Confidential

PRESENTATION FOR 2014

LEXISNEXIS LEGAL & IP SEMINARS

Joseph Chang

Vice President | Technical Analysis Group joseph.Chang@TranspacificIP.com

DEC 5 , 2014

AGENDA:

1 Company Intro & the Speaker2 Global Patent Economy Trend3 Patent Portfolio Strategy & Financial Planning4 Patent Valuation & Case Study

We not only lead the IP market - we move it forward

Session 1 - Company Intro & the Speaker

COMPANY PROFILE

Transpacific IP - NOT a Patent Prosecution Firm - NOT a Patent Litigation Firm

Our employees • Portfolio Mangers• Contract Managers• Paralegals• Patent engineers • Technical & market analyst • Attorneys & business

100+ external experts • Technology & field experts

Technologies • Telecommunications • Consumer electronics • Information technology • Software/hardware • Biomedical • Green technologies

COMPANY LOCATIONS

Offices: - Singapore - Taipei - HsinChu - Beijing - ShangHai - HongKong - Tokyo

Business Contacts: - Chicago - San Francisco - Austin - Munich

FOUR MAJOR COMPONENTS

Business Development

Technical Analysis

Legal &

D.D.

PATENT Prosecution

FUNCTIONAL GROUPS

COMPANY SERVICES

STRATEGY

• Portfolio Development • Portfolio Management • Commercialization

• Competitive Intelligence

• Technology Landscaping/Mapping

COMPANY SERVICES

ANALYTICS

• Claims Analysis

• Prior Art Search

• Due Diligence

• Valuation

• Litigation Support

COMPANY SERVICES

TRANSACTIONS

• Patent & Technology Acquisitions

• Patent & Technology Sales

• Patent & Technology Licensing

• Brand Licensing

SOME UP-TO-DATE NUMBERS

TRANSPACIFIC IP FACTS

Item DD service Deal Represent +DD service

Subtotal

# Deals 650+ 200+ 850+# Families 12,500+ 7,500+ 20,000+

# Patent Assets 55,000+ 25,500+ 80,500+

1-2% of Portfolio - $ 10-50 MMUsually the entire portfolio from a reputable company or one of its

Bus - With Key Patents can be leveraged in patent law suits leading to fully-paid up licenses or running royalty payments.

2-5% of Portfolios – $ 5-10 MMWith Key Patents can be leveraged in patent law suits leading to

fully-paid up licenses or running royalty payments, however, the portfolio size is in between a handful patents to 30 families, roughly. 5-15% of Portfolios – $ 1-5 MMPatents are sold to companies interested in entering new market or

product lines, for defensive use generally or for specific (short-term) counter defensive use against a specific target company.

SOME UP-TO-DATE NUMBERS

912 U.S. PATENTS ASSIGNED (SOLD) BY I.T.R.I

Transpacific IP

VIA Technologies

Others (52)

DATA SOURCE: USPTO ASSIGNMENT DATABASE, DATA AS OF 15TH JUNE 2014; TOTAL 1,133 US PATENTS ASSIGNED BY ITRI HAVE BEEN LOCATED; 113 PATENTS ASSIGNED TO ITRI ITSELF HAVE BEEN REMOVED FORM THIS RESEARCH; 105 PATENTS CO-OWNED BY ITRI AND OTHER 7 COMPANIES HAVE ALSO BEEN CONSIDERED NOT OF PURE PATENT TRANSACTION DEAL(S)

SOME UP-TO-DATE NUMBERS

BUYER CLIENTSReady Buyers Amount

Computer/Handset Company (TW; CN; KR)

6

Display Company (CN; TW; KR)

9

IC Company (US; TW; CN)

5

International 3C Company (CN; JP; KR)

3

Internet Company (CN; US)

4

Telecom Company (CN; EU; TW)

10

Software Company (US)

2

Medical Device Company (EU, US)

2

IP Company (CA; JP; KR; TW; US)

25

Subtotal 66

WHAT DOES PEOPLE SAY ABOUT US?

•We’ve been impressed with Transpacific IP from the beginning. Their team is experienced. Their work is meticulous. With their help we’ve been able to assess our technologies and facilitate licensing quickly and efficiently.

- Professor Paul C. B. Liu, Ph.D, Chairman, Cornerstone Foundation•Overall, Taiwan’s IT industry must adopt a multi-pronged IP innovation/value creation (not value added) model and strategies, including litigation strategies and tactics, such as using RPX, AST, Transpacific IP, or even a NPE to acquire patents or licenses of patents in litigation.

