| Contribution of Licensing Activities to Company Business |
| Olympus views intellectual property licensing activities primarily as a means of differentiating its products from those of other companies, rather than as a means of generating licensing revenue. |
 |
| With respect to imaging products, Olympus considers cross-licensing to be an important tool due to the extremely rapid pace at which technology advances in the imaging industry. Also, the Company considers it necessary to make use of a wide range of intellectual property assets, including those originally developed by other manufacturers, in order to respond quickly to customer needs. As for gastrointestinal endoscopes, our mainstay products in the medical endoscope field, however, our strategy is to use technologies protected by our patents to make it difficult for other manufacturers to enter the market, and thus maintain market share. |
|
| Contribution of Patent Portfolio to Company Business |
| Olympus actively pursues a policy of converting research and development results into patented intellectual property assets. The results of this policy over the past five years are shown in the graphs below, broken down by country and area of business. In the future, the Company will be more selective in applying for domestic patents, and will strive to increase the number of acquired foreign patents. Olympus has been channeling more resources into obtaining patents, not only in the United States but also in the growing market of China, where it also has manufacturing operations. At the end of fiscal 2004, Olympus held 72 patents in China, up from 24 a year earlier. |
|
|
| The number and ratio of Olympus’ patents in each business area at the end of fiscal 2004 are shown in the table below. Olympus holds patents with business potential in each of its businesses: imaging, medical, industrial, and life science. However, its imaging and medical businesses, which account for 79% of total net sales, are responsible for 67% of all patents held by Olympus. Furthermore, the Corporate R&D Center aggressively invest in new, future-oriented businesses, as well as in developing technologies that will help broaden its core technological foundation. As a result, the number of patents held has increased rapidly. |
|
|
Imaging |
Medical |
Industrial
Systems Group |
Life Science Group |
Research and Development
Institutes |
Total |
| |
No.
|
%
|
No.
|
% |
No.
|
% |
No.
|
% |
No.
|
% |
No.
|
% |
| Japan Patents |
1,989 |
34 |
2,071 |
35 |
347 |
6 |
434 |
7 |
1,087 |
18 |
5,928 |
100 |
| US Patents |
1,312 |
38 |
983 |
28 |
199 |
6 |
174 |
5 |
794 |
23 |
3,462 |
100 |
| China Patents |
42 |
58 |
3 |
4 |
12 |
17 |
9 |
13 |
6 |
8 |
72 |
100 |
| Other Patents |
78 |
11 |
347 |
48 |
91 |
12 |
126 |
17 |
88 |
12 |
730 |
100 |
| Total |
3,421 |
34 |
3,404 |
33 |
649 |
6 |
743 |
7 |
1,975 |
19 |
10,192 |
100 |
|
|
|
| Intellectual Property Portfolio Policies |
| Olympus regularly monitors newly registered patents and published patent applications, and analyzes intellectual property trends in each business area. It also studies competing products on a regular basis and uses the information it has gained to assess the value of its current intellectual property assets. Through these activities, it continuously reevaluates the position of its intellectual property portfolio and adjusts its patent application and licensing strategies accordingly. With regard to optical technology and other core company-wide technologies, the Company adds each individual patent to a shared database to allow wide utilization of such information. Once a year, Olympus makes a comprehensive inventory of its patent portfolio, and rationalizes its intellectual property management costs by abandoning its claim to any that are no longer relevant or needed. |
|
| Information on Risk Countermeasures |
| Ongoing negotiations with U.S.-based Ampex Corporation, regarding image data conversion technology for digital cameras, resulted in a settlement agreement between Olympus and Ampex in March 2005. The cost of the settlement is included in Olympus’ business results for the fiscal year ended March 31, 2005. |
|
| U.S.-based company Honeywell International Inc. has filed a lawsuit against Olympus regarding LCD technology. Olympus expects this action will have a minimal effect upon its business. |
|
| No other materially significant lawsuits are currently pending against the Company. |
|
| Notes: |
| 1) |
The information contained in this report includes information pertaining to Olympus’ domestic and foreign affiliates, with the exception of ITX Corporation. |
| 2) |
This report includes forward-looking statements, including statements on the Company’s projected business plans, strategies, and analyses. Such statements are based on information currently in the Company’s possession, and include assumptions and estimates that may be affected by changes in international technology and demand trends, economic circumstances, and competitive market forces. Consequently, actual outcomes may differ materially from those described in the forward-looking statements contained herein. |
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| 2004 Intellectual Property Report |
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