Made in Japan —or stolen in California?

Press, 15 July 1982, Page 17

Made in Japan —or stolen in California?

From

JOHN BARNES,

“Sunday

Times,” in Los Angeles

The Japanese computer experts arrested in - the United States last month on charges of stealing secrets from IBM were part of an intelligence-gathering operation run by their Government. .

This organisation's efforts have already helped Japan to corner 70 per cent of the market for the new 64k Ram wonderchip, a key building block in many computers. Information from “agents" is sent to a central clearing house run by Japan’s Ministry of International Trade and Industry through the Japan External Trade Organisation. This has 80 offices around the world, including nine in the United States.

The Japanese owe their success with the 64k to Americans’ pioneering work, says Daniel Klesken of Dataquest. a Silicon Valley market research company. “All the ideas and technology came from America, mostly right here in Silicon Valley.” That, no doubt, is why industrial intelligencegathering has cost United States electronics firms hundreds of millions of dollars. Ira Somerson, of the American Society for Industrial Security, says: “One bf the most cost-effective ways of doing research and development these days is to steal it.”

Selig Gertszis, director of technological studies for the Quantum Science Corporation in New York, explained how the Japanese worked. “Japanese companies sent over three-man and five-man groups of what they called ‘liaison officers' to conduct legal or quasi-legal industrial espionage in areas where they felt they had weaknesses.”

These intelligence-gather-ing operations have rarely been held to be illegal. How'ever, last month’s "sting” by the F. 8.1., which netted a covey of Mitsubishi and Hitachi executives, was by no means the first time Japanese companies have been accused of stealing United States industrial secrets.

In 1979, a manager of a Celanese Corporation plant making polyester film in South Carolina was convicted of criminal conspiracy for selling secrets to Mitsubishi’s plastics subsidiary in a case the judge called a "story of tragic betrayal." But in recent months, the United States Government has seemed more concerned with the theft of high technology by Soviet bloc countries. Intelligence experts believe that by riding piggyback on United States research the Soviets have made breakthroughs in highspeed submarines, missilesystems, and laser equipment. Much of the information came from Silicon Valley. However, United States electronics executives are every bit as incensed at .the Japanese “scavenger strategy” of copying their designs, without sharing the development costs, then selling them cheaper until they dominate the market.

Intel Corporation, one of Silicon Valley’s most innovative companies, claims Japan’s Toshiba made a

“dead ringer" for one of its memory chips that ■ cost millions to develop. The Japanese see nothing wrong in imitation. Indeed, many are proud of what has long been looked upon as a national characteristic. Yasiia Kato, a senior executive at Nippon Electric, said: “We are not 'so creative because the creative mind is peculiar, and we Japanese don’t like anything peculiar.' We believe that everyone should be the same.” That may explain why supposedly respectable Japanese executives are apparently prepared to take extraordinary risks to obtain IBM secrets.