Innovation management (intellectual property activities)

Idemitsu Kosan is currently transforming its business portfolio based on Medium-term Management Plan. We believe that intellectual property, an intangible asset, will play an important role as one of the resources needed to advance this transformation, and we are working to further utilize the intellectual property we possess.
Specifically, from the early stages such as the business planning stage, we analyze the internal and external environment using the IP landscape methodology and provide intellectual property information to business division personnel and researchers to identify areas in which existing businesses need to be strengthened and consider the direction of new businesses, thereby facilitating a transformation of the business portfolio.

Our intellectual property activities are promoted under a system in which intellectual property officers are assigned to the Intellectual Property Department and each business division. The Intellectual Property Department is primarily responsible for corporate functions, focusing on strengthening governance over business activities through training for department heads, managing intellectual property risks by early infiltration into business divisions and research laboratories, providing intellectual property information suitable for creating new businesses and formulating and presenting intellectual property strategies based on that information, and nurturing human resources who can utilize intellectual property in management. In addition, intellectual property officers in business divisions formulate intellectual property strategies in line with the strategies and business characteristics of their divisions, and aim to develop businesses through the rapid and efficient acquisition and utilization of intellectual property.

Looking at the status of patent applications by business segment of the Group, applications in the Functional materials segment, which is made up of technology-based business divisions, account for more than 70% of all applications both domestically and overseas, as was the case prior to fiscal 2022. In addition, we are building a strong patent network in order to utilize patents to be more competitive with our competitors.
In fiscal 2023, the number of domestic applications (publications) and foreign applications is expected to decrease compared to fiscal 2022. This is due to the fact that we have been steadily protecting know-how for technologies (inventions) that should be protected as know-how by strengthening our application strategy in line with our business development, such as filing applications only in specific countries overseas in response to market trends in each business, and our open and closed strategy.
On the other hand, the number of patents we hold remains unchanged, with a certain number of rights held both domestically and internationally, and we are using these, together with black-box technologies, in our global business development.

●Trends in the number of patent applications (published applications)/Trends in the number of patents held

In order to visualize our strengths, we use PatentSight®, a patent analysis tool from LexisNexis®, to calculate the TR ^* value, which is the value of patents held by our group. The TR value of our patents is high at 2.01 (average value is 1), and even higher at 2.28 for the Functional materials segment. In addition, looking at the breakdown of our patents, high-value (TR>1) basic patents make up about 50% of the total, and related patents and peripheral patents that strengthen the basic patents make up the remaining 50%, while in the Functional materials segment, high-value basic patents make up about 60% and related patents and peripheral patents make up the remaining 40%. In this way, we form patent groups consisting of high-value basic patents and peripheral and related patents, which strongly protect our core technologies and increase our competitiveness.
In particular, in OLED and lithium-ion battery material businesses, we combine our organic chemistry, inorganic chemistry, evaluation and analysis/measurement technology, industrialization technology, etc. to develop not only our own unique materials, but also a wide range of technologies such as manufacturing methods and applications, and have acquired various basic patents. As a result, our average TR value is relatively high among our businesses.

* Value of a patent (Technology Relevance: TR): Value calculated based on the number of citations (number of citations) in examinations by patent offices in each country (the average TR for all patents is "1").

Encouragement of inventions (employee invention rewards)

In order to increase employees' motivation to invent and promote the creation of innovative inventions that lead to business growth, we have established a unique "Employee Invention Performance Reward System" to recognize inventors who have made particularly significant contributions to business profits.
In fiscal year 2023, five inventors who achieved outstanding results in the electronic materials field (one product) were honored with the "Employee Invention Achievement Reward."

IP Landscape Activities

We analyze our group's valuable patents (technologies) and identify our technological strengths (core competencies) that will be our competitive advantage. Based on these core competencies, we will consider and set new growth area theme candidates in the future. In addition, by conducting IP landscape activities as an internal and external environment analysis from the early stages of business planning, we are considering third-party technologies and patents that can reinforce and complement startups and supply chains, and working to find partners who can contribute to the launch of new businesses.

DX activities

Continuing from fiscal 2022, we are gradually promoting the use of AI to improve the quality and efficiency of our intellectual property work. In fiscal 2023, we will begin using AI with training data for prior art searches, and have begun verifying whether it is possible to use generative AI to create documents that clarify the key points of the inventions created by the inventors.
Going forward, we will continue to proactively incorporate AI technology into our intellectual property activities and promote high-quality intellectual property activities that are adapted to the changing business environment.

Developing intellectual property human resources

Future intellectual property activities

In fiscal 2023, we aim to utilize intellectual property in management and business operations, and are strengthening our intellectual property activities by having the intellectual property department accompany the relevant departments from the early stages of business planning and research and development. We are focusing on license agreements when introducing technology and intellectual property due diligence (IP DD) for startup companies.
In particular, when selecting partners for research and development or business alliances, we verify our own technologies and analyze the intellectual property environments of our competitors through IP landscapes to select partners whose strengths are highly complementary to ours, and we aim to combine our technologies while strengthening the supply chain of our envisioned businesses in the future.