Fujitsu’s Intellectual Property Strategy
April 12, 2006
Masanobu Katoh
Corporate Vice President
President, Law & Intellectual Property Unit
Fujitsu Limited
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The FUJITSU Way
Group-wide
Activities
Business
Principles
JQA
Production
Innovation
Environment
Etc.
Business
Plans
2
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Intellectual Property Strategy
3
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Intellectual Property Strategy – Objectives
„ Maintain Superior Competitive Position
Actively secure intellectual property to more effectively
differentiate our products and services.
„ Ensure Business Flexibility
Work to develop a strong intellectual property portfolio to
ensure and enhance business flexibility and obtain more
favorable terms in collaboration agreements with other
companies.
„ Secure Business Profitability
Use specialist divisions to aggressively market our
technologies, including efforts to generate revenue from
licensing fees.
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Linking Business, R&D and IP Strategies
Business Strategy
R&D Strategy
Three-in-One
Intellectual Property Strategy
IP-based Initiatives to Promote Our Business and R&D
1.
Secure, maintain and utilize rights (patents, trademarks, industrial
designs, and copyrights)
2.
Measures to ensure respect for rights, including those of competitors
3.
Carry out thorough management of information, including trade secrets
4.
Actively engage in external policy-making activities
5.
Cultivate and maintain strategic human resources
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Link to Business and R&D Strategies: Example 1
„ Palm Vein Authentication Device
z Have submitted over 120 related patent
applications in Japan and other countries
z Actively working to secure rights for use of
technology in such applications as bank ATMs,
room access control, e-government services,
digital medical records and travel systems
z “Black box” solution to protect items that can not
be disclosed for security reasons
Established as Priority Area for
Securing Patents
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Link to Business and R&D Strategies: Example 2
z Fujitsu PRIMEPOWER Unix server achieves world record
performance in SPECjbb®2005 Java Server benchmark
(February 2, 2006)
z Over 600 patent applications per year in Japan and other
countries related primarily to processors and bus
architecture
„ Optical Transmission Technology
z Implementing patent application activities at R&D stage with
commercialized products in mind
z Achievement of cutting-edge WDM technology (all-optical
switching) for flagship FLASHWAVE 7500 product line
z Pursuing early market introduction of next-generation ultrahigh speed optical transmission technology (40G)
z Over 250 patent applications per year in Japan and other
countries related to these technologies
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Established as Priority Areas for
Securing Patents
„ Servers
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„ Next-Generation Networks (WiMAX, 3.5G, etc.)
z Consolidating and pursuing standardization of Fujitsu
technologies in areas such as communications and
semiconductors that leverage our strengths
z Over 100 patent applications per year in Japan and other
countries
„ Semiconductor Miniaturization
Technology (45nm and beyond)
z Regular implementation of joint activities by R&D, business
and IP divisions to secure rights based on future direction
z Priority efforts to establish rights in distorted Si (silicon)
applications, wiring and process technologies, and low
power consumption technologies
z Filed about 60 related patent applications in FY 2005;
targeting higher number of applications in FY 2006
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Established as Priority Areas for
Securing Patents
Link to Business and R&D Strategies: Example 3
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Position of Law & Intellectual Property Unit
Board of
Directors
BG: Business Group
BU: Business Unit
President
BG
Corporate Center
Law & Intellectual Property Unit
Fujitsu Techno Research
• Survey of Public Domain
• Clearance Survey
• 6 divisions
• Create, promote & support basic policies
• IP management (budget, planning,
rights management)
• IP creation activities (patents, designs,
trademarks)
• IP utilization promotion
• Support of standardization activities
BG
BG
BU
BU
IP/Patent Promotion Depts.
Creation and Use of IP
in Step with
Business Operations
* Survey of Public Domain: Survey of other companies’ technologies prior to patent application
Clearance Survey: Survey of other companies’ patents prior to commercialization in order to avoid infringement.
