Intellectual Property Trading Paves Way To Expansion Hong Kong Firm Opens Up New World Through Patent Licensing

Intellectual property trading has in recent years become increasingly active, and numerous deals in business expansion have been done. Reckoning the potential in smartphone lens market, Hong Kong-based AP Photonics has acquired patent licensing rights of voice coil motor (VCM), based on it to further improve and optimize the design, and subsequently launched its own high-performance optical image stabilizer (OIS) autofocus VCM. The product, which specially fits for smartphone lens, has attracted international phone-makers including HTC, and lately ZTE, as users. Its total production for the four months from March to June this year has been up to more than 8 million units.

Introduction of local R&D technology speeds up the pace

Kam Lau, CEO of AP Photonics, said four years ago he has already anticipated that smartphone lens would be trending professionalized and could be a threat to digital cameras. Since its mother company has partnered with ASTRI, AP Photonics has acted promptly to acquire the patent rights of the VCM technology then ASTRI was developing.

AP Photonics further improved and optimized the technology and launched its own OIS autofocus VCM. AP Photonics, a member of U.S. AP Group, has business focus mainly on the design, development and production of optical and opto-mechanical products. Lau said the company has recent years diversified into the consumer electronics market. In order to bring in rapidly all necessary R&D as well as technology supports for products and technology development, AP Photonics has been acquiring patents. Furthermore, mother group’s knowhow and competitive edge in optical and opto-mechanical technology also helps the firm to horn its production and speeding up product launch.

Unlike the traditional operating principles, AP Photonics autofocus VCM adopts OIS, which has tilt and shift function that could reduce the blur in videos due to shaky hands or body movement. It can focus promptly even during moving moments, Lau explained. Moreover, OIS helps to unify video and picture definition and at the same time lower power consumption.

Lau believes OIS is the unavoidable trend and hardware for smartphones that software cannot replace. “The iPhone 5S does has optical image stabilizer, however the software needs further integration after fast burst photo-taking. Its stabilizing effect also only applies to stills but not videos. Quite a lot peers now still use traditional optical techniques, camera thus will focus slower.”

Patent licensing and optimization twins to success

Despite IP trading brings in new technology, Lau said the keen competition in smartphone market has pushed developers to launch new products quick and in bulk, so as to earn a marginal profit. “At first, there was a client who agreed with OIS autofocus VCM market potential, ordering 20 units for marketing and to seek collaboration opportunities. However, for each unit we needs 3 - 4 days for production, as such we aware we have to bring in more innovation in production,”

Lau said. The company then developed high-performance semi-automated production lines, with innovative matrix forms. It differs from traditional way in accessories assembly and increases production efficiency by more than 50%. “Our firm has applied exclusive patent for that technology, adding values both to our products and our company,” said Lau. The new technology has AP Photonics’s production increased to more than 8 million units during four months. The company also manages to sell VCM to end-users via mobile parts specialist firms.

Hong Kong R&D platform to seize opportunities/ Platform to seize opportunities

Lau said Hong Kong has many R&D institutions and companies such as ASTRI. Furthermore, local IT professionals are of high standard and engineers are with board visions and international exposures. AP Photonics will retain most of its R&D activities to take place here in the city, as the collaboration with ASTRI has paved AP Photonics the way to develop patented products and new business opportunities.

He added that the company will continue improving technology as to fulfill different customer requirements. In order to strengthen intellectual protection, AP Photonics will obtain patent rights in the mainland before doing the same in other parts of the world. Lau said the application period in the mainland is shorter and with lower fees, as such can obtain patent protection sooner. However, Lau believes the most effective way to protect intellectual property rights is to optimize technology and product quality so as to lead competitors who will need at least 2 – 3 years to catch up. Moreover, he does believe hi-tech products will incur higher cost and impede plagiarizing.

Lau stressed the purchase of patent licensing rights is the first step for business expansion. In addition, companies should continue technology optimization and improvement to meet with market needs. He believes Hong Kong plays an important role in the R&D development and IP trading business. Apart from having high standard R&D personnel, Hong Kong also is a low tax regime when compares to the mainland and has a simple salary system, providing a favorable business environment for SMEs.