Intellectual Property Exchange International, Inc.

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Shanghai International IP Forum 2011

“Creating Best Practice in the IP Marketplace by Adding Transparency and

Efficiency”

November 22, 2011

Agenda

1. Unit License Right™ (ULR) Contract

2. Discussion: “Creating Best Practice in the IP Marketplace by Adding Transparency and Efficiency”

3. IPXI Status and International Strategy

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Core Objective

IP Market Problem IP Exchange Result

Incomplete or insufficient market information

Detailed prospectus, published pricing, consumption data reporting, bid/ask

TRANSPARENCY - enabling more efficient IP asset management and R&D decisions

Arbitrary or unilaterally determined IP value

Market-based pricing reflecting the value of a technology and increasing buy-side confidence

PRICE DISCOVERY – ensuring fair and reasonable pricing

Lack of standards, including course of dealing, contract terms, and pricing

Standardized tradable license rights accessible to all market participants

LEVEL PLAYING FIELD – accelerating technology transfer and innovation

Time and transaction cost inefficiencies associated with bilateral licensing

Central marketplace with market enhancing solutions, such as standard contracts, outsourced auditing, and alternative dispute resolution processes

EFFICIENCY - providing easy access, liquidity, and increasing transaction volume

A more efficient and transparent IP marketplace

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ULR Contract CharacteristicsIPXI Overview

Legal Characteristics

• Non-exclusive• Non-discriminatory• Standardized/

Commoditized• Consumable

Financial/Economic Characteristics

• Market-priced• Price-discoverable• Potentially liquid• Supply/Demand discovery

ULR Contracts

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US Patent 7,885,897US Patent 7,987,142

Unit License Right™ (ULR) Contract - Specification

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SECONDARY MARKET PRICE DISCOVERY

Initially through the IPXI Bulletin Board, supported by third party liquidity providers. Illustrative data:

Licensor/Licensee Benefits

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Licensor Benefits

• Efficient monetization of patent portfolios

• Dramatically reduced legal cost

• Avoids forced cross licensing

• Outsourced marketing

• Outsourced auditing

• Outsourced enforcement

• Timely reports on licensee usage

• Market determined fair and reasonable licensing terms

• Flexible rights structure

Licensee Benefits

• Efficiently obtain unit-based licenses to patent portfolios at market price

• In-licensing standard contracts

• Ability to resell unused ULR contracts to accommodate reduced future needs

• Fair and level playing field for all prospective licensees

• Formal mechanism by which licensees request that IPXI investigate alleged infringement

• Selection Committee screening and public comment period promote quality portfolio and rational pricing

• Amnesty for compliance

IPXI Overview

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Membership Committee

Enforcement Committee

Executive Committee

IPXI Governance

ULR Contract Lifecycle

Selection Committee

Auditing Committee

Rules Committee

BOARD

Timeline and Task Allocation*

Time Period TaskResponsible

Party

Days 1 - 30

Submit formal UOS IP Sponsor/IP Advisor

Review UOS proposal, including prior art search and vetting Selection Committee

Days 30 - 90 UOS public review and comment period IPXI Membership

Days 60 - 90Assess UOS proposal comments submitted by Selection Committee and IPXI Members IPXI/IP Sponsor/IP

Advisor

Modify UOS proposal based on assessment IPXI/IP Sponsor/IP Advisor

Days 90 - 110Review modified UOS proposal, and final decision regarding acceptance or rejection of UOS proposal

Selection Committee

Days 90 - 150

Form Special Purpose Vehicle (SPV) IPXI

License IP exclusively to SPV IPXI/IP Sponsor

Accept ULR Contract is listed on www.ipxi.com IPXI

Prospectus materials drafted and marketing of ULR contract begins for Dutch auction or private placement

IPXI/IP Sponsor/IP Advisor

Day 151

Initial offering of ULR Contract IPXI

Secondary market for ULR Contract trading is opened IPXI

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*For discussion purposes only; subject to modification

Submission Process

• Proposals for ULR contracts are generally submitted by IP owner or its Advisor

• IPXI may solicit IP for a ULR contract from prospective Sponsors and encourage pooling of certain IP

• Submission is via a Unit Offering Scenario (“UOS”) document, which will include patents to be licensed, target market, potential licensees, anticipated pricing, known encumbrances, license-back requirements, etc.