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Mission of Law & Intellectual Property Unit
„ Maintain Front-Line Philosophy & Orientation
„ Serve as General Counsel Office for Legal & IP Affairs
„ Provide Legal & IP Services to Fujitsu Group
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Basic Stance on Patents
„ Obtain Influential Patents
z Obtain patents that impact competitors
z Increase patents held overseas
„ Utilize Patents
z Actively utilize patents in our business
z Increase income from licensing royalties
„ Avoid Infringing on Competitors’ Patents
z Implement thorough early-stage surveys to avoid
patent infringement
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Global Patent Portfolio
Issued Patents & Pending
Applications by Region
Fujitsu Issued Patents & Pending
Applications Worldwide
40,000
Pending
Issued
30,000
Issued
Patents
Approx.
81,500 in
Total
65%
40%
20,000
Pending
Applications
42%
60%
10,000
69%
35%
64%
58%
31%
36%
0
Japan
North
America
Europe
Asia /
Oceania
As of September 30, 2005
Source: Fujitsu internal figures
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Continuously Strengthening Overseas Applications
– to Support Overseas Business –
8,000
8,000
Applications in
Japan
100%
Total Overseas
Applications
6,000
6,000
75%
% Overseas Applications
4,000
4,000
50%
2,000
2,000
25%
Asia / Oceania
Europe
North
America
0
0
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Fiscal
Year
* Includes patent applications in Japan based on
International Patent Cooperation Treaty
13
0%
1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Fiscal
Year
Source: Fujitsu internal figures
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Policies for Building Patent Portfolio
„ Focus on priority and strategic themes
„ Carry out post-application review and revision
for business deployment
„ Obtain a wide range of rights to assure
business stability
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Patent Applications Aligned with Business
„ Breakdown of International Patent Classification （Jan. – Dec. 2005）
2,655 Published Applications
1,511 Issued Patents
G06F
383
25%
G06F
716
27%
G11C, G09G, H05K・・・
G06T, G11C, G07C・・・
G02F
H05K
G02B
H04M
H04N
H04B
G11B
H04L
276
10%
H01L
256
10%
H04L
169
11%
H03K
H01J
H04B
H04Q
H04M
G06T
G11B
H01L
146
10%
G06F: Electric Digital Data Processing
H04L: Transmission of Digital Information
H01L: Semiconductor Devices; Electric Solid State Devices Not Otherwise Provided For
Source: Internal Survey Based on
Data from the Japan Patent Office
* Excludes patent applications in Japan based on
International Patent Cooperation Treaty
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Efficiently Obtain Patents in Priority Fields
Trend of G06F Published Applications (JP)
Trend of G06F Issued Patents (JP)
Full Year Jan. – Dec Based on Publication Date
Full Year Jan. – Dec Based on Issue Date
750
1,500
G Co.
G Co.
A Co.
A Co.
B Co.
500
1,000
B Co.
E Co.
D Co.
C Co.
C Co.
Fujitsu
Fujitsu
D Co.
E Co.
F Co.
G Co.
Fujitsu
Fujitsu
F Co.
A Co.
D Co.
A Co.
G Co.
B Co.
250
500
B Co.
D Co.
C Co.
C Co.
E Co.
F Co.
F Co.
E Co.
