Tokyo Electron Limited  Annual Report 08

Int e l l e ct u a l P r o p e r ty R e p o r t

Process and mechatronic technologies used in the manufacture ofsemiconductors and flat panel displays represent Tokyo Electron’score technologies. Tokyo Electron devotes considerable resources
to developing technologies that bolster the competitiveness of its
products. As part of its efforts to drive growth, Tokyo Electron is promoting three themes: (1) bolstering development of new technologies to create and expand sales of new products (2) enhancing costcompetitiveness through highly efficient manufacturing, and (3)expanding operational scale by entering new businesses domains.
In pursuing these strategies, it is vital to protect the intellectual
property rights of independently developed proprietary technologies
and products to ensure the smooth growth of businesses. The
integration of our intellectual property strategy with our technological and product strategies is thus important to realizing maximum
benefits from development efforts.
Recently, the needs of device manufacturers, our customers,
have been diversifying, and also they are emphasizing reliable process performance and higher productivity on products. Consequently, the role of equipment manufacturers such as Tokyo Electron
in developing semiconductor manufacturing technology is increasing.
Within this context, Tokyo Electron strives to bolster the protectionof its intellectual property by actively filing patent applications forequipment recipe, software technologies, process management
technologies for various types of manufacturing equipment, andother technologies.

Policies on Acquiring and Managing IntellectualProperty, Managing Trade Secrets and Preventing
Technology Leakage
Tokyo Electron has a set of internal rules that define the management of its intellectual property. Under these rules, Tokyo Electron
provides compensation for employees who have invented or created something new through their work within the Company. We
make lump-sum payments when applications are submitted forpatents, utility model rights, designs and other property rights.
Compensation is also given if such creations are implemented at
Tokyo Electron or licensed to third parties.
Management of trade secrets is rigorous, conducted according
to Tokyo Electron’s “Internal Rules on Managing Technology andMarketing Information” and “Manual for Managing Technology andMarketing Information.” The provisions of these measures areapproximately equivalent to those of the government’s “Policies
Regarding Managing Trade Secrets” and “Policies Regarding thePrevention of Technology Leakage” (both issued by the Ministry ofEconomy, Trade and Industry). Furthermore, to raise the effectiveness of trade secret management, Tokyo Electron runs an in-housetraining program and monitors the subsequent status of trade
secret handling to ensure strict adherence to the rules.

Status of Intellectual Property Application
The graph in this section shows historical data on the number ofpatent applications filed worldwide by Tokyo Electron up to the endof March 2008. While Tokyo Electron is already striving to be more
selective overall in the patents it acquires, both in Japan and overseas, it is now reviewing its strategy regarding countries in which
the applications are filed, including Japan, considering the locationsof our operating divisions’ key manufacturing bases and markets.
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Specifically, in addition to the recent emphasis on filing applicationsin the U.S., we are also filing more applications in China, SouthKorea, Taiwan and other countries as a countermeasure against
emerging competitors, mainly in East Asia.

Contribution of License-related Activities
In building and implementing our intellectual property rights strategy,
we do not see intellectual property rights acquired by filing applications and securing rights for proprietary products and developed
technologies as a source of income from licensing to other companies. Rather, we view this as a method of differentiating our own
products and bolstering our competitive advantages. Semiconductor and FPD manufacturing technologies are becoming increasinglyadvanced and sophisticated. To effectively develop new products
incorporating leading-edge technologies, and bring them to market
as quickly as possible, it is essential to utilize all available intellectualproperties. Tokyo Electron places high value on introducing cuttingedge technology and constantly enhancing the efficiency ofresearch and development, and on quickly launching new products.
We also respect the intellectual property rights of others, just as we
do our own, and effectively use them through licensing. Tokyo­Electron is also exploring the feasibility of licensing or selling its
proprietary technology to third parties in other business fields and tocooperating partners.

External Recognition
Tokyo Electron placed first in SBI Intechstra Co., Ltd.’s ranking ofbest performers in terms of technological competitiveness, determined using the company’s proprietary index, called PCI® (PatentCompetency Index). Tokyo Electron earned plaudits for investingheavily in research and development to produce high-quality results,and achieving a competitive edge by producing outstanding technologies of interest to other companies.
On April 18, 2008 (Inventors’ Day in Japan), Tokyo Electron wasawarded the Japan Patent Office’s 2008 Minister of Economy, Tradeand Industry’s Award for Contribution to Intellectual Property. Tokyo
Electron was commended particularly for its high patent approvalrate and high proportion of global applications, as well as for its
efforts to pursue strategic intellectual property initiatives led by theVice Chairman of the Board, who is responsible for legal and intellectual property-related activities.

Number of Patent Applications(Applications)

1,000
800
600
400
200
00405
U.S.

06
South Korea

07
Taiwan08
ChinaEuropeJapan