Patent Trolls: Knowing Your Risk January 28, 2016 28, 2016 No - PowerPoint PPT Presentation

Patent Trolls: Knowing Your Risk January 28, 2016 28, 2016

 No products or services  Patent licensing/litigation is sole business  Revenue = settlements  ~95% of cases settle  1,450+ active NPE campaigns today Source: RPX Research 2

 Are patent trolls a threat to your company?  How can you plan for patent troll activity?  What should be in your risk management plan? 3

NPE litigation activity and cost trends

5,370 5,203 4,595 4,396 1,637 1,599 1,556 1,505 2,873 2,137 1,461 3,733 3,604 3,039 1,394 2,891 1,412 743 2010 2011 2012 2013 2014 2015 NPE Cases Operating Company Cases Source: RPX Research 5

7,849 7,834 7,686 6,966 6,940 6,466 2,485 2,562 2,572 2,524 2,644 2,584 5,349 5,287 5,114 4,416 4,322 3,882 2010 2011 2012 2013 2014 2015 Total Defendants Added in NPE Cases Total Defendants Added in Operating Company Cases Source: RPX Research 6

2010 2010-14 NPE Defendant ndants s by Segment nt Non-Tech N No h NPE Defenda ndant nts by Compa pany T Type >22, >22,000 0 Cases 100% Retail 3,405 1,958 Financial Services High Te Hi Tech 51% Automotive & Transport 1,644 953 Consumer Products Industrial Manufacturing 672 501 Healthcare & Pharma Energy & Utilities 501 49% Not Hi High Te Tech 376 Hotels & Restaurants Other Sectors 1,181 Note: Hi-Tech includes all RPX technology sectors. Percentages reflect total defendants in the  case/defendant pairings of new cases. Defendants with unknown industry were excluded. Source: RPX Research 7

Methodology notes: Costs from NPE litigation calculated from average legal and settlement costs, multiplied by total  NPE litigation volumes. An additional gross-up is added to account for NPE-related costs outside of litigation (e.g. NPE assertions not proceeding to trial, IPR / re-exam proceedings, etc.) Source: RPX Research; RPX NPE Cost Report 2014 8

 Average cost for NPE assertion letter that does not result in litigation (“non-litigation NPE assertions”): $30K-$50K  In 38% of non-litigation NPE assertions the accused infringer had no cost ◦ These companies are generally experienced in handling NPE-related matters Source: RPX Research 9

 Average case length ◦ 12 – 18 months  Average case cost ◦ <$500M revenue: $530K ◦ $500M - $1B revenue: $1.6 million  Growing patent supply ◦ 2M+ grants since 2000 ◦ 300,000+ utility patent grants by USPTO FY2014  Tech-related patents comprised around 58% of the FY2014 utility patent grants 10 Source: RPX Research and USPTO assignment database

Where to find NPE data and intelligence

 How often are you and your peers sued by NPEs? ◦ Your legal department ◦ RPX Search (https://search.rpxcorp.com/) ◦ Docket Navigator, PACER, Lex Machina  What is the overall cost? ◦ Your finance department (don’t forget about IP indemnification costs) ◦ RPX Cost Study ◦ Risk profile/benchmarking 12

 Who is buying or selling patents? ◦ RPX OPEN ◦ Google LOT ◦ OIN, AST, etc.  Who has received threat letters from NPEs? ◦ National Conference of State Legislatures ◦ RPX assertion letter tool ◦ Trade associations  What is the status of patent reform? ◦ www.patentprogress.org ◦ RPX, Unified Patents, OIN, trade associations 13

Tools to understand and mitigate your risk

 Reduce frequency ◦ Obtain rights before NPEs acquire/assert the patents  RPX OPEN, Google LOT, OIN, AST ◦ Cost-effectively deal with assertion letters  RPX membership/assertion letter tool  Membership in trade groups  Use of state laws 15

 Reduce severity ◦ Participate in RPX cost study ◦ Collaborate with peers through OIN, AST, trade groups ◦ Join defensive networks such as RPX, OIN, AST ◦ Buy insurance 16

 Leader in patent risk solutions ◦ Founded in 2008 (NASDAQ: RPXC)  245+ clients ◦ Consumer electronics, financial services, personal computing, networking, media, mobile, semiconductors and software  Unique defensive model ◦ Nearly $2 billion in patent acquisitions and rights ◦ Nearly 900 litigation dismissals for our clients ◦ $2.5+ billion in avoided legal and settlement costs  Defensive acquisition, syndicated buying, insurance, market intelligence and advisory services 17

 Provides a customer service platform designed to bring organizations and their customers closer together ◦ Founded in 2007 (NYSE: ZEN)  More than 64,000 paid customer accounts ◦ Used by organizations in 150 countries and territories to provide support in more than 40 languages  Headquartered in San Francisco, Zendesk has operations in the United States, Europe, Asia, Australia and South America 18

 Patrick Lonergan-Zendesk, Inc. ◦ Associate General Counsel-Intellectual Property ◦ plonergan@zendesk.com ◦ 415-335-9238  Kimberly K. Cauthorn-RPX Insurance Services ◦ Vice President, Insurance Operations ◦ kcauthorn@rpxcorp.com ◦ 415-418-2336 19

THANK YOU !