0
0
2001
2002
2003
2004
2001
2005
2002
2003
2004
2005
* Comparison against top 7 companies for published applications (excluding Fujitsu)
G06F: Electric Digital Data Processing
Source: Internal Survey Based on Data
from the Japan Patent Office
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Fujitsu Group Patent Strategy
Initiatives for More Effective Patent Portfolio Creation
Certain companies deploying
independent businesses
Link
Group Company A
Group Company B
Group Company D
Group Company C
Group Company A
Group Company B
Most group companies (R&D, manufacturing, others)
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Education Programs for All Employees
Implementing educational programs to raise IP awareness, including
information management, at each stage of employee career track
Newly Hired Employees
Mid-level Employees
Senior Managers
Patent Basics (e-learning)
Information Management & IP
Basic Knowledge of Company
Network (e-learning)
Fujitsu’s Patent Strategy (for
Fujitsu Labs personnel)
Leveraging IP (e-learning)
Internet & Intellectual Property (e-learning)
Understanding & Writing About Discoveries (e-learning)
Information Security (e-learning)
Required Program for
All Employees
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Incentive Policy for Inventors
„ Patent Compensation System
z Two reward payments (at time of application and upon
registration)
z Compensation amount based on evaluation level
z Impact on competitors is important factor in evaluation
z No ceiling to compensation payment
„ “Awards” System
z Awards given to inventors of breakthrough inventions
z Awards given to teams whose patent activities prove
valuable to the company as a whole
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Utilizing Intellectual Property
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Leveraging Intellectual Property
Strategic Alliances
Standardization Promotion Activities
Participation in Business Strategy Planning
Licensing
Technology Sales
Intellectual Property Disputes
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Strategic Alliances (HDD Business Examples)
„ Features
z Multiple cross-licensing deals concluded with domestic and foreign
manufacturers
z Strong Fujitsu IP portfolio enables cross-licensing deals
(Over 1,500 deals, including patent applications and registered patents)
z Placing priority on securing rights in magnetic transfer technology and
write heads (high-density perpendicular recording technology)
„ Magnetic Heads
z Cross-licensing and joint development with TDK (Announced Jul. 2004)
„ Entering Market for 1.8” Drives for Consumers
z Joint development with Cornice Inc. (Announced Jan. 2006)
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Standardization Promotion Activities
An Essential Strategy in Pioneering New Markets
„ Established working group in IP Dept to promote standardization
„
activities company-wide
Representative examples of standardization activities:
Name of
Standardization
Group
Area
Fujitsu’s Activities
ISO*1, ITU*2
Standardization of multimedia
coding specifications
Obtain essential patents for H.264based MPEG-2 (DVD, digital TV
broadcasting), MPEG-4 Video, MPEG4 Audio specifications
3GPP (2) *3
Standardization of mobile
transmission specifications
RS i
(Robot Service
Initiative)
Standardization of service robot
interface specifications
Focus on advice for recognition of
essential patents used in
standardized specifications
Founding member and active
participant dedicated to setting
specifications for communication and
control of robots
*1: International Organization for Standardization
*2: International Telecommunication Union
*3: 3rd Generation Partnership Project 2
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Participation in Business Strategy Planning
„ Business Restructuring
z IP Unit participates from initial stage of project
z IP is important factor in analysis and value measurement
„ Internal “Start-up” Companies and Spin-offs
z Provide support for new business creation from IP perspective, in
cooperation with Corporate Planning & Business Development Office
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Licensing
„ Patent and Know-how Licensing (In/Out)
z Over 500 agreements concluded with domestic and foreign
companies
z Cross-licensing agreements concluded with domestic and foreign
companies
(Lucent Technologies, IBM, Microsoft, Intel, Texas Instruments,
Motorola, Samsung, and others)
„ Licensing Revenue
z Licensing revenues have exceeded payments since late ’90s, and
net profits from licensing are expanding
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Technology Sales
Applying Fujitsu Technology in Different Fields
„ Example of Materials: Titanium Apatite
R&D
Licensing
Fujitsu
Commercial
Production
Sales
Grant licenses in various fields
(materials, agriculture, ink, etc.)
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Apply
In
Products
Air Conditioner Filters
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Intellectual Property Disputes
Asserting Rightful Claims Is a Part of Fujitsu’s Identity
„ 1980s: IBM dispute
„ 1990s: TI patent dispute
„ Current Decade: Samsung SDI patent
infringement suit
* See supplementary materials for details
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Cautionary Statement
These presentation materials and other information on our meeting may contain forward-looking statements that are
based on management’s current views and assumptions and involve known and unknown risks and uncertainties that
could cause actual results, performance or events to differ materially from those expressed or implied in such statements.
Words such as “anticipates,” “believes,” “expects,” “estimates,” “intends,” “plans,” “projects,” and similar expressions
which indicate future events and trends identify forward-looking statements.
