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HP to open technology licensing center in Asia

How will Hewlett-Packard get some of its technology out of the labs and onto the streets? Through licensing deals in Asia.

Hewlett-Packard is opening a center to license its intellectual property to companies in Asia, part of an overall plan at HP to extract more revenue from its large patent portfolio.

The center, based in Singapore, will essentially make it easier for regional companies to learn about and license inventions from HP's labs. HP has already licensed many patents to Asian companies but the deals are often negotiated at a distance. So far, the Singapore center has cut one deal: HP is licensing its gesture keyboard for the Indian market to a company called Prodigy Labs. The keyboard makes it easier to type in Indian languages.

The center also demonstrates that intellectual property protection in some Asian countries is getting better, said Joe Beyers, vice president of intellectual property licensing at HP.

"IP protection is improving, but there is still a lot of work to be done," he said.

Like IBM, Microsoft and others, HP is combing more aggressively through its patent portfolio in an effort to boost licensing revenues. Since January 2003 when it formed a group to more actively seek licensing revenue, HP has quadrupled its revenue from licensing.

At the same time, however, the company has also seen patent infringement claims against it triple over the same period of time.

HP is rooting for eBay in the closely watched eBay-MercExchange case now pending before the U.S. Supreme Court, Beyers said. In 2001, MercExchange sued eBay for patent infringement, claiming that eBay's Buy it Now function violated its intellectual property. A trial court awarded MercExchange a $35 million verdict (later reduced to $25 million) and a subsequent federal court granted MercExchange an injunction, currently on hold, that would force eBay to change the feature and revamp its services.

Now eBay has argued that an injunction, which would force the auctioneer to revamp its Web site, is too harsh of a penalty. Instead, eBay wants to have the patents invalidated or, failing that, get a court to force MercExchange to license its technology to eBay for "reasonable" royalties--a process some call compulsory licensing.

"This is a very important test case on whether an injunction is an appropriate remedy," he said.

While several IT companies have filed papers in support of eBay, several pharmaceutical companies and many equipment makers have done the same for MercExchange. Independent inventors also argue that eliminating injunctions would actually increase the cost of litigation, because big companies would drag out suits even longer. For about a year, committees in the House of Representatives and U.S. Senate have discussed whether to alter the law to make it harder for plaintiffs to get injunctions.

Patent reform, a sometimes dry subject to some, has become a contentious and emotional issue for companies and many segments of the public in the past year.