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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Gus who wrote (14049)	4/13/2002 2:09:40 PM
From: Gus	Read Replies (1) \| Respond to of 17183

Like most Japanese companies, Hitachi has exhibited a strong tendency to settle rather than litigate patent lawsuits. For example, it paid $300M in 1982 to settle the IBM copyright and patent infringement lawsuits covering the mainframe operating system and application software. It also agreed to make all its products available for inspection by IBM. A more recent example is Hitachi's decision to settle the patent lawsuit initiated by Rambus over basic memory technology. This 1992 paper from the US Naval Research Office (Asia) does a good job of describing the fundamental differences between the US, European and Japanese patent systems that explains why Japanese companies tend to settle rather than litigate patent lawsuits. Keep in mind that the global patent royalty business went from less than $5B in 1990 to more than $100B in 1999 so the views of Japanese companies may be changing quickly to adapt to the times. Some excerpts: SOFTWARE PATENTS IN JAPAN Reflecting the growing importance of software in economies and industries, patents are now rapidly becoming more software oriented in Japan, Europe, and the US. Software itself is generally thought to be protected by copyrights, but how should software "ideas" be protected? Programs are definitely protected by copyrights. However, there is no basis for protecting the ideas and algorithms by copyrights; these can only be protected by patents. In the US and Japan the numbers of software patents, which protect software ideas and methods, are now increasing rapidly. Software is incorporated in almost all high-tech devices, especially, but not limited to, computers. These are hardware, but software is essential to their operation. Patents, which in the past were thought of as centering on hardware, also protect software ideas and algorithms, and there has been a rapid advance of patents covering software........ .........Basic patents are those granted for technological inventions that spawn many technologies and new products created on the basis of them. While Japanese companies have been ahead in terms of the number of patent applications submitted for almost twenty years, the majority of them relate to patents for improvements in technology (refinement patents). In the US there are roughly one million researchers, and about half that number in Japan. But patents in the US number about 100,000 whereas in Japan there are over five times that many. The primary reason is that the subjects of US patents are "basic", whereas Japan's center around production and refinement technology. In other words, Japanese lag behind the US and EC in terms of holding basic patents, and this has been a major reason for the frequent payment by Japanese companies of settlements and damages stemming from patent disputes. Fujitsu's view is probably close to that generally held in Japan. "New technologies in electronics are comprised of numerous existing technologies. There are not any new technologies that do not include other patents." "At the moment, it would be practically impossible" to develop a basic patent, such as the one that TI has for basic IC technology and which Japanese and other companies pay very large sums to use. A widely held Japanese view is that in the early 1980s, there was a rapid hollowing out of US manufacturing technology because of the high value of the US dollar. During the Reagan administration, strengthening and protecting intellectual property rights was emphasized, instead of strengthening manufacturing, as a way to compensate for the decline in production capacity and to reap profits, and this became a national policy of the US. One result was that US firms and the industrial world significantly shifted the course of their patent strategies from hardware subjects to an emphasis on software..... ........"In patent infringement suits, American standards for judging advancements or improvements achieved by an invention, a requirement in a patent, are lower than the standards used in Japan. The interpretation of the scope of a patent right is also expansive. A good example of this was a case between Corning and Sumitomo, concerning the manufacturing of optical fibers. Corning's technology refracts light in the fiber core, Sumitomo's refracts in the cladding. A US Federal District Court ruled that these were essentially equivalent. In Japan, the effects of an invention are given relatively high weight in judging advancements achieved by an invention, and the scope of a patent right tends to be limited to that claimed in the patent application. Japanese businesses accustomed to the Japanese patent system are likely to interpret US patents in the Japanese way. This trend probably made Japanese businesses misjudge their chances in patent disputes..... c) Modifying the usual Japanese routine of paying out large sums of money to settle patent suits out of court, and thoroughly challenging the points that should be challenged in the patent trial in order to check the increase in patent lawsuits and the huge out-of-court settlements. Japanese writers are also projecting that patent fights are anticipated in liquid-crystal and superconductor technology. One example of a more aggressive approach, is the Sanyo Electric Co. Sanyo recently presented a case to the US District Court against TI for violation of anti-trust laws. This is Sanyo's response to TI's case against them, which was presented to the district court, on the grounds of patent infringement of semiconductors. Sanyo believes that patent fights are usually conducted whether there exist patent infringements or not, and contrary to this traditional argument, Sanyo is trying to counter TI by using anti-trust laws as a weapon. Another example is Hitachi. In 1981 it established a patent division, covering everything from software copyrights to trade secrets. This was elevated to an Intellectual Property Rights Headquarters in 1988 and has moved into what is considered an offensive, rather than defensive stance. It has a staff of 330, including a tie-up with a law office in the US, and 60-70 technical researchers who are specialists in IPR activities. Other companies have established similar organizations and claim that they generate profit for their parent corporation cs.arizona.edu

To: Gus who wrote (14049)	4/18/2002 2:13:46 PM
From: VFD	Read Replies (4) \| Respond to of 17183

I am bailing out with a big loss. I have to admit that I made a mistake last summer when I bought back most of the shares that I had sold seven months earlier. I should have waited, but even though I am not as optimistic as I was 6 months ago I still think EMC will be OK. It is a good company with good management though at times overly optimistic. I wish the best to EMC and shareholders. EMC was good to me in my first 5 years (since 1995) as a shareholder. I made a lot more money in those 5 years than with any other stock. I just don't have the patience nor do I want to have to worry about individual stocks anymore. In fact, I am with the exception of Costco and Washington Mutual, bailing out of all my individual stocks (the growth portion of my portfolio) and investing in mutual funds (growth, value and small caps). I took an early retirement (I am 48) in early 2000 because I had already made my money. It is now time to enjoy it and do what my wife and I like to do: TRAVEL. GUS you are the best. I learned a lot about storage thanks to you. The best of luck to you.