Actual results may differ materially from those projected or implied in the forward-looking statements due to, without
limitation, the following factors:
•general economic and market conditions in the major geographic markets for Fujitsu’s services
and products, which are the United States, EU, Japan and elsewhere in Asia, particularly as such
conditions may effect customer spending;
•rapid technological change, fluctuations in customer demand and intensifying price competition in
the IT, telecommunications, and microelectronics markets in which Fujitsu competes;
•Fujitsu’s ability to dispose of non-core businesses and related assets through strategic alliances
and sales on commercially reasonable terms, and the effect of realization of losses which may
result from such transactions;
•uncertainty as to Fujitsu’s access to, or protection for, certain intellectual property rights;
•uncertainty as to the performance of Fujitsu’s strategic business partners;
•declines in the market prices of Japanese and foreign equity securities held by Fujitsu which
could cause Fujitsu to recognize significant losses in the value of its holdings and require Fujitsu
to make significant additional contributions to its pension funds in order to make up shortfalls in
minimum reserve requirements resulting from such declines;
•poor operating results, inability to access financing on commercially reasonable terms,
insolvency or bankruptcy of Fujitsu’s customers, any of which factors could adversely affect or
preclude these customers’ ability to timely pay accounts receivables owed to Fujitsu; and
•fluctuations in rates of exchange for the yen and other currencies in which Fujitsu makes
significant sales or in which Fujitsu’s assets and liabilities are denominated, particularly
between the yen and the British pound and U.S. dollar, respectively.
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Supplementary Materials
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Fujitsu Patents by Business Group
Composition of Fujitsu
Pending Applications & Issued Patents
by Business Group
Ratio of Pending Applications / Issued Patents
within Business Groups
30,000
Pending
Issued
25,000
Other
Solutions
8%
14%
20,000
Labs
56%
28%
Products
15,000
71%
30%
Electronic
Devices
54%
10,000
59%
20%
44%
5,000
46%
41%
48%
29%
52%
0
tions
Solu
ucts
ic
tron
Prod
Elec es
c
Devi
Labs
r
Othe
As of September 30, 2005
Source: Fujitsu internal figures
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Position in Japan and the US
„ Top 20 Issuing Companies for 2005
Japan Patents
0
1,000
US Patents
2,000
3,000
4,000 No. of
0
1,000
2,000
1. Matsushita E.I.
2,874
3. Canon
3,913
2,389
4. Seiko Epson
2,236
5. Hitachi
2. Canon
1,837
3. HP
1,801
1,645
5. Samsung
2,084
1,938
6. Micron
1,561
7. Nissan
1,906
7. Intel
1,551
8. Sharp
1,784
8. Hitachi
1,293
1,288
9. Sony
1,694
9. Toshiba
10. Ricoh
1,674
10. Fujitsu
1,168
1,149
11. Sanyo
1,544
11. Sony
12. Fujitsu
1,511
12. GE
906
13. Honda
1,463
13. Seiko Epson
888
14. Denso
1,418
14. Infineon
804
15. Toyota
1,411
15. Philips
767
16. Matsushita E.W.
1,197
16. Bosch
758
17. NTT
1,146
17. Fuji Photo
755
18. Microsoft
746
19. TI
736
20. Honda
730
20. Fuji Photo
1,060
991
934
Based On Issue date
Source: Internal Research on Patent Data
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2,972
1,720
4. Matsushita E.I.
6. Mitsubishi Elec.
19. NEC
No. of
Patents
1. IBM
2. Toshiba
18. Mitsubishi Heavy Ind.
3,000
Patents
Based On Issue date
Source: IFI CLAIMS Patent Services
All Rights Reserved Copyright © 2006 Fujitsu Limited
Japan Patent Volume Trends 1) - H04L
Trend of Published Applications
Trend of Issued Patents
Full Year Jan. – Dec Based on Publication Date
Full Year Jan. – Dec Based on Issue Date
600
600
C Co.
A Co.
C Co.
B Co.
400
B Co.
A Co.
Fujitsu
D Co.
E Co.
200 G Co.
F Co.
400
Fujitsu
A Co.
C Co.
D Co.
E Co.
F Co.
C Co.
200 A Co.
G Co.
0
0
2001
2002
2003
2004
Fujitsu
Fujitsu
B Co.
