Corporate reforms are shaking up their business models, so more Japanese banks look to IP space 26 May 17
Since the beginning of 2017, three of Japan’s four biggest investment banks have announced forays into the IP space with initiatives in patent analytics and IP trading platforms. It is the latest indication that investors in the country are increasingly scrutinising the IP holdings of their portfolio companies in search of growth opportunities. The new interest among investment bankers seems to be generating opportunities for IP service providers, but the take-up among corporate clients remains to be seen.
First up is Mitsubishi UFJ Morgan Stanley Securities (MUMSS), an investment banking subsidiary of the world’s fourth largest banking group. In April, MUMSS announced a partnership with Tokyo-based IP data analytics company VALUENEX. The bank’s research reports on potential tech mergers are going to feature analysis from the patent data firm, and the two will occasionally be putting out industry reports combining IP portfolio analysis with financial analysis.
The backstory to this is that the Abe government has made corporate governance reforms that severely hamper investment banks’ traditional reliance on cozy relationships between analysts and executives. Mitsubishi UFJ’s initial response to the change, as this blog reported last September, was to announce that inside info was out and big data was in – the company would be analysing millions of patents to inform its tech sector guidance. Whether that analysis materialised I don’t know, but evidently the bank has decided to call in the professionals to do its patent data crunching in the future.
Sumitomo Mitsui Banking Corporation (SMBC) – Japan’s second largest bank behind Mitsubishi UFJ – has itself ventured into the IP trading business. The group announced in February that it would operate a fee-based technology and IP trading platform open only to the bank’s clients (the technology acquirers). It further announced a partnership with open innovation network NineSigma that would allow its clients, through the fee-based platform, to access technologies from over two million researchers. So here we have a model where the bank provides an IP marketplace as a value-added service to its big clients.
According to Satoshi Watanabe at Japan IP News, this style of ‘business matching’ service is proliferating in Japan. Nomura Securities has an offering similar to that of SMBC called the Nomura Innovation Market, which focuses on connecting large corporations with university research organisations.
Some of these new experiments with IP may be driven by recent corporate reforms. Others may be a response to efforts by the Japanese government to encourage greater utilisation of IP assets. But hopefully there is also a genuine demand among the big banks’ clients for these types of IP tools. If investors want more patent analytics in their research, that means they may soon be asking questions about why some companies are under-utilising huge patent portfolios that cost a fortune to maintain. And if big corporate clients are asking for platforms that allow them to acquire technology, it’s a sign that the ranks of Japanese companies subscribing to a “Not Invented Here” mentality are dwindling further.
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