Intellectual Property Respecting and Protecting Intellectual Properties Fujikura engages in business operations fully respecting the intellectual property rights of others. Based on this policy, R&D divisions and IP divisions work together to evaluate regularly connections between the Fujikura’s products and technologies and third party industrial property rights. Specifically, other patent information domestically and internationally on R&D division research themes is shared regularly to and expert investigators are assigned to IP divisions to support investigations by R&D divisions. A number of lawyers that are employed by the company are also involved in determining the technical scope of products. In addition, we ask outside experts for their judgement when necessary. Moreover, we created a set of guidelines on copyrights and holding seminars it internally for employees to ensure we respect the copyrights of third parties. Meanwhile, we take appropriate actions under the law to protect our patent rights, design rights, and trademarks from unauthorized use. Fundamental Policy on Intellectual Property Activities 1.Fujikura strives to maintain and enhance its predominance on business by obtaining patents, including design patents, and other intellectual property rights for inventions and other intellectual property resulting from research and development. 2.Fujikura takes appropriate actions as required, such as taking legal actions against third parties in case of the infringement of patent, including design patent, trademark and other intellectual property rights owned by Fujikura. 3.Fujikura has a system in which business units, research and development units and intellectual property units cooperate each other across the units so that intellectual property strategies will be strongly linked to the solutions of business issues. Specifically, Fujikura regularly holds internal conferences specialized in intellectual property in which members from each unit participate in order to align intellectual property strategy with its business strategy, and to clarify and share the information of Fujikura's patent position in comparison with other companies in each business field for the further purpose of strengthening Fujikura's patent position. 4.Fujikura regularly and irregularly conducts intellectual property trainings in order to raise awareness of protecting and respecting intellectual property throughout the Fujikura Group. In addition, Fujikura holds an annual intellectual property event to share information on its own intellectual property activities and to have an opportunity of a lecture meeting by outside experts for the purpose of enlightenment. Alignment Intellectual Property Strategy and Business Strategy Fujikura's basic policy is to proactively protect the results obtained through research and development by acquiring intellectual property rights to ensure business superiority and to develop business while fully respecting the intellectual property rights of third parties. In FY2021, we continued to focus on the following issues under our single-year activity vision of "intellectual property activities integrated with business strategies. Intellectual Property Strategy According to Business 1.Promotion of Rights Acquisition We are promoting the realization of the ideal application model of domestic and foreign patents. Specifically, we constantly recognize relative intellectual property with competitors, aiming to create rights with high exclusivity.Especially in recent years, we have been promoting activities based on the recognition of the importance of "quality" of rights. 2.Building a Global Patent Network We will select the application country according to the business strategy and build a patent network for each country. 3.Ensure Superiority of Our Technology Through Strategic Patent Application We regularly hold "IP (Intellectual Property) Subcommittee" for each strategic business unit (SBU) to establish an intellectual property strategy based on the business strategy to connect business issues and IP management, The R&D department, the intellectual property department together promote the visibility and strengthening activities of patent positions of the Company, and we strive to maintain or enhance the superiority of our business. Activities to obtain rights to house mark trademarks Fujikura has been systematically working to obtain trademark rights in various countries for the purpose of protecting our house mark trademark globally, and has completed the filing of our branded house mark trademark applications as planned by 2020. Vanuatu, Madagascar, and China. In recent years, we have seen trademark applications from other companies that seem to be using our house mark with the intention of free-riding on the credibility of our brand. We are taking strict measures, such as requesting cancellation of the registration, etc., using the legal system. Trade Secret Management Based on the regulations concerning management of trade secrets, the Company properly manages it. This is especially important when securing an invention as a trade secret without applying for a patent. We manage confidentiality according to the importance of the trade secret based on internal regulations. Highly important information that affects the business is managed as a trade secret so that relief under the Unfair Competition Prevention Act can be obtained. Moreover, if another company independently develops and acquires a patent for technology managed as a trade secret, we also take action to obtain prior use rights so that we can continue to implement them.The Fujikura Group continued to provide consultation and information on trade secrets internally in FY2021. We also enriched the content on trade secrets as an educational opportunity for employees and worked in online study to increase awareness among Group employees. Rights creation activities as an intellectual property strategy We regard intellectual property obtained through research and development as one of the management resources to ensure the superiority of technology, and actively proceed with acquisition and management of rights for domestic and overseas in coordination with the development department, business department and intellectual property department. Regarding acquisition, we thoroughly discuss with the inventor about the essence of the invention and the range of possibilities that can be acquired, and we apply for licensing after considering the invention’s business contribution. Even regarding intellectual property rights that we have acquired, we judge the necessity of maintaining these rights each year based on the business value of the rights, and working to keep the optimum IP portfolio for our business at all times. In addition, we are doing various forms of management from application to extinguishment of rights with our proprietary intellectual property management system. We view the creation of high quality patent and other intellectual property rights as fundamental to intellectual property activities that contribute to our business. We work to strengthen these rights to ensure that they hold firm when exercising rights in line with the business strategy. In FY2021, we have designated specific technological fields to be intensively strengthened, and our business and intellectual property divisions are working together to formulate and implement intellectual property strategies in line with our business strategies. In addition, we have prepared guidelines to assist in the formulation of intellectual property strategies. Patent Ownership and Patents Pending Patents Owned in Japan The number of patents held in Japan over the past few years has remained at just under 3,000, but this number decreased to 2,840 in FY2021 as a result of a review of the portfolio. Patents Owned Overseas In line with the globalization of our business, the number of overseas patents held over the past few years has remained at just under 2,000, with 1,874 held in FY2021. Patents in the U.S., Europe, and China account for 80% of the total. Patents Pending in Japan The number of Fujikura patents pending has declined over the past several years to 258 in FY2021. While patents pending declined in Japan, patents pending outside of Japan increased. Global application rate The global application rate (the ratio of patent applications filed overseas with domestic applications as the foundation) had been hovering around 40%, but exceeded 50% in FY2021. IP activities related to priority development themes In the optical wiring solutions business, we have continuously applied for patents or actively secured patents for our strategic products, such as intermittent fixing tape and optical cables containing the tape, as well as optical fibers, optical connectors, and fusion splicer technologies, to ensure the superiority of our business. We will continue to promote IP management based on strategic considerations, taking into account technical aspects that contribute to the differentiation of our products. With regard to the development of millimeter-wave band communication devices for next-generation high-capacity, high-speed wireless communications, which is being promoted as an R&D theme for the creation of new businesses, we will establish a process for communication between the R&D and IP divisions to formulate IP strategies to secure business superiority and to confirm their progress. We are also working to ensure the timely protection of differentiated technologies and business freedom. We are also working to establish a similar system for the development of imaging modules using ultra-small CMOS image sensors for medical devices, which is also considered a priority development theme. For both themes, we are building a high-quality patent portfolio for future business.
