1. ACC SF BAY AREA
CORPORATE AND SECURITIES COMMITTEE
NUTS AND BOLTS OF M&A TRANSACTIONS
STRUCTURING IP AND TECHNOLOGY
ACQUISITIONS
December 7, 2015 Silicon Valley
December 8, 2015 San Francisco
This presentation is offered for informational purposes only, and the content should not be construed as legal advice on any matter.

2. Speaker introductions
Jeffrey Aronson
Partner, Technology
Transaction Group,
DLA Piper
Victoria Lee
Partner, Co-Chair,
Global Technology
Sector, DLA Piper
Louis Lehot
Partner, Corporate,
Securities and
M&A, DLA Piper

3. Speaker introductions continued
Phil Strauss
VP of Operations &
General Counsel and
CPO, Health Fidelity, Inc
Alan Stern
Counsel, Cisco Systems
David Sando
Senior Counsel, Salesforce
Alan Anderson
Assistant General
Counsel, DataStax, Inc.

4. Topics for discussion today
 Transaction structure
 Due diligence
 Representations, warranties and indemnities
 Red flag (or potential red flag) issues

5. Transaction structure
 Common deal structures
 Stock purchase/merger
 Asset
 Benefits and disadvantages of each structure from an IP
perspective
 Role of ancillary agreements
 Transition services agreement
 Licenses

6. Due diligence
 Differing approaches based on deal structure and timing
 Scorched earth approach
 Materiality approach
 Importance in asset deals
 Technology due diligence and the role of consultants
 Security audits and penetration testing
 Open source code scan
 Code quality

7. Representations, warranties and
indemnities
 The role of sufficiency
 Knowledge qualifiers and materiality
 IP as a fundamental rep
 The emerging role of rep and warranty insurance

8. Red flag issue: IP ownership
 Founders
 Effective assignments
 Employees
 Taint of prior employers
 Missing PIIAs
 Professors
 Claims by universities
 Consultants/contractors
 Effective assignments
 Remediation through confirmatory assignments as a condition
to closing
 Joint ownership

9. Red flag issue: open source
 Level of diligence
 Reviewing risk of taint
 Ensuring open source compliance
 Remediation and cost relative to deal value

10. Red flag issue: key licenses and
agreements
 Materiality based on revenue
 Ensuring assignment of large revenue contracts
 Materiality based on business
 Ensuring assignment of key technology agreements
 Avoiding patent leakage
 Understanding material upstream obligations
 Third-party licenses with ongoing payments

11. Applying best practices to hypotheticals
 Diligence reveals Target has distributed GPL v2 code
compiled with key Target proprietary code and not in
compliance with GPL agreement
 Target’s patent license with Buyer competitor seemingly
sweeps in Buyer’s patent portfolio
 Key IP is in-licensed from founders
 Target jointly owns with the developer source code to main
product and has failed to disclaim duty to account
 Target counsel insists on qualifying fundamental reps (like title)
with materiality and knowledge qualifiers

12. Hypo 1:
 Diligence reveals Target has distributed GPL v2 code
compiled with key Target proprietary code and not in
compliance with GPL agreement

13. Hypo 2:
 Target’s patent license with Buyer competitor seemingly
sweeps in Buyer’s patent portfolio

14. Hypo 3:
 Key IP is in-licensed from founders

15. Hypo 4:
 Target jointly owns with the developer source code to main
product and has failed to disclaim duty to account

16. Hypo: 5
 Target counsel insists on qualifying fundamental reps (like title)
with materiality and knowledge qualifiers

17. Conclusion
 Anticipate issues before they arise
 Seek practical solutions
 Keep big picture in mind

18. Questions from the audience and panelists comments

19. Upcoming programs…

20. Thank you for attending