Global Platform Largest law firm in the

Global Platform § Largest law firm in the world with 4, 200 lawyers in 30 countries and 76 offices throughout Asia, Europe, the Middle East and the US § 1 st in M&A deal volume globally § Ranked #1 among the world’s leading global law firms § 1 st in Venture Capital and Private Equity deal volume § Ranked in the top 5 for US IPOs by US Issuer Adviser § More than 550 DLA Piper lawyers ranked as leaders in their fields 2

Global IP and Technology Practice § More than 400 IP and Technology lawyers – 56 offices in 24 countries § Highly-ranked, full service, global IP practice § Litigation, prosecution and transactions § Patent, trademark, copyright, trade secrets, domain name, Internet, anticounterfeiting, anti-piracy, privacy § Acquisition, development, licensing, enforcement, technology transfer § Global patent litigation and patent enforcement § United States § Netherlands § Germany § Italy § UK § Australia § Asia § Full service law firm advantage – benefit from cross-practice knowledge base § Regulatory and government affairs, litigation, antitrust, etc. 3

Navigating the New IP World: The Future is Foggy 4

IP Monetization: Shareholder Pressure § Carl Icahn to Motorola Mobility (July 21, 2011) § “patent portfolio, which is substantially larger than Nortel Networks’ and includes numerous patents concerning 4 G technologies, has significant value … There may be multiple ways to realize such value given the current heightened market demand for intellectual property in the mobile telecommunications industry” § Starboard Value LP to AOL (Feb 24, 2012): § “(i) a significant number of large internet-related technology companies may be infringing on these patents, and (ii) AOL's patent portfolio could produce in excess of $1 billion of licensing income if appropriately harvested and monetized. Unfortunately, several of these parties have expressed severe frustration that AOL has been entirely unresponsive to their proposals regarding ways to take advantage of this underutilized asset” 5

IP Monetization § AOL Patent Sale: Value Difficult to Predict § $1. 1 billion from Microsoft § Microsoft resells 650 patents (approx) to Facebook for $550 M § M-Cam Estimate (March 29): $290 M § Copyright § US Copyright Group § Righthaven LLC § Trademark § Liz Claiborne: $200 M secured financing § Tupperware: $400 M secured financing 6

Patent Sales 7

It Could Be Worse § Average US Patent is worth $50 k to $75 k § And that’s the average 8

No, It’s Not Number of Patents 9

Buyers Drive Price … strategic financial strategic financial 10

Forms of Monetization § Monetization of IP Royalty/Revenue Streams § IP Rights Monetization § Monetization and Financing of Content and Technology 11

Why Companies Care: Top Ten Damage Awards (1995 -2010) (PWC Patent Litigation Report) 12

Rapid Growth in Patent Applications and IP Lawsuits (Lazard) PATENT APPLICATIONS PATENT LAWSUITS & INVESTIGATIONS ANNUAL US PATENT APPLICATIONS AND PATENTS ISSUED US PATENT LAWSUITS FILED ANNUALLY 18% increase in 2010 ~2. 5 x increase in U. S. patent applications since 1996 at an annual compounded growth rate of 6. 7% U. S. Patent related lawsuits have nearly doubled in the past 15 years, at an annual compounded growth rate of 4. 3% Source: U. S. Courts; Director’s Annual Reports. Source: U. S. Patent and Trademark Office. ANNUAL GLOBAL PATENT APPLICATIONS AND PATENTS ISSUED INTERNATIONAL Patent applications have increased 3% annually since 1996, led by the U. S. , Japan and Germany ITC SECTION 337 INVESTIGATIONS FILED ANNUALLY 81% increase in 2010 ITC investigations have increased 11% annually since 1996, and 18% since 2003 N. A. Currently 62 ITC investigations pending Source: U. S. International Trade Commission. Source: World Intellectual Property Organization. Note: 2009 & 2010 patents issued not available. 13

Why Companies Care: Smart. Phone Litigation 14

Avistar § Public company in Unified Communications § 50 patents § VOIP, IM, Video conferencing § Pre dated ICQ (original instant messaging company) § Valuation vs. reality § Ocean Tomo: Estimated net present value $300 -500 M (March 26, 2008) § Sold to IV for $11 M (and $3 M license to e. Bay/Skype) § Spun out to Pragmatus and suing Facebook/Linked. In/Google § Problems § Patents put into re examination by Microsoft § Company lacked cash § Failure to exploit aggressively 15

