Culture of innovation powers Chugoku Electric’s success
The Chugoku Electric Power Co., Inc. is an electric power company based in Hiroshima City, Hiroshima Prefecture. The group operates mainly in Japan’s southwestern Chugoku Region, where it generates and distributes energy to the region’s more than 7 million inhabitants. The sixth largest electricity company in Japan, Chugoku Electric has 3,703 employees and owns 101 power generation facilities, including 90 hydropower facilities, 8 thermal power stations, 2 solar farms and a nuclear power plant. Together, these facilities can produce 10.79 million kilowatt (kW) of energy. The power transmission and distribution business is operated by Chugoku Electric Power Network Co., Ltd., a wholly owned subsidiary that was spun off from Chugoku Electric in 2020.
Chugoku Electric was established in 1951, but the energy company can trace its origins back to August 7, 1945 – the next day of the atomic bomb was dropped on Hiroshima – and state efforts to supply power to areas that had escaped damage. Just two weeks later, power was being supplied to 30 percent of the region’s remaining houses. The innovation and determination that would come to shape Chugoku Electric began in these challenging days, weeks and years in the aftermath of the Second World War. One of Chugoku Electric’s first inventions was an inspection device that allowed for easy visual inspection of overcurrent – a potentially dangerous situation where excess current exists in an electric power system. This invention would go on to be used widely in the electric power industry.
It was not until the end of the 20th century, however, that Chugoku Electric developed a comprehensive, company-wide intellectual property (IP) strategy. The impetus for this change was the shift toward electricity liberalization in Japan, which ended the regional energy monopolies that had been in place since before the war. In its place came the threats of direct competition and overseas acquisitions, but also the opportunity to pursue new business developments with the ending of restrictions on concurrent business. In response, Chugoku Electric recognized the need to protect its IP to secure future growth, corporate value and the freedom to conduct its business activities using its own patented technologies.
Two decades later, and IP activities are firmly embedded in the company. An IP strategy meeting is held about once a quarter, in which senior managers – such as deputy general managers of business divisions and department heads – discuss basic policies for IP strategies and the status of ongoing IP applications as well as share information on IP risks. Based on deliberations of this IP Strategy Committee, the company’s basic policy for IP strategy is submitted to and decided upon by the its Management Committee. The results of policy implementation are also reported to the Management Committee.
In addition to these efforts, the company’s dedicated IP department focuses on disseminating Chugoku Electric’s IP activities both internally and externally. The company has been issuing IP reports since 2009 in response to the IP Information Disclosure Guidelines announced by Japan’s Ministry of Economy, Trade and Industry in January 2004. These reports not only promote the value of IP activities, but also give employees an opportunity to reconfirm their IP strategies and the results of their own activities. In addition, the company’s IP department publishes a bimonthly magazine to provide management with information about IP.
As a result of this strategy, Chugoku Electric owns a substantial IP portfolio including over 3,000 patents. As shown in the diagram below, its basic technologies are divided into 10 fields, ranging from fuel procurement to customer sales. Each of these fields is closely linked to deliver low-cost, high-quality electricity.
Concrete solutions to environmental problems
In recent years, the dangerous reality of climate change has made the need to decarbonize society an increasingly urgent priority for Japan and the wider world. Innovative technological development is essential for the realization of carbon neutrality, especially in the energy industry, and Chugoku Electric has been proactively promoting the adoption of new technologies to reduce its environmental impact.
The company is working on the production of concrete that makes effective use of carbon dioxide. By researching the inclusion of coal ash and other materials into cement mixtures and absorbs carbon dioxide and hardens, Chugoku Electric has succeeded in significantly reducing carbon dioxide emissions during manufacturing. Together with Kajima Corporation, a construction company, and chemicals manufacturer Denka, Chugoku Electric jointly developed CO2-SUICOM, an environmentally friendly concrete that can reduce carbon dioxide emissions. In 2020, the development of CO2-SUICOM was adopted as a commissioned project by the New Energy and Industrial Technology Development Organization, Japan’s largest public research and development organization. Chugoku Electric and its partners are also actively applying for patents related to their environmentally friendly concrete; of February 2023, they jointly hold eight patent rights.
The corporate philosophy, EnerGia, has been registered as a trademark since its establishment. It is registered as a “defensive mark,” which broadly restricts others from using the same or similar trademark in energy-related businesses. To be registered as a defensive mark, the trademark must be well-known and recognized. Its purpose is to prevent the registration of trademarks that may be mistaken for the defensive mark and thereby cause customer confusion regarding the goods or services provided by the holder of the defensive trademark. This is opposed to a normal registered trademark, which is not so restrictive, and means that Chugoku Electric can gain the trust of users accustomed to its trademark.
The nature of the company’s business has naturally shaped its IP strategy. For instance, it has several design rights related to the shapes of its power distribution equipment, but otherwise designs do not constitute a significant part of its IP portfolio. It also avoids relying on trade secrets to protect its IP. This is partly because it is difficult to maintain secrets when operating jointly with manufacturers, and partly because there is a tendency to share and standardize technologies among electric power companies. This makes it more effective for Chugoku Electric to protect its technologies and inventions with patents.
Women already have a sizable presence in Chugoku Electric’s IP work. Seven of the IP department’s 17 staff are women. Their wide-ranging responsibilities include the formulation of IP strategies, research and analysis, the acquisition of patent and trademark rights, legal affairs, in-house training and administrative and technical matters. They also rotate roles within the department, which allows them to accumulate a lot of professional experience.
As Chugoku Electric looks to the future, it knows that initiatives like these will be essential to continue nurturing its culture of innovation – a culture that has shaped the company since its establishment over 70 years ago.