Secondary Patent Market: Buyers, Sellers, Pricing, and Trends

1. Business Sense • IP MattersBusiness Sense • IP Matters 1 Secondary Patent Market: Buyers, Sellers, Pricing, and Trends Kent Richardson NGB – May 16, 2017 Contact Information: +1 (650) 967-6555 kent@richardsonoliver.com Copyright 2017 ROL

5. Business Sense • IP Matters Five Years Makes a Difference 5 2012 2017 Sources Transactions Pricing Capabilities Private Public Only WSJ published deals Quarterly public data Skewed Intellectual Ventures plus select companies Quarterly public data SMEs buying Copyright 2017 ROL

8. Business Sense • IP Matters How Big Is the Patent Market? 8 $0 $2 $4 $6 $8 $10 $12 $14 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1 ROL Group Tracked Brokered and Private Market Cumulative Sum ($B) Cum Sum Asking Price (Entire Market) Cum Sum Total Asking Price (Sold) Predicted Cum Sum Asking Price (Entire Market) Predicted Cum Sum Total Asking Price (Sold) $11 billion plus in patent packages 90 thousand plus patent assets 100 technology categories Copyright 2017 ROL

9. Business Sense • IP Matters Asking Prices Are Stabilizing 9 $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2012 2013 2014 2015 2016 $K Listing Year Average Asking Prices ($K) Price per US Issued Price per Asset Copyright 2017 ROL

11. Business Sense • IP Matters 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 SalesRate Listing Year Projected Sales Rate by Listing Year Sales Rates Dropping or Shifting? % Sold by Year Listed – Bad Trend 11Copyright 2017 ROL

12. Business Sense • IP Matters 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 SalesRate Listing Year Projected Sales Rate by Listing Year Sales Rates Dropping or Shifting? % Sold by Year Listed – Bad Trend % Sold as % Listed Per Year – OK? 12 0% 5% 10% 15% 20% 25% 2012 2013 2014 2015 2016 Year Sales in Calendar Year as % of Listings in Calendar Year Copyright 2017 ROL

13. Business Sense • IP Matters 66% 17% 10% 3% 2% 1% Distribution of seller type by sale year 2015-2016 Operating company NPE Inventor University/research Defensive aggregator Other Distribution of Seller Type by 2016 Sale Year Operating Companies Dominate the Market 13 Source Richardson Oliver Law Group LLP, 2016 Brokered Market Report Operating companies represent over 66% of the patents on the market down from 71% NPEs increased their sales up last year, this has continued - 17% up from 16% - likely as a result of difficulties enforcing their patents Cross-licensing prior to competitor patent sales is a benefit Copyright 2017 ROL

15. Business Sense • IP Matters 48% 34% 15% 3% Distribution of buyer type by sale year 2015-2016 Operating company NPE Defensive aggregator Other Distribution of Buyer Type by 2016 Sale Year 15 Operating companies now top buyers NPE buying is down to 32% from 42% IV buying dropped to only 13 packages down from 40 RPX is top single buyer Copyright 2017 ROL

16. Business Sense • IP Matters Buyers by Sales Year – Five Years 16 OpCos increasing their buying NPE down but not out Non-public companies buying increased from ~0% to 30% of company purchases 2012 2013 2014 2015 2016 Total Other 0% 3% 7% 2% 5% 4% Defensive Aggregator 11% 16% 22% 19% 19% 19% OpCo 41% 45% 31% 42% 41% 39% NPE 48% 37% 40% 36% 35% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% %ofPackageSales Sale year Buyers by entity type Other Defensive Aggregator OpCo NPE Copyright 2017 ROL

17. Business Sense • IP Matters Litigation Analysis: You Can Model Your Risk Has Litigation Has IPR Package Type Prior to listing date After listing date Prior to listing date After listing date Sold packages 5.4% 10.2% 0.0% 3.0% All packages 3.8% 3.5% 0.0% 1.4% 17 10.2% of sold packages are litigated – time to update models? Both sold and unsold packages are litigated post listing Defensive aggregator value may be greater than anticipated Copyright 2017 ROL

20. Business Sense • IP Matters Trends and Predictions More international sales Prices – stabilized Sales rates – remain low Faster and simpler transactions expand market NPEs continue to buy – fewer buyers drive this part of the market More brokers leave 20Copyright 2017 ROL

21. Business Sense • IP Matters Copyright 2015 ROL 21 BUSINESS SENSE • IP MATTERS ROL Group has over 60 years of IP strategy and execution experience. We ask the business questions first. We blend in-house and large law firm experience to create clear steps for success. We guide companies through unique IP challenges—like buying and selling patents, developing licensing programs, defending against patent assertions, and creating a value-driven IP portfolio. We give direction to businesses that share our passion for new ideas, creative problem solving and forward motion. Contact Information: +1 (650) 967-6555 kent@richardsonoliver.com Copyright 2017 ROL

Secondary Patent Market: Buyers, Sellers, Pricing, and Trends

Secondary Patent Market: Buyers, Sellers, Pricing, and Trends

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Secondary Patent Market: Buyers, Sellers, Pricing, and Trends