R&D; Contract : Japan’s Giant NTT Signs Pact With Michigan Firm

Nippon Telegraph & Telephone has signed a $1.3-million contract for joint research and development of new technology with an American company, Energy Conversion Devices of Troy, Mich.

The deal involves a new concept that, according to its patent holder, Stanford R. Ovshinsky, president of the Michigan company, could revolutionize computers and integrated circuits.

Earlier, Chicago-based Interand Corp. reached an agreement for joint development of teleconferencing equipment with the giant national telephone company that shifted to private control April 1. Interand will receive a combination of cash and NTT-developed technology worth an estimated $5 million, according to Leonard Reiffel, Interand chairman.

The separate contracts were signed at a time of mounting pressure on Japan to open its telecommunications markets to American companies.

Under terms of an agreement signed last week, Energy Conversion Devices and NTT will engage in joint research and development on high-density electronic memories using amorphous materials. (In amorphous, or non-crystalline, materials, atoms appear in disarray.)

The American inventor, who previously entered into a joint venture with Sharp of Japan to mass produce photovoltaic solar energy cells in Japan, said his invention holds out the promise of creating “the next-generation memory devices,” to replace crystalline semiconductors.

Although Ovshinsky will retain basic patent rights, NTT will acquire a non-exclusive license to any technology that is developed to make a commercial product and will have rights to sublicense, manufacture, use and sell high-density, solid-state memory devices.

NTT was reported to be interested in developing the new memory devices, which Ovshinsky said will be “the size of a piece of paper on your desk.” They will be used in NTT’s planned nationwide “integrated network service” using digital phone lines in combination with computers to offer a wide variety of data services.

He declined to give an estimate of the potential value of future dealings with NTT, which is now Japan’s largest private firm in terms of assets and capital.

“I’m very proud NTT picked a little company like ours,” Ovshinsky said. “They didn’t care how little we were. They cared that this idea had an impact for their future.”

The Interand contract--with its provisions for technology exchange--was signed last November and ultimately could be worth “$50 million to $100 million a year” to the company, according to Reiffel.

Key elements of the agreement provide for joint production of technology involving teleconferencing and transmission of high-resolution images of documents, which Interand will market outside Japan, and allow Interand access to NTT’s proprietary telecommunications technology.