Mimesis Law
2 June 2020

Japanese Sovereign Patent Fund Initiates Skirmish With Chinese Tech Company

Sept. 10, 2015 (Mimesis Law) — No one likes to be ignored. Especially Japan’s sovereign patent fund, IP Bridge. The proof? A Chinese technology company, TCL, which manufactures and imports phones into the US under the Alcatel One Touch brand, as well as under the TCL moniker, ignored numerous licensing invitations from IP Bridge, and was sued for patent infringement in Delaware in late July. At issue are three patents that IP Bridge sourced from Panasonic, one of its private sector investors. This is an interesting development that merits further observation, since there is a tremendous amount of potential nowadays for sovereign funds to buy up US patent assets on the cheap, or partner with local technology companies to aggregate patents — just like IP Bridge appears to have done.

Patents are wasting assets of course, and it is no surprise that IP Bridge felt that it needed to flex some US legal muscle by bringing a high-profile case using a big-name law firm (in this case MoFo). From the Complaint, it appears that IP Bridge approached TCL with some standard-essential patents, and was offering FRAND terms for a license. As our prior work has noted, there is usually a gulf between what the patent licensor and licensee consider to be “fair and reasonable” licensing terms. Here, IP Bridge complains that it tried to initiate discussions with TCL on four separate occasions, and was ignored each time. Considering its belief that the patents cover standard-essential technology, there was really no choice but to bring the lawsuit or forego the licensing campaign altogether.

It will be interesting to see how TCL responds to the lawsuit. Filing IPR’s is always an option, as is settlement. Equally interesting is whether this case becomes some sort of flash point in Japan/China political relations, or is a harbinger of more enforcement activity by other sovereign patent funds. There is no doubt that many US patent assets are “on sale” right now, and even a wealthy country (UAE or Qatar anyone?) that does not have the same homegrown technology sector like Japan could still source patents very easily with the right guidance. Who says US-based non-practicing entities should have all the fun?

Disclosures and Disclaimers:

Nothing in this material is intended to constitute legal or investment advice of any kind, nor is any of this material based on any non-public information of any kind. In addition to my work at Markman Advisors, I am also a name partner at a NYC-based intellectual property litigation boutique firm, Kroub Silbersher & Kolmykov PLLC (www.kskiplaw.com). Markman Advisors is affiliated with a Houston-based investment management firm, Perdix Capital Management, which may have existing or potential positions relating to situations discussed in this material. Markman Advisors also provides consulting services to buy-side investors, including hedge funds and family offices, that may also have or enter into positions relating to situations discussed in this material. Questions or comments can be directed to me at gaston@markmanadvisors.com. All suggestions are welcome.


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