• Submission is vetted by IPXI staff and reviewed by the Selection Committee based on quality criteria of IPXI

• Sixty-day period of open market peer review, including evaluation by third-party review sources.

• Reassessment of submission and pricing based on peer and third-party review and comments

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ULR Contract Lifecycle

Submission Procedures: Unit Offering Scenarios

Unit Offering Scenarios (“UOS”) shall include:

• An abstract of the technology and business opportunity

• Identification of the full portfolio, highlighting any core patents within the portfolio

• Market identification, including:

- Proposed field of use

- Proposed unit basis

- Identification of known prospective licensees

- Market adoption time, trends, rate, and size

- Proposed royalty rate based on sale of units

• Identification of any encumbrances, including most favored licensee obligations

• Terms of Amnesty (if any)

• Criteria (if any) for determination of a Failed Offering

• Identification of third party sources which may assist the Selection Committee in its decision making process

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ULR Contract Lifecycle

Discussion

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Discussion: IP Exchange Model and Corporate IP Strategy

Creating Best Practice in the IP Marketplace by Adding Transparency and Efficiency

Topics/Discussion Points:

1. Transparency

2. Transaction efficiency

3. Fair and reasonable pricing

4. IP Validity

Concern: Fair and Reasonable Pricing

• The structure and functionality of IPXI provides a market which promotes fair and reasonable pricing of IP rights

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Fair and Reasonable

Pricing

Submission Process

Primary Markets

Secondary Markets

Discussion: IP Exchange Model and Corporate IP Strategy

Concern: IP Validity

• In addition to the submission review process, IPXI provides arbitration and re-examination facilities aimed at effectively and efficiently mitigating IP validity concerns

• Arbitration addresses infringement and claim interpretation concerns and may include a mechanism for expedited claim construction

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Discussion: IP Exchange Model and Corporate IP Strategy

Mitigation of Validity

Concerns

Arbitration

Submission Process

Public Comment

IP Strategy Economics: IPXI vs. Other Monetization Methods

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Monetization Method

Total Revenue Potential

Penetration of

Addressable Market

Discounting of Fair Value

Upfront Payment Received

Broker Fee or

Commission

Expenses Incurred

before Net

Total Revenues Realized

Auction/Broker Model

$42.5M N/A 65%See Total Revenue Realized

25% None $11.1M

Third-Party Licensing Program

$42.5M 75% None $1M 57% $3M $11.7M

Self-managed Licensing Program

$42.5M 50% None None None $3.5M* $17.75M

IPXI ULR Contracts

$42.5M 100% None None23%

(Including IP advisor)

$105,000 $32.6M

* Inclusive of certain internal cost allocations

ULR Contract Cash Flow and License Right Scenario

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IP Advisor

Intellectual Property Exchange International, Inc.

Buyer A

IP Sponsor

Confidential

Buyer B

Buyer C

Initial Listing and

Membership Fee

Advising Fee

Exclusive LicenseULR Contracts

Total ULR Contract Revenues

80% of ULR Contract Revenues

20% of ULR Contract

Revenues

Special Purpose Vehicle

See Disclaimers.

Market Ready

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IPXI Overview

IPXI International Development Update

• Partnering with private stakeholders and government delegates to establish support in building IPXI model in multiple jurisdictions around the world.

• Significant progress made in:

• Europe• Korea• Singapore

• Continuing international development is 2012 Priority

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IP as an Exchange Traded Unit – Accelerated Innovation

Accelerated innovation

– Efficient and transparent technology transfer

– More accurate R&D and intangible asset management decision-making

– Greater technology access for SMEs at fair and reasonable prices

– An alternative for universities and research laboratories

– Level playing field

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Intellectual Property Exchange International, Inc.

Disclaimer: The models in this presentation were prepared prior to market opening. IPXI and related parties, accordingly, do not guarantee any market projects presented herein. Models shall not to be relied upon in making a decision to participate in the market .

The concepts covered by this presentation are for discussion purposes only and are not intended to be all-inclusive on the topic of IPXI or related parties. Many of the concepts are illustrative only and do not necessarily represent final IPXI functions and processes.