Special Issue

Technologies supporting the achievement of Furukawa Electric Group
Medium-term Management Plan 2022 - 2025〉〉Opening Remarks

Intellectual Property Activities Supporting the Achievement ofFurukawa Electric Group Medium-term Management Plan 2022-2025

Michio Ohkubo*

1.

INTELLECTUAL PROPERTY STRATEGYOF FURUKAWA ELECTRIC GROUP~“Defensive Intellectual Property” and“Proactive Intellectual Property”~

Furukawa Electric Group has adopted the basic policy ofdefining and utilizing the intellectual assets as an important management resource. With the trinity managementof business, research and development (R&D), and intellectual property, we promote group-wide and global intellectual property activities 1). (Figure 1)
On approaching Furukawa Electric Group Medium-termManagement Plan 2022-2025 (2025 Mid-term Plan), inFY2022 being the first year, Intellectual Property landscaping (IP landscaping) has been centered on our intellectual property activities. That is, we are aiming to contribute to building competitive advantages for Furukawa
Electric Group, with the creation and accumulation of
intellectual assets to be used in each business area basedon an Open & Close Strategy along the protection of ourbusiness and core technologies using the accumulated

BusinessDivisions

intellectual assets, through the reliable implementation ofmarket environment analysis with the IP landscaping.
In the following sections while touching on the historyof Furukawa Electric Group, we will outline “Proactiveintellectual property” making a full use of the IP landscaping which means the IP activities will aim for Chance
Maximization, breaking from a “defensive intellectualproperty” which is aiming at Risk Minimization.

2.

FURUKAWA ELECTRIC GROUP’S DNA~“Intellectual Assets” and “Human Capital”
Connected by Three Valuable Things~

2.1

Intellectual Assets Supporting Innovation Since
the Company Foundation
The Company was founded in 1884 when our parent
companies, Yamada Cable Works and Honjyo Copper
Smeltery were established, and this year marks the 138thanniversary of its foundation. Yoshichi Yamada, thefounder of Yamada Cable Works, was an outstanding
inventor who acquired Japan’s first patent for the electricwires. In 1892, he obtained two patents for the covered
wires (Figure 2).

ResearchDivisions

IntellectualProperty
Department

Figure 1*The trinity management of business, research anddevelopment, and intellectual property.

Senior Fellow, General Manager, Intellectual Property Dept.

Figure 2

Yoshichi Yamada’s patents for the covered wires(No.1682 and No.1953, 1892).

Furukawa Electric Review, No. 54 2023

2

Intellectual Property Activities Supporting the Achievement of Furukawa Electric Group Medium-term Management Plan 2022-2025

