30 Oct
2019

IPBC Asia comes to a brilliant end in Tokyo

The final day of sessions at a highly successful IPBC Asia has come to an end in Tokyo. IAM’s editorial team covering the event – Richard Lloyd (RL), Jacob Schindler (JS), Joff Wild (JW) and Bing Zhao (BZ) – bring you selected highlights of what went down today

New commissioner speaks – This morning marked one of the first chances for an international audience to hear from Japan Patent Office commissioner Akira Matsunaga, who assumed the post over the summer. Based on his 15 minute presentation it is clear that he intends to run a very user-focused office. The JPO is rolling out the welcome mat for foreign patent filers amidst a long-term downturn in application volume. Matsunaga offered three key selling points for the JPO’s services – speed, quality and global reach. He revealed that foreign filers could get on a “super-fast track” process which in 2018 offered a total pendency of just 2.4 months on average. From there, the JPO’s relationships with other IP offices via Patent Prosecution Highway (PPH) agreements could result in fairly speedy grants across a range of other jurisdictions. Coverage of the Asia-Pacific region is a particular strength, the commissioner noted, as he touted statistics that PPH applications that originate in Japan have a 90% grant rate in other Asian jurisdictions.  Japan is also set to roll out a PPH arrangement with India and is working with offices across Southeast Asia that are growing in commercial importance but struggling with pendency issues. Matsunaga touted IAM’s latest benchmarking survey as showing that users assess the JPO’s examination quality as higher than that of the USPTO, and second-only to the EPO. There was not much to indicate what actions the JPO might take on some of the key policy areas mentioned briefly in the speech such as SEPs, but it is safe to say that attracting more overseas applications will be high on the agenda this year. JS  

A pair of global leaders - Much has been made of the progress that Chinese courts have made in recent years in modernising and helping to strengthen the local IP system. Key to the success has been a willingness to learn from other jurisdictions and, in particular, from the German courts. According to Zhen Liu of Xiaomi, who was speaking in the Your China Checklist plenary, that approach of learning from others has enabled the country’s court system to emerge, together with Germany, as a global leader. To support his case, he cited: the fast pace of proceedings; the likelihood of a successful IP owner receiving an injunction, which Liu claimed was more important than the level of damages awards; and the relatively low cost of litigating in the two countries. “The average cost of litigating in China and Germany is less than $200,000, which is around one-fifth the cost of a case in the US or some other European jurisdictions,” Liu reflected. One risk in China could be a shortage of judges but with more being transferred from lower courts to the newer specialist IP courts the appeal of litigating in the world’s most populous country would continue to grow. “With more predictability and consistency, I think Chinese courts will become more and more popular among patentees,” Liu concluded. RL

The fundamentals of 5G - Sometimes it is worth taking a step back from the 5G licensing debate to remind ourselves of why it is so important. That’s exactly what the panellists in this morning’s 5G – the Future has Begun plenary were invited to do by moderator Ian MacLean of TechInsights. Sisvel CEO Matia Fogliacco spoke engagingly, using examples from his family, about how the advent of 2G, 3G and then 4G had transformed the lives of individuals. With 5G, he stated, exactly the same thing can happen for entire industries and for society as a whole. Nokia Technologies’ Susanna Martikainen echoed Fogliacco’s words and observed that public services will be dependent on 5G in a way that was never the case with previous iterations of network technology. This will make it much more critical for economic security, she said. For their part, Sony’s Shizuka Sayama and NTT DOCOMO’s Tadanobu Andou spoke of the extraordinary product-development opportunities 5G presents. Business models that have never previously been contemplated could soon be emerging, Sayama stated. Matthias Hellman from Ericsson noted that while many people talk of 5G creating the Internet of Things, they are wrong to do so. IoT is old hat, he said; at the Swedish company they were looking at connecting things outside of mobile since the era of 2G back in the 1990s. Instead, Hellman explained, what has changed is that the environment now exists to allow scale – it is this that was always the missing link. More sobering, at least from a European perspective, was Hellman’s observation that the roll-out of 5G is not going to be uniform across the board. Asia – in particular Japan, South Korea and China – as well as the US, look like they will be enjoying the benefits of the new technology long before we do in Europe. It was a reminder that governments have a major role to play in facilitating the transformations everyone anticipates. If they fail to rise to the occasion, it will not just be licensors who run the risk of missing out. JW   

