This manuscript is based on a chapter to be included in "Intellectual Property - Innovation and Incentives" by Suzanne Scotchmer, translated by Munetomo Ando, forthcoming from Nihon Hyoronsha. The purpose of the chapter is to shed light on Japanese historical and institutional aspects that corresponds to US aspects in the original book. We particularly focus on innovation and incentives before Meiji period. There was no intellectual property but there were significant innovations. We seek to answer the questions, what is the environment that produced them and how did innovators make a living? We see that there were organizations such as "za" that functioned like guilds in the west while "senbai" system probably induced a procurement system, much like government of today. This manuscript is not an English translation of the final version (in Japanese) in the book.