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Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
Ip provider life cycle  bangalore
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Ip provider life cycle bangalore

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  • 1. Is There a Business Track? IP Provider Life Cycle Patent Cabinet Gris Design and Reuse SaucierAvocats.com Yvon Gris Gabriele Saucier Luc Saucier
  • 2. Outline <ul><li>Introduction </li></ul><ul><li>Patent war and Lawsuits </li></ul><ul><li>Acquisitions and Mergers </li></ul><ul><li>Conclusion </li></ul>
  • 3. Development Cost Source: Infinitedge <ul><ul><li>Exponential growth in IC design costs </li></ul></ul><ul><ul><li>Design verification 80% of costs at 45 nm </li></ul></ul>IP/Soc - March 2010 <ul><ul><li>WW design starts are down </li></ul></ul><ul><ul><li>Only the largest industry players or highest volume producers can justify such high costs </li></ul></ul>Trends Favor Larger Companies Who are Increasing their Focus on Vertical Markets, Partnerships, Outsourced Services and External Integrated Platforms for Embedded Systems Development IC Development Costs Worldwide Design Starts
  • 4. Transformation of Semiconductor Industry Source: Infinitedge Putting the Toothpast Back in the Tube! Outbound <ul><li>Consolidation and Transformation in Large Public and Private Companies </li></ul><ul><li>Increased Pool of Talented Engineering </li></ul><ul><li>Innovation for differentiation </li></ul><ul><li>IP companies created through the process </li></ul>IP/Soc - March 2010
  • 5. Growing Use of Semiconductor IP Source: Infinitedge Growth In the Number of SIP Blocks Per Design Putting the Toothpast Back in the Tube! IP/Soc - March 2010 > 50% of Today’s Semiconductor Is Third Party IP (Avg of 50 Blocks)
  • 6. Real Life for IP Providers <ul><li>Innovation is needed </li></ul><ul><ul><li>Innovation is coming from small companies </li></ul></ul><ul><ul><li>Talented independent designers </li></ul></ul><ul><ul><li>Has to be known , detected and carefully followed up by major players </li></ul></ul><ul><li>Is it suitable to share innovation among large companies ? </li></ul><ul><ul><li>Large companies would prefer not to share </li></ul></ul><ul><ul><li>Unless IP has become a standard and sharing is a necessity </li></ul></ul><ul><ul><ul><li>( Arm core/Amba bus) </li></ul></ul></ul><ul><ul><li>Kill /Copy/ Buy paradigm </li></ul></ul><ul><ul><ul><li>Kill /Copy: Protection and Patent war </li></ul></ul></ul><ul><ul><ul><li>Buy: Acquire at the right time and the right price </li></ul></ul></ul>
  • 7. Outline <ul><li>Introduction </li></ul><ul><li>Patent war and Lawsuits </li></ul><ul><li>Acquisitions and Mergers </li></ul><ul><li>Conclusion </li></ul>
  • 8. Patenting Intellectual Property <ul><li>A necessity but can be a nightmare for small providers </li></ul><ul><ul><li>“ Many will agree that trying to compete in a high technology industry without adequate patent protection is insane if not merely futile.” </li></ul></ul><ul><li>Patent Application </li></ul><ul><ul><li>Complex process </li></ul></ul><ul><ul><li>Where, when, how? </li></ul></ul><ul><ul><ul><li>in what country do we need protection, </li></ul></ul></ul><ul><ul><ul><li>when is the best time to make application, </li></ul></ul></ul><ul><ul><ul><li>what is the most suitable procedure (local, regional or international application) </li></ul></ul></ul>
