The Group has established “Basic Regulations for Intellectual Properties,” based on the policy of “applying for and acquiring valid patents to protect our business and increase business value, and not to infringe on the patents of other companies.

The Group supplies a wide range of material products globally, and the market environment and competitive situation vary depending on the business. Each business division therefore formulates its own optimal intellectual property strategy. At the same time, the R&D Department is actively working on research themes that will lead to the creation of new businesses across business divisions.

We are also working to create highly original and valuable intellectual property and to ensure its appropriate protection through the acquisition of rights. We protect our intellectual property from infringement by third parties while simultaneously engaging in sound business practices that respect the intellectual property rights of third parties.

In recent years, while maintaining our traditional "defensive" intellectual property activities centered on protecting rights, we have been strengthening our "offensive" efforts aimed at establishing a competitive advantage and building barriers to market entry. For our products with distinctive product forms, we also actively acquire the design rights.

Going forward, we will utilize innovative technologies, including generative AI, to improve the efficiency and sophistication of our intellectual property-related work, while further strengthening our collaboration with the R&D Department. Starting from the earliest stages of idea generation, we will pursue the exploration and patenting of promising technologies that anticipate future market needs. By strategically combining patent rights and know-how secrecy, we will build stronger barriers to entry into our businesses and further strengthen the intellectual property foundation that supports the sustainable growth of the Group.

Shin-Etsu Chemical has the Patent Department as a specialized organization to promote intellectual property activities in close cooperation with the R&D Department and business divisions. The Patent Department is responsible for advancing intellectual property strategies and helping to secure a competitive advantage of our businesses in the marketplace through the acquisition, management, and utilization of intellectual property. There is frequent communication between the President and other senior management team members and the corporate officer in charge of intellectual property to promote intellectual property strategy and management strategy in an integrated manner.

As the core organization promoting the intellectual property strategy for the entire Group, the Patent Department also serves to connect the R&D Department, business divisions, and management.

The Patent Department contributes to securing a sustainable competitive business advantage by quickly and reliably acquiring the rights to the results of R&D activities that cannot be easily imitated by other companies.

At each research center, members of the Patent Department discuss their research themes on a monthly basis, either in person or via online web conference, and hold patent review meetings with the persons in charge of patents and key researchers. This allows us to consider appropriate strategies for securing patent rights for our own research results, as well as to identify, at an early stage, any risk of infringing on other companies' patents.

To keep track of patent information related to our research themes, we use SDI^*1 to continuously identify and monitor patent trends, which helps to reduce risks and create opportunities in our R&D and business activities.

The Patent Department encourages each researcher to always keep the idea of patents in mind and trains them to be able to draft patent application specifications themselves. In this way, we are taking the lead in creating a culture in which researchers see intellectual property as their own responsibility and carry out their research in a proactive manner. As a result of these efforts, there were no cases in which business progress was impeded due to patents in FY2025, and no litigation has occurred.

For Group companies that carry out development but do not have an intellectual property-related department, the Patent Department conducts audits focusing primarily on their responses to infringements of intellectual property rights. In FY2025, we conducted audits of two companies. For Group companies that do have an intellectual property-related department, we continuously exchange information with the people in charge and provide advice and guidance regarding other companies' patents with the goal of protecting intellectual property throughout the Shin-Etsu Group.

Shin-Etsu Chemical has established the following awards for the purpose of recognizing employees who have made inventions, improvements, innovations, or ideas that contribute to business operations.

A system to recognize and award employees who have created an invention or idea which greatly contributed to the company in the form of patents

FY2025: 26 awards (Shin-Etsu Chemical)

A system to recognize employees who have made a large number of inventions and acquired a large number of patent rights in the company

FY2025: 21 awards (Shin-Etsu Chemical)