- Richard “Dick” Thurston, Senior Vice President and General Counsel , TSMC

•Transpacific IP is one of the 40 most influential global IP market makers. - IAM magazine, 2014 June.

AUTM Asia 2012 SINGAPORE

2013 NOV 17-19 SINGAPORE

2014 DEC 7-9 Shang Hai

SPONSORING & NURTURING THE REGION

SPEAKER INFO

SPEAKER ARTICLES

Session 2 - Global IP Economy Trends

We understand the IP world, the economy, and the value chain

IP INCOME/OUTFLOW - ASIA

IP INCOME/OUTFLOW - U.S. & JAPAN

http://www.managingip.com/Article/3361947/US-patent-litigation-cases-filed-up-25-in-2013report.html5PwCPatent litigation study

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1,000

2,000

3,000

4,000

5,000

6,000

7,000

100,000

120,000

140,000

160,000

180,000

200,000

220,000

240,000

260,000

280,000

300,000

Pat

ent c

ases

file

d Patents granted

’91 ’92 ’93 ’94 ’95 ’96 ’97 ’98 ’99 ’00 ’01 ’02 ’03 ’04 ’05 ’06 ’07 ’08 ’09 ’10 ’12’11 ’13

CAGR = 8%

CAGR = 5%

Patent cases Patents granted

Year

Years are based on September year-end.Sources: Performance & Accountability Report (US Patent and Trademark Office) and Judicial Facts and Figures (US Courts)

Chart 1. Patent case filings and grants

'HWDLOHG�ğQGLQJV

PATENT LITIGATION & FILING TREND (U.S)

THE LEXMACHINA RESEARCH

New Cases Filed 2005-2013, by month (2013 in orange)

https://lexmachina.com/2014/05/patent-litigation-review/

• Patent caseload in U.S. courts spiked significantly since 2011• A clear continuation of the trend towards increasing patent litigation

ANOTHER LITIGATION TREND REFERENCE

2014 Patent Litigation Study As case volume leaps, damages continue general decline

Source: PWC official website

COVER PAGES - PWC LITIGATION STUDY

Google VP: “We Weren’t Investing in the Patent Ecosystem Like We Should Have Been”

http://www.droid-life.com/2012/09/12/google-vp-we-werent-investing-in-the-patent-ecosystem-like-we-should-have-been/

THE INNOVATION GIANT

Google Portfolio – Project Overview

Google Origination Google Acquisitions

Patent Portfolio Acquisition Company Acquisitions

Assigned to Google

Not Yet Assigned to Google

4CONFIDENTIAL

to Google Google

BRIEF

!Company Acquisitions: Based on the information made to pubic, TIPG has compiled all the records of Google’s effort. That is, 144 companies until now, include the Motorola Mobility acquisition.

!Total Coverage of the Study: By using TI, TIPG has successfully pulled out 9891 families, from the latest assignor analysis, 167 entities have been identified. After cross checking the assignor list and the acquisition list, only 52 acquired entities (out of 144) have assigned all or part of their patent assets to Google (“Assigned to Google”), and the other 115 entities assigned patents to Google are not on the company acquisition list (this 115 entities are of “Patent Portfolio Acquisition” showing above).

5167 4263 461 ?

(US Family)

GOOGLE’S PATENT PORTFOLIO

A $10B PATENT PORTFOLIO

Confidential

on 5,000+ companiesSource: http://www.lotnet.com/

GOOGLE SAYS P.A.E. ECONOMY IS $29B/YR

POST GRANT REVIEW Statistics 2013年10⽉月⾄至2014年7⽉月1⽇日

Source: http://iknow.stpi.narl.org.tw/post/Read.aspx?PostID=9853

A.I.A. IMPACT

Dropping Deal Rate

• IV (⾼高智）has already got 40,000 patents (US)

• RPX only buys at really low price

• Acacia is not buying open market patents

• Maybe US post grant review system is working

Source: RPX Corporation investor presentation 2014 Q1

RECENT OPEN MARKET & DEAL RATE

Confidential

1993 Acacia

2008 RPX

2000 IV

2010 I-Discovery

2014 RuiChuang

(Zhigu)

2013 IP Bridge

1911 IBM

NPE, PAE OR PATENT TROLL !?

or maybe …… Real Patent Experts !

