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1 Inc, 2009 Page 1 Making the Most of Your Intellectual Property

2 Inc, 2009 Page 2 – Global leader in intellectual property (IP) licensing, acquisition and consulting Formed in 99. Advisory Board includes: AGFA, Avery Dennison, Bayer, DSM, DuPont, Philips, P&G, Takeda Full range of services to assist clients in licensing and technology acquisition Offices in Boston, London, Tokyo internet presence is unique resource to facilitate deals – –100,000+ registered users –Network of 10,000+ smaller companies ($10-500m) Completed 35 deals with clients in last 2 years

3 Inc, 2009 Page 3 Leading members

4 Inc, 2009 Page 4 Lawrence Bickers (BT), Bill Heming (Caterpillar), Bob Hirsch (DuPont), Ruud Peters (Philips), Jeff Weedman (P&G)- Industry Panel Discussion Sponsors: Executives from the Following Companies Attended Recent Executive Briefings: 3M; ABB Ricerca S.p.A; Acushnet Company; Agfa-Gevaert; AKZO-Nobel; Argus Insights; Asahi Glass; Asahi Kasei; Aventis CropSciencei BAE Systems; Battelle; Baxter Healthcare; Bayer AG; BP Amoco Chemicals; British Telecom; Caterpillar; Centro Ricerche FIAT; CERN; Ciba Specialty Chemicals; Clariant Corporation; DERA; DLR; DSM; DuPont; Eastman Chemical Company; EPRI; Epson; ESTEC; F. Hoffman-La Roche Ltd.; Firmenich SA; Ford Global Technologies; France Telecom; GE Industrial Systems; General Mills; Halliburton; Hitachi Chemical Co., Ltd; Hitachi, Ltd.; Honeywell; Hyundai Heavy Industries Co., Ltd.; Ingenieurs Conseils en Brevets SA; JRA Technology Ltd; Kao Corporation; Kimberly-Clark Corporation; Kyoto University; L'Oreal; Lubrizol; Lucent Technologies; MG Engineering; Zimmer AG; Michelin; Mitsubishi Heavy Industries; Nippon Steel Corporation; Nomura Research Institute; NTT Leasing Co. Ltd; NTT-AT; Philips; Polaroid; Porsche AG; Procter & Gamble; Reebok; Rhodia; Rockwell Technologies; Samsung Electronics Co.; Schott Glass; Sequa Corporation; Sharp Corporation; Shell Global Solutions; Siemens AG; Singapore EDB; SK Corporation; Sonera Corporation; SONY Corporation Relationship-based global network Next Conference: Sep 29 – Oct 1, 2009, Boston, MA Driving Open Innovation: Dealmaking Keynote Speakers: Jeff Weedman (VP EBD, P&G) Hiro Uchida (former exec, Sony) Kevin Mulvaney (former President, DRI/McGraw Hill) Chuck Munns (retired Navy Vice-Admiral) Cheryl Perkins (former CIO, Kimberly Clark) Zia Yusuf (EVP, OI, SAP)

5 Inc, 2009 Page 5 Relationship-based global network partners in virtually all technical centers world-wide

6 Inc, 2009 Page 6 services Technology Acquisition / Open Innovation Technology Licensing –Platforms for non-strategic applications –Leading edge innovations from SMEs Technology and Needs Identification / Prioritization Patent Trading –Private sales of non-core patent portfolios –Anonymous acquisition of strategic patents

7 Inc, 2009 Page 7 and Open Innovation Weve worked with 8,000+ buyers of technology –Key success determinants (structure, culture, incentives, etc) Conducted 300+ proactive searches on behalf of technology acquirers –How to maintain anonymity –How to maximize valuable responses, and filter out non- valuable ones Access to the processes of most of the F500 –1 yr ago – only 3-5 really serious companies –Today – all our clients are moving to OI models (Asia moving most quickly)

8 Inc, 2009 Page 8 yet2.coms Scouting Service Growing 50% of yet2.coms services ~125 current searches Rolling out new Quick-turns searching service

9 Inc, 2009 Page 9 services - Needs Identification and Prioritization BU2 BU3 BU4 BU5 BU1 Need#1 Dispose Best Formed Eliminate Replace Alternative Radiate Improved Natural Dev Eliminate Replacement Packaging Need#16 Need#24 Need#33 Best (other) Highest priority needs Apples to apples comparison – enabling prioritizing across the company

10 Our Marketing Approach employs multiple channels to make connections: Broadcast channels Marketplace, communications Syndication partners and Broker relationships Direct Rolodex channels competencies database Relationships borne of over 5000 introductions between buyers and sellers (corporate, SME, University, Research, VC) External expert network and literature searches

