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Risk Management»Corporate Governance Aspect»Management of Intellectual Property

Management of Intellectual Property

• Intellectual property rights are one of the important achievements of R&D, and R&D is the cornerstone for companies to achieve their strategic business goals. We value the importance of IP rights, while managing and protecting our own IP rights, we also respect the IP rights of external partners, including customers, suppliers, and academic institutions, to avoid infringement. Therefore, the Company has formulated an operational management model composed of strategies in business, R&D, and IP rights. With a continuous positive cycle, we aim to increase the Company's value, strengthen enterprise quality, ensure operational freedom, and elevate our competitiveness and profitability.
• Given the Company's main business model is OEM, ODM, and EMS, the current IP related affairs are mostly focused on patents, followed by trademarks. IP rights are mainly obtained through in-house development, collaboration with academic institutions on projects with promising prospects, while others are legally obtained through external parties based on operational needs. Designated unit manages and utilizes IP rights including patents and trademarks, and regularly controls and manages the rights to reduce infringement risk. In terms of patent management, "Procedures of Patent Rights Management " was approved by the Chairman and executed on January 11th, 2002. The Procedures served as the basis of policy and execution for patent rights management. The Procedures and application forms for patent proposals are published on the Company's intranet for employees to understand and apply. Strategy of the Company's patent management focuses on both quality and quantity; thus decisions are not made solely based on the number of applications. Key management directions include the scope and assessment of patents. Through the execution of patent search, reward system, education and training, we can ensure the results of the Company's R&D efforts, build fields of patents, ensure the freedom of operation, and increase product competitiveness.
• In terms of patent management, "Procedures of Patent Rights Management " was approved by the Chairman and executed on January 11th, 2002. The Procedures served as the basis of policy and execution for patent rights management. The Procedures of Patent Rights Management and application forms for patent proposals are published on the Company's intranet for employees to understand and apply. Strategy of the Company's patent management focuses on both quality and quantity; thus decisions are not made solely based on the number of applications. Key management directions include the scope and assessment of patents. Through the execution of patent search, reward system, education and training, we can ensure the results of the Company's R&D efforts, build fields of patents, ensure the freedom of operation, and increase product competitiveness.
• Patent proposals are initiated by R&D personnel, after internal indexing and evaluation with approval from supervisor and VP of the business unit, the patent proposals are then processed according to operation procedures. In addition, we have established a patent database, providing patent lists and generating reports for different departments and personnel based on their operation needs and responsibilities. Quarterly patent reports are also published on the Company's intranet. In terms of patent maintenance and application, we have established a re-inspection mechanism, where patents are reviewed one to three months prior to expiration, related technologies and products are discussed with the proposed personnel, then the efficiency of patent maintenance is assessed with reference to current technology status and market prospects. Application of patent rights owned by the Company can then be authorized and reciprocal authorized to external parties with approval from the President of the Company. When engaging in patent trade with external parties, we could also leverage patent rights owned by the Company to offer reciprocal trade as a bargaining chip.
• The standard operation procedures for handling patent disputes are as follows:
• When business units directly or indirectly receive notice of patent infringement dispute, such notice shall be submitted to the legal department and the intellectual property rights team for handling.
• The legal department shall meet with relevant personnel from the business unit involved in the dispute to understand their relationship with the counter party based on the content of infringement notice. The intellectual property rights team would conduct technical analysis on the infringement and collaborate with relevant personnel from the business unit involved in the dispute to clarify the relationship between the involved patent, related products or objects.
• Based on the discussion results from the business unit, legal department, and intellectual property rights team, they would jointly formulate countermeasures, and entrust the business unit and legal department to reply to the counterparty or customers.
• Depends on the progress and development of each case, the business unit or legal department would respond to the matter accordingly.
• To protect the rights and interests of the Company, we have taken the following measures to protect intellectual property rights in daily operations:
• Procedures regarding confidentiality of outsourced operations, agreements on the ownership of IP rights, and measures to reduce the infringement risk of products procured are regulated by the business unit in collaboration with the legal department through contracts signing and agreements. The review of clauses in the IP rights contracts is conducted by the business unit in collaboration with the legal department.
• For joint R&D projects with external organizations, the confidentiality agreement and ownership of intellectual property rights are jointly drafted and signed by the business unit, the legal department, and the collaborating external organizations. The intellectual property department is responsible for acquiring and maintaining intellectual property rights in accordance with the terms outlines in the contract or agreement.
• IP rights agreements with employees through the beginning of their employment, in-service until resignation is communicated at employee training programs and listed in their job regulations. The agreement is signed by employees, collected and kept by the human resource department.
• Procedures on confidentiality control include regular internal training on the PIS (Proprietary Information Security) control measures, and continuous implementation of various promotional activities.
• Implementation Status for FY2024:
• Execution status on IP rights related matters are regularly reported to the Board of Directors at the end of each year. The latest report was on December 27, 2024 and current achievements are as follows:
• As of 3Q 2024, the Company has applied a total of 8,652 patent applications in Taiwan, the United States, China, Japan and Europe, and has obtained 6,791 patents.
• In response to digital transformation, the Company has established a public and announced patent query system. The data content is mainly based on the Company's existing invention patent applications and invention patents in Taiwan, the United States, and China. Previously, the public and announced patent query system was suspended for updates due to consolidation of the Company's internal information system and concerns with information security. System update was completed in 2Q 2024 and re-launched to provide services after testing. Relevant data is progressively uploaded to the system in batches in chronological order, and we expect the collection of all data to be completed by 1Q 2025. Data will be updated every quarter going forward to facilitate employee queries.