  • 9. Intellectual Property <ul><li>Time to grant </li></ul><ul><ul><li>Several years before granting a patent </li></ul></ul><ul><ul><li>Depending of local law. </li></ul></ul><ul><ul><ul><ul><li>Protection may be granted by patent filing. </li></ul></ul></ul></ul><ul><li>Cost </li></ul><ul><ul><li>Balance between the cost and level of protection must be evaluated BEFORE any action. </li></ul></ul><ul><ul><li>Cost related to : </li></ul></ul><ul><ul><ul><ul><li>Right acquisition </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Right maintenance </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Litigations </li></ul></ul></ul></ul><ul><li>Need of VCs money ahead ? </li></ul><ul><ul><li>But VC want to see patent. and value ahead </li></ul></ul><ul><ul><li>To prove value ? difficult as no innovation publishing before patenting . </li></ul></ul>
  • 10. <ul><li>Which patent is worth or valuable especially in a patent portfolio ? </li></ul><ul><li>Related to the Degree of innovation or its application power? </li></ul><ul><ul><li>Inventor or final Product Vendor View? </li></ul></ul><ul><li>Product Vendor View </li></ul><ul><ul><li>“ Value lies in the ability to protect products and technology, avoid litigation, and leverage cross-licensing opportunities” </li></ul></ul><ul><ul><li>Patent portfolio are used to negotiate agreement and/or value of products. </li></ul></ul><ul><li>If Patents are correlated with products and technology segments </li></ul><ul><ul><li>“ a high level value determination may be made based on the revenue streams associated with products” </li></ul></ul>Patent Value
  • 11. Patenting: the rules <ul><li>Need of a set of “good” patents in order to survive </li></ul><ul><li>File before publication </li></ul><ul><li>Optimize Cost of the first application </li></ul><ul><ul><li>Choice of patent Attorney </li></ul></ul><ul><ul><li>Choice of procedure ( local, US provisional application ) </li></ul></ul><ul><ul><li>Access to a patent attorney able to file within a short delay less that 2 weeks </li></ul></ul><ul><li>Patents are valuables as sword and shields </li></ul><ul><li>as shown on USPTO </li></ul>
  • 12. Patent War <ul><li>Battle between David and Goliath </li></ul><ul><li>Large companies have an army if lawyers and maintain a huge portfolio of patents up to exotic ones </li></ul><ul><ul><li>“ The IP model requires extensive legal expertise and very deep pockets. Tessera, Rambus, Interdigital & Tivo all have big scares to show. Multinationals (apart from Japanese) may opt to try to bleed to death a startup by dragging it through the US court system instead of taking a license. With legal costs at up to 100k/day, they easily succeed with 95% of the adversaries and can eventually sign the surviving 5% with little penalty”. </li></ul></ul><ul><ul><li>http://www.eetimes.com/electronics-news/4206255/Sources </li></ul></ul><ul><ul><li>“ A portfolio of key patents may keep a competitor from asserting their own against you – a sort of patent based cold war phenomena. It is impossible to know when a competitor has decided not to assert a patent against you” </li></ul></ul>
  • 13. Patent War: Asia - USA ? Data extracted from D&R News Services
  • 14. Legal Suits
  • 15. Court Decision Examples Subject Court Decision <ul><li>Proxim vs 6 companies for 3 wireless patent infringement </li></ul><ul><li>Proxim and Intersil settled. </li></ul><ul><li>Intersil paid a one time $6 million fee and Proxim could purchase 802.11 products </li></ul><ul><li>Rambus versus Infineon Tech, Hynix Semi conductor and Micron Technologies. </li></ul><ul><li>Rambus accused them of using memory technology in their chips (DDR2,GDDR2,GDDR3) without a license. </li></ul><ul><li>Hynix paid Rambus $306 million </li></ul><ul><li>Infineon settled out of court for $5.9 million quarterly for licensing fee </li></ul>
