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Our core IP activities include creation, development, and utilization of intellectual property, such as patents, designs, and trademarks, as well as policies therefor. In addition to those activities, we have set up a new IP strategy department in FY2019 and built a support system for business activities as part of our IP Division, for the purpose of expanding our service and solutions business, and strengthening our response to open innovation utilizing external resources such as collaboration with other companies and M&As.
Over the last few years, as IoT technology has developed, the scope of IP has expanded to include data and other information resources. For example, when various solutions are provided to customers who use devices by utilizing the data obtained from those devices, issues with the ownership of the information resources and the secondary use arise in relation to the following: who possesses the knowhow and analysis methods and—particularly when AI is applied—the raw data, data sets for learning, and learned models and parameters; and to what extent the company can use the data. The IP Division negotiates with customers and obtains their consent in order to include those points in contracts prior to providing services and solutions, and provides business support from a specialist position.
In addition, although we were self-sufficiency-oriented, focusing on in-house development, open innovation utilizing external resources through collaboration with other companies and M&As is increasing. We assess collaboration partners with respect to such matters as whether their IP is suitable for our business purpose and does not infringe on other companies’ patents, and we resolve the various IP issues that arise in collaboration with companies from different backgrounds in terms of country and industry by using contract schemes. In this way we contribute to business activities from the aspect of intellectual property.
We are also coordinating with business departments with respect to trademark strategies in order to increase the value of our product brands. In addition, we seek to ensure that others respect our IP rights while respecting the IP rights of others.
There is demand for solutions using physical and non-physical things. In the solutions business, collaboration with customers and partners is the key. It is vital to deal with IP provided to customers and partners and that created during the collaboration process, and especially data and knowhow, which cannot be completely secured with only IP rights. Regarding that, we provide total support, from non-disclosure agreements at the proof of concept (PoC) phase, to co-development agreements, and contracts at the commercialization phase, to ensure a win-win relationship with customers and partners.
The IP Division is a group of specialists, including 12 in-house patent attorneys and 2 PhD holders (total figures as of April 2019). It is working to foster human resources that possess excellent professional skills and the ability to cope with the globalization of business in order to strengthen IP activities.
Moreover, we have a robust invention incentive program designed to encourage employees who work on the front lines of research and development to make inventions, as well as an IP award program we are revising according to business changes with the aim of further increasing the motivation of inventors.
The Hitachi High-Tech Group generates the majority of its revenues from sales overseas, primarily in Asia. To adapt to such globalization in our business, we are strengthening our patent applications and acquisition of grants in the West and Asia, while also continuing our measures against counterfeit products that make use of our trademarks. We are also working to further improve cost efficiency. For instance, when there is little need to apply for Japanese patents, which we had applied for as a matter of course until now, we now only apply for overseas patents. In FY2018, overseas applications accounted for about 68% of our total applications. In addition, we are responding to the shift in development to overseas group companies by providing support in matters such as drafting IP policy and securing IP rights.