Tech companies are uniquely valuable, with much of that value tied to IP and the protection afforded by strong patents. But with changing patent law, patent trolls and confusing Supreme Court decisions, how can your technology company best secure and maximize the value of your IP?

2. World Financial Symposiums
www.wfs.com
WFS is an international organization dedicated to educating
technology leaders through monthly,
Market Spotlight webcasts and day-long
Growth and Exit Strategies for Software and IT Companies
conferences.
Upcoming Events:
Growth and Exit Strategies
- Silicon Valley – April 7
Growth and Exit Strategies Focus
- Vancouver, BC – March 17
- Austin, TX – March 31
Market Spotlights
- Trends and M&A for Media-tech Companies – March 16
- Trends & Opportunities in Security Tech – March 23
•www.wfs.com

3. Dave’s diverse background in technology includes incubating and scaling an
innovation intelligence business that built an intellectual property platform that
aggregated over one hundred twenty countries' patent data sets and created advanced
citational analytics algorithms that mined concurrent art and un-cited prior art for
counter-intelligence, patent litigation and predictive intellectual property trends.
Before joining Corum, Dave was CEO North America for Gaxsys, an eCommerce and
logistics company that is a leader in last mile logistics and fulfillment for eCommerce
marketplaces. As an executive and entrepreneur, Dave has been operating and
investing in companies sitting at the convergence of commerce and eCommerce as
well as innovative life science businesses for over 25 years.
Dave has been on both sides of the mergers and acquisitions table, having sold a life
science technology company, facilitated sell side and buy side technology transactions
and has also scaled multiple technology companies globally in the eCommerce, life
sciences and innovation intelligence markets. In the intellectual property space, Dave
sits on boards of numerous public and private companies, including one that recently
filed for an IPO.
Dave Levine
Vice President, Corum Group
Moderator

4. Agenda
• Introduction
• Tech Trends M&A Report
• Panel
• Q&A

5. Software Patent Luminaries
Elon Gasper
Vice President & Director of
Research, Corum Group
F. David LaRiviere
Owner of LaRiviere, Grubman PC

6. Elon Gasper
Vice President & Director of Research, Corum Group
Software entrepreneur and tech M&A IP specialist Elon Gasper’s own
inventions have driven M&A value and underpinned his experience on the
sell-side, buy-side and as an advisor and research director at the Corum
Group. He founded a software start-up, obtained venture funding and was
CEO until its acquisition by the leading public entertainment software
company, where he guided patent portfolio work while supporting its growth
through further acquisitions and eventual exit in an acquisition by a larger
public entity. Elon then helped start and grow a number of other companies.
His awards include a COMDEX Envision; a Codie, the retail software 'Oscar';
and eleven patents. He was a finalist for the Fleugelman Award, the only
personal achievement award given by the Software Publishers Association,
and has held faculty and staff positions at Univ. of Washington, Mich. State,
Cal. State, and others. MS, Computer Science; BS, Biochemistry.
Guest Speaker

7. Patents as an Asset in M&A
• Patents now a business asset
• Increasingly driving midrange M&A
• Affecting all phases:
– Valuation
– Negotiation
– Due Diligence
• International increasingly important
• Costs

9. US Patent Apps Claiming “Computer-readable medium”
Source: TAEUS Corporation *US Patent apps claiming “Computer-readable medium”
01 02 03 04 05 06 07 08 09 10 11 12 13

10. Patents granted for selected
software-based technology classes
0
500
1000
1500
2000
2500
2011 2012 2013 2014
Source: U.S. Patent and Trademark Office, Patent Technology Monitoring Team (2015). Patenting in Technology Classes, Breakout by Geographic Origin (State and Country).
Retrieved from http^//www.uspto.gov/web/offices/ac/ido/oeip/taf/other_sites.htm
Software development
Control systems
I/O data processing
Virtual machine tasks
Modeling/Simulations

