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Friday, June 22, 2012
Innovative data delivery firm e-Parcel takes on the big boys
When e-Parcel Corp., an online data delivery service provider, last year sued 13 U.S. Internet-related service firms, including Yahoo Inc., Google Inc., AOL Inc. and Akamai Technologies Inc., for patent infringement, the action meant more than just protecting its intellectual property.
The president of the Tokyo-based venture says he wanted to prove that the company's technologies are the de facto global standard. Joji Kitano's primary target for this message was the conservative domestic market, which he says is closed to newcomers.
"If we can prove (through the lawsuits) that companies like Google and AOL are using our technologies, Japanese companies can trust us and introduce the technologies as well," Kitano told The Japan Times in a recent interview.
The lawsuits filed in April 2011 in a U.S. court claim the major Internet companies infringed on five of e-Parcel's 11 patents that enable user companies to send heavy volumes of highly confidential content at high speeds and in complete security. E-Parcel says it obtained the patents between 1998 to 2002.
One of the e-Parcel products using its patents includes software that compresses heavy data automatically according to the Internet connection environment of both the sender and receiver, the firm says.
For example, when companies send heavy three-dimensional computer-aided design (CAD) files, it can often take so long that the network connection breaks before the transfer is completed, forcing the sender to send them all over again. CAD is used by many businesses, including makers of automobiles, aircraft and housing, to model their products.
With e-Parcel's software, the files don't have to be resent because the program sends the remainder of the automatically compressed files once the connection is restored.
E-Parcel's software includes technology for not only sending confidential data in ciphers but also authenticating each receiver, allowing it to verify the file is undistorted and to keep a record of all data sent, received and opened.
Kitano said he is confident e-Parcel will prevail against the U.S. firms. In fact, five companies, including BlackBerry maker Research In Motion, have already settled and signed contracts, he said.
He stressed his company did not file the lawsuits just for monetary gain.
"Lawsuits cost a lot in the U.S. It is risky to do this only for money," he said, adding he hopes winning the cases will cast light on how U.S. companies more openly embrace technologies of young companies.
"The Japanese market is not at all open. Companies shy away from those who have little experience. They won't even judge if the products are good or bad," the 49-year-old president said in an office in Tokyo's Kojimachi district.
This conservatism hinders startups from growing, except for a fortunate few that have succeeded by doing business for consumers, rather than for companies, as individuals tend to accept new services and products more easily, he said.
Kitano's views are based on the fact that e-Parcel has been able to expand because its services were appreciated in the American market in the early stages after its launch.
In 1999, three years after e-Parcel was founded in Boston, Compaq Computer Corp., which was later acquired by Hewlett-Packard Co., offered a high evaluation of e-Parcel's services. Thanks to the computer giant's support, the now defunct Lehman Brothers became the first user of the startup's online delivery service.
"I believe this is the strength of the U.S. — the courage to pick up an unfamiliar firm just because it trusts the product," Kitano said.
E-Parcel was founded by a Japanese businessman with engineering expertise when the potential of the Internet had yet to be appreciated by many. Kitano joined the company in 2000 and took the leadership role in 2004 after working in the insurance industry for 14 years. Now e-Parcel, with seven other employees, has more than 600 corporate customers, including Nissan Motor Co. and Komatsu Ltd.
"Our aim is to have Japanese blue-chip companies introduce our technologies and find U.S. partners who will sell them in the U.S.," he said.