  • 16. Court Decision Examples Subject Court Decision <ul><li>Toshiba filed a pair of suits in US and Japan over DRAM and flash memory patents after failure to negotiate extension agreement prior to cross licensing agreement in 1966. </li></ul><ul><li>Toshiba won the suit and as a plus all products from Hynix violating patents couldn't be sold on Japanese market. </li></ul><ul><li>Hynix was to pay $67000 in damages to Toshiba </li></ul><ul><li>Infringement of 10 US Transmeta patents involving microprocessor products </li></ul><ul><li>Intel paid $150 millions to Transmeta in a lump sum followed by $20 millions / year for 5 years </li></ul>
  • 17. A Worst case : Aptix Story <ul><li>Quickturn and Mentor engaged in patent litigation for years </li></ul><ul><li>Mentor paid $1 million to license an Aptix patent in Feb. 1998 for the apparent purpose of suing Quickturn, </li></ul><ul><li>Mentor Graphics and Aptix Corp. sue the Quickturn subsidiary of Cadence Design Systems </li></ul><ul><li>Dismissed :Mentor is seeking to recoup its legal costs </li></ul><ul><li>Turned into a three-way battle, with Mentor filing a new lawsuit that accuses Aptix of fraud and civil conspiracy.. </li></ul>
  • 18. A Worst case : Aptix Story Sad End… <ul><li>Mentor lent Aptix $3 million and agreed to front all legal expenses for a suit, which was filed in late Feb. 1998. </li></ul><ul><li>Gambit backfired when a federal court judge ruled that Amr Mohsen, president and chief executive officer of Aptix, had committed fraud </li></ul><ul><li>Judge William Alsup of U.S. District Court in San Jose, Calif., ruled that Mohsen and his brother had fabricated entries in an engineering document in an attempt to establish the date the disputed patent was invented. </li></ul><ul><li>Ordered Aptix to pay Quickturn $4.2 million in legal fees, and he ruled that the Aptix patent was invalid. </li></ul><ul><li>http://www.eetimes.com/story/OEG20001009S0062 </li></ul><ul><li>Sad End </li></ul>
  • 19. Outline <ul><li>Introduction </li></ul><ul><li>Patent war and Lawsuits </li></ul><ul><li>Acquisitions and Mergers </li></ul><ul><li>Conclusion </li></ul>
  • 20. Long Term and Exit <ul><li>Long Term at the semiconductor scale </li></ul><ul><li>The IP becomes a standard in semiconductor industry ( ARM) </li></ul><ul><li>Long term small IP providers </li></ul><ul><ul><li>Niche domain </li></ul></ul><ul><ul><li>IP provider adhering to Third Party Programs of larger companies </li></ul></ul><ul><ul><ul><li>EDA companies </li></ul></ul></ul><ul><ul><ul><li>Fabless companies </li></ul></ul></ul><ul><li>Long term Design centers </li></ul><ul><ul><li>Becoming or being re absorbed by a viable design center </li></ul></ul><ul><li>Being acquired </li></ul><ul><ul><li>A success story </li></ul></ul>
  • 21. Acquisitions reported in D&R News
  • 22. Average Age when companies are bought
  • 23. Embedded Systems Evolution Drives Acquisitions Source: InfinitEdge 1990 2000 2010 1980 Discrete Analog Discrete Software Tools MPU’s CPU’s Discrete RF Wired -> Wireless Drives Demand for Integrated RF EDA Enables Custom IC Design ASIC ASSP IP Industry Evolves Programmable Fabrics Emerge FPGA Digital IP EDA FPGA Tools Analog IP RF IP Multi-Cores Cloud Computing Drives Demand for Compute Power Multi-Core Tools LINUX Commercial RTOS Programmability Required to Reduce SKU Count & Differentiate KiloFlops MegaFlops GigaFlops Performance Re-aggregation of Software and Semiconductor