11 Marketplace

12 Technology Acquisition Methodology Key Activities: Understand clients objectives Understand market and available technologies Understand partnering requirements Document marketing description and project objectives (for both internal & external use) Promote using marketplace and direct Search the network (competencies database, entrepreneurs, brokers, VCs, universities) Find offerings fitting initial criteria Find companies and filter results against criteria Gather additional information based on clients evaluation criteria Update market and technology understanding Refine target criteria and continue search Engage key targets with in- depth discussions Clarify mutual contributions and benefits; position relative value-add Client Define strategic objectives Define initial search and partner criteria Respond as questions arise Evaluate preliminary info Prioritize Review and evaluation Refine criteria Confirm next steps Participate in initial discussions Evaluate most promising alternatives

13 Technology Licensing Methodology Key Activities: Conduct technology / market debrief Interview market experts Identify potential markets and applications Collect market data (size / growth, IP landscape) Prioritization Identify list of targets Develop and validate business model and licensing approach Prepare materials for presentation and evaluation Online marketing through Offline marketing to target companies identified in the Mktg / Licensing Strategy Qualification of interested companies Initial discussions Moderation of initial meetings Clarify buyers key motivations Vet contract drafts Lend licensing expertise to overcome hurdles Assist in pricing Internal due diligence support Deliverables: Agreed articulation of overall competitive advantage Prioritized list of applications / markets For each Priority market / application: Prioritized target list Packaging Value proposition to key targets Initial discussions with qualified target companies Completed deals

14 Inc, 2009 Page 14 Market Areas of Strength 2004 / OLEDs Transdermal Heat Sinks Woundcare DNA Hybridizatn Filtration Food Self- heating Inhalation Noninvasive Biosensors Food Packaging Anti-fouling Energy Conversion Location-based RFID Topical Drug Delivery Clean/Green Natural Ingredients Grinding Solar Barrier films Lasers Motors/compressors Fermentation Gasification OLEDs Wipes Antimicrobials

15 Inc, 2009 Page 15 Hot Area# Buyers / Sellers Buyers OverviewSellers Overview Clean Green 6 buyers; 11 sellers. 2 Deals recently completed. 2006: +2% 2007: +20% Reducing emission of volatiles, replace need for hexavalent chromium Energy saving Biodegradable From sustainable sources Thermal diffusion coating Low VOC: reduced molecular weight (ie, with silicone); remove outgases (ie, via vacuum distillation); water-based recyclable/renewable: animal cellulose, aliphatically aromatic copolyesters, fermentation of plant sugars and (renewable/edible) oils. Note NOT biodegradable into plastics recycling streams Materials & Green Chemistry buying interest

16 Inc, 2009 Page 16 3 example technologies: Food-grade biodegradable anti- microbial/preservative, made of citrus-based bioflavonoids, organic acids and water Polymer-based plant growth medium, easily recyclable (vs. rockwool). Adaptable to sustainable/biodegradable when cost profiles reach tipping point CVR Manufacturing Biodegradable / compostable plastic alternative Materials & Green Chemistry

17 Inc, 2009 Page 17 Results: Completed Agreements

18 Inc, 2009 Page 18 Examples of Recent Deals Closed Acquisition – Patent: represents anonymous F500 in electronics patent auction Acquisition – Technology: finds technology for ultra thin- deposition on flexible substrates, for a F500 consumer products company, from a NA small-co. Patent Sale: Wireless IR Networking Technology sold for JPBE (US merchant bank) Strategic Out-License: Diffraction Based Biosensor from Kimberly-Clark to SME Axela Biosensors. (Product commercialized in 8 mos)

19 Inc, 2009 Page 19 links Ganeden BioTech to DSM Ganeden BioTech Developer of a highly efficacious probiotic (microbial digestional aid), which is sold through retail drug stores and supermarkets and can be incorporated into foods and beverages DSM Holds leading positions in the Nutrition sector, particularly the markets for ingredients for human and animal nutrition and health and personal care Purpose May enable many new probiotic applications in both food and feed that DSM wants to follow closely as an area of potential future business Deal Size DSM joined a private equity partner in a $12 million financing round DateNovember 2007 HIGHLIGHTS SINCE TRANSACTION Ganeden products were featured on Oprah Winfreys syndicated radio program in November (as a result of an introduction from rede4). DSM evaluating possible future partnering with Ganeden for the development of specific applications HIGHLIGHTS SINCE TRANSACTION

