What Can We Predict from Five Years of Secondary Patent Sales?

1. in collaboration with 1 Contact Information: +1 650 967 6555 kent@richardsonoliver.com

2. in collaboration with Agenda Look back Market dynamics Prediction 2

4. in collaboration with What’s in a Brokered Patent Package? • List of patents for sale, applicable market, infringement analysis (claim chart), background on the seller • Asking price, bid dates, special circumstances (license back, specific encumbrances) Typical package • Confluence Patent Portfolio • Single family (15 US patents and 7 open applications) relating to social network data aggregation. • 2006 priority date. • Received July 2013 • Sold October 2014 • Asking prices: “7 figures” • Multiple claim charts presented for • Apple • Google • Facebook • Purchased by an operating company • Fingerprint Cards AB Example package from Patent Profit (Will Plut) 4Copyright 2017 ROL

5. in collaboration with LinkedIn – What You Can Do Over Four Years 2011 2016 0 500 1000 1500 2000 2500 #ofAssets Portfolio Growth by Priority Year Organic Portfolio Projected Organic Portfolio 0 500 1000 1500 2000 2500 #Assets Total Portfolio by Priority Year Acquired Portfolio Organic Portfolio 5

6. in collaboration with WhereIs the Patent Market Today? 6

7. in collaboration with Ten Years Ago - Secondary Market 2007 IV the biggest buyer Few brokers AST and RPX Few capable buyers What’s a good deal? 7

8. in collaboration with Five Years Makes a Difference 8 2012 2017 Sources Transactions Pricing Capabilities Private Public Only WSJ published deals Quarterly public data Skewed Intellectual Ventures plus select companies Quarterly public data SMEs buying

10. in collaboration with Sellers Buyers Direct Sales >1,000 deals per year hit the market And 50+ more … 10

11. in collaboration with How Big Is the Patent Market? 11 $0 $2 $4 $6 $8 $10 $12 $14 2011-Q1 2012-Q1 2013-Q1 2014-Q1 2015-Q1 2016-Q1 2017-Q1 ROL Group Tracked Brokered and Private Market Cumulative Sum ($B) $11 billion plus in patent packages 90 thousand plus patent assets 100 technology categories Unsold Sold

13. in collaboration with Caveats – Sure There Are a Few 13

14. in collaboration with Asking Prices Are Stabilising $0 $50 $100 $150 $200 $250 $300 $350 $400 $450 $500 2012 2013 2014 2015 2016 $K Listing Year Average Asking Prices ($K) Price per US Issued Price per Asset 14

15. in collaboration with What’s Hot In the Patent Market Today 15

16. in collaboration with Sales Rates Dropping or Shifting? Sold by Year Listed – Bad Trend 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 SalesRate Listing Year % Sold as % Listed Per Year – OK? 0% 5% 10% 15% 20% 25% 2012 2013 2014 2015 2016 Year Sales in Calendar Year as % of Listings in Calendar Year 16

17. in collaboration with Sales Rates Dropping or Shifting? Sold by Year Listed – Bad Trend 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 SalesRate Listing Year Sold as % Listed Per Year – OK? 0% 5% 10% 15% 20% 25% 30% 35% 40% 2012 2013 2014 2015 2016 Year 17

18. in collaboration with Some Brokers Are More Effective Than Others 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 0 5 10 15 20 25 30 35 40 45 50 SalesRate Number of Listings 2015 Broker Sales Rate Broker's 2015 Sales Rate 2015 Sales Rate 10.4% 18

20. in collaboration with 66% 17% 10% 3% 2% 1% Operating company NPE Inventor University/research Defensive aggregator Other DistributionofSellerTypeby2016SaleYear:OperatingCompaniesDominatetheMarket Operating companies represent over 66% of the patents on the market down from 71% NPEs increased their sales up last year, this has continued - 17% up from 16% - likely as a result of difficulties enforcing their patents Cross-licensing before competitor patent sales is a benefit 20

21. in collaboration with Sales by Sales Year – Five Years OpCos are the biggest sellers NPE sales increasing 21

22. in collaboration with 48% 34% 15% 3% Operating company NPE Defensive aggregator Other Distribution of Buyer Type by 2016 Sale Year Operating companies now top buyers NPE buying is down to 32% from 42% IV buying dropped to only 13 packages down from 40 RPX is top single buyer 22

23. in collaboration with Buyers by Sales Year – Five Years OpCos increasing their buying NPE down but not out Non-public companies buying increased from ~0% to 30% of company purchases 2012 2013 2014 2015 2016 Total Other 0% 3% 7% 2% 5% 4% Defensive Aggregator 11% 16% 22% 19% 19% 19% OpCo 41% 45% 31% 42% 41% 39% NPE 48% 37% 40% 36% 35% 38% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% %ofPackageSales Sale year Other Defensive Aggregator OpCo NPE 23

24. in collaboration with TopSellersandBuyers2016 Top Sellers by Package Count Alcatel Lucent Allied Security Trust (AST) ATT BAE Systems, Inc. British Telecom Caveo Elizabeth Dyor Empire IP, LLC Harris Corporation IBM Imation Corporation Intel NEC Netsocket Nokia Solutions and Networks (NSN) Panasonic Corporation Petnote LLC QinetiQ Limited Rockstar Rovi Corporation TP Lab, Inc. Tyco Electronics Verisign, Inc. Verizon VideoMining Corporation Xerox/PARC Top Buyers by Package Count 9051147 Canada Inc. Alliacense Limited Llc Allied Security Trust (AST) Beijing Xiaomi Mobile Software Co., Ltd. Carlow Innovations LLC Commscope Emea Limited Domo, Inc. Empire IP LLC Facebook, Inc. Finnavations LLC Gemalto SA Google Inc. Huawei Technologies Co., Ltd. Intellectual Discovery Co., Ltd. Intellectual Ventures Knapp Investment Company Linkedin Corporation Marking Object Virtualization Intelligence, LLC Microsoft Technology Licensing LLC Open Invention Network, LLC Optimum Communications Services, Inc. Palo Alto Networks, Inc. Rakuten, Inc. Red Hat, Inc. RPX Corporation Taiwan Semiconductor Manufacturing Co., Ltd. Twitter, Inc. Uniloc Luxembourg S.A. 24

25. in collaboration with Litigation Analysis: You Can Model Your Risk Has Litigation Has IPR Package Type Before listing date After listing date Before listing date After listing date Sold packages 5.4% 10.2% 0.0% 3.0% All packages 3.8% 3.5% 0.0% 1.4% 10.2% of sold packages are litigated – time to update models? Both sold and unsold packages are litigated post listing Defensive aggregator value may be greater than anticipated 25

27. in collaboration with Where Is the Market Going? 27

28. in collaboration with Trends and Predictions Market size remains around $200 million to $300 million More international sales Prices – stabilised Sales rates – remain low Faster and simpler transactions expand market NPEs continue to buy – fewer buyers drive this part of the market More brokers leave 28

29. in collaboration with 29

30. in collaboration with Questions? 30

What Can We Predict from Five Years of Secondary Patent Sales?

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