First-ever multi-party patent transaction shows increasing sophistication of Asian IP market 10 Dec 12
Last week at the IPBC China, the focus was not only on the PRC but also on Asia as a whole. And what was noticeable is that although we got a very strong corporate turnout from the region, the intermediaries, aggregators and other IP marketplace service providers were mostly not based there but instead tended to have their HQs in North America and Europe. Organisations such as Intellectual Ventures do have offices in Asia, while there are some other business and transaction focused entities too, but the concentration you see in, say, the US does not exist. It’s not a surprise, of course, given that in general IP infrastructures are not as well developed as they are in other parts of the world.
But there is one firm that bucks the trend. Singapore-based Transpacific IP has a team of over 100 people and seven offices in the region. It is also the only entity headquartered in Asia which offers a full service on the IP business side, with a focus on advising on strategy and doing transactions. Chairman and CEO Guy Proulx founded Transpacific in 2004 and since then, he told me last week, he has watched as Asian businesses have realised, at first slowly and recently much more rapidly, that IP is something to which they must give serious thought.
As more Asian companies expand into foreign markets, Proulx said, so they see that being short of IP leaves them vulnerable to attack. And, like their counterparts in other parts of the world, business leaders in the region have read the stories about the smartphone patent wars and the increasing value of portfolios. As a result, they are asking more questions and looking for more information. And on occasions, that is turning into deals.
One such that Transpacific has recently concluded is evidence of the growing sophistication developing in the Asian market, Proulx stated. At the end of November, the firm closed on the purchase of a patent portfolio developed by Silicon Valley-based Phoenix Technologies that covers BIOS (basic input-output system) technology. The deal was dependent on the coordinated sign-off of many individual licensing deals with a number of Asian companies, several of which are in Taiwan, for a total amount in the low to mid tens of millions of dollars. It was hugely complicated because the agreements had to be arranged by a certain date in order for the acquisition to close,while each licensee had its own reasons for wanting to do a deal and had to be convinced that what was on offer was right for them – with everything being done at the general counsel and CEO level. It involved Transpacific working not only with the companies themselves, but also with a number of advisers. To the best of Proulx’s knowledge, it was the first such transaction to have been concluded only involving Asian companies.
There is scope for more of the same in Asia, Proulx believes, although he stresses that the education process remains a challenge, while the lack of transparency in deal-making is problematic: Asian companies want to be confident that they are getting the best deal, but that is very difficult when the confidentiality that surrounds transactions means that there is very little opportunity to make meaningful comparisons. Trust is, therefore, a major issue. And generally in Asia you only get respect in business if people believe you are in the region for the long term and are prepared to give something back. The lesson seems to be that if you want to be a serious player in a market that is only going to get bigger and more lucrative, flying in and out on a deal by deal basis is not going to work. Instead, you are going to need a permanent and visible presence in the region, and a reputation for doing the best by your clients.
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