Jacob Schindler

This post has updated to include IP Bridge's comments.

A trove of US patents previously owned by Japan's IP Bridge has finally wound up in court, targeting Korean automaker Hyundai. As of now, we do not know what interest, if any, the sovereign patent fund still has in the portfolio, which was originally developed by parts supplier Visteon (a Ford spin-out). Either way, the case suggests that the firm has found a way to create some sort of value from its only major acquisition to date outside the Japanese electronics sector.

An entity called Michigan Motor Technologies LLC filed the lawsuit on 1st September in the Eastern District of Michigan, with Hyundai as sole defendant. According to records obtained via Lex Machina, the complaint alleges infringement of 21 US patents, many of which are related to engines and fuel systems.

The patents-in-suit are part of a larger portfolio of 42 assets which were assigned to Michigan Motor by an entity called Mobile Automotive Technologies LLC just four days before this assertion. The latter company obtained the portfolio from IP Bridge about one year ago, in an assignment dated 2nd September 2016. IP Bridge owned the patents for about a year and half, following a transfer from Visteon in Feburary 2015.

IP Bridge’s 2015 acquisition of the Visteon portfolio was significant for two reasons: first, it was a somewhat rare departure from the Japanese fund’s modus operandi of aggregating patents developed within major Japanese corporates - while the company says it is open to work with clients regardless of nationality, it has mainly partnered with the likes of Panasonic, NEC and Fujitsu; and, second, it is something of an outlier in terms of subject matter. - the fund’s assertion campaigns have all either focused on semiconductors (as in its settlement with Broadcom), or wireless mobile SEPs (as in its assertion against TCL). Again, that’s no surprise given the IP Bridge’s major Japanese clients. It is not known whether the firm has any sort of relationship, at least publicly, with Toyota, Honda, Nissan or any other of Japan's automakers.

Generally, IP Bridge has asserted patents in the US under its own name rather than using third party assertion vehicles. So my guess would be that the fund is not the primary mover behind this new campaign. Many patent sales these days include some element of future licensing proceeds, so it’s possible IP Bridge retains some interest in how the suit plays out. If that is the case, it would mark very new territory for the firm – showing that it is much more than just Japan’s national patent fund.

Another possibility is that the Japanese company wanted to acquire the patents not as an assertion opportunity, but for defensive reasons on behalf of a client. While we don’t know whether any Japanese automakers have a direct relationship with IP Bridge, perhaps one of them saw the Visteon patents on the open market and sensed that they could potentially pose a threat in the hands of an NPE or a competitor. If that is the case here, it would showcase a part of IP Bridge’s offering – defensive aggregation – that has attracted less attention to date than its assertions on behalf of Japan Inc. To test this theory, it will be instructive to watch whether Michigan Motor expands the campaign to target any Japanese companies.

Of course, it is also possible that IP Bridge acquired the patents independently and later concluded that they didn’t fit with its future monetisation strategy for some of the reasons discussed above. IP Bridge has not responded to IAM’s request for comment on this matter; unless they do, it looks like this will remain a matter of conjecture.

UPDATE - IP Bridge CEO Shigeharu Yoshii has responded with some comments on this transaction:

IP Bridge purchases patents and portfolios regardless of nationality. Our mission is to promote open innovation globally. Necessary patents should be distributed/licensed at a market price as [far] as possible. For this purpose, we purchased valuable patents from Visteon in 2015 and licensed them to willing licensees. Thereafter, we sold to Mobile Automotive Technologies LLC in 2017.