Furukawa Electric : Intellectual Property Report 2022

IntellectualProperty Report2022

Contents

1 Management of Intellectual Property

1-1. Intellectual Property Strategy of FEC Group...3

1-2. Risk Minimization: Intellectual Property Risk Management...4

1-3. Chance Maximization: IP Landscaping...5

Activity Reinforcing and Creating of Business with Intellectual Assets...6

2 Intellectual Property Activity Framework

2-1. Promotion Framework...10

2-2. Activity Bases...11

Activity Intellectual Property Education and Awards System...12

3 Intellectual Property Analysis Report

3-1. Intellectual Property Portfolio...13

3-2. Sustainability Indicator (IP Landscaping Implementation Rate)...15 Activity Visualization of Strengths by Competitive Technology Map...16

4 Interviews on Utilization of Intellectual Assets

Creating New Business that Contributes to Carbon Neutrality..17 Creating Life Science Business...19

5 Topics

• Participation in the Intellectual Property and Intangible Asset Management Forum...21
• Informal Meeting with the Commissioner of the JPO...21

Introduction

I would like to welcome you to the intellectual property report by the Furukawa Electric Group. This report introduces, as part of the promotion of intellectual property management in our Group, our activities to reinforce and create business with intellectual assets and activities with respect to human resources and organizations that utilize the intellectual asset.

Based on his wish to "brighten Japan," Ichibei Furukawa, the founder of Furukawa Group, said that we must "Value employees, Value customers, Value new technology, and Contribute to society." Since its foundation in 1884, Furukawa Electric has treasured and passed on these words in its DNA as it has grown.

In order to inherit this DNA as our Group's values, we must accumulate and reinforce the use of intellectual assets, and we must reinforce human capital and organizational execution abilities that generate intellectual assets. This is our Group's basic concept of promoting intellectual property management.

FURUKAWA ELECTRIC GROUP

Until now, our intellectual property management has been based solely on the concept of "defensive intellectual property," but from now on, we will also incorporate the concept of "aggressive intellectual property" into our intellectual property management. Furthermore, we will place more importance on the utilization of intellectual assets than ever before as we strive to contribute to the resolution of contemporary issues such as carbon neutrality and circular economy.

I hope this Intellectual Property Report will provide you a better understanding of the intellectual property activities of the Furukawa Electric Group.

July 2023

Chairman of the Board

Keiichi Kobayashi

1 Management of Intellectual Property

1-1. Intellectual Property Strategy of FEC Group

The Furukawa Electric Group has adopted the basic policy of defining and utilizing intellectual property as an important management resource. We promote group-wide and global intellectual property activities with an understanding that business, R&D, and intellectual property are one and the same.

Our basic policy consists of the following three pillars:

Reinforcing management and

• business strategy planning capabilities by IP Landscaping

• Utilizing intellectual assets with Open & Closed strategies

• Stabilizing business by reducing intellectual property risks

Reinforce management and business strategy planning capabilities by IP Landscaping that incorporates, analyses and utilizes intellectual property information into strategy planning processes.

Run a cycle*1 that starts from analysis utilization of intellectual property (analysis <--> utilization -> creation -> protection), and formulate/implement Open and Closed strategies to reinforce business strategies.

Identify four categories of risks, which are infringement risk, technology outflow risk, contract risk, and counterfeit risk, as frequent risks with a significant impact, and continuously reduce such risks to stabilize business.

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*1 The basic concept of promoting intellectual property management: In order to enhance our business, we implement intellectual property strategies for our unique differentiating technologies and run a cycle starting from the utilization of intellectual property.

To promote intellectual property management and reinforce our business, we implement intellectual property strategies for our differentiated proprietary technologies and run a cycle starting with "analysis <--> utilization" of intellectual property. While understanding changes by environmental analysis using IP landscaping, we run a cycle of activities starting from utilization of intellectual assets with Open & Closed strategies, followed by creation and accumulation of intellectual assets, and protection of business and core technologies.

To contribute to the realization of a truly prosperous and sustainable society through continuous technological innovation, we will establish this IP landscaping as a tool for ambidextrous management (management that takes as its two wheels, "Exploitation," which exploits existing business, and "Exploration" which develops new business). In other words, among environmental analyses by IP landscaping, internal environment analysis is used for the Exploitation and external environmental analysis is used for the Exploration. With these activities, we will strive for the integrated management of intellectual assets, including not only conventional intellectual property but also management assets such as human resources, organizational capabilities, and customer networks.

