International Technology : The Software War : Japan is considering copyright changes that could wrest billions of dollars away from U.S. companies that program computers, critics say.

It’s one major squabble over an arcane issue that might seem to make zero sense.

But the “ones” and the “zeros” in this case hold the secrets of such major American computer firms as IBM, Microsoft and Motorola. And as a result, those companies and others, backed by the U.S. government, are expressing concern bordering on panic over possible changes in Japanese law that they say could weaken copyright protection for the all-important software that makes computers do all those marvelous things.

Approval of the proposed changes would be “a tremendous blow to those software companies that have invested billions of dollars in developing their software and bringing it to the market,” said Rao Coca, assistant general counsel for IBM Asia Pacific. “You’re talking about billions of dollars of investment that may be taken away.”

The U.S. government has come down 100% on the side of critics of the proposed legal revisions.

“We have grave concerns about this initiative,” Secretary of Commerce Ronald H. Brown and U.S. Trade Representative Mickey Kantor wrote in a November letter to Hiroshi Kumagai, minister of international trade and industry, which was later made public. “There is a clear implication that the purpose of the study is to determine ways to weaken Japan’s protection of computer programs under its copyright law.”

Washington is so worried that it sent Michael K. Kirk, assistant commissioner at the Patent and Trademark Office, on a special trip to Tokyo last month to stress American concerns. After a clearly unsatisfying round of talks, Kirk expressed fear at a U.S. Embassy news conference that Japan might “choose to abandon . . . established international norms.”

Kirk said that the proposed change in Japan’s law “would set a very damaging international precedent that would have adverse impacts not only on industry in Japan and the United States, but all developed countries that are generators of proprietary software.”

At the heart of the dispute is the esoteric subject of “decompilation.” Software programs are initially written in special languages, which are then converted into “zeros” and “ones”--the symbols actually read by computers--through a process called “compilation.” Reversing this process--turning the “zeros” and “ones” of computer talk back into a language that humans can more easily read--is called “decompilation.”

With certain fairly restrictive exceptions, “decompilation” is currently illegal in the world’s major industrialized nations. The European Community issued a directive in 1991 narrowly defining when it can be allowed. And two U.S. court cases--both of which involved Japanese manufacturers of video games--also defined occasions when it may be legal. But those rulings did not set clear and wide-ranging precedents.

Now the field of conflict has moved to Japan, where the enormous technical capabilities of Japanese corporations--combined with their current position generally lagging far behind the United States in software development--could make this fight the most important one yet. Hanging in the balance, according to many of the players, are key ground rules for international competition in the 21st Century.

Tokyo officials cite the partial approval granted to the process in Europe and the United States as grounds for initiating their own study. But Japan appears to be considering a much broader legalization of the decompilation process.

Favoring the Japanese study is a rival group of U.S. computer firms--generally smaller companies or ones that mainly produce hardware--who contend that their larger competitors are merely trying to make it harder for them to write programs compatible with established standards.

But critics insist that changes contemplated by Tokyo would open the floodgates for firms to study software produced by others, figure out its essentials, rewrite it slightly, then sell it as their own.

“It’s going to make it exceedingly difficult for the innovative firm, the creator, to determine whether or not that program was copied, without finding a smoking gun in the file or something like that,” Kirk said. “So it would weaken the incentives to invest in the development of new innovative software because of the risk that it could be copied and you would never be able to adequately learn that.”

Both Japan and the United States “need to take a careful look at any steps that would weaken our ability to compete--not only with each other, but with other countries around the world,” the U.S. official added.

At the Ministry of Education’s Cultural Affairs Agency, which has the power to draft proposed revisions of Japan’s copyright law, officials say the whole uproar is basically just a misunderstanding.

“We are trying to strengthen copyright protection, not weaken it,” Toru Kameda, a Cultural Affairs Agency official, said in an interview. “We have a committee which is discussing the issue, but they haven’t reached a conclusion yet. It’s still a blank sheet of paper. In spite of the fact that it’s still in the study process, the United States seems to have misunderstood.”

When agency officials try to explain what they are considering, however, their statements tend to fan U.S. fears.

Kameda, responding to critics’ concerns, stressed that “the copyright principle doesn’t protect ideas. For example, if you write a cookbook, the copyright can protect the book. But it cannot protect the cooking method itself.”

Kameda is legally correct, in that copyrights protect the specific manner of expressing ideas, not the ideas themselves. But to have the Japanese government looking at software in this way reinforces the apprehension of the U.S. firms that currently stand at the top of the industry worldwide.

Major U.S. software creators insist that if competitors are allowed to take convenient close-up looks at how copyrighted programs are written, this will allow those rivals to cook up similar products with only a small fraction of the investment. They could then market that software at low prices that undercut the ability of the creative firms to recover their investment.

A position paper recently presented to the Japanese government by a group of worried U.S. firms paints the issue in sweeping terms: “This topic, although complex and esoteric, is of interest to more than the computer industry. It will affect the publishing and entertainment industries and others which are part of the digital and multimedia technological revolution. At stake is no less than control of the future of information technology.”

The companies whose names were attached to this sweeping statement included: Apple Computer Inc., International Business Machines Corp., Lotus Development Corp., Microsoft Corp., Motorola Inc., Texas Instruments Inc., Word Perfect Corp. and the Business Software Alliance, an organization dedicated to protecting the worldwide interests of software creators.

Those on the other side of the issue dismiss such statements as groundless hyperbole.

“If the new product closely resembles the product you decompiled, that is (copyright) infringement,” said John Scroppo, vice president of Storage Technology of Japan Ltd. “What we’re supporting is changes in the law for the purposes of interoperability and compatibility of systems. We want to be allowed the freedom that allows us to connect our products to IBM or Fujistu or Hitachi (systems).”

Heading up this side of the battle, in support of the proposed changes, is an organization called the American Committee for Interoperable Systems, which lists about 35 members, including Storage Technology Corp., Sun Microsystems Inc., Tandem Computers Inc., Unisys Corp. and NCR Corp.

The committee wishes Washington had stayed out of the fight.

“I’m very upset,” Scroppo said, “that our government has decided to take this position.”

Researcher Chiaki Kitada in The Times’ Tokyo Bureau contributed to this article.