Hitting the jackpot - As regular litigants know all too well, market conditions in the US have meant that bringing a patent case in the world’s largest economy has become a particularly daunting prospect. Nikon in-house lawyer Eric Kirsch, who was speaking on the Disputes Dynamics breakout panel at the end of the day, had a particularly interesting perspective. He spent years in the US, first as a criminal prosecutor before moving into private practice as an IP litigator and then taking an in-house role in Japan. The changes in the US legal system, Kirsch said, have meant that for patent owners it has become much harder to “jackpot someone”, borrowing a phrase from his days as a public prosecutor. “If people are looking for leverage, I don’t think they look at the US like they used to,” Kirsch said. That may not be popular among patent owners on the plaintiff side but had prompted litigants, he insisted, to become much more realistic in terms of what they might be able to achieve through a court action. RL

Inside China’s new IP appeals court – One of the biggest developments this year in Chinese IP has been the inauguration of a dedicated IP appeals court within the Supreme People’s Court in Beijing. Fortunately for IPBC Asia delegates, Mindray’s Jianguang Du recently attended a hearing in the new venue for his company and was able to provide some first impressions during the Your China Checklist plenary session. Du said he was impressed with the knowledge and experience of the judge in the proceedings, who was well-versed in the law and raised issues that the parties’ counsel had not. He said that the inauguration of the court is good for Mindray for the same reason it is good for foreign companies: it will reduce the impact of forum shopping and the potential for local protectionism or even potentially anti-foreign bias. One drawback of the new forum, said Xiaomi’s Zhen Liu, is that it has absorbed many of the best judges from the intermediate level, creating staffing issues that can delay cases at the lower down the litigation chain. Zou Yixiong of Midea, who has practised in both the United States and China, cautioned that thinking about the Beijing court as “China’s CAFC” may be somewhat misleading. The key difference is that a US federal appeals court only considers issues of law. What you’re getting when you appeal to China’s IP appeals court is really a second trial, said Zou, which will cover both factual and legal issues. JS

Crunching the numbers - While the use and comercialisation of data is most commonly associated with some of the giants of Silicon Valley, such as Facebook and Google, the sheer volume that many modern multinational businesses are harvesting can be jaw dropping. In a lot of cases, organisations are still in the early days of how working out how to manage and manipulate those numbers, but the potential that they present was laid bare during this afternoon’s Data Power breakout, particularly by GE’s Lawrence Davis. For a company like GE - whose reach extends across a range of sectors including power, jet engines and medical devices - every part of the business generates reams of data that help inform decision-making, deepen customer relationships and open up potentially new commercial avenues. Take the jet engine operation, where GE is a world leader. “We generate almost a terabyte of data per day for each pair of jet engines,” Davis explained. Or in healthcare where, he revealed, the company’s more than four million medical imaging and diagnostic units take more than two billion images every year, “all of which need to have perfect fidelity and generate an enormous amount of data”. On top of that, there’s the huge amount of data that’s created throughout GE’s supply chain in the manufacturing of that equipment.  According to Davis all this means that the industrial giant does not only have the opportunity to sell pieces of equipment to customers but also solutions - and can use the data to help optimise the performance of the products that it sells. From a licensing angle, he admitted that the new approach to data throws up plenty of exciting new avenues but also some challenges. Cardiac data that GE gathers through its medical device business can be deployed, for instance, to develop an algorithm that can be used in software for a wearable device or even a smartphone in the rapidly developing personal medtech space. That, though, raises privacy concerns meaning it must be handled cautiously. “We believe that this data, while not affording the same protection that patents and trademarks have, still represents a massive opportunity going forward - but we have to be very judicious about how we manage it,” Davis concluded. RL

