Jacob Schindler

Japan’s IP Bridge has launched what appears to be its first lawsuit. The sovereign patent fund (SPF) filed a complaint for patent infringement against Chinese electronics company TCL and two subsidiaries in the US District Court for Delaware. It is dated 24th July. At issue are three US patents which, according to IP Bridge, have been declared essential to the W-CDMA and LTE telecommunication standards. Guangdong-based TCL sells mobile devices under the Alcatel OneTouch brand in the United States.

The case was filed just one month after IP Bridge CEO Shigeharu Yoshii told IAM that his organisation would “litigate regardless of nationality, and offer equitable deals to any company as well”. According to court documents, IP Bridge first approached TCL about the alleged infringement in December 2014, offering to license the patents on fair, reasonable and non-discriminatory (FRAND) terms. IP Bridge alleges that it received no response to four such letters sent to TCL executives over a span of four months.

According to the USPTO database, all three patents were transferred to IP Bridge by Panasonic in early 2014, as part of an assignment that included over 500 rights. Panasonic was one of the initial private sector investors in IP Bridge, alongside Mitsui; the public-private Innovation Network Corporation of Japan provided 90% of the aggregator’s ¥3 billion ($25 million) in funds.

Panasonic has contributed a number of assets to the aggregator since its 2013 establishment, with the most recent announced transaction involving a portfolio of video codec related patents back in May. That assignment made IP Bridge one of the licensors in a patent pool operated by MPEG-LA, possibly providing a regular source of revenue. IAM wondered at the time whether the deal might hint at a stepped-up monetisation campaign for the SPF, which had in the past emphasised its goals of promoting open innovation and patent commercialisation among Japanese corporates, and its role as a bulwark against overseas entities acquiring Japanese patents.

In a statement sent to IAM in June, Yoshii seemed to acknowledge that monetisation, too, might have a role to play. “IPB's mission is indeed open innovation, but it also includes such basic ideas like eliminating free riders and receiving fair value that can be rightfully demanded for practise of patents,” he said. But the IP Bridge chief also emphasised that assertion was not always necessary for securing licensees, stating: “It is IPB's task to improve portfolios as well as to communicate the value of particular patents. When these factors are at their strongest, no threat of litigation is necessary.” Nevertheless, IP Bridge will hope that the lawsuit against TCL clearly demonstrates its seriousness and perhaps encourages more potential infringers to sit down to negotiate when they are approached.

However, that could be a tall order when it comes to the China market. While IP Bridge should be believed when it says it does not litigate based on nationality, it is not exactly a surprise that its first public enforcement attempt has come against a Chinese company. The fact is that for many, if not most, Japanese corporates, potential infringement by Chinese (and Taiwanese) manufacturers – and the difficulty of obtaining legal remedy – remains IP issue number one. If IP Bridge complaint’s account of the form's experience with TCL is any indication, it may prove challenging to even initiate negotiations with some infringers. It remains to be seen whether this issue will put the SPF on a collision course with more Chinese companies in the future.

France Brevets became the first SPF to cross the Rubicon and file a patent infringement lawsuit back in 2013. It followed this up with successful cases against LG and HTC. There are a couple of parallels to IP Bridge, beginning with the time between the establishment of the SPF (2011 for France Brevets) and its first lawsuit: about two years in both cases. In addition, the French SPF told IAM earlier this year that it only pursues litigation when there is no movement in negotiations: “For example, when after sharing a lot of information about our patents and the financial scheme we are offering, we have not received any counter-offer after several months of discussion.” This is similar to the situation apparently faced by IP Bridge in trying to establish a dialogue with TCL.

One difference, however, is that IP Bridge has been pretty tight-lipped about its first contentious dispute. The France Brevets action was accompanied by a press release forcefully making the argument that “public funds and enforcement are highly compatible”. IP Bridge has not issued a press release and did not respond to IAM’s request for comment. Just a couple of references to the case exist in the Japanese and Chinese language media so far, but the emergence onto the patent assertion scene by Asia’s first SPF may one day be looked back on as a significant moment in the region’s IP development.