IP M&A: The History of Asset Sales Nortel: $4. 5 Billion (Apple, Ericsson, EMC, Microsoft, RIM & Sony) 6, 000 patents AOL: Astella Posidion: $1. 1 Billion (Microsoft) (resale of 650 patents to Facebook for $550 M) Novell: Real. Networks: Friendster Unova: $609 Million (Royal Pharma) DPP IV patents $450 Million (Microsoft, Apple, EMC & Oracle) 882 patents $120 Million (Intel) 190 patents/170 patent applications (codec development team) $40 Million (Facebook) 18 patents $24 Million (Broadcom) 150 patents/patent applications 16

Company Based M&A IP Transactions Target Acquiror Motorola Google Sirna Therapeutics Merck Price $12. 5 Billion $466. 2 Million ($1. 035 B total) Mosaid Sterling Partners $590 Million Intertrust Sony/Philips $453 Million Cryptography Research Rambus $343 Million S 3 Graphics HTC $300 Million 17

Patent Sale Myths § Less (information) is more § Lack of necessary information will get your transaction tossed to the end of the line so provide all of the information requested § Force a tight decision timeline to create multiple offers § A short decision timeframe means more corporate buyers are likely to exit the process. Understand your buyers process and decision timeline § There are no comparables so pick a high price § Information transparency has arrived. Comparables exist and Buyers are using them 18

Patent Sale Myths § Never reveal encumbrances § See point #1. Would you buy a house without an inspection? Enough said § Take lots of liberties with the truth § Deals get done based upon relationships and credibility. Questions about either will slow or crater a deal § 500+ patents in a transaction will net a higher price § Maybe … but more likely the Buyer will pick the top ten and discount the rest (and the price) 19

Due Diligence § Critical Issues § Chain of title § Licenses § Covenants not to sue/immunity § Liens (may be covered by bank or other security interests) § Foreign issues § Potential fraud on patent office § Past behavior § Future assistance 20

Due Diligence § Goal: Disclosure of all prior relevant documents § Assignments in the chain of title § Licenses § Covenants not to sue § Liens or other encumbrances § Prosecution files § In some cases, full disclosure by seller is impractical or impossible so representations and contract remedies will be critical become important 21

Representations § Representations widely vary and price will be a factor § Seller prefers “AS IS” § Critical buyer issues: § Ownership § Licenses, covenants not to compete, liens and encumbrances § Prosecution history (e. g. , no fraud committed on any patent office), no terminal disclaimers § No pending or threatened lawsuits, interference proceedings, etc. § No government funds used § Validity/enforceability § RAND obligations to standard bodies § No patents or applications that are ‘related’ to the transferred patents exist 22

Less Critical Buyer Issues § Other Buyer issues § Return of ownership rights in the future § Future assistance in lawsuits § Terminal disclaimer § Inventor payments § Future assistance in prosecution 23

Assignment § Assignment language needs to include all patents/patent applications and other matters that should be assigned § Are there pending applications? § Counterparts filed in other countries? § A right to file applications in other countries? § Include right to bring suit and recover for past infringement as well as future infringement § Consider including future rights that the seller may acquire with the patents and applications 24

Continuing Obligations § Buyer § Potential license back to seller § Limit on enforcement § Indemnification § Seller § Assistance in perfecting rights § Assistance on prosecution during transition period § Payment of maintenance and prosecution fees coming due for transition period 25

Licensing Program § IBM Program § Started in early 1990 s § Revenues of over $1 Billion per year § Budgets for each division § Licenses of software, trade secrets as well as patents § Rambus § Public company § Licenses semiconductor patents § MPEG LA § Licenses patents from multiple companies for certain digital music standards § Move to third party organizations 26

IPXI: New Options for Monetization A more efficient and transparent IP marketplace IP Market Problem IP Exchange Result Incomplete or insufficient market information Detailed prospectus, published pricing, consumption data reporting, bid/ask TRANSPARENCY - enabling more efficient IP asset management and R&D decisions Arbitrary or unilaterally determined IP value Market-based pricing reflecting the value of a technology and increasing buy-side confidence PRICE DISCOVERY – ensuring fair and reasonable pricing Lack of standards, including course of dealing, contract terms, and pricing Standardized tradable license rights accessible to all market participants LEVEL PLAYING FIELD – accelerating technology transfer and innovation Time and transaction cost Central marketplace with inefficiencies associated market enhancing solutions, with bilateral licensing such as standard contracts, outsourced auditing, and alternative dispute resolution processes EFFICIENCY - providing easy access, liquidity, and increasing transaction volume 27

