In the United States, we tend to think of Japan as a high-tech, exporting powerhouse.
That is certainly true in the automotive and consumer electronics industries, where company size and manufacturing prowess are indispensable.
It is not as true for small and medium sized companies, where ideas and creativity, not industrial manufacturing, are the predominant ingredients in the value added mix.
Exhibit A: an interesting New York Times article, which notes that Japan is home to some of the most creative, cutting edge fashion brands in the world, but those small companies do not have the know-how or infrastructure to export. Rather, Western retail chains “buy up bagfuls of the latest hits. The designs are then whisked overseas to be reworked, resized, stitched together and sold under Western labels.”
Japan earned a mere $416 million from clothing and apparel related exports in 2008, compared to $3.68 billion for US apparel companies, and a staggering $113 billion for Chinese clothing exports.
According to experts quoted in the Times article, in order to turn the situation around, “Japan’s fashion industry needs…more concrete help in marketing and setting up shop overseas….The government could also play a larger role helping Japanese labels protect their intellectual property rights, they say.”
In my opinion, the most effective means for Japanese fashion labels to protect their IP would be to negotiate license and/or distribution agreements with partners in foreign countries. Copyright law is usually not an effective means to protect against copying fashion designs, and trademark law would not help unless the labels were already selling in the foreign markets.
Exhibit B: a failure to protect intellectual property rights has had a severe economic impact on another field where Japan is a global creative leader—animation or “anime” (アニメ in Japanese). Anime enjoys growing worldwide popularity for its complex, creative art and storytelling, but a combination of absurdly high prices for legitimate DVDs and a failure to challenge massive Internet piracy has had a devastating economic impact not only on foreign distributors of authorized anime, but on the Japanese anime studios as well.
Japan’s automotive and consumer electronics industries have thrived in part because they learned how to export and how to protect their intellectual property in foreign markets. (Japanese companies are the largest foreign filers of US patent applications.) Small and medium Japanese IP companies can follow their example and prosper.
Coming soon: an article explaining how small and medium foreign businesses can start doing business in the United States.