11. Studies show most software firms
haven’t been getting patents…
Sources: James Bessen (Boston University), Stuart Graham et al, NBER Patent Data Project, Crunchbase
24%
Pre-packaged Software
1996
20%
Computer Services & Software
1996
24%
Venture-backed Software Startups
2005
33%
Pre-packaged software
2006
24%
All Software Startups
2009
67%
Venture-backed Software Start-ups
2009
33%
All Funded Start-ups
2012
19%
E-commerce, Web, & Video Games
2012

12. Approaches to Value of Patents in M&A
• Study: having a patent assigned to the target
increases the deal value by $250,000 on
average
• Study: the quantity of patents in a portfolio is
secondary to the quality of those patents
• Net present value of established royalty stream
• Book value of patent (cost to date)
• Assign 25% of operating profits to the patents
• Compare to similar patents
Source: Antti Saari, Aalto University

13. • Purpose and Suitability
– Defensive or offensive
– Setting out a trail to a marketing objective
– Inhibit competitive funding
• Extent of licensing
• Evidence of validity
• Synergy with rest of portfolio
• Structure of transaction
Examples of factors of valuation

14. Just part of the wireless-related arms race…
ource: PCMag, Verizon

15. Carefully consider
your next move,
particularly in terms
of exit strategy…

16. Recent software patent deals across markets
“IP is an increasingly valuable asset class
in business…”
- Kevin Rhodes, VP & Chief Intellectual Property Counsel for 3M
“Patent battles have become a strong catalyst
for mergers…”
- James Gleick, historian of science, internet pioneer and
author of “The Information: A History, a Theory, a Flood”
InfrastructureConsumer InternetVerticalHorizontal

17. Consumer Application Software Valuations
Subsector Sales EBITDA Examples
Education 1.54x 14.35x
Entertainment 3.51x 62.51x
Gaming 2.74x 14.15x

18. Consumer Application Software Market
Deal Spotlight
Sold to
Target: FlexScore [USA]
Acquirer: United Capital Financial Advisers [USA]
- Online financial assessment, planning and advisory
services
- Broad claims based around ‘quantitatively improving a
financial evaluation’
- To be combined with the buyer’s ‘Money Mind” and other
evaluative dialogs and games
Patent: Financial evaluation process

19. Consumer Application Software Market
Deal Spotlight
Sold to
Target: RealDeck [USA]
Acquirer: World Poker Fund Holdings [USA]
Transaction Value: $15 million
- Online poker gaming software that uses
live human dealers and physical cards
- Buyer is tournament operator and producer
of reality TV shows such as “Poker Boss”
Patent: Land-based, on-line poker system

20. Infrastructure Software Valuations
Subsector Sales EBITDA Examples
Endpoint 3.23x 14.93x
IT Services
Management
6.20x 27.40x
Network
Management
2.29x 19.22x
Security 4.84x 15.42x
Storage & Hosting 2.34x 6.68x
Other 4.32x 13.78x

21. Infrastructure Software Market
Deal Spotlight
Sold to
Target: Socialware [USA]
Acquirer: Proofpoint [USA]
Transaction Value: $9 million
- Provides enterprise social media compliance and
communications risk management, access control,
content archiving, brand protection and social marketing.
- Works at infrastructure level by filtering internet traffic
- Furthers Proofpoint’s Social Media Security and
Compliance solution with capture/review capabilities Patent: Method, system, and storage
medium for adaptive monitoring and
filtering traffic to and from social
networking sites

22. Infrastructure Software Market
Deal Spotlight
Sold to
Target: NetBox Blue [USA]
Acquirer: Bloomberg [USA]
- Social media filtering, risk assessment, and
compliance security SaaS for enterprises.
- Social media monitoring and governance
technology to enhance Bloomberg’s enterprise
compliance platform.
Patent pending: Unified content scanning
and reporting engine

23. Horizontal Application Software Valuations
Subsector Sales EBITDA Examples
Business Intelligence 3.65x 15.81x
Marketing &
Ad Tech
1.94x 16.74x
CRM 1.59x 20.88x
ERP 2.90x 14.25x
Human Resources 6.24x 35.12x
SCM 6.89x 25.88x
Payments 4.13x 16.03x
Other 2.74x 28.33x

