Strategies

NTT’s Intellectual Property Strategy
Takashi Suzuki
Director of NTT Intellectual Property Center
The astounding changes in the communications market
caused by the global spread of the broadband society havemade the development of an intellectual property strategy
essential to strengthen corporate competitiveness. To revitalize Japan's economy and society by enabling companies toadd higher value to products and services through intellectualproperty, the government formulated the Intellectual Property
Promotion Plan in May 2004. This indicates that the key tostrengthening business competitiveness is finding better ways
to combine business strategies with developed technologies
and intellectual property arising from R&D results. The Intellectual Property Center promotes the strengthening of business competitiveness and the creation of business opportunities in the NTT group, while also formulating an intellectual
property strategy linked to NTT's business and R&D strategies, and conducting strategic activities aimed at making better use of intellectual property. To build an effective intellectual property strategy, we seek to establish an intellectual
property creation cycle, which will consist of creation, protection and evaluation, and utilization stages. We are also promoting global development and standardization in this area,
while developing new business fields.
Creation of new intellectual property and rights
As part of the R&D business development strategy, we are
evaluating the results of our R&D and strategically acquiring
product-related patents by identifying NTT's strong and weaktechnological areas using a patent portfolio approach. In particular, we are ensuring that we can maintain our initiative indeveloping technologies which can be used directly for ourbusinesses. We are doing this by widening our base of intellectual property and rights so that it includes the necessary
peripheral technologies and services. We file several thousand patent applications every year and currently hold over
10,000 patents. These range from basic technologies for ournetwork architecture and new services to fundamental leading-edge technologies for the future.
Protection (definition) and evaluation of intellectual property and rights
To reflect NTT's R&D and business strategies, we evaluate
our intellectual property holdings, such as patent and trademark rights, in terms of their cost, expected returns, and marketability. In particular, we evaluate patent rights for eachtechnological field corresponding to a product or service andacquire patent rights that suit our business development strategy. We also strive to create and utilize technology brands
through our R&D to enhance our brand value.

Effective use of intellectual property and rights
To strengthen our business competitiveness, we need toapply this strength in intellectual property and rights. For
technologies that indirectly contribute to our business, we arepromoting their spread through licensing. For fields that
require cooperation with companies outside NTT, we welcome cooperation, including the introduction of outside technologies.
We have obtained extensive rights in Japan and overseas inmany areas, including optical fiber manufacturing technology(the VAD method); FC-, SC-, and MU-type optical connector
technologies; optoelectronic integrated circuit technology;
and planar lightwave circuit (PLC) technology. For optoelectronic integrated circuit technology, we have over 1000
patents in Japan, the US, and Europe. For the VAD method
and optical connector technologies, we have licensing agreements with more than 250 companies in 10 countries, and wecontinue to contribute significantly to establishing next-generation broadband communications in many countries aroundthe world.
NTT is actively involved in standardization activities
through the main standard-setting bodies (ITU-T, ISO/IEC,TTC, ARIB, etc.) to promote the spread of technologies while
also promoting business development. For MPEG-2 Visual(video encoding), MPEG-4 Audio, H.264, VC-1, and G.729(sound coding), we have been forming a patent group for collective licensing based on rational licensing conditions.
In these ways, we contribute to NTT's business development by strengthening the group's competitiveness and creating new business opportunities. At the same time, we reducebusiness risks by strategically acquiring product-related
patents, effectively applying our intellectual property andrights, and wisely handling the know-how and proprietary
information created through our R&D activities.