Ichibei Furukawa, the founder of Furukawa Group,
introduced the latest technologies from Europe and theUnited States to the mining industry. And focusing oninnovations such as the inventions of Yoshichi Yamada,
he started the electric cable business based on his wishto “brighten Japan”.
The founder, Ichibei Furukawa, has mentioned “Valueemployees, Value customers, Value new technology, andContribute to society” which we have inherited as a partof our DNA. “Value new technology” is in other words,
cherish and protect the intellectual assets obtained
through the development of new technology. This is
Furukawa Electric Group’s basic philosophy to approach
the intellectual property. Regarding this basic stance,some examples are introduced bellow.
• Electric wire and cables“Value new technology” is also derived from the phrase“Innovate new technology”. Since 1920, when theCompany was established, foreign technology wasactively introduced and many new products were developed using what is now called open innovation. After
that, the number of patents acquired also increased
sharply, after entering the Showa era. During this period,
record-breaking products were developed one after theother, including insulated cables, power cables that wereincreasingly compatible with ultra-high voltages, andcommunication cables. In addition, the Company
received a patent license related to power cables from aDutch company, and jointly took orders with Sumitomo
Electric and Fujikura through mutual licensing of the patent license. Then the development of an environment to“Value customers” was promoted, also products to“Value new technology” were created.
• Optical fiber
Patents have an important role in the optical fiber R&D in
Furukawa Electric Group, which boasts the world’s topclass. In the 1960s, when R&D of optical fiber for communication was intensified, Professor Nishizawa of Tohoku
University applied for a patent on the concept of opticalfiber (but Japan Patent Office rejected it). Later, in the1970s, Corning in the United States announced the practical application of optical fiber for communication, theCompany also started research at the Central ResearchLaboratory. The Company received a patent license related to the optical fiber technology from Corning, in thiscase as well, it has been relicensed to Sumitomo Electricand Fujikura. This also eloquently represents the DNA of“Value new technology”.
2.2 Human Capital as the Driving Force forPromoting Intellectual Property Activities
Toward the achievement of 2025 Mid-term Plan, andbeyond along with the achievement of Furukawa ElectricGroup Vision 2030, we will firmly inherit the DNA of “Valuecustomers and Contribute to society” and we are firmly
determined to become an indispensable company forsolving social issues. For this purpose, “Value new technology”, that is, strengthen the use of intellectual proper-ty, and at the same time, “Value employees” that is,strengthen human resources and organizational performance are extremely important. We believe that the useof intellectual assets born from human capital is essential
to solving social issues. In 2021, Japan’s Corporate
Governance Code was revised, and oversight and disclosure of human capital and intellectual property wereincluded. This is exactly the founder’s thoughts, “Valueemployees” and “Value new technology”.
We conduct training to gain a better appreciation ofintellectual property and enable strategic intellectual
property activities, leading to improve the skills of individuals.
- Five training courses that provide systemic learning ofnecessary knowledge based on the work experienceof each individual- Lectures by experts who are active in the field of intellectual property- Specifically designed e-learning materials that allow
learning around the clock- Intellectual property basic training for sales divisions(from FY2020)- IP Landscaping seminars for technology divisions(from FY2021)
For overseas affiliates, we provide individual training
sessions aimed at raising awareness while taking into
consideration their local circumstances or requests. We
also regularly provide an intellectual property publication(IP-Newsletter) to all Furukawa Electric Group companies
to inform them of intellectual property risks and otherconcerns with the goal of encouraging them to conduct
intellectual property activities.

3.

FROM “DEFENSIVE INTELLECTUAL PROPERTY”
TO “PROACTIVE INTELLECTUAL PROPERTY”
AND TO “AMBIDEXTERITY”

3.1“Defensive Intellectual Property” With Open andClose Strategies
In the long history of Furukawa Electric Group, the opportunity for enhancing intellectual property activities as partof business activities dates back to a patent infringement
lawsuit in the information and communication field in theearly 2000s. At the same time, in the midst of greatchanges in management strategy and business strategy
with the acquisition of OFS in the United States, intellectual property activities centered on “defensive intellectualproperty”, which uses patents as armor and shields forstable business operations, has become the keystone ofthe strategy. “Defensive intellectual property” means
nothing less than the promotion of Risk Minimization
activities to protect Furukawa Electric Group’s uniquespecificity technology based on Open & Close strategy.
On the other hand, in the era of globalization and digitalization, as represented by the fourth industrial revolution that has begun to be called in the late 2010s, themovement to actively use intellectual property to change
Furukawa Electric Review, No. 54 2023

3

Intellectual Property Activities Supporting the Achievement of Furukawa Electric Group Medium-term Management Plan 2022-2025

Non-patent information

IP Landscaping

Strategy

External environment
Internal environment
Patent information

Management strategy

Strategyplanning

Business strategy

Published unexamined
patent applications
Patent publications

Intellectual property landscaping.
Sustainability indicator: The IP landscaping
implementation rate.

Table 1

Indicator

Result（Sustainability indicator）

FY2021

FY2022

FY2025

Furukawa Electric Group,
the IP landscaping implementations
for business enhancement and new
business creation themes*1

17%

30%

100%* 2Target*1 The themes for business enhancement and new business creationinclude themes related to Maximize profits in existing businesses
through a focus on capital efficiency directed at 2025 (Optical fiber andcable, Power cable systems, and others) and Build a foundation for
creating new businesses by 2030 (the bipolar lead-acid storage
battery, and others).
*2 This means that all the business enhancement and new businesscreation themes for FY2022 have been implemented.

