TOKYO ELECTRON ANNUAL REPORT 2014

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CONTENTSCONTENTS

Financial Highlights

Business Overview

Talking about
Tokyo ElectronTop Message

Review of Operations
and Business Outlook

Corporate GovernanceCorporate Citizenship

R&D / Intellectual Property

Financial Section

ResearchResearch andand Development
Development

Corporate DataIntellectual Property

Intellectual Property
Policy for Intellectual Property Activities

corporate headquarters, where they are near the sales and market-

A fundamental tenet of the Tokyo Electron policy for intellectual prop-ing divisions. In addition, we periodically convene IP committees forerty (IP) is to protect the Company’s intellectual assets and help

each business/R&D area in order to make informed decisions based

increase corporate revenue by supporting Tokyo Electron’s businessupon market and technological trends. These committees are com-

activities in both existing and new market sectors. To do this, our IP

prised of IP personnel, sales/marketing management, and R&D man-strategy must be closely integrated with our technological and prod-

agement who are tasked with assessing IP, discussing IP strategy,

uct strategies. Our IP strategy must also prioritize the differentiation ofand deciding upon cost-effective avenues to grow IP. Tokyo ElectronTokyo Electron’s products and bolster the Company’s competitive

acquired several companies in fiscal 2013. IP personnel have been

advantage with strong IP rights. In addition, the evolution of a strong,advancing the integration of these new members of the Tokyo

diverse IP portfolio generates income from licensing.

Electron community and establishing consistent policies/proce-

The advancing technological complexity of our business sectors
significantly increases the risk of becoming involved in IP disputes

dures for IP activities, including IP committees, in all of theacquired companies.

during the development of new products. Given the increasinglycompetitive environment, we strive to minimize the risk of potential

Status of Intellectual Property Rights

disputes by actively monitoring IP developments, fully respecting theTo establish an elevated entry barrier around our business, Tokyo

IP of other companies, and taking appropriate measures, such as

Electron vigorously constructs an IP portfolio encompassing our core

licensing, when necessary.

technologies, and protects our future technological growth. Thegraphs below show the number of patent applications and patents

Operation of Intellectual Property Activitiesof Tokyo Electron in each region. During fiscal 2014, the patents weTokyo Electron continues aggressive R&D activities to satisfy andacquired through M&A in the previous fiscal year continued toexceed the requests of our customers, and further enable newstrengthen our IP portfolio.

market opportunities. In order to maintain the competitiveness ofEffective prosecution process that Tokyo Electron has been

our R&D achievements, it is necessary to protect these by steadily

establishing makes our IP portfolio competitive. Tokyo Electron keeps

obtaining IP rights. To facilitate this process, we cooperate closely

high success rates, around 70%, before Patent Offices in main coun-with our R&D operations, and we locate IP personnel nearby andtries. The rates exceed average of our competitors. With optimal fil-often within our product development centers and manufacturing

ing routes/agencies, the high success rates have been reducing costfacilities. Furthermore, we have IP personnel based overseas in thefor constructing IP portfolio.

U.S. and other countries to address our increasing global R&Dactivities.

The IP committees periodically revise policies for filing and holding
patents in light of evolving perspectives including technological

Flexibly responding to dramatically changing markets and techno-trends, market conditions, competition and cost-effectiveness. We

logical trends is essential for effective IP activities. To ensure the rapid

have maintained a global application ratio of approximately 70%* inexchange of information on market and technological trends, our IP

recent years while strategically adjusting the regional distribution of

personnel in charge of monitoring and external affairs are assigned tothese.
* The percentage of our patents filed with the Japan Patent Office that were also filedoverseas. The average among Japanese companies is about 25%.

Number of Patent Applications

Number of Patents Held

1,000

6,000
5,000

800

4,000

600

3,000
400

2,000

200

1,000

0010Japan

U.S.

Europe121314South Korea

TaiwanChina1110(Fiscal year)

JapanU.S.

Europe111213

South Korea

Taiwan14 (Fiscal year end)
China