IP policy & strategy

Basic policy

Since our founding, SATO has always sought to offer products and services that solve operational problems in the spirit of Ceaseless Creativity. Through the development of new products and services, we build up a portfolio of intellectual assets that are important to the company's present and future. To protect these resources, we have established a basic policy with actions set out as follows, which we will use toward securing freedom to operate and increasing our corporate value to contribute to a better and more sustainable world.

Create and make use of intellectual property

We encourage creative work throughout our group so as to drive the creation of intellectual property that benefits our group businesses while maximizing its use to pursue sustainable growth.

Respect intellectual property rights

We comply with laws governing patents, utility models, industrial designs, trademarks, copyright, trade secrets and employee know-how in different countries, making sure we respect the valid intellectual property rights of third parties to minimize any related risks.

Provide intellectual property training and education

We educate employees to increase their awareness about intellectual property and enable more intellectual property activities.

Intellectual property management

Under our corporate motto of Ceaseless Creativity, SATO has grown alongside customers, providing auto-ID solutions and services to meet their operational needs, in line with our mission to “contribute towards a better and more sustainable world.” Intellectual property we produce in the process is inseparable from our business and keeps us competitive.

Through our Intellectual Property (IP) Department, which reports directly to the Group CEO, we work to put strategies and plans into action to enhance IP governance. We also engage in company-wide activities and collaboration to create intellectual assets that help enhance and grow our existing DCS & Labeling business, toward realizing our medium-term management plan. As we make and sell our products, we strive to improve them to deliver more advanced solutions. This is our focus for both business and IP. Such efforts have boosted patent applications associated with our solutions, raising the three-year average through FY 2023 to more than 2.5 times that of FY 2014.

We are also eager to produce IP that supports technological innovations as part of our strategic investment in seeking long-term growth. In our nonlinear, trial-and-error process to innovate, we started performing and providing IP landscapes,^* taking actions to strategize how we create intellectual assets for competitive differentiation and grow our IP portfolio both in and outside Japan.

With a focus on protecting and leveraging the creative outputs we produce from solving customer pain points, we have been applying for patents and working to increase our patent utilization rate. Also, we replace older, less valuable patents with newer, more valuable ones to improve overall quality, reviewing and rebalancing our patent collection regularly to keep it compact and aligned with our business portfolio, so that we can concentrate resources on seeking profitable growth for higher capital efficiency. This shows in our patent utilization rate, which is increasing steadily and inching closer to the industry average. While we seek stronger patent protection to support and reinforce growth of our global DCS & Labeling business, the number of patents we hold in key countries outside Japan has grown rapidly such that by the end of FY 2023, it is already more than 2.8 times that of FY 2014. This corresponds with the bigger role our overseas business now plays at the group level. It brought in almost 50 percent of our consolidated sales in FY 2023, up from just around 30 percent in FY 2014.

*Analysis of patent and market data used by companies to understand their strengths and market positioning and to make informed decisions about their corporate and business strategies.

Patents owned

*1Total number of patents and not unique patents. For example, if a patent is granted in four countries, it is counted four times.

Patent utilization rate (Japan)

• *1Source: In-house records.
• *2Source: Japan Patent Office Annual Reports 2019-2024.

To motivate even more intellectual creations and inventions that contribute to customer value and our competitive advantage, we have made invention awards part of our in-house awards for recognizing Ceaseless Creativity. Held every year since 2000, the Invention Awards ceremony, themed “Involving everyone in innovations to make SATO stronger,” shows our appreciation and commendation for employees who produce outstanding inventions with actions and efforts that embody Ceaseless Creativity. Through the awards, we also learn from each other and find inspiration for our next actions, thereby fostering a corporate culture of innovation. As a result, the number of first-time inventors in the company has been rising steadily over the years.

First-time patent applicants (cumulative total)

As society changes, our customers' needs change too. In using IP to protect and leverage the value we create today (exploiting our current business capabilities) and tomorrow (exploring opportunities for future growth), we believe we can improve our competitiveness and will continue doing so to create a better and more sustainable world and raise our corporate value over the long term.

Our 25th Invention Awards

We give recognition to value-creating innovations, commercialized designs and other employee inventions, focusing on intellectual assets that help enhance and grow our existing DCS & Labeling business as well as those that support technological innovations eyeing long-term growth. In 2024, nine out of the 12 awards presented went to inventions related to DCS & Labeling. These include inventions for improving yield in RFID label production and for managing RFID printing/encoding logs via the cloud network. The other three awards went to inventions for new, original devices that would contribute to our long-term growth.

IP awards and recognition received by company and employees