Kikkoman Corporation

Intellectual Property Report

2005
April 2004 - March 2005
 Intellectual Property Report 2005

Message

The Kikkoman Group, as a group of companies engaged in the field of food and health,
has been endeavoring to develop and offer high quality, delicious and safe merchandise
that are good for health based on its brewing and food processing technologies. In order
to make the products more competitive, the Kikkoman Group places importance on the
research and development of products and technical development aiming for innovation
and differentiation. The intellectual properties gained in the development process are
powerful weapons to support our operations and the source of the Group’s
competitiveness.

In order to strengthen the system promoting the intellectual property strategy, the
Intellectual Property Department was separated from the Research & Development
Division and became an independent department in June 2004. The department reports
directly to top management. We in the Kikkoman Group consider the intellectual
property strategy as one of our core management strategies, and will place greater
importance on it.

We take pleasure in presenting this Intellectual Property Report to make our stance
understood.

Yuzaburo Mogi Takashi Ushiku

Chairman & CEO President & COO

KIKKOMAN CORPORATION
 Intellectual Property Report 2005

Preface

The Intellectual Property Report discloses the policies and programs of the Kikkoman Group for the business, research and
development and intellectual properties to all our stakeholders.

Using the guidelines for disclosing information on intellectual property provided by the Ministry of Economy, Trade and
Industry as a reference, we try to explain our intellectual properties, particularly patents and trademarks, in a reader-friendly
manner.

I hope that this report will be of some help to understand the intellectual properties of the Kikkoman Group.

October 2005

Shigetaka Ishii
Executive Corporate Officer
(in charge of Intellectual Property)

Contents:

Message
Preface
1. Core Technologies and Business Segments 1
2. Direction for Research & Development and Business Strategies 1
3. Outline of Research and Development and Intellectual Property 2
4. Analysis of Marketability and Market Superiority of Technologies 2
5. Research & Development and Intellectual Property Organization
and Research & Development Alliances 4
6. Intellectual Property Management 5
7. Contribution of Licensing Activities to the Business 6
8. Contribution of Patents to the Business 6
9. Policy for an Intellectual Property Portfolio 7
10. Risk Information 7
11. Trademarks and Brands 7
Company Profile

Note: Except for the events that have occurred, the policies and strategies of the Group, views on the facts, and descriptions about the future are based on the
knowledge and understanding of the Group at the time of preparation for the report, and their realizations in the future are not promised or guaranteed.

KIKKOMAN CORPORATION
 Intellectual Property Report 2005

1. Core Technologies and Business Segments

The business segments of the Kikkoman Group are “Foods manufacturing and sales,” “Foods-wholesale,”
“Coca-Cola” and “Others.”
The core technologies of the Group are brewing technologies and food processing technologies developed
through the company’s long history and tradition. These core technologies are applied in the Soy Sauce
Division and Soy Sauce Derivative Products Division, the Del Monte Division, the Sake and Wine Division in the
“Foods-manufacturing and sales” segment, and the biotechnological field in the “Others” business segment. All
these sections and fields are promoting the production of products with higher values on the base of the core
technologies, and at the same time, they are promoting technological innovation and product differentiation to
develop new competitive products.

2. Direction for Research & Development and

Business Strategies
The Kikkoman Group conducts a wide range of research and development activities from the basics to creating
new applications for soy sauce. In order to respond to the needs of consumers in the field of “food and health,”
the Research & Development Division is developing new creative food products and new technologies to
enhance the quality of products.

