Motorola 2015 Annual Report Download - page 7

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6
Other Information
Backlog
Our backlog for the Products and Services segments includes all product and service orders that have been received and
are believed to be firm. As of December 31, 2015 and December 31, 2014 our backlog was as follows:
December 31
(In millions) 2015 2014
Products $ 1,234 $1,194
Services 5,241 4,582
$ 6,475 $5,776
Approximately 52% of the Products segment backlog and 22% of the Services segment backlog is expected to be
recognized as revenue during 2016. The forward-looking estimate of the firmness of such orders is subject to future events that
may cause the amount recognized to change.
Research and Development
We continue to prioritize investments in R&D to expand and improve our portfolio of products through both new product
introductions and continuous enhancements to our core products. Our R&D programs are focused on the development of: (i)
new public safety devices, infrastructure, and solutions, (ii) public safety broadband solutions based on the LTE technology, and
(iii) smart public safety applications that include voice, data, and video.
R&D expenditures were $620 million in 2015, $681 million in 2014, and $761 million in 2013. As of December 31, 2015, we
had approximately 5,000 employees engaged in R&D activities. In addition, we engage in R&D activities with joint development
and manufacturing partners and outsource certain activities to engineering firms to further supplement our internal spend.
Intellectual Property Matters
Patent protection is an important aspect of our operations. We have a portfolio of U.S. and foreign utility and design
patents relating to our products, systems, and technologies, including research developments in radio frequency technology and
circuits, wireless network technologies, over-the-air protocols, mission critical communications, software and services, and next-
generation public safety. We have filed new patent applications with the U.S. Patent and Trademark Office and foreign patent
offices.
We license some of our patents to third-parties, but licensing revenue is not a significant source of revenue. We are also
licensed to use certain patents owned by others. Royalty and licensing fees vary from year-to-year and are subject to the terms
of the agreements and sales volumes of the products subject to the license. Motorola Solutions has a royalty free-license under
all of the patents and patent applications assigned to Motorola Mobility at the time of the separation of the two businesses in
2011.
We actively participate in the development of standards for interoperable, mission-critical digital two-way radio systems.
Our patents are used in standards in which our products and services are based. We offer standards-based licenses to those
patents on fair, reasonable, and non-discriminatory terms.
We believe that our patent portfolio will continue to provide us with a competitive advantage in our core product areas as
well as provide leverage in the development of future technologies. Furthermore, we believe we are not dependent upon a single
patent or even a few patents. Our success depends more upon our extensive know-how, innovative culture, technical leadership,
and distribution channels. We do not rely primarily on patents or other intellectual property rights to protect or establish our
market position; however, we will enforce our intellectual property rights in certain technologies when attempts to negotiate
mutually agreeable licenses are not successful.
We seek to obtain patents and trademarks to protect our proprietary positions whenever possible and wherever practical.
As of December 31, 2015, we owned approximately 4,440 granted patents in the U.S. and in foreign countries. As of
December 31, 2015, we had approximately 1,315 U.S. and foreign patent applications pending. Foreign patents and patent
applications are mostly counterparts of our U.S. patents. During 2015, we were granted approximately 415 patents in the U.S.
and in foreign countries.
We no longer own certain logos and other trademarks, trade names and service marks, including MOTOROLA, MOTO,
MOTOROLA SOLUTIONS and the Stylized M logo and all derivatives thereof (“Motorola Marks”) and we license the Motorola
Marks from Motorola Mobility, which is currently owned by Lenovo.
Inventory and Raw Materials
Our practice is to carry reasonable amounts of inventory to meet customers’ delivery requirements. We provide custom
products which require the stocking of inventories and a large variety of piece parts and replacement parts in order to meet
delivery and warranty requirements. To the extent suppliers’ product life cycles are shorter than ours, stocking of lifetime buy
inventories is required to meet long-term warranty and contractual requirements. In addition, replacement parts are stocked for
delivery on customer demand within a short delivery cycle.