  • 24. Embedded Systems Evolution Drives Acquisitions: Arc & Virage $42M Virage Logic ($47M) Arc ($24M) Configurable processor IP Sonic Focus ($1.2M) Digital Sound IP VAutomation IP Precise Software Real-time OS MetaWare C compiler Alarity Firmware Teja ($900K) Multiprocessor software Tenison Technology ($500K) SoC design software InChip Logic IP Ingot Systems Design services Impinj Memory IP NXP (CMOS IP Group) IP Infrastructure 2002 - 2007 - 2008 - 2009 - $5M $6.5M $3.5M $1.6M $5.2M $20M
  • 25. Embedded Systems Evolution Drives Acquisitions: Synopsys Synopsys ($1.35B) Coware Codesign EDA Software Virage Logic Memory IP MOSAID Memory IP CHIPit Business Unit (ProDesign) Verification Solutions Cadis EDA Software Viewlogic Systems EDA Software Co-Design Automation EDA Software inSilicon Connectivity IP Numerical Technologies Design For Manufacturing (DFM) Accelerant Networks Connectivity IP Analog Design Automation EDA Software Monterey Design Systems EDA Software Cascade Semiconductor Solutions Digital IP Integrated Systems Engineering Infrastructure Software LEDA Design Mixed Signal IP Nassda Corp. IC Planning HPL Technologies Design For Manufacturing (DFM) Virtio Corp. Virtual Emulation Sigma-C Lithography Simulation ArchPro EDA Sotware Sandwork Design Verification Software Synplicity FPGA EDA Software VaST Virtual Prototyping MIPS C.I / MIPS Analog IP 1994 - 2003 - 2004 - 2006 - 1997 - 2002 - 2007 - 2008 - 2009 - 2010 - 2005 - ChipIdea Analog IP $147M $22M $289M $223M
  • 26. Embedded Systems Evolution Drives Acquisitions: Cadence & Mentor $315M $90M Cadence ($880M) Denali Memory IP Mentor Graphics ($800M ) Sierra Design Automation High-performance P&R solutions Embedded Alley Android and Linux systems Descon PDM Agility Design Solutions C Synthesis Palmchip Parallel and Serial ATA IPs Verisity Verification process automation Silicon Perspective Virtual prototyping Clear Shape Design for manufacturing (DFM) $315M ChipEstimate IC planning Aptix Rapid prototyping 2000 - 2005 - 2008 - 2010 - 2001 - 2004 - 2007 - 2009 -
  • 27. Conclusion <ul><li>Provider life cyle is hectic. </li></ul><ul><li>Acquisition are somewhat predictable by sector </li></ul><ul><li>D&R put in place agreement with dedicated firms with Specific services adapted to D&R partners </li></ul><ul><ul><li>Business track definition ( Infinitedge) </li></ul></ul><ul><ul><li>Intellectual Property counsel ( Cabinet Gris) </li></ul></ul><ul><ul><li>Lawyer firm for Contract Review up to Acquisition (www.SaucierAvocats.com) </li></ul></ul>
  • 28. D&R Service Network <ul><li>Intellectual Property Counsel Cabinet Gris: [email_address] </li></ul><ul><li>Expertise in order to define and to implement offensive and defensive IP strategies including : </li></ul><ul><ul><li>Detection of technical inventions for valuable patents </li></ul></ul><ul><ul><li>Development of patents portfolio </li></ul></ul><ul><ul><li>Patents applications writing </li></ul></ul><ul><ul><li>Infringement expertise </li></ul></ul>Yvon Gris French Patent Attorney Biography: Yvon Gris started his career in 1974 as a physicist researcher at LETI, a CEA laboratory located in Grenoble, France. Yvon became a technical expert in the field of electronics and physics related to micro and nano technologies. He is mentioned as inventor of several dozen inventions, which led to more than 134 patents applications. During last decade he worked as a patent manager at STMicroelectronics. During this period he has been graduated in french patent attorney qualification. Yvon Gris has founded is own firm named &quot;Cabinet Gris&quot;.
