Jun 19, 2011
ThumbDrive founder's crusade against copycats
CEO of small S'pore firm says his long and costly fight against tech giants is in the name of justice
Proving he's no pushover
'It's not the money that's driving me... I'm now just a (Singapore) flag bearer... You have to jealously guard your technology to gain respect. They're not going to pay attention to your threats until you let them know you're not a pushover.'
MR HENN TAN, on why he chose to take the legal route
Mr Henn Tan, the self-professed 'dictatorial' CEO of Trek 2000, has been undaunted by opposition from his company's shareholders in his push to protect Trek's ThumbDrive patent rights. The Singapore company filed a patent infringement complaint against eight companies operating in the United States last week. -- ST PHOTO: ASHLEIGH SIM
Nine years after taking on four companies for violating his firm's patent in Singapore, Mr Henn Tan, 54, says he is still in search of justice.
The reason? Everyone seems to have a 'USB ThumbDrive' these days, and many have even thrown away those they received as free gifts.
But no one seems to have remembered that his company invented the device a decade ago, or even bothers to ask how one can license the technology from him.
At least this is what Mr Tan, chief executive officer of Singapore mainboard-listed Trek 2000 International, claims.
People have looked askance at him, wondering if a small Singapore company could really claim to have invented such a device.
Others have wondered why he is still wasting millions of dollars in legal fees so late in the game. How will he go after what is now a veritable army of large and small companies that sell 200 million of these pocket wonders worldwide every year?
'It's not the money that's driving me... I'm now just a (Singapore) flag bearer,' he said, eyes flashing with anger, in an interview with The Sunday Times.
Others may think that fighting tech giants is a lost cause, but he is convinced that small companies have to be assertive to survive.
'You have to jealously guard your technology to gain respect,' said Mr Tan. 'They're not going to pay attention to your threats until you let them know you're not a pushover.'
It took three long years - and $6 million in legal fees - before Mr Tan got at least some of the respect he wanted.
In 1995, Mr Tan bought over Trek, a family-owned electronic parts trading firm, for $1 million and changed its business to providing engineering technology. The company is listed on the Singapore Exchange. It has regional offices in nine countries and employs about 100 staff in total.
After inventing the ThumbDrive, Trek filed patents all around the world to protect its intellectual property.
In 2002, noting that many companies were massively copying the invention, Trek sued four relatively small memory device makers - M-Systems Flash Disk Pioneers, FE Global Electronics, Electec and Ritronics Components (Singapore) - in the Singapore courts.
It was only in 2005 that the courts finally awarded victory to Trek, but the damages were barely enough to cover legal costs - something the company's directors and shareholders noticed.
'I took a lot of punches from my shareholders,' said Mr Tan, recalling gruelling meetings explaining to them why he was 'wasting time' fighting needless legal battles when he could have focused on growing the business.
'It didn't help that the damages recovered were insignificant. But I wanted to make a stand,' he added.
Eventually, Mr Tan's efforts paid off somewhat. Multinationals like Imation, Verbatim, Lenovo and Toshiba have since been paying Trek royalties for producing and selling ThumbDrives.
Now, six years later, Mr Tan is going after the big fish.
Last week, Trek filed a patent infringement complaint with the International Trade Commission (ITC) to stop eight companies from importing and selling ThumbDrive products in the United States, one of the largest markets for USB flash drives in the world.
These eight companies cannot be named as an investigation by the ITC has yet to start. But needless to say, the infringing companies include major American and Taiwanese household names in consumer electronics.
Renowned international law firm White & Case is representing Trek in the case which is estimated to cost US$3 million (S$3.7 million) in legal fees for starters.
This is just the opening salvo. Trek says some 30 flash drive makers and sellers have been identified altogether.
But whether the company will pursue the remaining 20-plus infringing companies hinges on whether they 'come to me repenting', said the self-professed 'dictatorial' CEO.
Mr Tan would not reveal how much licensing revenue he aims to recover this time around, but the company's directors were clearly sceptical.
Trek's board had objected to taking the legal route again, but was later convinced by a lawyer from White & Case who flew from the United States at his own expense to personally explain the case.
Will the intrepid Mr Tan succeed?
Mr Bryan Tan, director of Keystone Law Corporation, noted that complaints to the ITC are indeed usually settled through licensing agreements.
Mr Gilbert Leong from Rodyk & Davidson's Intellectual Property & Technology Practice Group adds that there have been many instances when small companies have fought against multinationals and prevailed.
For example, Singapore's Creative Technology sued Apple in May 2006 for illegally using patented user interface technology in the latter's iPod music players.
Creative was much derided, but the dispute was settled out of court, earning it a cool US$100 million.
Trek's ThumbDrive patent was first granted in Singapore in 2002, followed by some 30 countries such as the United States, China and South Korea. In November 2006, however, Britain revoked its ThumbDrive patent.
Trek's patents now number more than 300 for over 50 products, of which only five have been launched so far.
Besides the ThumbDrive, Trek's other notable invention is the FluCard, a thumb-size device that allows compatible digital cameras and video camcorders to connect wirelessly to the Internet and to each other. It was introduced early last year.
Learning from his mistake with the ThumbDrive, Mr Tan has partnered industry heavyweight Toshiba - which has a minority share in Trek - to sell the FluCard and police its copyright.
The FluCard is tipped to replace the SD card market, controlled by Toshiba with its share of 45 per cent of the 1.3 billion SD cards produced each year.
Trek is slated to officially launch the FluCard next month in Asia, while Toshiba will market FluCard to the rest of the world from next year. But until today, an agreement has yet to be reached as both parties could not agree on the licensing fee.
'We're still negotiating. They gave me a quantum that is too low,' laughed Mr Tan.
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