Jack Ellis

WiLAN announced two significant licensing deals last week, each involving patent portfolios that had been assigned to it by Japanese electronics giant Panasonic. As well as delivering potentially important returns for the firm, the agreements also vindicate Panasonic’s decision to work with NPEs as part of its effort to take a more proactive approach to monetising its vast IP portfolio – something that has garnered substantial criticism in its native Japan.

Under the terms of the first deal announced last week, WiLAN subsidiary Collabo Innovations will license patents relating to semiconductor packaging technology to Taiwanese chip assembly and testing company Powertech. The relevant assets are among around 900 issued patents and applications covering a broad range of semiconductor-related technologies transferred to WiLAN by Panasonic in late 2013.

The Canadian NPE has already had a number of successes in licensing the portfolio, having secured agreements with Singapore’s STATS ChipPAC – a subsidiary of China’s Jiangsu Changjiang Electronics Technology (JCET) – in September this year and with US company ON Semiconductor the following month. This latter deal resolved litigation between the two parties that had been pending in the Delaware federal district court. Collabo also settled US litigation and entered into a licence agreement with an unnamed entity back in May. Based on information from the RPX database, this is likely to have been US-based outsourced semiconductor assembly and testing (OSAT) company Amkor Technology. The same database suggests that the WiLAN subsidiary still has US district court litigation pending against Taiwanese OSAT firms Siliconware and Advanced Semiconductor Engineering (ASE); as well as Panasonic compatriots Sony and Toshiba.

The agreement with Powertech means that WiLAN has now licensed the Panasonic Collabo portfolio to several of the OSAT sector’s main participants. That may well put other companies with business in the segment under pressure to sign up to similar deals.

In the second transaction WiLAN announced last week, the Canadian firm’s SEQ VEND Technologies subsidiary entered into a litigation settlement and licence agreement with Stamford, Connecticut-based Crane, the United States’ leading manufacturer of merchandising equipment, including food and beverage dispensers and related technologies covering areas such as cashless payments, touch screens and vending management software. This would appear to be the first licensee that WiLAN has secured for the SEQ VEND patent portfolio, which covers vending machine technology and was acquired from Panasonic in October last year.

For a licensing-based business such as WiLAN, the ability to demonstrate that it can regularly sign up licensees to the portfolios it manages is important - not just as proof of success to its partners, but to prospective licensees, courtroom opponents and investors as well. Moreover, its achievements with the Collabo and SEQ VEND patents in particular underscores that it is leading the way in monetising IP assets on behalf of Japanese operating companies.

Alongside Acacia and its relationship with Renesas, WiLAN stands out as one of few NPEs that has convinced the Japanese corporate world to entrust patents to its care as a licensing partner. Kyoto-based Rohm and Osaka’s Funai have both assigned portfolios to WiLAN in partnering arrangements too, and will be buoyed to see the positive results the Canadian firm has achieved with Panasonic’s patents.

Of course, Panasonic itself – and its IP team headed by Hideo Toyoda, one of IAM’s 2015 Market Makers – will feel vindicated in its decision to team up with WiLAN as the payouts from the Collabo and SEQ VEND licensees trickle in. Attitudes towards patent monetisation – and NPEs in particular – remain extremely antipathetic among many of the largest Japanese operating companies, despite the need to find ways of maximising corporate value in today’s tough economic conditions. Panasonic is one of just a handful that have decided to try out a number of different strategies – including outsourcing licensing activities to third parties – to create additional value from their huge IP holdings and decades-long, high-cost investments in research and development. But as money coming in from the likes of WiLAN adds to Panasonic’s bottom line, it could just be that more cash-strapped and embattled Japanese corporates will begin to change their minds about patent monetisation and working with NPEs.