ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO Presented by Stephen Stein Thompson & Knight LLP

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #1: Failure to have an IP Strategy Defensive: How will I protect my business from third party claims? Offensive: How will I stop latecomers from stealing my ideas/business model/customers? Financially Viable: IP Strategy has to balance IP needs with available funding. Industry Partners: Risks and benefits. Implementation: Taking the necessary steps and documenting same on a timely basis.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #2 Know the Playing Field The Goal: Freedom to Operate Mistake or Problem: Failure to adequately research industry history, key players, maturity of industry, and the role IP has played in the past.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #2 Know the Playing Field (Case Study: Semiconductor Start-up) Start-up sees an opportunity to sell math co- processors at a price point significantly below market leader. Start-up introduces product triggering a multi-million dollar patent infringement fight with the market leader.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #2 Know the Playing Field The Solution is Due Diligence Understand industry history and role of IP. Identify where your product/business plan fits in the industry: Improvement, Replacement, Quantum Leap. Research Existing Patents & Public Applications. Identify standards bodies, patent & license pools.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #2 Know the Playing Field (Continued) Identify licensing policies of existing industry players. Consider negotiating industry licenses on the front end – versus adopting a wait and see attitude.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #3 Sleeping with the Enemy The Goal: Use Industry partners as investors. This can bring in industry know-how and occasionally some IP protection under a license umbrella. Mistake or Problem: Mortgaging your future in exchange for the relationship. Industry partners often require exclusive dealing arrangements. Loss of IP – industry partners will often want pre- emptive rights to company’s IP portfolio or a “cheap” license.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #3 Sleeping with the Enemy (Case Study: Plant Genomic Start-up) Start-up is in field of identifying and patenting specific traits for crops. Two industry partners invest in start-up and gain preferential access to start-up technology in their respective crops leaving rights in remainder to Start-up. Not enough money in crops left behind for Start-up to grow and raise additional capital.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #4 Failure to Develop an Offensive Strategy The Goal: Protect/Differentiate What You Create Mistake or problem: Forgetting to close the door after you.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #4 Failure to Develop an Offensive Strategy (Case Study: Publishing Start-up) Start-up leveraged rights under copyright law to reproduce works in the public domain (court decisions, statutes, etc.). Start-up was able to take large blocks of data from market leader, strip out proprietary content and sell at a lower price. Next player came along, copied Start-ups data and undercut Start-ups price.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #4 Failure to Develop an Offensive Strategy The Solution Adopt an IP Program at the front-end: Patents, Trade Secrets, Copyrights, Trademarks Make sure you own what you start with: Verify title to IP licensed in or contributed by founders, employees, and investors Capture what you build and pay for: Patent applications where appropriate/trade secrets where appropriate Have a Trademark Strategy - build a protectible brand

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #5 Postponing the Paperwork The Goal: Identify IP issues and opportunities on the front-end – avoid unpleasant surprises Mistake or Problem: –Failure to verify title to “contributed IP”. –Failure to implement Non Disclosure Agreements. –Failure to document employee’s past and present inventions. –Incorrect reliance on “work for hire doctrine”. –Missing filing deadlines and bar dates.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #5 Postponing the Paperwork (Case Study: Telecommunications Start-up) Start-up hires marketing manager from industry giant. Start-up makes “bet the company” proposal to new customer. Former employer sues to enjoin start-up from making bid citing “inevitable disclosure” of former company’s trade secrets.

ALGIERS AUSTIN DALLAS FORT WORTH HOUSTON MONTERREY PARIS RIO DE JANEIRO #5 Postponing the Paperwork The Solution Ensure that new hires do not bring trade secrets of former employers. Document with appropriate policies and procedures. Written agreements with consultants verifying IP ownership. Put the IP program in place on the front-end – don’t wait for a problem.

Contact: Stephen Stein