1. Osaka Institute of Technology "How a Company Develops its Business Strategy by Improvement of Patent Productivity“ Kazuo TANAMI Dean & Professor Dean & Professor Graduate School of Intellectual Property Former Head of Contracts and Licensing Center, Corporate IP And Legal Headquarters, CANON INC. 201 １ Patent Information Annual Conference of China September 5, 2011

2. Corporation’s Business Strategy Patent Productivity Corporation’s Business Strategy Patent Productivity Prof. Kazuo Tanami, OIT, Japan 1 IP Strong IP Weak Dying Co. Top Ranked Co. Marketing Strong Marketing Weak

3. Patent Productivity: Key Factors 2 2 nd Step: Building patent portfolio to protect your own products 2 nd Step: Building patent portfolio to protect your own products 4 th Step: Excluding competitors patenting 1 st Step: Securing pioneer patents in an earliest stage of R&D 1 st Step: Securing pioneer patents in an earliest stage of R&D 3 rd Step: Acquiring patents in the peripheral Areas surrounding your products 3 rd Step: Acquiring patents in the peripheral Areas surrounding your products Prof. Kazuo Tanami, OIT, Japan

4. 1 st Step: Securing pioneer patents in an earliest stage of R&D 3 Business started 1985 １９７０ s Patent search Pioneer pat. filed 1977 Pat. filed for products features Business Technology Time Example: Canon’s Ink jet technology Prof. Kazuo Tanami, OIT, Japan

5. 2 nd Step: Building patent portfolio to protect your own products 4 Business started 1985 １９７０ s Patent search Pioneer pat. filed 1977 Pat. filed for products features Business Technology Time Example: Canon’s Ink jet technology Prof. Kazuo Tanami, OIT, Japan

6. 3 rd Step: Acquiring patents in the peripheral Areas surrounding your products 5 Business started 1985 １９７０ s Patent search Pioneer pat. filed 1977 Pat. filed for products features Business Technology Time Example: Canon’s Ink jet technology Prof. Kazuo Tanami, OIT, Japan

7. 4 th Step: Excluding competitors patenting 6 Business started 1985 １９７０ s Patent search Pioneer pat. filed 1977 Pat. filed for products features Business Technology Time Example: Canon’s Ink jet technology Prof. Kazuo Tanami, OIT, Japan

8. 7 JP applications 1977 Pioneer Patent 1985 Release of First Product ■ ： filed ■ ： granted Inventors Canon’s Ink Jet Patent Applications source: Canon Corporate IP & Legal Headquarters Prof. Kazuo Tanami, OIT, Japan

9. Canon Group Profile 8 Net sales $45,764million Net income $3,044million Employees 197,386 Consolidated subsidiaries 294 Americas Net sales $12,633million Employees 20,182 Asia & Oceania Net sales $18,656million Employees 153,770 Europe Net sales $14,475million Employees 23,434 Consumer 38% Office 54% Industry and Others 12% (Sales ratios do not total 100% due to sales between segments of 4%) (As of December 31, 2010) Prof. Kazuo Tanami, OIT, Japan

10. ※ World No. 2: Copier （ 17% ）、 IJ printer （ 22% ） (Canon’s estimation as of 2010) Digital SLR Camera Laser Beam Printer Photolithography apparatus (45%) (45%) (50 ％ ) World No. 1 share products ＝ Management philosophy ＝ “Respect for human being” “Competing by original technology” 1937 Started camera business Canon’s Management Philosophy 9 Prof. Kazuo Tanami, OIT, Japan

11. Canon’s Products photo: Canon HP 10 1937 Cameras 1941 Medical equipment / 1958 TV cameras 1967 Semiconductor manufacturing apparatus 1967 Copiers 1985 IJ Printers 1981 Video cameras 1976 Facsimile 1975 Laser Beam Printers 1940 1970198019902000 1996 Digital cameras KWANON NP-1100 LBP-10 Prof. Kazuo Tanami, OIT, Japan

