1. Preparing Patents for Sale
Kent Richardson’s slides
June 23, 20156

2. Logo
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3. Patent Sales as a Patent Monetization Option
•Definition: Private or semiprivate sale of groups of related patents and applications
•Considerations
•Higher value is obtained where at least one value driving patent is included in the group
•Direct sales rather than brokered sales will likely be more successful for larger groups of patents
Sales
•Definition: 3rd party takes ownership of the patents. Company receives a portion of any proceeds after costs are removed
•Considerations
•Minimal costs to engage
•Proceeds are net of costs… See Hollywood movie financials
•Legal environment continues to make this model more difficult. Acacia Research stock is down nearly 50% YoY
•Example partners include Acacia, Longitude Licensing, Conversant
3rd Party Licensing
•Definition: Company directly licenses the portfolio. Company builds licensing plan, value proposition, closes the licenses.
Company takes the risk of any litigation
•Considerations
•Easily the highest return and expected value
•Longest time to money
•Highest costs (litigation, building team, impact on current products)
Direct Licensing
•There are a number of other structures including partnering and debt financing
Other Structures
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4. Why Sell When It Makes the Least Amount of
Money?
Example Model (NPV Estimated) Mid ($M) High ($M) Low ($M)
Sales (Baseline) $ 10 $ 20 $ 5
3rd Party License $ 30 $ 60 $ -
Direct License $ 60 $ 120 $ -*
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• Time to money is fastest
• Risk is lowest – what is the impact of no sale versus no license revenue?
• Other options negatively impact corporate culture and ecosystem
• Rambus as a case study
• Least distraction
• Least resources needed
• Least amount of skills needed
• Vibrant and robust market
Why sell?

5. Sales Process – Readying the Package
•Assist in closing
sale
6. Monitor
bidding and
select buyer
•Looks like a
smaller
investment
banker process
5. Bring
package to
market
•Value
proposition
properly
articulated
•Test package for
completeness
4. Complete
package
•Market analysis
•Value drivers
•Overall package
information
3. Build value
proposition
•Allow seller to
test brokers for
potential
working
relationship
•Subset of
brokers selected
from over 50
potential
brokers
2. Direct or
brokered sale
•Each value
driver patent is
grouped with
related patents
to build a
compelling
potential patent
package
•Value drivers
have Evidence
of Use (EOU)
1. Finalize
groupings
around value
drivers and
supporting
patents
Attorney-Client Privileged & Confidential 5
2-3 months
6-12 months

6. Identifying Value Driver Patents?
• Patents with claim charts against high volume, high
revenue products/services
• Claim charts may include assumptions
• Often referred to “Evidence of Use” or “Indications of
Use” (EOU and IOU)
Value drivers
• Relates to why buyers buy
• Focus your bundles around value drivers
• Focus the marketing materials
• Pricing and chance of sale improve
Why value drivers
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7. Asking Price $K With EOU Top/Bottom 5% Removed
Per Asset Per US Patent
% EOU Packages Asking Price vs General
Market
134% 123%
Average $255.00 $340.58
Min $22.73 $41.67
Max $1,000.00 $1,142.86
StdDev $233.12 $270.98
NumData 167 165
Claim Charts (EOUs) Drive Pricing
• Almost no drop in pricing for claim charted
packages
• 25% better chance of a sale if there is an claim chart
Claim charted packages maintain their
pricing power
Copyright 2012-2016 ROL
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• Source Richardson Oliver Law Group LLP, 2015 Brokered Market Report

8. More Than 1,000 EOUs Tell Us What’s Hot
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Who and
what gets
targeted?
Over 1,000 EOUs reviewed
5 years of data
Hot
companies Apple
Google
Microsoft
Samsung
Hot
technologies Communications and smartphones
Social
Wearable, storage, RFID, mail
Hot
products iPhone, Galaxy
Bing
YouTube
Xbox, TiVo
Source: Richardson Oliver Law Group, LLP

9. What Is in a Brokered Patent Package?
• Contents
• List of patents for sale, applicable market, infringement analysis (claim chart), background on the seller
• Additional information
• Asking price, bid dates, special circumstances (license back, specific encumbrances)
Typical package
• Confluence Patent Portfolio
• Single family (15 US Patents and 7 open applications) relating to social network data aggregation.
• 2006 priority date.
• Received July 2013
• Sold October 2014
• Asking prices: “7 figures”
• Multiple claim charts presented for
• Apple
• Google
• Facebook
• Purchased by an operating company
• Fingerprint Cards AB
Example package from Patent Profit (Will Plut)
• Receive about 50 packages per month covering a broad range of technologies
Package flow
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Copyright 2012-2016 ROL