24. Deal Spotlight
Sold to
Target: Appinions [USA]
Acquirer: Scribble Technologies [Canada]
- Content marketing analytics SaaS
- Campaign optimization platform applies linguistic
analysis to news, blogs, social media posts,
scoring top items and influencers
- Patented data science technology slated to
enhance Scribble’s content marketing capabilities
Patent: System and method for generating
influencer scores
Horizontal Application Software Market

25. Deal Spotlight
Horizontal Application Software Market
Sold to
Target: Lyris [USA]
Acquirer: Aurea Software [USA]
Transaction Value: $17 million
- Provides email and social media marketing creation,
delivery and analytics, and customer engagement SaaS
- Patented ClickTracks technology involves the display of
statistical data overlaid on the Website, as well as
automatic parameter masking used to define relevant
page-identifying URLs
Patent: Consolidating web visitor
behavior statistics for sales
prospect qualification

26. Vertical Application Software Valuations
Subsector Sales EBITDA Examples
A/E/C 5.13x 17.25x
Automotive 3.98x 36.54x
Energy &
Environment
3.34x 15.78x
Financial Services 4.80x 15.24x
Government 1.75x 12.25x
Healthcare 5.23x 18.31x
Real Estate 7.17x 31.16x
Vertical Other 4.46x 14.83x

27. Vertical Application Software Market
Deal Spotlight
Sold to
Target: LightHaus Logic [Canada]
Acquirer: Envysion [USA]
- Provides video surveillance customer analytics SaaS for
retailers
- To expand video analytics capabilities of Envysion’s
business intelligence software
Patent: Systems, methods and articles
for video analysis

28. Vertical Application Software Market
Deal Spotlight
Sold to
Target: Yodlee [USA]
Acquirer: Envestnet [USA]
Transaction Value: $660 million
- Provides personal financial data management
and account aggregation SaaS
- Yodlee’s patented data aggregation solutions to
strengthen Envestnet’s wealth management
platform Patent : Host exchange in bill
paying services

29. Subsector Sales EBITDA Examples
Diversified Internet 5.63x 20.00x
eCommerce 1.53x 26.55x
Social Network 7.75x 42.11x
Travel & Leisure 5.25x 25.92x
Internet Valuations

30. Internet Market
Deal Spotlight
Sold to
Target: Destination Rewards
Acquirer: Deluxe
Transaction Value: $20.1 million
- Patented rewards and loyalty solution to
enhance Deluxe’s suite of Customer Lifecycle
Management offerings for financial institutions
- Expanding into Deluxe Rewards, a loyalty
program that operates on the foundation of
that patented integrated technology platform
Patent : System and method for
providing a discount

31. Internet Market
Deal Spotlight
Sold to
Target: Sidecar Technologies [USA]
Acquirer: General Motors [USA]
- Mobile ride-sharing & delivery service
- GM, with its Lyft Alliance, aggressively targeting
hot areas in transportation-related tech: car &
ride-sharing, autonomous taxis, etc.
- Includes license to potentially seminal patent
Patent : System and method for determining
an efficient transportation route

32. Seminal patent key to GM-Sidecar deal?
 Filed in 2000 by Sidecar founder; granted in 2002
 Sample claim: A computer-implemented method
for providing transportation services comprising:
 receiving a transportation request from a passenger;
 tracking said passenger's position following said
request using positional detection logic; and
 transmitting positional data identifying said
passenger's position to a pickup vehicle.
 Potential Uber-killer (or Alice roadkill?)

33. Elon Gasper
Vice President & Director of Research, Corum Group
Software entrepreneur and tech M&A IP specialist Elon Gasper’s own
inventions have driven M&A value and underpinned his experience on the
sell-side, buy-side and as an advisor and research director at the Corum
Group. He founded a software start-up, obtained venture funding and was
CEO until its acquisition by the leading public entertainment software
company, where he guided patent portfolio work while supporting its growth
through further acquisitions and eventual exit in an acquisition by a larger
public entity. Elon then helped start and grow a number of other companies.
His awards include a COMDEX Envision; a Codie, the retail software 'Oscar‘;
and eleven patents. He was a finalist for the Fleugelman Award, the only
personal achievement award given by the Software Publishers Association,
and has held faculty and staff positions at Univ. of Washington, Mich. State,
Cal. State, and others. MS, Computer Science; BS, Biochemistry.
Guest Speaker