  • 29. D&R Service Network <ul><li>Lawyer Contract Review up to Acquisition and Merge: </li></ul><ul><li>www.saucieravocats.com </li></ul><ul><ul><li>IP licensing term sheets </li></ul></ul><ul><ul><li>Drafting and negotiating IP License agreements </li></ul></ul><ul><ul><li>Advice regarding Consumer / Provider legal issues </li></ul></ul><ul><ul><li>Assistance in IP Litigation </li></ul></ul><ul><ul><li>Restructuring, acquisition or merger involving IP consumers </li></ul></ul><ul><ul><li>Dissolution or liquidation of IP companies </li></ul></ul>Luc Saucier Senior International Lawyer Biography: Luc Saucier, a Fulbright scholar, earned LL.M. degrees both from Columbia University and the University of Paris. He is admitted to the New York and Paris bars. Prior to establishing his own practice, Luc Saucier was an Equity Partner at Paul Hastings.
  • 30. D&R Service Network DR. DAVID YOUNG Chief Executive & Founder of Shield Biography From a start in strategy consulting in 1981, Dr. Young moved into pan-European M&A. He spent four years in Paris before transferring to New York in 1985, where he joined Goldman Sachs' M&A Group. From 1989–1994, he built Wasserstein Perella's German business, with a developing focus on pharmaceuticals and chemicals He subsequently headed the European Healthcare M&A group of Merrill Lynch. 'Lift Off! Selling your business for more than it's worth, honestly '
  • 31. Fast-paced controlled auction process within four months Business and process review Weeks 1-6 Prepare marketing materials Weeks 1-6 Broad marketing approach (10-30) Weeks 6-10 Selected buyer due diligence (Max. 6) Weeks 11-15 Confirmatory due diligence and negotiations (2-3) Weeks 16-18 Preparations Marketing Due diligence Negotiations 1. Clarify objectives/ constraints of all parties 2. Help secure maximum management cooperation 3. Evaluate buyers and prepare buyer list 4. Gather intelligence on potential buyers' motivations/concerns 5. Work with management to &quot;groom&quot; business for sale – Understand business – Financial adjustments – Quantify improvement and growth potential 6. Assist in anticipating/ clearing sale impediments 7. Perform preliminary valuation from buyers' standpoint 8. Advise on vendor due diligence 9. Devise buyer-driven marketing strategy 10. Test marketing? 1. Develop key selling points 2. Review with management and vendors 3. Produce marketing materials – Teaser (presentation?) – Descriptive memo – Management presentation 4. Prepare procedure letter 5. Finalise buyer list 1. Teaser presentations 2. Send Confidentiality Agreement 3. Send Descriptive memorandum and procedure letter 4. Continue gathering market feed-back 5. Assist in preparation and rehearsal of management presentations, Q&A 6. Receive preliminary indications of interest 1. Evaluate final bids and SPA mark-ups to help select finalists 2. Coordinate confirmatory due diligence 3. Help negotiate remaining deal/contractual points 4. Handle exclusivity requests 5. Expedite signing 1. Rank bids based on price, terms and conditions 2. Organise due diligence including management presentations, data room and plant visits 3. Coordinate responses to buyers’ questions 4. Distribute draft Sale & Purchase Agreement (SPA) 5. Receive final binding bids from short-listed bidders 6. Confirm financing arrangements
  • 32. Due diligence investigation Ÿ Anticipate buyers' concerns – Risk analysis – Address value detractors Ÿ Anticipate due diligence findings – Consider vendor due diligence – Avoid contradictions and negative surprises by preparing detailed Q&A Ÿ Control due diligence process – Prepare and coordinate information flow – Beware of &quot;bid high, buy low&quot; tactics: avoid negative newsflow – Preserve competitive pressure Ÿ Influence buyers' pricing – Armour - plate standalone and synergy projections – Restate to present true, sustainable earnings – Quantify growth avenues – Highlight sources of strategic value – Educate buyers about &quot;right&quot; pricing approach Ÿ Assist buyers' decision making – Catalyst in internal process – Anticipate people issues – Develop constructive relationships Ÿ Add credibility to process – Data/Process clarity – Guarantee fair treatment – Contribute reputation for objectivity/ integrity Protect downside Maximise upside

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