Session 3 - Patent Portfolio Strategy & Financial Planning

PATENT “COST” ?

We are talking about cost of “Patent Holding”

➢ Patent Prosecution Cost (Cash Outflow per patent)

A. 申請費⽤用 (filing) B. 答辯費⽤用 (OA response) C. 維持年費 (annuity) D. 發明⼈人獎⾦金

➢ In-House Cost (management)

A. 專利經理與⼯工程師 B. 管理系統 (docket system) C. ⼯工具軟體與付費資料庫

(note: true R&D expense is not listed )

SAMPLE PROSECUTION FEE SCHEDULE

SAMPLE PROSECUTION FEE SCHEDULE

Common legal cost for a patent:

• Patent Filing: around 1/3 of total cost

• Patent Prosecution: around 1/3 of total cost

• Annuity/Maintenance: around 1/3 of total cost

A SAMPLE PATENT PORTFOLIO - ANNUITY COST

Country Year US CN JP KR TW DE FR GB Total

Invention Utility Invention Utility Invention Utility Design Invention UtilityTotal # from TI 67 1 0 30 1 2 58 0 0 3 0 0 3 165

Total # from PTO 0 20 1 1 0 0 59 15 1 0 0 0 0 97Patent # 46 13 1 14 1 1 43 8 0 0 0 0 2 129

2003 - - - - - - 84 - - - - - - 84 2004 - - - - - - 84 - - - - - - 84 2005 - - - - - - 253 - - - - - - 253 2006 - - - - - - 676 - - - - - - 676 2007 - - - - - - 929 - - - - - - 929 2008 1,600 - - 355 - - 1,098 - - - - - - 3,052 2009 3,200 441 - 355 - - 1,621 169 - - - - - 5,786 2010 4,800 1,763 98 828 - - 2,128 169 - - - - 180 9,965 2011 14,400 2,449 147 1,598 89 - 2,922 253 - - - - 213 22,071 2012 14,800 2,546 147 2,071 89 246 4,442 777 - - - - 360 25,478 2013 16,800 2,938 196 3,454 89 246 6,621 777 - - - - 426 31,546

Sub Total - Before 2014 55,600 10,137 588 8,660 267 492 20,858 2,145 0 0 0 0 1,178 99,925

2014 18,800 3,983 196 5,541 265 246 8,715 828 - - - - 491 39,064 2015 45,200 4,244 196 6,569 265 454 10,556 1,351 - - - - 557 69,391 2016 39,000 5,224 326 10,122 265 454 12,380 1,351 - - - - 655 69,776 2017 38,000 7,835 326 10,122 265 454 14,322 1,486 - - - - 753 73,564 2018 40,200 8,488 - 12,905 - 747 15,977 2,162 - - - - 884 81,363 2019 95,400 9,468 - 14,992 - 747 17,464 1,621 - - - - 1,015 140,706 2020 66,200 12,080 - 14,992 - 747 21,078 1,621 - - - - 1,162 117,880 2021 48,000 12,732 - 14,992 - 860 21,889 270 - - - - 1,309 100,053 2022 37,000 13,712 - 14,992 - 860 22,429 - - - - - 1,489 90,483 2023 59,200 16,324 - 14,992 - 860 22,699 - - - - - 1,653 115,728 2024 29,600 16,977 - 13,921 - 860 21,078 - - - - - 753 83,189 2025 7,400 16,977 - 11,779 - 860 18,376 - - - - - 835 56,227 2026 - 16,977 - 8,567 - 860 17,295 - - - - - 917 44,615 2027 - 13,059 - 7,496 - 860 16,214 - - - - - 982 38,611 2028 - 2,612 - 6,425 - 860 10,269 - - - - - - 20,166 2029 - - - 1,071 - - 5,405 - - - - - - 6,475 2030 - - - - - - 3,243 - - - - - - 3,243 2031 - - - - - - 540 - - - - - - 540 2032 - - - - - - - - - - - - - 0

Sub Total 2014~ 524,000 160,690 1,045 169,476 1,059 10,73 259,927 10,691 0 0 0 0 13,454 1,151,07Total 579,600 170,826 1,632 178,136 1,326 11,223 280,786 12,836 0 0 0 0 14,633 1,250,99

LET’S GET SOME SENSE OF THIS ECONOMY

We provide global expertise and the local network to connect all parties in the IP value chain.