12. Canon’s Sales and R&D 2010 Canon’s Sales and R&D 2010 http://www.canon.com/about/library/pdf/canon_factbook.pdf 11 Prof. Kazuo Tanami, OIT, Japan

13. 12 Canon Inc.’s R&D Expenditure Canon Inc.’s R&D Expenditure (source: Canon) Prof. Kazuo Tanami, OIT, Japan

14. 13 Copier Business in 1960’s Canon Started Copier Business with Original Technologies Copier Giant Xerox With Huge Patent Portfolio With Canon’s Original Technology and Patents Canon Challenges Canon Challenges Canon recognized the importance of patents. Canon recognized the importance of patents. Canon’s Pro-IP Activities

15. Prof. Kazuo Tanami, OIT, Japan 14 IP activities are vital to protect Canon’s business operations. The fruits of R&D are products and IPRs. Other parties’ IPRs should be respected. Basic Policy Basic Policy Canon’s IP Strategy

16. Canon with a Gene Inherited 15 All the Researchers/Engineers Write a patent earlier than Write a patent earlier than a technical report! Read patents more than Read patents more than technical reports! Prof. Kazuo Tanami, OIT, Japan

17. Canon’s Sales and Patents source: Canon IP & Legal Headquarters 16 Patents are Tools to Protect Your Business ■ Consolidated Sales ◆ US Patents Prof. Kazuo Tanami, OIT, Japan

18. U. S. Patents Ranking 2010 Canon Source: USPTO SamsungElectronics Microsoft Intel PanasonicToshiba SonnyLGElectronics 5879 17 Prof. Kazuo Tanami, OIT, Japan

19. Canon’s Patents in the World Canon’s Patents in the World (http://www.canon.com/environment/report/ma12.html) Prof. Kazuo Tanami, OIT, Japan 18

20. Canon in Asia Canon in Asia source: Canon IP & Legal Headquarters 19 South Korea (1985) (photocopiers) Dalian (1989) (LBP,CRG) Tianjin (1997) (photocopiers) Suzhou (2001) (photocopiers) Taiwan (1970) (cameras) Shenzhen (1993) (photocopiers) Zhuhai (1990) (cameras & LBP) Zhongshan (2001) (LBP) Vietnam (2001) (IJP) Malaysia (1988) (cameras & lenses) Thailand (1990) (IJP) Major Production Site Major Software Development Site Manila (1991) Software development New Delhi (1999) software development Beijing (1998) software development Major Production & Software Development Sites Overseas Production Ratio Prof. Kazuo Tanami, OIT, Japan

21. 20 Importance Business in Asia (consolidated) Americas 3.60 trillion yen 2.53 trillion yen 21% 8% 32% 19% 28% Japan Americas Europe Japan 28 % 34% 29% 1.5 times 3 times 19992010 Asia & Oceania

22. Patents in China Prof. Kazuo Tanami, OIT, Japan 21

23. Business- oriented PGA Four-Step Patent Productivity Actions Starting with PGA(patent grade-up) Activity 22 Researchers Engineers Invention disclosure Specification Idea sheet Patent Grade-up Activity Patent Group Assessment PGA= IP staff Enginee r Invention Evaluation R&D Manager IP Manager Invention Prof. Kazuo Tanami, OIT, Japan

24. Management In-house IP Management System JPO, USPTO,etc JPO, USPTO,etc Pat. Info. Connected ＤＢ All IP proposals Search In-house Pat. Info. Retrieval System All Pat. ＤＢ DB ⇒ JP, USP, EP, CN, etc. All Researchers must use ⇒ Available to All Researchers Patent Information for Search & Management 23 Prof. Kazuo Tanami, OIT, Japan

25. Osaka Institute of Technology 2011 Patent Information Annual Conference of China Thank You for Your Attention! Kazuo TANAMI Dean & Professor Graduate School of Intellectual Property Osaka Institute of Technology Japan Prof. Kazuo Tanami, OIT, Japan