Daikin understands that intellectual property rights constitute a valuable company asset. We thus strive to both protect these rights and use them effectively. Our Group Conduct Guidelines state that we will respect other companies' intellectual property rights and ensure that our inventions do not infringe on these rights.
4. Respect and Protection of Intellectual Property Rights
Recognizing that intellectual property rights are important company assets, we shall strive to protect and maintain our intellectual property rights and effectively utilize them. Furthermore, we shall respect and make every effort not to infringe upon the intellectual property rights of other companies.
Based on the Group Conduct Guidelines, we formulated more detailed points in our Compliance Action Guidelines, which state that we will acquire patents and avoid infringement by having the person in charge of R&D at Daikin be the person responsible for a patent and having the researcher/developer understand that he/she is the sole developer of the product or invention.
In new product and new technology development, part of the design review process involves verifying that these products and technologies do not infringe on existing patents. In collaborations with other companies, we distinguish between open technologies and confidential technologies, and confidential technologies are designated as such and kept out of reach.
To actively support researchers/developers, the legal department assigns an intellectual property manager in each division.
The intellectual property managers keep in contact with each other, and manage the variety of intellectual property matters that come up daily (filing/acquisition of rights, reduction of risk of infringement upon and infringement by other companies, etc.). They also educate employees at various levels on intellectual property and reward Daikin patent awardees. To ensure strategic implementation of intellectual property activities, they strengthen patent networks with researchers/developers and global intellectual property survey functions.
We will continue to strive to better manage our intellectual property rights by acquiring and using a greater number of patents and higher quality patents.
We are also strengthening our intellectual property rights systems at our overseas R&D bases. At Daikin Industries, Ltd. and at overseas group R&D bases, starting with those of our Group companies in China, we are striving to obtain various intellectual property rights. We also continue to offer classroom and e-learning, and on-the-job training for intellectual property managers and developers at overseas R&D bases.
China has overtaken the U.S. as the country with the most patent applications. It also has more intellectual property court cases than the U.S. Daikin is actively acquiring intellectual property rights in China, and is stepping up applications for patents, utility models, devices, and trademarks. In emerging countries like India and Brazil, and in emerging countries in southeast Asia, we are stepping up device applications as a way to effectively prevent product copying and boost patent applications.
In fiscal 2021, we again shared Daikin’s intellectual property policy upon launch of the Fusion 25 Strategic Management Plan and stepped up efforts to consolidate information from business sites. We held the Global Intellectual Property Meeting online largely divided into three regions.
Looking ahead, we will continue to strengthen our collaborative system holding meetings with each region as needed.
Daikin Industries, Ltd. has two systems for stimulating employees' motivation to invent and for spurring the creation of intellectual property.
The first is the Compensation System for Employee Inventions, a system in which Daikin pays employees for inventions created on the job that result in patent applications as well as successful uses of the patent. In fiscal 2021, in addition to paying compensation for patent applications, Daikin compensated employees for 539 successful uses of patents.
The second is the Incentive System for Valuable Patents, which gives employees incentive bonuses for valuable patents. In fiscal 2021, we awarded incentive bonuses to the creators of 97 patents.
While these systems are aimed at stepping up Daikin's intellectual creativity, they also represent an effort to promptly tackle pressing issues, such as increasing the quality and quantity of patents in competitive fields, and increasing the number of patents in our key technological fields, in particular in emerging countries. In fiscal 2020, we applied for 1,045 patents in Japan and 587 patents overseas.
In fiscal 2021, in the air conditioning divisions, the number of patent applications increased; this covered everything from development of new products that we intend to release, to near-future products that make use of AI and IoT technologies. In the chemicals divisions, we increased the number of patent applications by clarifying and implementing strategies in each product and technology area.
We will also continue to conduct thorough advance patent surveys so that we can deal with problem patents early on and thus ensure that we eliminate patents that could hinder our development. We will also step up patent efforts worldwide.
To encourage the worldwide adoption of R-32, which has a low global warming potential (GWP) compared to conventional refrigerants, in September 2011 Daikin began offering companies in emerging countries 93 patents related to the manufacture and sales of air conditioners that use R-32 free of charge. In September 2015, these patents were offered to companies worldwide, including developed countries.
In July 2019, we announced our non-assertion pledge describing the grant of free access to our pledged patents, all 176 of which have been filed in 2011 and later, for the manufacture and sale of air conditioners using R-32 single-component refrigerant. Free access to the pledged patents without our prior permission or without a contract in writing enabled other companies to make use of these patents quicker and easier, which represents a step forward in promoting the use of R-32.
In July 2021, we newly added 123 patents to this pledge for use of our patents without prior permission related to the manufacture and sale of air conditioners using single-component refrigerant R-32.
In July 2022, we added another 120 patents, including 30 jointly held with Daikin Europe N.V., our European subsidiary.
Today, we have made a total of 419 patents accessible to any party without fee and the need for prior permission or contract.
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