion about the relationship between foreign direct investment and intellectual property rights (Sáiz and Castro 2017). Multinational enterprises had a greater impact on industrialization not only through their investment but also through the patent system.