Japanese patent fund IP Bridge today announced plans to launch a $50 million “Intellectual property and innovation” fund with Malaysian partners. The new entity will invest in national and regional enterprises in Malaysia that are “IP rich or to-be-rich”, with a particular focus on technology areas including IoT. The fund’s goals echo those of another major investment vehicle founded in Singapore earlier this year, suggesting that we may yet see more money poured into the region’s IP ecosystem.
IP Bridge CEO Shigeharu Yoshii tells me that he signed a memorandum of understanding with local partner Leonie Hill Capital (LHC) earlier today in the presence of Malaysian prime minister Najib Razak. According to a press release [in Japanese only], the two companies will focus their investments on tech companies in sectors including IoT sensors, wearables, robotics and agri-tech. LHC operates hedge funds and private equity funds, and Yoshii credits the team there with having “an excellent track record in supporting start-ups in ASEAN”. As a first step, the press release says that the partnership will “re-domicile more than 10 South East Asian and Japanese start-ups in Malaysia, providing them with facilities, access and market opportunities”.
As indicated by the involvement of the prime minister’s office, the Malaysian government played an instrumental role in bringing the two partners together, Yoshii adds. In January of this year, IP Bridge formalised its relationship with the Malaysia Digital Economy Coporation (MDEC), a government body that has taken the lead in the country’s efforts to promote its domestic technology sector and tap into intellectual property expertise from abroad. As Yoshii explained in an interview at the time, his firm sees significant potential in connecting Japanese technology and expertise with fast-growing enterprises in Malaysia and elsewhere in Southeast Asia.
The inauguration of a Malaysia-based innovation fund follows a somewhat similar initiative announced by the Intellectual Property Office of Singapore (IPOS) in April this year. The Makara Innovation Fund has pledged to pump one billion Singapore dollars ($736m) into “high-growth companies with strong IP and proven business models”. According to government officials in Singapore, the money in that fund will be used to bolster the country’s IP ecosystem, including potentially by establishing or luring dedicated IP commercialisation or monetisation entities.
So from Malaysia’s perspective, launching such a fund (though more modest in size) keeps it in the conversation as a regional IP centre. It also cements its relationship with an IP aggregation and monetisation firm that is putting together a fairly good track record – something that Singapore may be looking to emulate.
For IP Bridge, the fund underlines that it is much more than one of Asia’s largest and most active IP funds. For a non-practising entity to move into the start-up investment space is certainly not a new tactic. But it is an appropriate one for a company that is seeking to show a sceptical domestic constituency that IP monetisation can be part of a sustainable business model.
On the patent side of its business, IP Bridge recently announced a new assignment to its IP fund by an unnamed Japanese corporate. Recent USPTO assignment records show that the source of the patents – which are related to the H.264/AVC and H.265/HEVC standards – was Seiko Epson, which transferred at least six granted US assets to IP Bridge in late August. Another recent recordal indicates that the fund received 10 US patents from Avago (now known as Broadcom), possibly as part of the two parties’ recent settlement after US and China assertions by the NPE.