Mobile Platforms, Patents and Linux in Context

Agenda –Realities that Shape the Context for Android and Other OSS Platforms –Global Markets & Actors »Secondary Market for Patents »Hedge Funds »Patent Speculators/Trolls »Operating Companies –Litigation – eBay, ITC and the DOJ –Conclusion

Realities – Emergence of an Increasing Number of Patent Speculator/Troll business models and Defensive Patent Pools (OIN, AST, RPX, etc.) are Forming, at least in part, to address the Patent Speculator/Troll problem Operating Companies Threatened by Linux and OSS Technology Platforms are Using Capital to: Acquire Patents to Strengthen/Broaden Offensive and Defensive Patent Position Limit the Number of Linux/OSS Technology Platforms or Distributions – Potentially Fund Patent Speculator/Troll Activities Targeted at Linux/OSS – SCO Redux? Current Realities

Realities - Mobile Linux/Android Rising

Source: Florian Mueller Android’s Success is Attracting Attention

Android is More than Just Linux

Current Realities

Source: PatentFreedom © 2011 Data captured as of January 1, 2011 Operating Company Parties in NPE Lawsuits Over Time

No.Company Name Total 1HP Apple AT&T Sony Microsoft Dell Samsung Motorola LG Verizon Panasonic Nokia Time Warner Google Cisco HTC Sprint Nextel Toshiba Deutsche Telekom RIM Acer IBM Yahoo Oracle Fujitsu Source: PatentFreedom © 2011 Data captured as of January 1, 2011 Ranking of Operating Companies by Number of NPE Lawsuits

Litigated Patents CategoryPatentsNPEsLitigations Semiconductor Software Applications Market Financial Service Communications Equipment System Infrastructure Software Market Communication Services Computing Wireless Software Application Development and Deployment Market Consumer Electronics Imaging Industrial Manufacturing Components Consumer Goods Medical Devices, Pharma & BioTech25835 Retail31312 Other NPE Patent Litigation By Product/Technology Category Source: PatentFreedom © 2011 Data captured as of January 1, 2011

11 Mobile Wars – Linux/OSS as Targets

Defensive Countermeasures : 1)Acquisition of 1,000+ patents from IBM 2)Purchase of Select Defensive patents from Motorola and HP (Palm) that were conveyed to HTC 3)Announced acquisition of Motorola Mobility and its 17,000+ Wireless patents Mobile Wars – Linux/OSS as Targets

Open Invention Network’s Role – Guardian & Enabler OIN Mission Summary Open Invention Network – Industrial Firms Committed to Open Source and Linux and Engaged in Purchasing/Licensing of Patents & Parallel External Actions to Create a Patent “No Fly Zone” around Linux Patent Acquisitions (past and current inventions) Directed Invention (Universities, Individual Inventors, Acquired Patent- Centric SMEs) Patents Defensive Publications Patents w/Defensive Publications Royalty Free Licenses One on One Assistance to Those Under Threat DOJ Resource to Advise on Anti-competitive Behaviors Related to Patent Leverage Linux Defenders OS “Peer to Patent” OS “Post-Issue Peer to Patent” OS “Post-Issue Peer to Patent” “Defensive Publications” “Defensive Publications” “LinuxDefenders911” “LinuxDefenders911”

14 OIN Licensee US patents Holdings Note: For efficiency, only those licensees with US patents and/or applications are listed. > 385+ Licensees > 400+ Patents & Applications > 250+ Defensive Publications > 300,000 Patents & Applications in Potential Cross- License Grant Back Pool OIN “Owned” IP Assets & Licensees

AST Other ‘Defensive’ Patent Entities

Realities – Innovation – Discontinuous Innovation - that radically Redefines and Existing Market or Creates a New One - is Challenged by Incumbent Monopolists and Duopolists Seeking to Protect the Status Quo Patent Wars Emerge BUT Rationalization Can Be Expected to Develop Over Time as the Linux/Android Antagonists’ Proprietary Products/Platforms are Vulnerable to Defensive Patent Counter-Attack in the Mobile Space eBay Ruling and ITC Reform Will Serve to Limit Ability of Speculators and Operating Companies to Secure Injunctive Relief and Further Encourage Negotiated Cross-Licenses Current Realities

Open Source/Linux is a Social Phenomenon with Far Reaching Ramifications for Innovation - Economic Principle of Increasing Returns Applies = 6 As a result - –Open Source/Linux Enable Innovation in a Manner that is Threatening to Operating Companies Seeking to Restrict the Manner and Output of Invention – Direct Android Antagonists –Market Dynamics have given rise to Increased Patent “Troll Litigation” that Limits Innovation and Diverts Capital to Defense – Indirect Android Antagonists – Android Platform (not Linux in the main) subject to – direct and indirect – attack on patent grounds in a misguided effort to make total cost of ownership prohibitive for vendor and carrier deployment BUT in the end the market and freedom of choice wins out Conclusion