Licensing Executives Society(U.S.A. and Canada), Inc.

PATENT/IP BROKERAGE STANDARDS COMMITTEE

Paul GrecoSenior Vice PresidentICAP Patent Brokerage

Issues to Address

2

• PROBLEM: PATENT / IP BROKERAGE PERCEPTION IN MARKETPLACE GENERALLY NOT GOOD

• LEGISLATION & REGULATION IS NOT THE ANSWER• SOLUTION – STANDARDS ADOPTED BY RECOGNIZED IP

INDUSTRY LEADER - LES• As a consequence of recently delayed and unsuccessful

legislative initiatives in the patent space, as well as general negative perceptions in the IP transaction community regarding IP brokerage, it is in the participants’ respective best interests to develop baseline best practices and standards by which they facilitate and conclude IP transactions in the marketplace.

Objectives & Focus

3

• OBJECTIVES AND FOCUS:• Create Identifiable Areas in IP/Patent Brokerage for

Standards (i.e., engagement, conduct, documentation, manner of payments, etc.)

• Identify and articulate the specific standards for those areas of IP/Patent Brokerage

• Manner of implementation of agreed-upon standards for IP/Patent Brokerage

• Result should be increased dollar amount and volume of IP transactions in the market as well as increased trust with clients

Possible Standards to Explore

4

Some Areas to Explore for Possible Standards:

1. IP Owner/Brokerage Engagement Agreement2. IP Owner/Brokerage NDA & Brokerage/Prospective Buyer NDA3. IP Purchase Agreement (IPPA)4. IP Assignment5. Due-Diligence Questionnaire6. Encumbrance Disclosure (white lists, black lists, liens, etc.)7. Negotiations (competing bid disclosures, other party interest, etc.)8. Auctions (public vs. private, price guidance, minimum bid, etc.)9. Information Disclosure (Chain-of-Title Report, EOUs, claim charts, file

wrappers, valuation reports etc.)10. License (Cross-License, Grant-Back License, etc.)11. Marketing

Within each of the above, it would also be prudent to determine the scope of possible acceptable variants (i.e., term, commission rate, etc.)

Priorities of Standards

5

PRIORITIES OF STANDARDS:

1. TRUST – What standards can best build and restore confidence in IP brokers?

a. Duty to Client.b. Honesty.c. Communication Standards.d. Managing Price Expectations.e. Realistic Deadlines (buyer/seller).f. Marketing Efforts.g. Confidentiality.

Priorities of Standards (Cont.)

6

PRIORITIES OF STANDARDS:

2. DIMINISHING TRANSACTION IMPEDIMENTS – What standards can best break-down transaction impediments (while preserving Trust) to increase volume of IP transactions among brokers and decrease transaction time?

a. Standardized NDAsb. Minimum Standard Data Room Structuresc. Encumbrance Disclosures (White Lists, Black Lists, etc.)d. Other Information Disclosures (Chain-of-Title Reports, file histories,

EOU, claim charts, market studies, valuation reports, projections of market capture, etc.)

Priorities of Standards (Cont.)

7

PRIORITIES OF STANDARDS:

3. UNIFORMITY OF AGREEMENTS – What agreements need to be standardized in an effort to increase efficiency in IP transactions?

a. Engagement Agreementsb. IP Sale Agreementsc. Assignmentsd. NDAse. Non-Notice Agreements

Who should Participate?

8

What kinds of companies / people should participate and help formulate IP/Patent Brokerage Standards:

• PLECs / NPEs / PIPCOs• Defensive Aggregators• Operating Companies• Universities• Patent Pools?• IP/Patent Brokerage Firms• IP Lawyers

Key Questions

9

1. Are there any other areas for standards for IP/Patent Brokerage that you feel that we might have missed? If so, what are they?

2. Regarding any of the proposed standard documents, are there forms that you have access to that you feel might serve as a beginning template? If so, would you be able to provide them to the committee?

3. Are there any other problem areas with IP/Patent Brokerage that you feel need to be addressed other than through standards?

4. Are there any other mechanisms or protocols that could be used to increase the speed and volume of transactions in the IP/Patent market?