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ABC of Intellectual Property ABC of Intellectual Property RightsRights

| Kiran Bettadapur || Kiran Bettadapur |

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Story #1Story #1

Tech GiantTech Giant ≈≈100K employees100K employees Rev.: US$ 30 b.Rev.: US$ 30 b.

Market Cap:Market Cap: FY2000: FY2000:

≈US$ 300 b.≈US$ 300 b. 2009: <US$ 2 b.2009: <US$ 2 b.

Ch. XI: Ch. XI: BankruptcyBankruptcy

6000 patents6000 patents

Stalking Horse Bid: Stalking Horse Bid: US$ 0.9b.US$ 0.9b. US$ 1.9 b.US$ 1.9 b. US$ 2.6 b.US$ 2.6 b. US$ 3.1 b.US$ 3.1 b.

Sold: Sold: US$ 4.5 b.US$ 4.5 b. US$ 0.75 m. p.p.US$ 0.75 m. p.p.

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Story #2Story #2 HomeHome Arris Arris

1K Patents 1K Patents US$ 2.35 b.US$ 2.35 b.

Cut 6K jobsCut 6K jobs Bleed: $1 bil. p.a.Bleed: $1 bil. p.a.

2011: Set-top + C. 2011: Set-top + C. Modem + Mobile Modem + Mobile Rev.: US$ 4 b.Rev.: US$ 4 b. Inc.: US$ 0.16 b.Inc.: US$ 0.16 b. 20K employees20K employees No Market LeaderNo Market Leader [17K+8K] Patents[17K+8K] Patents

MobilityMobility Lenovo Lenovo US$ 2.91 b.US$ 2.91 b. IP with GoogleIP with Google

IP ≈ US 4.0 b.IP ≈ US 4.0 b. US$ 0.2-20 m. p.p.US$ 0.2-20 m. p.p.

Sold: Sold: US$ 12.5 b.US$ 12.5 b. Android ProtectionAndroid Protection

80X80X MultiplierMultiplier 65% premium65% premium

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More CasesMore Cases

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More ProofMore Proof

P.I.L (Patent P.I.L (Patent Infringement Infringement Litigation)Litigation) Arthritis DrugArthritis Drug 1 Patent1 Patent

Award: Award: US$ 1.67 US$ 1.67 billionbillion

MP3 Technology MP3 Technology InfringementInfringement 2 Patents2 Patents

Jury Award: Jury Award: US$ US$ 1.54 b.1.54 b.

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TakeawayTakeaway

IntellectualIntellectual

Property Property

= =

LOADSLOADS

OFOF

WEALTHWEALTH

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I.P. ElementsI.P. Elements

Creations of Mind, Creations of Mind, Skill & IntelligenceSkill & Intelligence

GoodwillGoodwill ReputationReputation

Artistic: Artistic: CopyrightsCopyrights Pictures, Paintings Pictures, Paintings Video, AV, Movies, Video, AV, Movies, Jingles, SoundJingles, Sound Literary WorksLiterary Works Dance & Drama Dance & Drama

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I.P. ElementsI.P. Elements MarketingMarketing

TrademarksTrademarks (logos; (logos; trade/brand namestrade/brand names

Domain NamesDomain Names Customer: Customer:

Trade SecretsTrade Secrets; Conf. ; Conf. Info.Info.

Client DatabasesClient Databases ContractContract

Licenses, royalties, Licenses, royalties, permits, franchise permits, franchise agreements, use agreements, use rights, etc.rights, etc.

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I.P. ElementsI.P. Elements

TechnologyTechnology PatentsPatents Software CodeSoftware Code Industrial DesignsIndustrial Designs IC LayoutsIC Layouts

CommunityCommunity Geographical Geographical

IndicationsIndications Plant VarietiesPlant Varieties

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Why Protect?Why Protect? Business ValueBusiness Value

PremiumPremium Revenue / Margins Revenue / Margins TrustTrust Competitive Edge Competitive Edge

Major Asset Class

Shield / Sword

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Just Brand ValueJust Brand Value

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Criterion #1Criterion #1

Any Unique Idea... Any Unique Idea... OKOK

NOVELTY & NOVELTY & ORIGINALITYORIGINALITY

TM Litigation:TM Litigation: Christian Louboutin v. Christian Louboutin v.

Yves Saint LaurentYves Saint Laurent Protection:Protection: Red Sole Red Sole Not all colorNot all color

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Criterion #2Criterion #2 Patent Litigation:Patent Litigation:

Perfect Web v. Perfect Web v. InfoUSAInfoUSA

Bulk E-mailBulk E-mail Profiling + GroupingProfiling + Grouping

INVENTIVE STEP; INVENTIVE STEP; NOT OBVIOUSNOT OBVIOUS Flash of GeniusFlash of Genius Teaching-Suggestion-Teaching-Suggestion-

MotivationMotivation No CommonsenseNo Commonsense

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Criterion #3Criterion #3 Apple Smart Shoe Apple Smart Shoe

PatentPatent Nike + iPodNike + iPod Outdoors EnduranceOutdoors Endurance Real-time FeedbackReal-time Feedback Speed, distance, Speed, distance,

slope, elevation, etc.slope, elevation, etc.