34. F. David LaRiviere
Owner, LaRiviere, Grubman PC
F. David La Riviere is the owner of the law firm LaRiviere, Grubman PC, a
full-service intellectual property law firm on the legal cutting edge of
converging technologies. Prior to his time at LGP, Dave served at IBM, HP,
Tomy and other technology firms as both an attorney and engineer. He is a
past chair of the Intellectual Property Section of the State Bar of California,
and consults and advises clients on all phases of intellectual property
matters, including domestic and foreign licensing, validity and infringement
opinions; due diligence investigations and reports; technology transfer,
disclosure agreements and employer/employee rights and obligations;
litigation support, including dispute settlement and arbitration; and
preparation, filing and prosecution of applications for domestic and foreign
patents and trademark registrations. He holds a J.D. from the University of
Santa Clara School of Law, and a B.S.E.E. from Stanford University.
Guest Speaker

35. Legal protection of intellectual property
Trademarks Copyright Trade Secrets Patents

36. A) Owning a patentable technology
• Provisional application also serves to define your trade secret technology
• If already on the market for more than a year – use trademark registration protection
• Make Improvements
B) Owning a patent application in process
• Establish 3 levels of claims strategies:
– broadest possible claim tree, mid-level claims tree, a “picture” claim
• File an RCE / CIP as technology evolves
C) Owning an issued patent
• Follow the issued patents with applications on improvements, other embodiments, additional
uses and the like to build a patent portfolio
Legal protection of intellectual property

37. Provisional Application:
Legal considerations
• Defines, describes & prepares claims structure
• Holds world-wide “priority”/place in line for 1 year
• Does not itself result in a patent, but starts the
process clock
• Can take a number of forms
• Assignable like other IP rights

38. Patents
A) Patent:
• Protects inventions
• Invention is a two-step process
– Concept
– Reduction to practice
– However, no practice required
• Protects inventions from infringers
– A negative right
– To exclude others from making, using
selling
• Constitutional Basis
B) Anatomy of a Patent
• Drawings
• Specification
• Claims

39. Patenting Software
A) The Trilogy
• Gottschalk v. Benson
• Parker v. Flook
• Diamond v. Diehr
B) 33 Years Later
• Alice v. CLS Bank
International

40. Risk Management
• IP Assets are major drivers in M&A
activity
• Due diligence absolutely required
• Corralling Intellectual Property Asset,
including trade secrets
• Protection for valuable IP asset
• Pilferage by exiting employees

41. Dave’s diverse background in technology includes incubating and scaling an
innovation intelligence business that built an intellectual property platform that
aggregated over one hundred twenty countries' patent data sets and created advanced
citational analytics algorithms that mined concurrent art and un-cited prior art for
counter-intelligence, patent litigation and predictive intellectual property trends.
Before joining Corum, Dave was CEO North America for Gaxsys, an eCommerce and
logistics company that is a leader in last mile logistics and fulfillment for eCommerce
marketplaces. As an executive and entrepreneur, Dave has been operating and
investing in companies sitting at the convergence of commerce and eCommerce as
well as innovative life science businesses for over 25 years.
Dave has been on both sides of the mergers and acquisitions table, having sold a life
science technology company, facilitated sell side and buy side technology transactions
and has also scaled multiple technology companies globally in the eCommerce, life
sciences and innovation intelligence markets. In the intellectual property space, Dave
sits on boards of numerous public and private companies, including one that recently
filed for an IPO.
Dave Levine
Vice President, Corum Group
Moderator

42. Q&A
We welcome your questions!
– Use Q&A window on left side
– Submit to queue at any time
– If your questions in not answered, we will
attempt to follow up after the event

43. Q&A
Elon Gasper
Vice President & Director of
Research, Corum Group
F. David LaRiviere
Owner,
LaRiviere, Grubman PC

44. Contact Us
For further information or copies of today’s
presentation:
Visit www.wfs.com
-or-
Email
Dave Levine: davidl@corumgroup.com