Ambidextrous management by

business)	Utilization of intellectual assets	intellectual assets integrated management
(New	with Open & Closed strategies
Exploitation	Environmental analysis
		by IP landscaping
		IP landscaping as a tool
		- Internal environment analysis	Creation and
	Protection of business	-> Exploitation of knowledge
	- External environment analysis	accumulation of
	and core technology	-> Exploitation of knowledge
	intellectual assets
Code of
Conduct
Protection of intellectual			Exploitation (Existing business)
property rights

Management of

confident information

FURUKAWA ELECTRIC GROUP

1-2. Risk Minimization: Intellectual Property Risk Management

The Furukawa Electric Group's Code of Conduct stipulates two actions: (1) protection of intellectual property rights and (2) management of confidential information.

In accordance with the Code of Conduct, we make sure that the intellectual property portfolios are built and utilized based on detailed competitor analysis and the promote activities to globally reduce intellectual property risks, such as activities to prevent technical information outflow.

As a system for such risk minimization, we implement intellectual property risk management procedure that consists of three steps which are shown below:

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Intellectual property risk communication

1	Dialogue based on	3
evaluation
Intellectual property	＋	Intellectual property
risk evaluation	Determine countermeasures	risk management
	cooperatively
- Intellectual Property Department	- Business divisions prioritize countermeasures
evaluates intellectual property risks	- General managers of business divisions
- Intellectual Property Department	determine implementation of countermeasures
proposes risk countermeasures	- Business divisions and Intellectual Property
	Department implement countermeasures

In the step of intellectual property risk evaluation, each priority product of business divisions subject to intellectual property activities is visually evaluated from the viewpoints of whether: (1) an intellectual property portfolio has been built to prevent any disruption to the business; (2) any rights of other companies are not infringed by the product; (3) countermeasures for technical know-how leakage are being implemented for the product; and other viewpoints.

We define the following four categories to classify intellectual property risks and continuously call attention to risk management to stabilize business execution.

Infringement risk

Technology outflow risk

Regularly and continuously search for other companies' rights information to ensure that our products do not infringe other companies' intellectual property rights.

Aboid risks of direct damage to businesses and loss of opportunity.

Manage technologies at development and manufacturing sites and use a timestamp system to reinforce information preservation. Regularly check external announcements, including news releases.

Aboid risks of unintended disclosure of confidential information and other risks.

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Technology counterfeit risk

Obtain patent rights, utility model rights, design rights, and trademark rights to protect our products. Bring an action for injunction or damages if another company counterfeited our product.

Aboid risks of loss due to declined market share or other.

FURUKAWA ELECTRIC GROUP

Contract risk

Ensure that every technical contract is reviewed by the Intellectual Property Department before being signed.

Avoid risks of future disputes concerning the terms of technical contracts, including non-disclosure agreements, joint research agreements, purchase and sale agreements.

1-3. Chance Maximization: IP Landscaping

The Furukawa Electric Group lists "Reinforcing management and business strategy planning capabilities using IP Landscaping" as the first pillar of its intellectual property strategy.

To promote activities to seek new business fields and business models, we analyze the competitive environment and market environment using the intellectual property information of our own and other companies.

As a tool for such chance maximization, we implement this IP Landscaping in the following process.

Non-patent information	IP Landscaping
External environment
Internal environment
	Strategy
Patent information	planning
Published unexamined
patent applications
Patent publications

Strategy

Management strategy

Business strategy

Intellectual property

strategy

What is IP Landscaping?
As opposed to patent maps, IP Landscaping includes research
IP Landscaping has been gathering attention since	and development information, trends in management strategies,
its listing in "Intellectual Property Personnel Skills	technical information on individual patents, and other information
Standard Version 2.0" released in April 2017 by	on your company, competitors, and markets. IP Landscaping
the Ministry of Economy, Trade and Industry. This	provides a broad view of the current status and future perspectives
standard defines IP Landscaping as follows:	with respect to the market positioning of your company.

In 2021, the FEC has established a dedicated section in the Intellectual Property Department that utilizes IP Landscaping to predict market trends, analyze the value in customers' need and propose strategies for new business through co-creation with business divisions. To promote co-creation with business divisions, we apply IP Landscaping to activities (such as marketing activities) which have been regularly conducted by each business division to ensure effectiveness. We repeat analysis, evaluation, and hypothesis testing based on patent and non-patent information in accordance with the purposes of management and businesses and reinforce our strategy planning capability in tandem with marketing activities.

Flow of IP Landscaping (Example)

Extract			Extract
		key information
major players
		by major player
• Extract major applicants from		• Extract highly important information
patent information		based on patent information
• Confirm business content,		- Size of intellectual property
financial statuses, positions			investment
in the value chain from		- Changes in the intellectual
non-patent information			property strategy
		- Influence on other companies

Target customers by segment and extract customer job

• Discuss with business division to test the hypothesis drawn from non-patent information. Propose the strategy discussed.

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Please refer to "3-2. Sustainability Indicator (IP Landscaping Implementation Rate)" and "4 Interviews on Utilization of Intellectual Assets" for more information on IP Landscaping.

FURUKAWA ELECTRIC GROUP