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

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

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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

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January 28, 2016 28, 2016

Patent Trolls: Knowing Your Risk

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 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

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

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NPE litigation activity and cost trends

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

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Source: RPX Research

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

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Source: RPX Research

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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.

49% 51%

100%

1,181 376 501 501 672 953 1,644 1,958 3,405

Other Sectors Hotels & Restaurants Energy & Utilities Healthcare & Pharma Industrial Manufacturing Consumer Products Automotive & Transport Financial Services Retail

No Non-Tech N h NPE Defenda ndant nts by Compa pany T Type 2010 2010-14 NPE Defendant ndants s by Segment nt Hi High Te Tech Not Hi High Te Tech

>22, >22,000 0 Cases

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Source: RPX Research

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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.) 8

Source: RPX Research; RPX NPE Cost Report 2014

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 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

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 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

Source: RPX Research and USPTO assignment database

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Where to find NPE data and intelligence

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 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
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 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

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Tools to understand and mitigate your risk

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 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

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 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
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 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

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 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

  • perations in the United States, Europe, Asia,

Australia and South America

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 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

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THANK YOU !