Neurosurgeon Tetsuya Goto had just begun testing a robot to perform brain surgery when he discovered Japan was moving to tighten regulations that would shut down his seven-year project.
Over the next dozen years he watched in frustration as the da Vinci, a rival endoscopic robot that U.S. regulators had already approved, became a commercial success while his and other Japanese prototypes languished in laboratories.
Japan, with the world's largest robot population, is now awakening to a crisis as its lead in robotics - one of its last areas of technological prominence - comes under threat from better-coordinated efforts in the United States and Germany, as well as Asian rivals South Korea and China.
As robots advance from the factory floor into homes, hospitals, shops and even war zones, officials hope to spur a new "robotics revolution" by rewriting rules that researchers say have stifled innovation.
"We think robotics can make Japan competitive again," said Atsushi Mano, director of robotic technology at the trade ministry's New Energy and Industrial Technology Development Organization.
The agency has recruited Kawasaki Heavy Industries and Panasonic Corp to make a rival to the da Vinci that could perform more intricate tasks, such as removing pancreatic tumors, while a surgeon manipulates its controls.
At stake is a fast-growing industry - the market for industrial robotic systems is worth $29 billion a year worldwide according to the International Federation of Robotics.