Most startups are clueless about intellectual property. This startup is trying to change that
It seems that every month, somewhere around the globe, Apple and Samsung are battling it out in court over patents. The term “patent troll” has entered the vernacular over the past few years as some companies try to squeeze settlements out of alleged cases of patent infringement, a tactic that experts agree stifles innovation by forcing tech companies to allocate funds to litigation that could otherwise be spent on R&D.
Heavyweights like Apple and Samsung can afford to slug it out in the courts, but what’s an individual entrepreneur or a bootstrapping startup to do when it comes to protecting and monetizing their intellectual property (IP)?
“Startups often don’t have the financial resources or legal knowledge when it comes to patents and other IP,” says Hidero Niioka, the founder and CEO of IP Nexus, a global online marketplace for intellectual property and IP-related services that focuses on the little guys.
“We want to be like Linkedin for innovation and intellectual property – in the sense that Linkedin isn’t a social network, but an online marketplace for human capital,” he adds. “Our users can connect to experts who can help them plan and execute their IP strategy and protect their business. Many don’t realize how important IP is for getting investment later. Investors want to avoid risk and see strong IP.”
IP Nexus seeks to make such information and services easily accessible and affordable for startups. A new range of community features launched this August offer a free Q&A forum, a marketplace for posting jobs, and a searchable directory of lawyers, IP experts, and others working with new ventures. In addition to intellectual property advice and services, startups can also get input on other aspects of implementing their venture – such as business incorporation, taxation, and investment. It’s aimed at startups of all sizes.
For IP owners, the platform also offers free listings for marketing IPs and connecting to buyers, licensees, and brokers. Since launching in April 2012, IP Nexus has amassed 61,000 IPs belonging to 730 registered owners from around the world – including 200 universities and research institutes. About a third of the IPs are from Asia, with Japan accounting for a large portion of the company’s regional business.
Flirting with finance
The IP Nexus team, based primarily in Hong Kong, is 12 members strong. Niioka, a Japanese-German, was born in the US but raised in Germany and the UK. He worked as an attorney and taught IP law in Germany before becoming a litigator for a German law firm.
Niioka (second from left) and members of his team at Startup Asia Tokyo 2014.
After receiving his Master’s from Stanford Law in California, Niioka was set to join a high-profile New York law firm, but instead shifted gears to finance. He worked in the investment banking at Deutsche Bank. Niioka was even involved in Alibaba’s initial Hong Kong IPO back in 2007. He stuck around and eventually decided to dive back into patent law with a base of operations in Asia.
IP Nexus went through the Hong Kong-based Cyberport Incubation program in 2013, where it was given approximately US$70,000 in match funding to get the ball rolling. Connections at Stanford, Yale and a former senior manager from Alibaba jumped on board as did other private and institutional investors. These included the Chinese state-owned investment fund of the Guangdong Technology Financial Group (GTF). In all, the startup raised approximately US$900,000 in the initial seed round.
Another big achievement has been partnering with the World Intellectual Property Organization (WIPO), a United Nations’ expert organization, which IP Nexus works with on three levels at their regional headquarters in Singapore – with its SME division, its Alternative Dispute Resolution division, and its Green Technology division called WIPO Green.
What’s next for IP Nexus? Niioka is focused on deeper expansion into the Japanese market. “It makes sense,” he says. “Japan is number one in the world when it comes to filing IPs, and number two for registered IPs behind the US.” The service, already available in English, began offering Japanese language support last month.
Editing by Steven Millward