Session 4 - Patent Valuation & Case Study

SOME FAMOUS TRANSACTION DEALS

Price ($) / Asset

TRANSPACIFIC IP BENCHMARK

DATA SOURCE: TRANSPACIFIC IP TRANSACTION DATABASE; THE DATA IS OF 850+ DEALS WITH 25,500+ US PATENTS (TRANSACTED)

45K 100K 250K20K

Price/ US asset (USD)

Source: PWC 2014 patent litigation study

7PwCPatent litigation study

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Year Plaintiff Defendant Technology Award (in $MM)

2009 Centocor Ortho Biotech Inc. Abbott Laboratories Arthritis drugs $1,673

2007 Lucent Technologies Inc. Microsoft Corp. MP3 technology $1,538

2012 Carnegie Mellon University Marvell Technology Group Noise reduction on circuits for disk drives $1,169

2012 Apple Inc. Samsung Electronics Co. Smartphone software $1,049

2012 Monsanto Company E.I. Dupont De Nemours and Company Genetically modified soybean seeds $1,000

2010 Mirror Worlds LLC Apple Inc. Operating system $626

2005 Cordis Corp. Medtronic Vascular, Inc. Vascular stents $595

2004 Eolas Technologies Inc. Microsoft Corp. Internet browser $521

2011 Bruce N. Saffran M.D. Jonhson & Johnson Drug-eluting stents $482

2008 Bruce N. Saffran M.D. Boston Scientific Corp. Drug-eluting stents $432

Chart 3. Top ten largest initial adjudicated damages awards: 1995–2013

7PwCPatent litigation study

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Year Plaintiff Defendant Technology Award (in $MM)

2009 Centocor Ortho Biotech Inc. Abbott Laboratories Arthritis drugs $1,673

2007 Lucent Technologies Inc. Microsoft Corp. MP3 technology $1,538

2012 Carnegie Mellon University Marvell Technology Group Noise reduction on circuits for disk drives $1,169

2012 Apple Inc. Samsung Electronics Co. Smartphone software $1,049

2012 Monsanto Company E.I. Dupont De Nemours and Company Genetically modified soybean seeds $1,000

2010 Mirror Worlds LLC Apple Inc. Operating system $626

2005 Cordis Corp. Medtronic Vascular, Inc. Vascular stents $595

2004 Eolas Technologies Inc. Microsoft Corp. Internet browser $521

2011 Bruce N. Saffran M.D. Jonhson & Johnson Drug-eluting stents $482

2008 Bruce N. Saffran M.D. Boston Scientific Corp. Drug-eluting stents $432

Chart 3. Top ten largest initial adjudicated damages awards: 1995–2013

U.S. PATENT LITIGATION DAMAGES - TOP 10

13PwCPatent litigation study

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23 $0.417

$0.817

Median damages are adjusted for inflation to 2013 US dollars.

The number of identified decisions is indicated within the respective column.

Chart 7b. Median damages awarded: top ten industries, 1995–2013

Source: PWC 2014 patent litigation study

U.S. PATENT LITIGATION DAMAGES - MEDIAN (2014)

Source: PWC 2014 patent litigation study

ROYALTY METHOD IS STILL MOST-WELCOME

10 PwC Patent litigation study

Success rates vary by type of entity and stage of decision

Finally, damages awards for price erosion claims have become almost non-existent over the last nine years. The cost and complexity of price erosion analyses have reduced the recovery (and, most likely, the pursuit) of price erosions claims.

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

1995–1999 2000–2004 2005–2009 2010–2013

Price erosion

Lost profits

Reasonable royalty

8%

41%

69%

29%

78%80%

29%

2% 1%

37%

81%

9%

Chart 5. Composition of damages awards

Chart 6a shows that the overall success rate for practicing entities is 10% higher than that for NPEs over the last 19 years. NPEs are much less successful at the summary judg-ment stage: winning in only 3% of identified decisions, as opposed to 10% for practicing entities. Conversely, the trial success rate for practicing entities is nearly identical to that for NPEs, at roughly two-thirds.