New voice for an established player - The sessions are always a big part of every IPBC event, of course, but the networking is another major draw. You get to meet a lot of important people in a short space of time. This morning, for example, I ran into Pio Suh, the managing director of IPCom, frequently referred to in the past as one of Europe’s only significant patent trolls. The firm has its roots in the purchase of a portfolio of assets from Bosch back in 2007. This has since been augmented by a number of families created by its own in-house R&D team. Over the years IPCom has secured any number of licensees, as well as a reputation for being an aggressive litigator. Suh, who became the firm’s MD in 2018 after stints at the likes of Qualcomm, Intel and Phillips, acknowledged that in the past IPCom had allowed others to define it by failing to proactively communicate about itself and its aims as effectively as it could have done. His mission, he said, is to change that. He wants the world to know about the R&D investments the firm makes, its strong adherence to FRAND principles and its commitments to openness and transparency. Attending IPBC Asia, of course, is a good way to do that. But the litigation is not going away. Suh talked of a high-stakes high court case in London against Vodafone, due to be heard in the middle of November. It should be well worth keeping an eye on, he said. After a tip like that, we absolutely will! JW 

Weighing up willfulness - For many patent owners looking to litigate in China, the main attraction is undoubtedly the availability of injunctive relief. Damages awards are less of a factor and lag far behind other markets, particularly the US. The trend lines, however, are pointing up - and with a relatively recent new damages law the feedback from the panellists on the Your China Checklist plenary session was largely positive about the new law. One area of concern, though, according to Mindray’s Jianguang Du is the lack of clarity around the law concerning punitive damages. This, he noted, contrasts with the US where several key decisions have provided litigants with plenty of insight. “Hopefully China’s IP courts can give companies guidance on how willfulness is determined and how punitive damages are calculated and awarded,” Du said. With no discovery in Chinese litigation, proving willfulness, he conceded, would remain very difficult for plaintiffs. Until that is resolved - and until typical damages awards rise further - the appeal of China’s courts is likely to remain in the power of exclusion. RL

Holding out against hold out - In any discussion of 5G licensing you are likely to reach the hold-up versus hold-out point at some stage. And it was no different in today’s 5G – the Future has Begun plenary. However, an audience member threw a curveball into the debate by asking panellists what licensors could do to minimise the risk of hold-out short of going to court. Mattia Fogliacco of Sisvel sang the praises of technical engagement as a means to prevent the problem from arising in the first place. His firm has invested heavily in a team of engineers who are able to speak about the applications of the technology that Sisvel patents underpin and this frequently helps to smooth the path towards a deal, he explained. If that fails and problems remain, “we consistently offer mediation and arbitration as a means to de-escalate when there is disagreement on royalty ranges,” Fogliacco said. But, he noted wryly, this is very rarely accepted. At that stage, a visit to the courts becomes almost inevitable. For Ericsson’s Mathias Hellman, balance in the litigation system itself is an important way to facilitate meaningful discussion between licensor and prospective licensee.  “There needs to be risk on both sides in going to court,” he argued. “If there is risk for only one side, then you will always end up in front of a judge.” Most delegates would have had a very good idea of which jurisdiction he had in mind when he said this. JW

NPEs in China – Opinions on NPEs in China appear to remain mixed, though many major Chinese tech companies would acknowledge that there is a place for non-operating companies in the patent market. Speaking in the Your China Checklist plenary, Jianguang Du of Mindray said that among China’s IP community and the public at large, there is still what he would consider “too much animosity in general” towards NPEs. He pointed out that it is continues to be very common to hear them referred to with a Chinese phrase meaning “professional thugs”. Du drew a distinction between good and bad NPEs, with the latter going after the medical device company with portfolios that are barely tangential to its business. Zhen Liu of Xiaomi added that although his company is facing around two dozen litigation cases globally, most of which were launched by NPEs, he sees it as an issue of balancing interests based on the recognition that there should be a reward for successful R&D. JS

See you in San Jose - What impact is the growth in the importance of data to many modern businesses going to have on the world of IP value creation and where might we be in 10 years’ time? That question was posed towards the end of the afternoon’s Data Power breakout and prompted High Tech Solution’s Jeffrey Carter to predict that within the next decade data licensing is going to be a big part of the job of a typical IPBC delegate. Of course, for those looking to get ahead of the curve there is the inaugural Data Business Congress to attend. It is taking place next February in San Jose. That will help you get a jump on your peers at IPBC Asia 2029. RL