NewActivities for
Chance Maximization
New businesses
to be achieved by 2030CD

Areas to be refinedin 2025 Mid-term Plan

Existing

the game has been activated. The best example of thismovement is the management method called the IP landscaping which uses intellectual property information to formulate management and business strategies (Figure 3).
The opportunity for this movement was the article in themorning edition of the Nikkei dated July 17, 2017, titled“Intellectual property analysis in the core of management”, which introduced the IP landscaping, andIntellectual Property Personnel Skills Standard Version
2.0 2), published by The Japan Patent Office in April of thesame year and which incorporates the IP landscaping.
Furukawa Electric Group was quick to adopt the IP landscaping philosophy. Creation of business opportunities,
such as the competitive environment analysis and utilization for each strategy formulation, in other words, theChance Maximization activity was implemented as one of
the “proactive intellectual property” component andFurukawa Electric Group tried to put into practice.
3.2 “Proactive Intelligent Property” with the IP
Landscaping
Taking 2017 as an opportunity, in addition to the“Defensive intellectual property” for the stabilization ofbusiness operations, “Proactive intellectual property”
aiming at business enhancement and new business creation was set up as a company-wide policy for intellectualproperty activities. Specifically, using the IP landscaping,
we are exploring where gaps exist in our business, how
we can promote our technical strength, where we should
target the market, and what our customer’s jobs are, etc.
through multi-directional investigation and analysis in patent information and marketing information from a macroand micro perspectives. In FY2022, the “IP landscaping
implementation rate” has been set as a sustainability
index for Furukawa Electric Group’s profit opportunities,
and the IP landscaping is being dynamically utilized toachieve 2025 Mid-term Plan and Furukawa Electric Group
Vision 2030 (Table 1, Figure 4).
3.3 “Ambidexterity” with the IP Landscaping
We believe that the IP landscaping is a very effective
method for “Ambidexterity 3) ” in an age of rapid digitalization. Ambidexterity is a management theory that advocates the importance of balancing “Constant improvement of business (Exploitation)” and “Action for new busi-Markets

Figure 3Intellectual property
strategyA
Risk Minimization

BExisting

NewProducts

Figure 4

From defensive to proactive: Development of the IP
landscaping shown in the Ansoff Growth Matrix.

ness (Exploration)”. Visualizing internal management
resources, such as four core technologies of Furukawa
Electric Group, through the IP landscaping utilizing digitalization technology will be the driving force for “Exploitation”.
Furthermore, visualization of public information such as
the market information in the IP landscaping is an effective means of “Exploration”. We believe that the daily
implementation of the IP landscaping throughout
Furukawa Electric Group and the strategic use of intellectual assets are a thrust based on “Ambidexterity” (Figure 5).
Furukawa Electric Review, No. 54 2023

4

Exploitation (New business)

Intellectual Property Activities Supporting the Achievement of Furukawa Electric Group Medium-term Management Plan 2022-2025

Ambidexterity based onIntellectual assets integrated management
Intellectual assets utilization
based on Open & Close strategies

Environment analysis
with the IP landscaping
Function of the IP landscaping

Protection of businessand core technology- Internal environment analysis–> Exploitation- External environment analysis–> Exploration

Basic codeof conduct
Protection of intellectual
property rights
Management ofconfidential information

Figure 54.

Creation andaccumulation of
intellectual assets

Exploitation (Existing business)

Furukawa Electric Group’s Intellectual Property Cycle.

CONCLUSION

In 2019, Furukawa Electric Group set the motto issued byPresident Kobayashi “Intellectual Property is at the coreof the Business Strategy” (Figure 6), and aspiring intellectual property management that utilizes intellectual property as an important management resource. “IntellectualProperty is at the core of the Business Strategy” is theword that expresses the passion of the Company
Founder’s message “Value new technology” which is oneof the three valuable things. Toward the achievement of
this motto, we are confident that we will surely be able tocontribute to build competitive advantages, to improve
corporate value, and to solve social issues, through thecontinuous promotion of intellectual property activities
from the standpoint of both Risk Minimization andChance Maximization.

Figure 6

Signature board with President Kobayashi motto.

REFERENCE
1) Furukawa Electric HP > R&D > Intellectual Property Report >Intellectual Property Report 2022 (in Japanese) (Referred onMar. 31, 2023)		https://www.furukawa.co.jp/rd/ip-report/pdf/ip-report_2022.pdf
2) JPO HP > Related Ser vices > General Ser vices > Intellectual
Property Skill Standards (version 2.0), (in Japanese) (Referred on
Feb. 8, 2023)		https://www.jpo.go.jp/support/general/chizai_skill_ver_2_0.html
3) Charles A. O’Reilly, Michael L. Tushman: Lead and Disrupt,Stanford University Press, (2016).

Furukawa Electric Review, No. 54 2023

5