To add value to the existing soy sauce products both in Japan and in overseas markets, the Soy Sauce Division
of the “Foods-manufacturing and sales” segment is making technological developments relating to a brewing
process and improving the technology from a new perspective. Currently, it is developing a new soy sauce
product for processing. Further, it is constructing a new type of raw materials processor and improving the
membrane separating process to enhance its productivity and product quality in the manufacturing process.
The Soy Sauce Derivative Products Division is emphatically developing products for the growing market such
as grilled meat sauces, seasoning sauces for noodles, seasoning sauces for one-pot cooking, bouillons for
Japanese daily dishes, and bouillons for rice bowls with various toppings.
The Del Monte Division is engaged with developing drinks and seasonings, breeding tomatoes and other
plants, as well as developing technologies to control plant viruses. The Sake and Wine Division develops
shochu (a clear liquor), mirin (sweet sake), synthesized sake products, unfiltered wine, and wine using sake
yeast. It also is actively developing healthy foods.
In the “Others” segment, the biotechnological field conducts R&D of materials for health enhancement,
develops enzymes for clinical diagnostic reagents, and food hygiene test kits.
The Kikkoman Group further researches into safety, and develops technologies that can be applied to all
segments, and combines the technologies developed by different segments to produce new products.
The Kikkoman Group spent 3.5 billion yen in total in 2004 mainly for R&D in soy sauce and its related products.

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 Intellectual Property Report 2005

3. Outline of Research and Development and

Intellectual Property
To build a strong patent network, Kikkoman is positively applying for patents on the achievements obtained
through research and development activities. For example, the great number of patents held by Kikkoman in
the field of brewing soy sauce is one of the factors for Kikkoman to maintain the large market share of its main
product in the soy sauce market.
The subsidiaries are also positively applying for patents on their technologies, and Kikkoman is strongly
supporting them.
The “Foods-manufacturing and sales” segment began to strengthen the application for patent on its expertise in
2004, in order to obtain patent rights. It is considered important to obtain patent rights for new technologies as
soon as they are developed. Therefore, also in the “Others” segment, the strategy is taken to apply for patent
on all new devices.
In the future, the Kikkoman Group will place a greater emphasis on intellectual property activity as part of the
tripartite strategies comprised of business strategy, R&D strategy and intellectual property strategy. The brand
is an essential intellectual property. The Kikkoman Group will positively obtain the trademark right both in
Japan and in other countries, and will take legal action against any infringement by a third party.

4. Analysis of Marketability and

Market Superiority of Technologies
Kikkoman is a top soy sauce manufacturer and has maintained the largest market share for many years.
Recently, the ratio of premium “marudaizu ” soy sauce for the household market in Japan has been on the rise,
and here too, Kikkoman is maintaining an overwhelming share.
Kikkoman has been engaged in research from different angles such as
research on koji mold, researches on taste, color, and fragrance for many
years, and research into the safety of foods for which consumer demand is
rising. By responding to consumer needs, and offering safer, higher quality
and premium soy sauce products, Kikkoman creates new markets.

The method to “mature an unheated sauce mix” for soy sauce-based sauce koji mold
(microscopic photo)
varieties, and the technology to give full flavor to dipping and marinade
sauces of Kikkoman, and virus-resistant tomato seedlings and the “rain-cut”
cultivation (covering trees to avoid rain) method for grapes for wine
developed by subsidiaries and other technologies are important properties to
support the competitiveness of the products of the Group. These patented
technologies and the expertise behind them will act as a driving force for the
Kikkoman Group to create a new market and expand the existing market.

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Fundamental Technological Fields and Business Deployment of the Kikkoman Group

Premium
Soy Sauces Soy Sauces
Functional
Soy Sauces for Different
Purposes

Soy Sauce
Fruit and Dipping
Vegetable Processed and
Juices Tomato Marinade
Foods Soy Sauce Sauces
Soup Base

Del Monte Quick & Easy

Health
Soy Sauce Japanese - style
Foods Derivative Products Seasoning Mix

Functional
Food Wine
Materials
Reagents for
Biochemical Sake and
Shochu
Hygienic Products Wine (Clear Liquor)
Tests Mirin
Diagnostic (Sweet Sake
Enzymes for Cooking)

plant breeding fermentation food processing food

zymurgy
science engineering science engineering

plant pathology pharmacology food hygienics nutritional food science

science

medicine and organic analytical

biology microbiology biochemistry
veterinary chemistry chemistry

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5. Research & Development and Intellectual Property

Organization and Research & Development Alliances
<R&D Organizations>
In the Kikkoman Group, the Research & Development Division, Production Division, and Product Development
Department of Kikkoman, the Research and Development Division of Nippon Del Monte Corp. and the
Research and Development Department of Manns Wine Co., Ltd. are involved in R&D activities. In the
Kikkoman Corporation, the Research & Development Division concentrates on researches on soy sauce, health
foods and biotechnology. The Production Division focuses on product and technical development for soy sauce
and alcoholic products. The Product Development Department develops seasonings using soy sauce. Nippon
Del Monte Corp. is engaged in technological and product development in the fields of drinks and seasonings.
Manns Wine Co., Ltd. concentrates its efforts on technological and product development of wine and related
products.

