TOKYO -- Mitsubishi Corp., Nikkei Business Publications Inc. and Toshiba Corp.have joined forces to set up an Internet-based intellectual property trading center
in an effort to ignite the core and system-chip business in Japan. The trio will
announce on Monday the formation of the IPTC Planning Corp., which
hopes to open in April 2001 an IP trading center geared for Japan's designers.
The effort comes at a time when the fledgling market for intellectual property (IP)
is still dominated by a handful of core providers. And some sources here said they
are concerned the new effort will not focus enough on the needs of small design
The goal of the IPTC is to address the specific requirements of the Japanese
"IPTC aims to activate IP trading in Japan," said Shojiro Mori, group manager of
Toshiba's corporate development center, who will serve as president of IPTC
Planning. "A regional Japanese center can satisfy the requirements from regional
Capitalized with about $1.1 million and owned evenly by the three founders, the
IPTC will invite supporters to join its effort to define its business plan. By October,
the company will drop the word "Planning" from its name as it morphs into a
full-fledged business and begins test trading.
Next April, the company will begin regular IP trading. By that time, IPTC intends to
increase its investors to about 11, including the original three, Mori said. By
involving a greater number of investors and supporters, the original trio hopes to
make the center a public trading platform in Japan.
IPTC will provide four services: a standard trading environment; a prepurchase IP
performance check; protection from patent infringement lawsuits; and an IP
catalog. The group expects to trade such standard parts as bus and Ethernet
interface cores and imaging and audio codecs. Most of those cores will be provided
by overseas IP vendors. Sources in the United States said the IPTC could help U.S.
IP users navigate the unique requirements of Japanese law.
Mitsubishi, a major trading company, will provide trading, financial and
electronic-commerce know-how, while Nikkei, a leading high-tech magazine
publisher in Japan, will provide expertise in information distribution. Toshiba, a
major semiconductor manufacturer, will provide its understanding of system-on-chip
design technology, patents and contracts.
IPTC intends to collaborate broadly with existing IP-related organizations such as
the U.S.-based Virtual Socket Interface Alliance (VSIA), the Virtual Component
Exchange, based in Livingston, Scotland, and the IP Highway Consortium in Tokyo. "IPTC
won't conflict with these existing organizations," said Mori. Specifically, it aims to
ensure the IP traded at the center complies with VSIA standards.
The group is also considering using the TransactionWare software of the Virtual
Component Exchange. "We are currently in negotiations with the IPTC and they are
very interested in the software we have developed," a VCX spokesman said. "We
don't see IPTC as a threat. What they are trying to do is create a regional
exchange, where we are creating an international IP exchange."
IP Highway, a separate coalition developing IP trading tools, will also provide
technology for IPTC. Fujitsu, Matsushita, Mentor Graphics Japan, Sony and Toshiba
formed IP Highway in 1998 with financial support from a Ministry of International
Trade and Industry (MITI) affiliate to develop common specifications for IP to be
traded over the Internet. The consortium has completed system development and
is now in the midst of the verification test phase. Upon issuing a report in August,
IP Highway will end its mission. "The consortium has no intention of going into IP
trading," said a spokeswoman for Fujitsu.
IPTC is also looking to the Semiconductor Industry Research Institute Japan and
the Semiconductor Technology Academic Research Center for technology
Just how the IPTC will meld all this input remains unclear. And whether the results
will meet the needs of both large and small Japanese design companies is another
challenge, according to an executive of one design house in Japan who asked to
"The trade center attempt will be led by major semiconductor manufacturers, so it
will be subject to satisfy their needs," said the executive. "The requirements for a
trade center differ between majors and small-scale design houses." In his opinion,
the trade center is "better than nothing, but it won't benefit us."
Perhaps an even greater challenge lies in whether the group can spark a
still-nascent move toward trading IP cores. Dataquest Inc. values the semiconductor
IP market at just $417 million last year, up 36% from 1998. And 51%
of that relatively small business went to three companies: ARM, MIPS and Rambus.
Meanwhile, sources at MITI are working on other parts of the IP trading puzzle.
"Current IP trading is like just exchanging ideas," said a MITI spokesman who was
briefed on the IPTC effort. "To implement IP trading in LSI cores, all the rules have
to be rewritten."
To solve that problem, MITI will launch a five-year "virtual core" project that aims to
integrate the various design rules used by the different chip makers. For the first
year MITI plans to provide $7 million in financial support.
--Michael Santarini contributed to this report