0%

10%

20%

30%

40%

50%

60%

70%

Overall Summaryjudgment

Trial

Nonpracticing entities

Practicing entities

10%

66%

25%

35%

3%

65%

Chart 6a. Patent holder success rates: 1995–2013

REASONABLE ROYALTY / RELEASE FROM ROYALTY

Patent Portfolio Valuation Concept

• VALUATION &COEFFIENCTs ! !"#$, %&'()*, +,-)*

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VALUATION - MUST CONSIDER “PATENT QUALITY”

Field of Use analysis - “what” is the technology space - initial tech grouping

High-level review: - Claim 1

Mid-level review : - independent claims - background/motivation - reason of allowance

Claim charting - Might involve reverse Engineering - Chip level cost reference: 200-500K per patent/per chip

Detailed-level review: - full file wrapper - all embodiments & limitations - all estoppel

Mid-level work : - identify possible infringing products - identify related standards Detailed-level work :

- literature-based & time-limited search - element by element EOU comment

Literal Target/EOU

Patent Analysis

Deep Dive Analysis

Large Portfolio Analytics

PATENT ANALYSIS FUNNEL

New TAG system

Deal Info

Price

Encumbrance

Portfolio Analysis

Family counts

US granted patent counts

non-US patent counts

Portfolio-level priority year analysis

Technical Analysis

objective rating

Claim structure

1) Consisting of very bad

2) Method claim good

3) Means for bad

4) How many independent claims? More better

5) Dependent claim not the reason to get bonus; but if no dependent claim bad

6) Long preamble might be bad

7) Multiple bodies infringement bad8) business method claim --> bad

9) International claim label --> bad

Spec

1) Long good

2) Background can hurt

3) All claimed elements should be supported by the SPEC

History reason for allowance

Date & distribution

citation

broad or narrow?# claimed elements

with specific/very narrow claim elements?

Target

tech group

companies

products/technology Detectability

Infringement Detectability Method/Difficulty

market size

standard essential?

commercially essential?

New system.mmap - 2013/1/22 -

ANALYSIS ITEMS FOR A PATENT

Samples

Source: iRunway 4G LTE patent landscape

Patent & Landscape Analysis of 4G-LTE technology

© iRunway 2012 Confidential Page 19 of 25

# of Patents

# of Seminal Patents

# of Patents

# of Seminal Patents

Samsung 1179 77 243 0

Qualcomm 729 80 180 1

InterDigital 345 22 85 0

Nokia Corporation 275 27 80 0

Ericsson 217 24 75 0

LG Corp. 226 25 60 1

Motorola Solutions, Inc. 188 11 34 0

Motorola Mobility Holdings, Inc. 30 12 5 0

Panasonic 379 13 80 0

Sony 181 12 20 0

Electronics and Telecommunications Research Institute 197 8 52 0

Industrial Technology Research Institute 70 4 11 0

Korea Advanced Institute of Science and Technology (KAIST) 27 0 3 0

Hong Kong Applied Science & Technology Research Institute 20 3 9 0

Seoul National University Industry Foundation 15 0 6 0

Massachusetts Institute of Technology 8 0 2 0

California Institute of Technology 4 1 0 0

Adaptix Inc. 47 1 5 0

Digcom Inc. 93 18 6 2

Innovative Sonic 21 1 0 0

Others(SMEs/NPEs)

Assignee Category

AssigneesDevices Network & Infrastructure

Major Players

5 Potential Licensing/ Litigations in 4G-LTE

Patent   set   comprising   ‘Essential’   patents which were declared on various standards were

analyzed and compared with the list of seminal patents. The difference in the patent

constitution between the two patent sets was significant. Larger companies such as

Samsung, Qualcomm, Ericsson, etc were the ones which publicly declared their patents as

‘essential’.  Unlike  larger  companies,  SMEs and NPEs such as Adaptix Inc., Digcom Inc., Inha

Industry Partnership Institute, etc. continues to remain in stealth mode despite the

presence of strong patents in their portfolio.

A closer look at the assignees of patents in the 4G-LTE space (other than the top

companies) revealed some interesting trends on companies that can pursue efforts to

monetize their patents, either through licensing or litigation.

Table 5 provides information on 4G-LTE landscape of major players and others (primarily

SMEs and non-practicing entities) across Devices and Network & Infrastructure patents.

Table 5: Patent distribution of key players across Devices and Network & Infrastructure

Table of 4G LTE Patent Landscape -

DATE & PORTFOLIO SIZE

ENCUMBRANCE - A deadly important factor in IP valuation

THANK YOUEnd of Presentation

Thank you! Questions?

End of Presentation