June 2017
The Foxconn group has announced a new venture into micro-LED space that will see a portfolio of Sharp patents spun off to a newly acquired, jointly owned entity. The move comes as Foxconn’s IP organisation continues to explore options for streamlining Sharp’s patent portfolio, including through sales.
Micro-LED is a next-generation display technology, and Apple – a major Foxconn client – is thought to be very keen on it, initially in the wearable domain with the potential for much wider applications down the road. Foxconn and four of its affiliates are acquiring a small US-based company called eLux that is developing MicroLED technology, at a cost of just $27 million. The move matches Apple’s acquisition a few years ago of LuxVue, a startup focused on similar tech.
Sharp will share ownership of the small company with Foxconn subsidiaries Innolux, Advanced Optoelectronic Technologies and CyberNet Venture Capital. Sharp is getting around 32% of the new venture, a stake valued at $7 million. It’s apparently acquiring this stake in exchange for a portfolio of patents related to MicroLED display production technology, rather than cash. Another source says around 21 patent families are involved in the deal. There is very good reason why Sharp’s IP may well prove useful to the small venture – it was founded in October 2016 (that is, after Sharp's sale to Foxconn) by employees who formerly worked at Sharp’s US research facilities.
So essentially, a particularly promising business of the struggling Sharp has been spun out, with the IP and technology coming from Sharp, and the funding coming from the Hon Hai Group. It is just one example of how the group’s independent IP management function is streamlining the Sharp portfolio while at the same time spreading access to key technology throughout the organisation and investing in promising Sharp business units.
Foxconn arranged for Sharp to spin-out its 200-member IP function last September, into a group that is called ScienBiziP Japan. MiiCs & Partners, an independent entity, is charged with looking after monetisation of the portfolio, a function it performs throughout the Hon Hai Group. Around that same time, MiiCs head YP Jou told this blog that the priorities for monetisation were licensing first, sales second.
We haven’t seen a large-scale selloff of Sharp patents as of yet, according to public records. But there are a number of portfolios that MiiCs is seeking to divest. On the IAM Market platform, there are at least 8 Sharp portfolios comprising hundreds of patent families on offer in a variety of technology domains. But the IP team is clearly also looking at how best to deploy patent assets within its own organisation.
Foxconn is currently still in the running to acquire Toshiba’s NAND memory unit, a business it has reportedly bid up to $27 billion for. It now also says that bid is backed by Apple and Amazon. Though many higher-ups in Japan worry about turning over vast amounts of domestically-developed IP to a company with close China ties, no comparable bid from inside the country has emerged. In that context, the fate of Sharp’s IP portfolio is surely being watched very closely in Japan. What looks like fairly win-win spinoff venture between Sharp and its new Taiwanese partners may calm some nerves. |