IPXI Status Update § In December of 2011, IPXI completed a $10 million funding round by a group of U. S. and European investors including CBOE Holdings, Inc. (Nasdaq: CBOE), the world’s largest options exchange, and Royal Philips Electronics (Philips) § IPXI has received commitments to sponsor ULR Contracts with an aggregate target market value of $300+ million, and is reviewing many other submissions § IPXI will begin trading of ULR Contracts in 2012 § IPXI is partnering with regional government and strategic partners to establish support in building IPXI model in multiple jurisdictions around the world 28

IP Strategy Economics: IPXI vs. Other Monetization Methods Estimated Outcome Third-Party Enforcement Self-managed Enforcement Program IPXI ULR™ Contracts 75% Potential Market Penetration 50% Potential Market Penetration 100% Potential Market Penetration 75% Price Discount 57% of Licensing Revenues Paid as Fees $1 Million to $5 Million in Legal Expenses Incurred 20% of Licensing Revenues Paid as Success Fee 15% Commission Assumptions Sale through Broker or IP Auction 75% Potential Market Penetration Monetization Method $1 Million to $5 Million in Legal Expenses Incurred Approximately $500, 000 in Internal Costs Allocated to Licensing Program $100, 000 Listing Fee and $5, 000 Annual Membership Fee IP Owner Collects 15 -20% of Total Value IP Owner Collects 20 -30% of Total Value IP Owner Collects 40 -50% of Total Value IP Owner Collects 79% of Total Value 29

Failed IP Asset Strategy: SCO & Linux § Copyright claim based on use UNIX code in Linux § Lawsuits § SCO v. IBM § SCO v. Autozone § SCO v. Daimler. Chrysler § SCO v. Novell § SCO is bankrupt after spending over $80 M § Fundamental mistake § Failure to confirm title § Selecting IBM as defendant 30

Monetizing IP Royalties: History § Music and Film Royalties § Bowie Bonds – backed by revenues from David Bowie music catalogue – rate A 3 by Moody’s – closed in 1997 § Four additional music copyright deals closed in 1998 with same rating § Dream. Works -- $1 Billion revolving credit facility backed by 36 film properties – closed in 2003 § Village Roadshow Films -- $900 million facility backed by 27 films – wrapped by MBIA – closed in 2004 § Universal Film Funding -- $950 million facility backed by 125 films of Vivendi Universal – wrapped by Ambac – closed in 2004 31

Royalty Streams Monetization Drug Royalty LP 1 --Series 2012 -1 -- • • • Total securities issued--$195 million BBB rated Term bonds maturing in 2024 Sponsor is Drug Royalty Corp. Inc (DRI), a Canadian privately held investment management company focused on the health care industry DRI business model is to purchase royalty assets (either in whole or an undivided interest) in commercialized pharmaceutical products from inventors, universities, hospitals, biotech firms, pharmaceutical companies and other parties who own royalty interests in pharma products Collateral for this transaction consisted of 18 royalty streams on 14 patent-protected drugs and technologies Domino's Pizza Master Issuer LLC--Series 2012 -1 -- • • • Total securities issued--$1. 675 billion Expected final maturity--2019 Legal final maturity--2042 Rated BBB+ Collateral securing bonds consists of franchise royalty and license payments, Domino's intellectual property and profit from distribution arrangements The IP collateral is held by Domino's IP Holder LLC, a bankruptcy-remote special purpose entity which is wholly owned by the issuer of the bonds. The IP Holder holds all the Domino's IP and licenses it to the issuer and various other domestic and international affiliates Miramax LLC--Series 2011 -1 • • • Total securities issued--$550 million Senior securities ($400 M) rated BBB and subordinated securities ($150 M) rated BB Collateral consists of rights to IP (including distribution rights) and film materials relating to a portfolio of 700 films and 14 TV series, mini-series and specials, and shorts, plus rights in over 240 books and 300 development projects Most films are older, seasoned films Legal final maturity--2021 32

Royalty Streams Monetization § Major pause in the market § Few recent deals § Recent Patent Financing Deals § Astella Poseidon: $609 M § Stereotaxis: $40 M § Recent Trademark Financing Deals § Liz Claiborne: $200 M § Tupperware: $400 M 33

Summary § IP Strategy and Assets: New Focus of C Suite § Dynamic market, but still early § Kodak Bankruptcy § Trident Bankruptcy § Moving to private companies § Friendster § WOWD § Increase in options for exploitation § RPX § Open Source Model: Hortonworks spinout from Yahoo § IPXI 34

Questions? Thank You 35