G Co.
F Co.
E Co.
D Co.
2001
2005
E Co.
B Co.
G Co.
D Co.
F Co.
2002
2003
2004
2005
* Comparison against top 7 companies for published applications (excluding Fujitsu)
Source: Internal Survey Based on Data
from the Japan Patent Office
H04L: Transmission of Digital Information
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Japan Patent Volume Trends 2) - H01L
Trend of Published Applications
Trend of Issued Patents
Full Year Jan. – Dec Based on Issue Date
Full Year Jan. – Dec Based on Publication Date
750
1,800
A Co.
500
1,200
C Co.
E Co.
B Co.
C Co.
C Co.
A Co.
E Co.
B Co.
A Co.
D Co.
E Co.
F Co.
G Co.
600
D Co.
Fujitsu
D Co.
B Co.
Fujitsu
0
2002
2003
2004
Fujitsu
G Co.
G Co.
Fujitsu
F Co.
2001
D Co.
B Co.
F Co.
E Co.
250
G Co.
0
A Co.
C Co.
F Co.
2001
2005
2002
2003
2004
2005
* Comparison against top 7 companies for published applications (excluding Fujitsu)
H01L: Semiconductor Devices; Electric Solid State Devices Not Otherwise Provided For
34
Source: Internal Survey Based on Data
from the Japan Patent Office
All Rights Reserved Copyright © 2006 Fujitsu Limited
Japan Patent Volume Trends 3) - G06T
Trend of Published Applications
Trend of Issued Patents
Full Year Jan. – Dec Based on Issue Date
Full Year Jan. – Dec Based on Publication Date
150
300
A Co.
100
200
A Co.
B Co.
C Co.
A Co.
100
A Co.
D Co.
F Co.
D Co.
G Co.
C Co.
Fujitsu
E Co.
F Co.
G Co.
E Co.
Fujitsu
B Co.
0
0
2001
2002
2003
2004
Fujitsu
50
2001
2005
F Co.
Fujitsu
F Co.
E Co.
G Co.
D Co.
C Co.
B Co.
G Co.
E Co.
C Co.
D Co.
B Co.
2002
2003
2004
2005
* Comparison against top 7 companies for published applications (excluding Fujitsu)
G06T: Image Data Processing or Generation, in General
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Source: Internal Survey Based on Data
from the Japan Patent Office
All Rights Reserved Copyright © 2006 Fujitsu Limited
IBM Software Dispute (1980s)
„ Legal protection of computer software (OS) was
subject of dispute
(utilization of copyright laws and use of interface data)
„ Utilized ADR (Alternative Dispute Resolution)
(arbitrator used to determine case in lieu of litigation in court)
„ However, computer industry subsequently
underwent dramatic changes
(architecture, hardware, software)
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TI Patent Dispute (1990s)
„ Japanese Patent 320,275 was subject of dispute
TI Position:
Basic patent for ICs
Fujitsu Position: No infringement by Fujitsu, validity of the patent is doubtful
„ Although other companies settled, Fujitsu asserted its rightful claim
(experience in the IBM dispute)
„ The case took 10 years to obtain decision by the Supreme Court
Fujitsu‘s position on non-infringement was upheld
New precedent was set:
“Court can judge whether or not a patent includes invalidating factors”
„ Watershed decision by Supreme Court to invalidate a patent
Case sparked Patent Law reform (implemented Apr. 2005)
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Samsung SDI Patent Infringement (2000)
„ Dispute arose over value of Fujitsu basic PDP patents
„ Legal action taken after 2 years of negotiation failed to resolve
dispute
„ Fujitsu took the following actions in the face of infringement of its
basic patents by Samsung PDPs
9
9
9
Filed a civil law suite (temporary injunction from Tokyo District Court)
Petitioned for suspension of imports under Customs Tariff Law (Customs & Tariff Bureau)
Filed a civil law suite in US (US Federal Court, Central District of California)
„ Customs & Tariff Bureau accepted petition to halt imports due to
patent infringement
„ Value of Fujitsu patents was upheld and parties subsequently
reached a settlement
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