Technology and manufacturing development

Primax Electronics's continuous profitability and growth are primarily attributed to its embrace of innovation. The company's focus on technology development lies inthe integration of acoustics, visuals, and human-machine interfaces, known as "three-senses-in-one" product applications. In an era of constant technological advancements,Primax Electronics strives to develop key new technologies and products that sustain profitability and extend its business into every individual's living environment. TheGroup committed NT$3,089,186 to R&D expenses in 2023 as a means to enhance its R&Dcapacity and competitiveness, i.e. 5.11 % of the operating revenue. The fund was applied to the development and design of new products and technologies and enhancement and improvement of production process. For the R&D results in the recent year, please refer to《 P68~P69 of the "2023 Annual Report of Annual General Meeting.》"

In terms of production and global expansion, Primax Electronics continues to serve global customers with the motto of "R&D in Taiwan, Intelligent Manufacturing, Global Logistics." The planned Zhubei Innovation Center in Taiwan is expected to include advanced laboratories, industry academia incubation center and new product manufacturing center..In terms of global manufacturing layout, production and shipments of the factories inThailand and the Czech Republic have continued to grow steadily..

Intellectual property rights management

Strategy & Goals

To respond to the advancement of technology and maintain the hard-earned advanced technological achievements, Primax, in addition to continuously investing resources in R&D and regularly collecting and analyzing market and technological changes related to the products, has implemented intellectual property strategies in alignment with operationalgoals and R&D resources, which are detailed as follows and continues to increase intellectual properties to strengthen our competitive advantages. Primax Electronics continues to improve its strength in patents and maintain competitiveness in the observable market indicators. In addition to improving the quality of patent management, it also integrates and improves the Company's existing internal intellectual property management regulations and systems, and strengthen patented R&D protection to ensure intellectual property rights. The relevance of the financial protection subject to the Company's main future revenue products or key technologies. Primax has formulated a patent strategy forthe main products developed by it, rewards R&D innovation, and pays close attention tothe patent situation of peers to strengthen the patent layout in the customer market. It is expected to achieve the goal of ranking in Top 30 of the first 100 domestic corporate patent applicants by 2030 . For detailed implementation information in 2023 , please refer to the"Company Website"

To this end, Primax has formulated the following intellectual property policy:

• Implement the intellectual property regulations
• Carry out the quality management of patent and the encouragement of innovation
• Reinforce the patent layout
• Implement the intellectual property management
• Implement the management of confidential document
• Implement the management for research and technical notebook

Management plan for intellectual property rights

Management of patent

For the purpose of protection of technical achievement and leading position, we not only constantly encourage our staff to file application for utility patent via the corporate grading innovation award, but also establish the patent management policy and risk control mechanism. In addition, the quantity and quality for patent application has been managed by means of AI analysis through the entertainment patent system. We contact and cooperate with the patent competent authority closely to raise efficiency of patent examination and acquire the high-level patent protection. We also take efficient actions to reduce patent risk. We strive to monitor the competitors of certain products and analyze relevant market and patent information.

Management of Copyright

We promulgated the Management plan for intellectual property rights to formulate the process of acquirement, preservation and maintenance of copyright.

Protection of trade secret

Trade secret and confidential information are the technological and business operation core of the Company. The regulations with regard to trade secret and confidential information have been stipulated in Regulation and Procedure of  confidential documents, Employee Handbook and Employee Contract. We also provide our staff with the training courses to disseminate the importance and protection measures of trade secret and confidential information.

Operation

The report of the implementation of intellectual property events has been submitted to the Board of Directors on Nov.8, 2023.

We have carried out the management of intellectual property rights since 1990, the details are listed as follows：

1.  Application of patent

Primax group has filed numerous patent applications in countries since 1990.

2.  Process management

• In 1990: We formulated and promulgated Regulation of Patent Application.
• In 2002: Regulation of Risk Management and Patent Usage was put into force.
• In 2004: The Enterprise Patent System was introduced.
• In 2021: Regulation of Copyright and Regulation of Trade Secret were put into force. In addition, the AI analyze system was introduced for data calculation to identify the valuable innovative employee.
• In 2022：Procedure of Copyright and Procedure of Trade Secret were put into force.
• In 2023：Procedure of patent, Regulation and Procedure of IP confidential documents were put into force.
• In 2024：Amend the Procedure of patent, the Procedure of confidential documents.

3. Activation of Property

To realize Patent Monetization, we sold almost 900 patents in 2006.

4. Risk Control

To reduce the patent risk during the period of product development, we have carried out the management of patent search archive since 2012.

5. Management of trade secret

  The provisions of trade secret which have been stipulated in Regulation of  confidential documents, Employee Handbook and Employee Contract are summarized below：

• It’s staff’s duty to maintain secrecy pertaining to his work and the company’s business.
• Staff shall not disclose, inform, provide or transfer such Confidential Information to third party, or announce to public or make use for third party of such Confidential Information during and after the termination of employment period. We are eligible to request the staff who breaches the foregoing to compensate the damages incurred by the Company and the said staff will be punished by Section 317 of Criminal Code of the Republic of China on account of offense of disclosing trade secret knew or possessed because of occupation.
• Staff shall not disclose or use the trade secret owned by his former employer.

Measures for dealing with the risk of intellectual property rights

We occasionally receive the notices from third parties who assert that our products may involve in the controversy of intellectual property rights. We respect and try not to infringe third parties’ intellectual property rights for all time. In view of the foregoing, we will analyze the related issues pertaining to legitimate, technical and business aspects to formulate the best tactics for resolution of the IP controversy so as to protect the Company’s and stakeholders’ interests.

Performance

As of the end of 2023, 897 patents of Primax Electronics Ltd. have been approved while 467 patents are pending in countries.