<Organization for Intellectual Property>

The Intellectual Property Department was separated from the Research & Development Division and became
an independent department in June 2004 in order to strengthen the system to promote the intellectual property
strategy for the Kikkoman Group.

<R&D Cooperation and Partnership>

Having taken a stake in Higeta Shoyu Co., Ltd. in March 2004, the Kikkoman Group will strengthen its soy
sauce and soy sauce based products operations through the alliance with Higeta Shoyu. The Kikkoman Group
concluded an agreement on capital and business collaboration with the Kibun Foods Group in March 2004. The
first jointly developed product was launched in March 2005 with the combined brand of “Del Monte-Kibun.” It is
hoped that the synergy of the advantages of both parties will expand operations and enhance business
performance for both.

Organizational Structure of R&D and Intellectual Property of the Kikkoman Group

Kikkoman Corporation
Intellectual Property Department

President of Research & Development Division

Kikkoman Corp. Production Division
Chairman of
the Kikkoman Group Product Development Department

Nippon Del Monte Corp.

Manns Wine Co., Ltd.

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 Intellectual Property Report 2005

6. Intellectual Property Management

<Acquisition and Management of Rights>
The Intellectual Property Department manages, for the Kikkoman Group as a whole, all matters related to deploying
the intellectual property system.
The Kikkoman Group has obtained patents and other intellectual property rights for the technologies developed by
member companies from time to time. These rights with their various advantages are important management
resources.
To obtain intellectual property rights, the department conducts all the required procedures such as research, pre-
application studies, the preparation and submission of application documents with speed and strict confidentiality.
Upon submission, the department follows prescribed procedures until the right is approved. After the right is granted, it
gives the information to concerned business segments at an appropriate time for their judgment for the continued
usability of right, and when necessary, gives advice to them.

<Information Management>
The Intellectual Property Department releases regular e-mail information on intellectual property to all sectors in
Kikkoman. The intra-net website of the Department opened in January 2003 provides information on request forms to
be submitted to the department, educational information on intellectual property, the simplified databases of patented
rights and trademarks of Kikkoman, which are occasionally updated. Educational messages on intellectual property
rights and precautionary messages as to the disclosure of technological information are also given to help employees
become more conscious about Kikkoman’s rights.

For intellectual properties inside the Kikkoman, the Rules and Regulations on the Inventions in Service are provided.
For joint research and development with organizations outside the company, relevant agreements are concluded, such
as the Confidentiality Agreement, Joint R&D Agreement, Joint Application for Patent Agreement, and so on. Through
these measures, the Kikkoman Group gives careful attention so that precious information categorized as intellectual
property will not leak out, and strengthens its monitoring system.

<Measures against Disputes>

In order to avoid lawsuits and disputes with other companies over patents and trademarks, the Kikkoman Group
conducts continuous research, from the conception of a theme for R&D activities to the merchandising stage, to
ensure that technology to be deployed and products to be launched will not infringe the rights of other companies.
The Kikkoman Group also keeps an eye on the possible infringement of the rights of the Group by the technologies
and products of other companies. In the case of infringement, the Kikkoman Group will take appropriate action to
exercise its rights in accordance with the Patent Law, Trade Mark Law, Unfair Competition Prevention Law and other
laws in Japan and in the countries concerned.

