Business strategies for value creation

Intellectual property strategies
Intellectual property policy
Over the years, ISEKI Group has produced a great many products, guided by its founding spirit of “freeingfarmers from exhausting labor.” Going forward, we will continuously create high-quality intellectual
property through active investment in frontrunner research and human resources development, in linewith the strategies for our business and products. In addition to incorporating the intellectual property
we create into product design, we will seek to monetize it through means including intangible assets suchas know-how. This will enable us to enhance our competitiveness as a corporation, thereby boosting ourmarket shares and improving profitability.
Invention creation and patent strategies
ISEKI Group is strongly driving forward invention proposal activities
based on invention proposal themes that are set by consideringpromising technologies, market trends and needs, and incorporating
opinions from the development and sales departments. We also bring
together engineers in charge of different products and carry out
invention creation activities by systematically grasping agriculture as awhole to improve the quality and quantity of inventions through thehorizontal deployment of technology.
Taking into account the future social environment, technologicaltrends, and feasibility of the business, we examine the invention, andthen acquire the property rights only for the highly viable ones toprotect our proprietary technology and enhance the competitivenessof product development.
Design and trademark strategies
By building up a store of attractive designs and friendly pet names
as design rights and trademark rights, we strive to improve ISEKI
brand value through differentiation from competitors’ products andenhanced protection of product design.
Establishment of overseas IP network
We strive to prevent imitations of our products in various regions,
including emerging countries, and to prevent infringements ofintellectual property rights of other companies by striving to acquireand accumulate valid rights according to the intellectual propertysystems in multiple countries, where application methods, application
examination criteria, and the legal validity of rights vary.

Development departments
Promisingtechnologies

Sales departments

Gathering
opinions

Market trendsand needs

Invention proposal themesEnhancement ofcorporate valueIntellectual property management
Acquisition and management of intellectual property
are conducted in accordance with laws and regulations
and company rules. Through this, we strive to protect
trade secrets and respect the intellectual property rights
of other companies. Intellectual property informationin Japan and overseas is digitized using an intellectual
property management system for the smooth and efficientmanagement and implementation of intellectual property.

Invention awards scheme
To invigorate intellectual property creation activities, awards
are presented to young engineers as an awareness-raising
exercise. Internal awards are also presented to promotecreation activities by sharing outstanding inventions within
the development departments. Through the creation ofoutstanding inventions, we will pursue the enhancementof ISEKI Group’s competitiveness.

Based on our value calculation standards and in light ofconventional wisdom, we make a reasonable evaluationthat enables us to determine the value of a technology andcalculate the consideration for the transfer of rights andlicensing fees.

Example: Valuation of intellectual property

Human resources development[Intellectual property education, transmission of creative abilities]
Intellectual property education
To invigorate employees’ creativity, we provide
intellectual property education commensurate withyears of experience, including new recruit training. In
particular, we promote the enhancement of the creative
abilities of young engineers through the transmission ofinvention creation know-how from veteran engineers toyoung engineers.
Technological research presentations
In order to manufacture products that will be able tocontribute to the changing market environment in Japanand overseas, technological research presentations areheld to share the outcomes of research and development
and invention information and to provide opportunities
for discussion, including senior management, with theaim of raising the standard of the Group as a whole.

Invention
proposal
activities

Strict management ofintellectual property

Invention proposal
Social environment
Technical trends

Examination

Feasibilityof the project

Incentives forinvention creation

Intellectualproperty system

Systematic invention
creation activities

Patent application
Checking andmanaging intellectual
property
agreements

North
AmericaEurope
Asia

Outcomes of intellectual property activities: Proof of ISEKI Group’s high technological capabilities

Use of intellectual property
In addition to strengthening our defense with our technological foundation and intellectual property through in-house useof intellectual property, we will expand our foundation by making further investments in frontrunner development, joint
development (introduction of other companies’ technology), and human resources development.
Having firmed up this foundation, we will expand the establishment of IP rights for our proprietary technologies and ouroverseas intellectual property network to strengthen our competitive advantage.
Further, we will leverage our proprietary intellectual property and intangible assets (drawings, know-how, and brands) togenerate profits and enhance corporate value by communicating information to stakeholders.
ISEKI is also engaged in technology transfer for agriculture-related products, having signed a technical and business allianceagreement with a major agricultural machinery manufacturer in India.
Generation of profitsIntellectual property system
At ISEKI Group, the Intellectual Property Control
Department manages intellectual property strictly, fromcreation to establishment of rights and the waiver of thoserights. Incentives such as bonuses and awards are offered
for the creation of intellectual property through invention
creation activities.
When concluding intellectual property agreements, theIntellectual Property Control Department considers thelegal aspects, and checks and manages the agreements.

Communication of information

Our proactive efforts to develop, launch and commercialize new technologies are exemplified by the high number of patentapplication registrations in Japan per specialty field, as well as high patent allowance rates. Taking advantage of the technologicalcapabilities underpinned by our intellectual property, we will strive in business activities that emphasize intellectual property.
Number of patent application registrations per specialty field

2020

2021

Statistics

Number of laid-open applications
per specialty field

Number of patent application registrations
per specialty field

Agricultureand fisheries

Other special machinery

Rank

2016–20172019

2000–2006

Field

2007–2014

2018

Year

No. 1

No. 2

No. 1

No. 2

Patent allowance rate
Promotion of advanced technologies

Strengthening of Promotion of foreign applications
competitive advantage

Promotion of human resources development
Promotion of advanced technologies
Implementation of frontrunner research

Introduction of external technology

In-house use

Implementation of joint developmentYear

2004–201020112012–2017

2018

2019

2020

2021

Patentallowance rate*

83.7%–91.8%

91.8%

94.7%–100.0%

96.4%

97.7%

98.7%

97.2%

Rank

No. 1

No. 2

No. 1

No. 2

No. 1

*Patent allowance rate = Number of allowed applications / (Number of allowed applications + Number of rejected applications+ Number of withdrawn and abandoned applications);
Number of withdrawn and abandoned applications = Number of applications withdrawn or abandoned after notification of reasons for refusal

Number of invention awards
received(The Japan Institute of Inventionand Innovation)

National awardsfor inventions:19

Regional awards
for inventions:213

Total:

232(As of February 2023)