1. 6 November 2002 Areas of Potential Disputes: the Venture Capital Perspective Francesco De Rubertis, PhD General Partner, Index Ventures WIPO Conference on Dispute Resolution in International Science and Technology Collaboration, Geneva April 25-26, 2005

2. 6 November 2002 Index Ventures  Among European largest Venture Capital firms (ca. 1bUSD under-management)  Geneva and London location  Only Institutional Money

3. 6 November 2002 Framing the Start Up scene  Actors within start up companies  Founding scientists (publications)  Concerned Universities (IP-income)  Entrepreneur (glory and money)  Venture backers (money and glory)

4. 6 November 2002 Unique situation of start up companies At very early stage, for the first years of life of the Company, the Venture Capitalists exerts a control position in the Company, both because of contractual agreements and because of the dependence of the Company’s survival on their investments

5. 6 November 2002 Assets of start up companies  IP-related transactions and agreements  Licenses  Employment contracts  IP positions  Patent applications  Trademarks

6. 6 November 2002 Due Diligence ahead of investment  Total cost ca. 75-100k EUR  60-70% of total cost is legal bill (ca. 40-70k EUR)  IP deals, transfers  Assignment of IP rights and co-ownership issues  Enforceability of IP, novelty  Freedom to Operate  Applicable law (R&D or HQ location, IP depot…)

7. 6 November 2002 Risk-mitigating approaches  Move Top-COs to other countries  Ownership vs licensing IPR, when possible  Integrated IP and product analysis  Relevance of third party claims  IP interference on likely future product  Business-driven focus on key claims  Due diligence with lawyers from multiple jurisdictions

8. 6 November 2002 Standard Terms (general)  Veto power on major decisions  Joint decision power with the other major stakeholders  Representation and Warranties  Indemnification clauses

9. 6 November 2002 The role of arbitration and mediation  Start up environment killed by uncertainty  More than direct financial cost is “opportunity cost” on the upside that can impair Start up growth  Speed of decision correlates with survival