The need for speed - In the Patent Priorities for Japan Inc breakout session this afternoon, a group of IP heads from the country’s corporations discussed the IP risks and opportunities that confront their firms. One key and urgent challenge they identified related to the changes IP teams are currently experiencing in big and small companies alike. Maki Ohmizu of Fujitsu talked about the new outlook and skill-set that in-house IP professionals require as the company undergoes digital transformation. It is a case, he said of expanding the imagination, thinking outside the box and looking beyond the conventional view, while creating new knowledge from old information. What’s more, these days IP team members must be future and solution oriented, and be able to communicate IP effectively with senior management. Sung-Jin Hong, from start-up e-commerce company Mercari, spoke about small but fast-growing businesses needing agile all-rounders. Flexibility is a key attribute, he said, as is the ability to make fast decisions on a case-by-case basis. It was clear that the Japanese IP executives on the panel understand the need to re-engineer traditional IP functions to ensure they can help enable the transformation of businesses. The biggest challenge of all, though, is achieving this at the pace required to keep up with business change. BZ

Not all about products - Rio Tinto, explained Brendan Cheong of the company’s patents and technical IP group, is a mining business. That does not mean it mines data or inventions, he said during the Reinvention of the Corporate IP Function breakout this afternoon; instead, it does what he termed “normal mining” of stuff that comes out of the ground. So, what is he doing at an IP event like IPBC Asia? Well, one of his jobs was to remind delegates that IP is not all about product, very often it can be about process. Rio Tinto will often struggle to use patents to protect the copper, lithium, aluminium and diamonds it sells in various shapes and forms, but it can gain significant advantage from protecting the ways in which it extracts the raw materials and then turns them into the finished article. There is, for instance, the technology allowing its three kilometre long trains to simultaneously travel up and down slopes as they transport thousands of tons of iron ore; or the driverless trucks the company has developed that carry rubble which may be the by-product of the autonomous drills it has invented. Covered by patents, these are all hugely valuable commercial tools. Then there are the collaborations that IP enables: the capsules that delegates might find accompanying the Nespresso coffee machines in their hotel rooms, Cheong explained, are all made with 100% renewable aluminium that Rio Tinto produces using patented technology. And on top of all the direct benefits of this engagement with IP, there may be considerable licensing opportunities too. After all, it’s hard to believe that other companies operating in other industries might not be interested in Rio Tinto’s proprietary tech and what it is developing. That, of course, may be another reason why Cheong is in Tokyo. JW

The potential of pools in 5G - While modern patent pools have enjoyed success in various sectors over the last 20 years, one area where their record has been more mixed is in the wireless space. The largest IP owners in the sector - such as Qualcomm, Nokia and Ericsson – have traditionally  opted to license their patents themselves to handset makers. Now, though, they have taken the plunge into pools with the licensing platform Avanci to target the auto sector. It is, however, still early days in terms of how a collective approach might be applied in the new generation of mobile. Speaking on today’s 5G – the Future has Begun plenary Sisvel CEO Mattia Fogliacco took the opportunity to highlight the role that pools can play in a 5G world which looks set to change how consumers and industries connect to networks. The power of a pool, he said, is in the efficiency it can generate. “Pools enable large swathes of patent owners to find a way that reduces the friction in the market in making their IP available,” he commented. Fogliacco made the point that the wireless market has evolved considerably with each generation of mobile and that 5G probably represents the steepest change of all for IP owners and implementers. That is where pools could play a key role.  “Our mission in 5G will be to not only reduce the friction in the market but also to increase education, increase transparency and increase engagement with new actors to help them realise why licences are needed,” he commented. That, the Sisvel head added, would help aid the widespread adoption of 5G technology. RL

Thank-you and goodbye - And so that is IPBC Asia 2019 done and dusted. Many thanks to all delegates, speakers and sponsors for making it such a successful event – and many congratulations to IAM’s Hong Kong-based team for organising everything so well. These are not easy events to put on and doing it all so seamlessly is an incredible skill that Sam Woo, Alsace Yau, Dan Cole and co have got down to a fine art. The work that both Jacob Schindler and Bing Zhao did in developing the programme and managing the speaking faculty was also outstanding. After the briefest of rests, our thoughts will turn to various regional IPBC events, as well as 2020’s IPBC Global taking place in Chicago next June. You can keep up with what we are doing here. See you soon! JW

Richard Lloyd

Author | Editor

[email protected]

Richard Lloyd

Jacob Schindler

Author | Asia editor

[email protected]

Jacob Schindler

Joff Wild

Author | Editor-in-chief

[email protected]

Joff Wild

Bing Zhao

Author | China editor

[email protected]

Bing Zhao