Jack Ellis

Japanese sovereign patent fund (SPF) manager IP Bridge launched its latest patent assertion campaign at the end of last month, suing fabless chipmaker Xilinx in the Eastern District of Texas. The US company has responded with its own suit for declaratory judgment of non-infringement – with the filing making some astonishing claims about both parties’ conduct in the run-up to the dispute.

IP Bridge’s initial lawsuit, filed on 31st January, accuses Xilinx of infringing two US patents that the SPF had acquired from Panasonic or its affiliates:

In court documents viewed by IAM, IP Bridge claims that Xilinx has been aware of the alleged infringement since at least 21st September 2016, “the date on which the parties met and plaintiff IP Bridge provided specific notice that defendant was practicing [the two patents]”. Xilinx’s field-programmable gate array (FPGA) integrated circuits, which are used in devices including image sensors, are implicated in the patent infringement complaint.

On 1st February – the following day – Xilinx filed a complaint for declaratory judgment of patent non-infringement in the Northern District of California. In its filing, Xilinx claims that IP Bridge alleged infringement of 22 patents in total before 15th December last year, when it agreed not to identify any other patents for potential assertion if the two parties could come to an agreement.

Beyond this, Xilinx makes some extraordinary claims in its filing about the interactions between the two parties prior to the East Texas suit, including the following:

  • On 1st October 2016, IP Bridge’s licensing team told their Xilinx counterparts that “if Xilinx is too busy to take the matter seriously, maybe a suit will provide the necessary incentive” and that it “will file one minute after the forbearance period ends”. This is in reference to a forbearance and confidentiality agreement signed by the two parties that was ultimately amended twice to expire on 31st January 2017.
  • On 23rd November, IP Bridge told Xilinx that it had two choices: “A reasonable business solution or the start of litigation.” Xilinx claims that IP Bridge counsel further stated that “there are too many patents, too many claims and too many jurisdictions to defend for a battle to make any sense to Xilinx”.
  • On 12th January 2017, IP Bridge provided Xilinx with a list of over 900 US and foreign patents from its portfolio that it was offering for licensing. Xilinx further claims that “a third of the listed patents are identified as ‘inactive’,” though it is not made clear what is meant by this in this context.
  • On 18th January, IP Bridge’s counsel threatened to file suit the day the forbearance agreement expired, stating that the SPF would “likely file in Guam” as the US external territory is “at least ‘two orders of magnitude’ more convenient for my clients than any court on the mainland” and “the president of the Guam bar is Alfonso’s classmate.” This is apparently a reference to Alfonso Garcia Chan, an attorney with Shore Chan DePumpo LLP, a Dallas-based law firm representing IP Bridge.
  • Xilinx claims that “IP Bridge made clear that its strategy was to drive up Xilinx’s litigation costs” by threatening additional lawsuits in “other suit locations, Beijing and Tokyo where Xilinx and IP Bridge will be battling.” On 30th January, Xilinx claims that IP Bridge said that its “first suit” in the United States would be “filed later this week,” followed by lawsuits in China and Japan.
  • The following day, IP Bridge said that its US lawsuit (filed that day) represents “the first wave of an onslaught of patents to be asserted, and the filing of suits will continue around the world in subsequent waves until Xilinx makes a reasonable proposal to resolve the matter”.
  • Xilinx further claims that on the same day IP Bridge said “this is going to be war” and told the US company’s in-house counsel: “It is your career on the line, and if you think you can win the cases around the world in a cost-effective matter compared to a deal now, you deserve what you get.”

Just to reiterate, all the above points are claims made by Xilinx in its declaratory judgement action – in other words, what we have here is just one side of the story. Moreover, while it all sounds quite hot-blooded, many IAM readers will no doubt be thinking that they have heard a lot worse in their own experience of asserting and licensing patents and defending against infringement complaints.

We can speculate as to what end Xilinx and its counsel are working towards by providing these details, but it is interesting that the filing underlines the fact that IP Bridge “was created and funded by the Japanese government and Japanese private corporations”. Perhaps the intention here is to turn some of the spotlight onto a foreign government at a time when anxiety and suspicion about the actions, overt or otherwise, of foreign powers in the high-tech sphere are running close to fever pitch in the United States.  

However, IP Bridge has made it clear in the past that unlike many Japanese corporates, it is not averse to hardball tactics. CEO Shigeharu Yoshii has said before that part of the SPF’s mission is “eliminating free riders and receiving fair value” and that it will therefore “litigate regardless of nationality”. Of particular note in Xilinx’s filing is the suggestion of the dispute being expanded to other jurisdictions. Japan, as IP Bridge’s home field, is an obvious next port-of-call. But the specific mention of China seems especially significant; relatively few foreign NPEs have sought to assert patents in the country in the past, though there are clear signs that this status quo is beginning to change. At the time of writing, it wasn’t clear if IP Bridge had yet filed corresponding lawsuits against Xilinx outside of the United States.

Xilinx is the fourth company that IP Bridge has targeted in US infringement actions, following TCL, Broadcom and OmniVision. IP Bridge has hit the headlines recently for less contentious ventures, such as collaborations with the Malaysian public sector and Kyushu University. But the Japanese SPF is also proving itself ready and willing to roll up its sleeves and litigate.