<Employee’s Invention System>

Kikkoman revised its Employee’s Invention System in March 2005 (enforced on April 1, 2005) in order to offer greater
incentives for employee inventions and to accord with Article 35 of the Patent Law which was revised recently. The
draft plan for revision was communicated to employees through e-mail and explanation meetings for thorough
consultation with them. The revised Rules and Regulations and the procedures for its operation are disclosed through
the intra-net which is accessible at anytime.

Main Features of the Employee Invention System

1. Employees are obliged to report and transfer the rights of their inventions in service to the company.
2. The Company should compensate inventors in three stages for a transferred invention:
1) at the time of making an application for the invention for patent,
2) at the time of the registration, and
3) at the time of gaining its actual result.
3. The petition of objection system will be in place within the company regarding the compensation given at the time
of gaining the actual result of an invention.
4. This system will be conducted by the Invention Evaluation Committee chaired by an executive officer.
5. When the Rules and Regulations and its Procedures for Operation are to be revised, emphases will be placed on
consultation between the company and employees, the disclosure of the draft, and listening to employees’ opinions.

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 Intellectual Property Report 2005

7. Contribution of Licensing Activities to the Business

The Kikkoman Group considers it important to maintain exclusive use of technologies that have been patented
within the group. However, the Kikkoman Group grants licenses to selected companies for intellectual
properties that satisfy certain requirements.

8. Contribution of Patents to the Business

The numbers of patents that the Kikkoman Group has possessed in the past five years are as follows.

Number of Patents Possessed

FY2000 FY2001 FY2002 FY2003 FY2004

Japan 232 227 210 192 190

Overseas 109 130 121 120 127

The Kikkoman Group examines the feasibility of inventions made as a result of technological development and
R&D activities. For inventions found to be useful for business, the Group will positively apply for patents on them
and obtain rights with the intention of monopolizing their rights. For inventions, the Kikkoman Group might be
limited in its business if the same invention is to be patented by other company, the Group will also make a
defensive patent application.

Patents are regularly reviewed to determine whether they should be maintained or waived according to their
degree of contribution to operations. The numbers of patents possessed in Japan have been on decline for the
past several years. This reflects the reduced
number of applications upon scrutinizing
Patents possessed in Japan
proposed inventions, and the result of the
by business field
annual review to determine to maintain only
necessary and practical rights. As a result,
the use rate of patented rights in Japan as of
March 31, 2005 is 66 percent, which is Others 48%
(Biochemicals 41%)
higher than the national average use rate of
around 40 percent per applicant (Japan
Patent Office Annual Report 2005). Sake and Wine 7%

The patents by business field are: soy sauce Del Monte 6% Soy Sauce 27%
(27%), soy sauce derivative products (12%),
Soy Sauce
Del Monte (6%), sake and wine (7%), and Derivative
biochemicals (41%). Products 12%
The Kikkoman Group has accumulated
technologies and expertise through its

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 Intellectual Property Report 2005

product development and processing method development for soy sauce and other foods. In order to sustain its
market superiority, the Kikkoman Group places importance on obtaining rights for these technologies and
expertise as well as various technologies for manufacturing the products of the Group considering them as
important intellectual properties. For example, Kikkoman has maintained a top share in the soy sauce market,
and possesses large patent share. This large share reflects the high technological capacity of the Kikkoman
Group, and is the factor for the Group to maintain its top rank position in the food industry.

9. Policy for an Intellectual Property Portfolio

In “selecting and focusing” the areas of businesses and R&D activities, the Kikkoman Group analyzes its R&D
potential, and the intellectual properties that the Group and competitors possess. Based on the analysis, it
predicts their sustainability and restrictive conditions they may face in the future to determine the areas of
activities for concentrated efforts. By managing these portfolios, efforts to obtain patents are being made
strategically in the specified promising areas.

10. Risk Information

There is no lawsuit relating to the intellectual properties filed either in Japan or in other countries as of March 31, 2005.

11. Trademarks and Brands

(1) Trademarks
For the Kikkoman Group dealing with end consumer products, trademarks are intellectual properties of the
Group as equally important as patents. They symbolize the faces of respective companies and products that
are, with their technological strength, distinguished from others.

