Maximizing Your IP In A Minimized Economy Presented

Maximizing Your IP In A Minimized Economy Presented By: Michael D. Mc. Coy Richard M. Mc. Dermott Alston & Bird Charlotte, North Carolina April 15, 2009 ALSTON + BIRD LLP

Maximizing Your IP Three Key Topics -The business strength in IP -Benchmarking and best practices - Protecting strategic assets ALSTON + BIRD LLP

Patent Power Jan 14, 2009: IBM announces it was the first company to receive 4000 U. S. patents in a single year. ALSTON + BIRD LLP

Business Strength of IP • The American IP sector is strong. • IP Exports - 2007 USA Japan $62 B $20 B -Royalties and license fees - Exclusive of revenue and profits from partnerships and JVs (Blaxill, Eckardt) ALSTON + BIRD LLP

Rewards of Research Companies with $100 M+ market value that increased R&D in 2001 -2002 (Capital IQ, Bloomberg, BW, 2/09) ALSTON + BIRD LLP

IP Power • 2007: Business Week Innovation Index Up 7% over S&P Global Index • Sep. 2008: Innovation Index Up 9% S&P 500, Down 15% “The top performing companies in America shows innovation remains a powerful engine of success. ” Business Week, Top 50, April 2009. ALSTON + BIRD LLP

IP Benchmarking • Trend of Product Protection 58% - Much more protected 25% - Somewhat 17% - The same 0% - Less protected --(Aberdeen Group) ALSTON + BIRD LLP

IP Benchmarking • Strategic Drivers – Using IP to Protect: – 56% Design – 48% R&D investment – 43% Product differentiation – 36% Market share --(Aberdeen Group) ALSTON + BIRD LLP

IP Benchmarking • Consequences of failing to protect IP: – 48% Lost market share – 44% Lost product sales – 30% Commoditization – 27% Low margins --(Aberdeen Group) ALSTON + BIRD LLP

IP Benchmarking • Corporate priority for IP – 69% “Top Five, ” or “active focus” • Executive “ownership” of IP – 74% Executive level – 26% Senior manager, manager --(Aberdeen Group) ALSTON + BIRD LLP

Harsh Reality • Weak earnings • Declining revenue • Lower stock valuation • “Right – sizing” ALSTON + BIRD LLP

IP Growth and Budget Cuts Challenge: Strengthen IP with dwindling resources Key: Long term strategic approach • All IP: – Patents – Trademarks – Copyrights – Trade Secrets ALSTON + BIRD LLP

Best Practices - Strategy • Key: Treat IP as an asset, not an expense. – Identify strategic markets (5 years out) – Direct R&D – Continue IP programs – Continue incentives – Use in-house talent to harvest IP – Quality counts ALSTON + BIRD LLP

Best Practices - Prioritize • Prioritize disclosures – Future? Core? End of life? – Critical feature “Sizzle”? • Prioritize markets – US? Foreign? Where? – Sell? Manufacture? – Competitors present? • If important – protect • If not – sell or donate ALSTON + BIRD LLP

Best Practices – Map IP • Map IP to products – Your products – Competitor’s products – Business units – Technology segments • Profile competitive IP portfolios • Analyze evolving IP portfolios – Be acquisitive – Universities ALSTON + BIRD LLP

IP Map: Competition Optics Issued Patent License Agreement Finder Image r Scannin g Illuminatio n Processin g Decod e Image Preparatio n Comput er Fixed Product s Portable Slot Presentatio n ALSTON + BIRD LLP

Best Practices – Out License • Out license IP for revenue – Core v. non-core – Geographic territories – Market segments • Monetize IP • IP holding company ALSTON + BIRD LLP

IP Holding Company Parent Holdings IP Group Inc. Strategic Partners Other Affiliates Holdings Royalty Company License Company IP Management Company Marketing Company Third Parties ALSTON + BIRD LLP

Best Practices – Manage Licenses • Manage IP licenses – Dates – Milestones – Reports – Payments • Audit – 81% misreport royalties – 40% underreport by 40+% (Invotex Group, 4 -09) ALSTON + BIRD LLP

Patent v. Trade Secret • Duration: 20 years v. unlimited potential • Disclosure: full v. none • Cost: significant v. modest • Technology: Secret or public (product v. process) • Rights: Federal v. 50 states • Remedy: Injunction, exclusion order v. limited injunction ALSTON + BIRD LLP

Patent v. Trade Secret • Infringement: Make, use, sell, import v. misappropriation • Enforcement: Exclusion of all v. Misappropriation (except innocent user) • Implementation: US PTO v. security – Visitor logs, badges, escorts, restricted areas – Notices, education, email – NDA’s, employment agreements – Hiring, exit interviews ALSTON + BIRD LLP

Recognizing and Protecting Key IP • Identify key products, markets • Review products, packaging, marketing materials, etc. , for IP to be protected • Prioritize IP to be protected based on product, market, cost and value of protection • Evaluate what aspects or attributes should be protected. • Example: ALSTON + BIRD LLP

FRONT uct 5 F prod another Sta rr Ind ust rie s I nc. ALSTON + BIRD LLP

Long ago, in a design shop, far away, a shy, awkward technogeek stumbled on the invention of the ages – BACK www. st arrbox. c om the Hi. Fi-Wi. Fi. Satellite R MP 3 -PDAadio-HDT VCell phon e solution for the ages! Are Y OU 5 F? Far Flun g Forw a Fun rd Fash ion es stri ul du r In onderf r w Sta ho w se tho eople you p ght rou le hair b b ! edi gel ALSTON + BIRD LLP

CUT-AWAY ALSTON + BIRD LLP

colors (trademark) scent (trademark/trade secret) FRONT brand name (trademark) logo (trademark) uct 5 F prod another tagline or slogan (trademark) package design (trade dress/trademark) Sta rr Ind ust rie s I nc. company name (trade name) ALSTON + BIRD LLP

image (copyright/trademark) brand name (trademark) Long ago, in a design shop, far away, a shy, awkward technogeek stumbled on the invention of the ages – BACK advertising copy, images and layout (copyright) domain name (trademark) www. st arrbox. c om the Hi. Fi-Wi. Fi. Satellite R MP 3 -PDAadio-HDT VCell phon e solution for the ages! Are Y OU 5 F? tagline/slogan (trademark) Far Flun g Forw a Fun rd Fash ion es stri ul du r In onderf r w Sta ho w se tho eople you p ght rou le hair b b ! edi gel ALSTON + BIRD LLP

packaging configuration (design patent/trade dress) CUT-AWAY proprietary treatment (trade secret) functional feature (utility patent) ALSTON + BIRD LLP

Design Patents • Consider alternative, generally lower-cost protection, such as design patents, if appropriate. • A “utility patent” protects the way an article is used and works (35 U. S. C. 101), while a “design patent” protects the way an article looks (35 U. S. C. 171). • Both design and utility patents may be obtained on an article if invention resides both in its utility and ornamental appearance. Articles of manufacture may possess both functional and ornamental characteristics. • Examples: ALSTON + BIRD LLP

Design Patents ALSTON + BIRD LLP

Design Patents ALSTON + BIRD LLP

Recommendation • Get your Assets in Gear™ • “No company has ever saved its way to success. ” --(Anonymous) ALSTON + BIRD LLP

Maximizing Your IP In A Minimized Economy Presented By: Michael D. Mc. Coy Richard M. Mc. Dermott Alston & Bird Charlotte, North Carolina April 15, 2009 ALSTON + BIRD LLP