UTILITY / UTILITY / USEFULLNESSUSEFULLNESS Better (Non-obvious)Better (Non-obvious)

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Criterion #4Criterion #4 Dr. Bearden Patent:Dr. Bearden Patent:

MEG: Motionless MEG: Motionless Electro-Magnetic Electro-Magnetic GeneratorGenerator

Papadakis Perpetual Papadakis Perpetual Motion DeviceMotion Device

NOT ABSTRACTNOT ABSTRACT Capable of Capable of

ManufacturingManufacturing E.g., Metallic Film... 1 E.g., Metallic Film... 1

atom thickatom thick

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Rejection #1Rejection #1

Bulb-changing Bulb-changing MachineMachine

Chin Pump:Chin Pump: Piston-Powered Piston-Powered

PumpPump Resistance exercises Resistance exercises

& jaw muscles& jaw muscles

SILLY; FRIVOLOUSSILLY; FRIVOLOUS

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Rejection #2Rejection #2

Industrial DesignIndustrial Design Skull-shaped bottleSkull-shaped bottle Appealing to Appealing to

Underage DrinkersUnderage Drinkers Banned in CanadaBanned in Canada

AGAINST PUBLIC AGAINST PUBLIC POLICY & POLICY & MORALITYMORALITY

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Rejection #3Rejection #3

Awarded PatentAwarded Patent Centrifugal Birth Centrifugal Birth

MachineMachine Patient Strapped & Patient Strapped &

Rotated Rotated

AGAINST PUBLIC AGAINST PUBLIC HEALTHHEALTH

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Rejection #4-7Rejection #4-7 DISCOVERIESDISCOVERIES

E.g., gravityE.g., gravity ATOMIC ENERGY ATOMIC ENERGY

RELATEDRELATED E.g., fusion deviceE.g., fusion device

AGRICULTURAL AGRICULTURAL METHODMETHOD E.g., Black RoseE.g., Black Rose

MATHEMATICAL MATHEMATICAL ALGORITHMALGORITHM E.g., SimplexE.g., Simplex

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SummarySummary 20-yr. Exclusivity20-yr. Exclusivity Acceptance CriteriaAcceptance Criteria

Novelty & Novelty & OriginalityOriginality

Inventive Step & Inventive Step & Not ObviousNot Obvious

Utility / UsefulnessUtility / Usefulness Not AbstractNot Abstract

Rejection ReasonsRejection Reasons FrivolousFrivolous Against Public Against Public

Policy, Health & Policy, Health & MoralityMorality

DiscoveriesDiscoveries Atomic EnergyAtomic Energy AlgorithmAlgorithm New Agricultural New Agricultural

MethodMethod

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I.P. Rights: EssenceI.P. Rights: Essence

Government Government CreatedCreated

Asset Asset SpecificitySpecificity

Patents Patents &&

ProprietaryProprietaryKnowledgeKnowledge

Internal Internal Economies Economies

of of ScaleScale

MARKET-ENTRYMARKET-ENTRY

BARRIERSBARRIERS

Market Capture & Market Capture & RetentionRetention Globalisation Globalisation

(GATT/WTO)(GATT/WTO) TraditionalTraditional Removed Removed IP Fence: EvergreeningIP Fence: Evergreening Creative DestructionCreative Destruction

Holy Grail: Holy Grail: NationalismNationalism

Competitive Competitive AdvantageAdvantage

Sustainable ValueSustainable Value

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Patenting ProcessPatenting Process Prior Art ResearchPrior Art Research

Reactive: Idea-Reactive: Idea-drivendriven

Proactive: Area-Proactive: Area-drivendriven

Culture of Culture of Innovation Innovation Market OrientationMarket Orientation

I.P. = Catalyst for I.P. = Catalyst for Economic GrowthEconomic Growth

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I.P. ValuationI.P. Valuation QuantitativeQuantitative

IncomeIncome Cashflows; Cashflows; Savings (Royalty, Savings (Royalty, Litigation, Work-Litigation, Work-around costs)around costs)

MarketMarket Similar Similar transactionstransactions

CostsCosts R&D; R&D; Opportunity Opportunity

OptionsOptions Right to Right to exploit asset in future exploit asset in future

QualitativeQualitative CharacteristicsCharacteristics Potential UsesPotential Uses Market? Impact? Market? Impact?

Expiration? Who Expiration? Who Developed? Developed?

BlendedBlended

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State of AffairsState of Affairs

Vital Cycle (Vital Cycle (‡ ‡ Vicious):Vicious): InnovationInnovation Startups (Entrepreneurship) Startups (Entrepreneurship)

GrowthGrowth Jobs Jobs Wealth Wealth Investment Investment

North-South Divide

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““I.P. Protect or Perish!”I.P. Protect or Perish!”

... Sir MV (tweaked)... Sir MV (tweaked)