The numbers of registered trademarks held by the Group in the past five years are shown below. They are on
the gradual rise both in Japan and in other countries. The rights in possession are reviewed along with the
lifecycle of products to determine whether to maintain or waive them.

Numbers of Trademarks
FY2000 FY2001 FY2002 FY2003 FY2004
Japan 868 871 884 877 914
Overseas 473 475 477 485 494

(2) Brand
In Kikkoman’s the long history, dating back to the early Edo period, the Kikkoman brand has been widely
spread and has become a familiar brand in Japan because of the company’s long-standing adherence to high
quality and safety in its products. As a result of its efforts to spread soy sauce, Japan’s traditional brewed
seasoning, to the world, the Kikkoman brand has now widely permeated the United States, Europe, Asia and
Oceania. As of March 31, 2005, the Kikkoman trademark (the “MAN” character mark) which was registered in

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Japan in 1912, is now registered in 112 countries, and the Kikkoman brand logo in 109 countries.
Kikkoman obtained the rights of permanent use and sales of the global brand “Del Monte” in Asia and Oceania
in 1990.

<Brands and their Uses>

<Countries in which the Kikkoman Logo is registered>

(3) Brand Protection

The Kikkoman Group is strengthening its activities to keep its eye on and to take measures against the
infringement of trademarks. In 2004, the Group positively addressed the problem of counterfeit products in
China and took firm measures against them.

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Company Profile (As of March 31, 2005)

Name Kikkoman Corporation

Head Office 250 Noda, Noda-shi, Chiba, Japan 278-8601
Date of Establishment December 7, 1917
Chairman & CEO Yuzaburo Mogi
President & COO Takashi Ushiku
Paid-in Capital 11,599 million yen
Consolidated Annual Sales 344,625 million yen
Consolidated Number of
Employees 6,350
Business Activities Segment Contents
Foods-manufacturing and sales soy sauce, soy sauce derivating products,
Del Monte, sake and wine, etc.
Foods-wholesales Purchase and sales of oriental foods, etc.
Coca-Cola Production and sales of Coca-Cola and
other soft drinks
Others Production and sales of medical reagents,
clinical diagnostic reagents and
other chemicals; real estate rental;
and other businesses

Subsidiaries (in million yen) Net Sales

<Japan> 360,000

344,625
342,508

334,656
Nippon Del Monte Corporation
270,000
Manns Wine Co., Ltd.

126,813
126,626

126,967
Pacific Trading Co., Ltd.
180,000
Heisei Foods Company Co., Ltd.
Takara Shoyu Co., Ltd. 90,000
Tone Coca-Cola Bottling Co., Ltd.
<Overseas> 0
2002 2003 2004
Kikkoman Foods, Inc.
Kikkoman International Inc. (in million yen) Operating Income
JFC International Inc. 18,000
17,904

17,847
17,059

Kikkoman Foods Europe, B.V.

Kikkoman Trading Europe GmbH 12,000
JFC International (Europe) GmbH
3,762
3,619

3,642

Del Monte Asia Pte. Ltd.

6,000
Japan Food Canada Inc.
Kikkoman Australia Pty. Limited
0
2002 2003 2004
Major Related Companies
<Japan>
(in million yen) Net Income
Higeta Shoyu Co., Ltd.
10,000
Kibun Food Chemifa Co., Ltd.
9,487
9,287

Kibun Fresh System Co., Ltd. 8,000

8,311

Coca-Cola East Japan Products Co., Ltd.

3,957

6,000
3,717

<Overseas>
2,768

4,000
President Kikkoman Inc.
Kunshan President Kikkoman Biotechnology Co., Ltd. 2,000

0
2002 2003 2004

Consolidated
Kikkoman Corp.

KIKKOMAN CORPORATION
 K i kko m a n C or por a ti on
For inquir y, contact:
In te l l e ctu al Pr oper ty Depar tm ent
3 9 9 N oda, Noda- shi, Chiba,
2 78- 0037, Japan
Te l + 81( 4) 7123- 5551
Fa x +81( 4) 7123- 5553
U R L h ttp://www.kikkom an.com
Copyright C Kikkoman Corp. All rights reserved.