MITI and the Japanese miracle

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where he became a persistent thorn in the side of the national conservative establishment. MITI was never very enthusiastic about the MSEA, but it had no choice other than to support it because of the political clout the small-business sector wields. Moreover, some MITI officials discovered that the directorship of the MSEA was an excellent place from which to build support for their own postretirement political careers. MITI's attitude toward the MSEA has consequently remained ambivalent over the years; it is today an integral, if non-mainstream, unit of the ministry.

By far the most serious problem with the original Antimonopoly Law was its ban on agreements that provided for the exclusive use of technologies or know-how. SCAP historians have rather lamely acknowledged after the fact that ''such a proposal represented advanced antitrust thinking."

⁵¹

In fact, the stipulation was so advanced it did not exist in the United States, where know-how and trade secrets can be legally protected under the laws of the various states, not to mention the constitutional protection of patent rights (art. I.8.8). The original AML seemed to ban exclusive patent licensing agreements, which stopped in their tracks all Japanese efforts to import technology.

SCAP does not appear to have realized how long the issue of industrial property rights had been a bone of contention between Japanese and foreign firms. The problem went back at least to the Firestone Rubber Company's suit of 1933 against Japan's Bridgestone Rubber Company, founded in 1931, because of the similarity in their names (Bridgestone won the case when its founder, Ishibashi Shojiro*, demonstrated that "bridgestone" was a literal translation of his family name). In 1949 these issues were still highly salient because the government had extended all prewar patents issued to foreigners (Japanese patents normally run for 15 years, American patents for 17 years), and because the du Pont Company was just then charging Toray Textiles with infringing on its patent for Nylon 6 (this was settled out of court, and du Pont and Toray became partners).

⁵²

Under the AML many foreign companies concluded not just that they could not protect their know-how and trade secrets in Japan (Japanese law had never provided protection against "breach of trust" with regard to know-how), but that even patent-licensing agreements would not be honored. Most refused to sell their patents until the law was clarified. Thus, to promote economic recovery, SCAP authorized the first formal amendment to the AML itself (law number 214 of June 18, 1949), which liberalized the provisions covering patent and exclusive agent contracts and allowed foreign corporations to acquire stock