20 Inc, 2008 Page 20 Inc, 2009 Page 20 ElectroPetroleum (EPI) developed a technology to extract heavy oil. 2/3 of the worlds oil supplies are heavy oil, so this technology has broad implications. The technology uses 1,000 watts of DC electricity to heat the oil and cold crack it. The technology competes favorably with steam and an AC technology. Field tests showed a 10 times improvement in oil output per well at a cost of $4 per barrel. October EPI retained to find partners and capital. July got 3 term sheets for investment and closed a $10 million round from DFJ Element. also sourced the first customer, Deloro, who gave EPI 10% of a 63 million barrel field. links ElectroPetroleum to Customers and Raises $10 Million

21 Inc, 2009 Page 21 IP-based Spin-out: NaturNorth auction NaturNorth Subsidiary of Potlatch – maker of IP-protected bioactive birch bark-derived materials for pharma, ag, cosmetics, paints. Derived from birch bark Buyer Small Pharma company in clinical trials for a new formulation with a NaturNorth derivative as a key ingredient Purpose Couldnt afford to switch/re-qualify supplier in the midst of Phase III trials, and greatly strengthened their monopoly through acquisition of 30-patent portfolio Deal Size Winning auction bid was [7-figures], with several other bidders lined up ot buy non-critical patent families for [6-7 figures] DateFebruary 2008 And, a Library of ~1000 Derivatives Outer bark + unique chemistries yield pure Betulin

22 Inc, 2009 Page 22 Patent Acquisition deal Anonymous Bid in Patent Auction Anonymous Bid in Patent Auction - The Client: F500 company, which has just learned that a software company is about to auction off a very relevant patent portfolio. - Worst-case outcome: The Clients name and bidding information could be leaked to some other winner. In such a case, the winner (even possibly one of the patent trolls) could later approach the Client. - Why Based on trust built over several years (through successful licensing negotiations both for the Client and on the other side of the table), Client asks to bid/negotiate anonymously on its behalf. - Negotiation – success!: Throughout the auction, advised the client on negotiating strategy, and then very carefully executed that strategy. Including successfully maneuvering with the auctioneer for exclusive negotiation period. As a result, the patent portfolio was purchased at half the price of the Clients budget. - Anonymity: The Client remained anonymous throughout, right until the actual signing of the definitive agreement.

23 Inc, 2009 Page 23 Artificial Soil Technology License – DuPont / 6062 Links 6062 Holdings LLC and DuPont Central Research & Development in Artificial Soil Licensing Agreement 23 August Holdings LLC, of Beachwood, Ohio, has licensed patents for an artificial biodegradable soil technology from DuPont Central Research & Development (CR&D). The agreement grants an exclusive global license to further develop and commercialize this DuPont technology. Inc. brought the two parties together five months ago when DuPont CR&D posted information about this available technology on the website Holdings LLC noticed and responded with interest. The technology provides the optimum balance of water and gases necessary to sustain higher rates of plant growth through the use of in-ground bio-degradable polymer fiber balls. The fiber balls also reduce shipping and handling costs because they are lighter than the soil plants that are currently shipped. The fiber balls can also be watered from below, as opposed to being sprayed from above as traditional soils require. The fiber balls retain 30 to 50 times their weight in water, and need less than half the amount of water required in soils.

24 Inc, 2009 Page 24 January 11, 2006 – Axela Biosensors has completed a significant exclusive in-licensing agreement with Kimberly- Clark. The agreement includes exclusive rights to approximately 150 world-wide patents and applications, as well as transfer of significant immunodiagnostics assay technology. As part of the agreement, K-C will be acquiring an equity interest in Axela. These technologies are are a significant contribution towards our execution of product offerings in the diagnostic market, including our Diffractive Optics Technology (DOT) products planned for product launch in 2006 said Rocky Ganske, CEO, Axela Biosensors. links Axela Biosensors Inc. and Kimberly- Clark on biosensors deal August 2006: Axela launches new real-time analytical device (8 months from deal).

25 Inc, 2009 Page 25 Appendix

26 Why use YOUR NETWORK: -Suppliers -Select university relationships -Conferences/trade shows -Industry journals OUR NETWORK: -Geographically broad -Solutions from other industries -Direct access to a large population of SMEs -Broad reach to universities/research institutions -Connect through private equity -Network of affiliated brokers Both networks important, but will yield different responses

27 Inc, 2009 Page 27 Portfolio Mining / Gaps Analysis Deals Anonymity / IP shield, Lead Qualification, Call facilitation, Due diligence, Contract and negotiation support Needs Identification Gather priority needs - from R&D, Marketing, etc Prioritize Build or buy Membership and Technology Acquisition Process – Marketing High Priority Needs High Value CasesTechNeeds

28 Inc, 2009 Page 28 High Value Cases – standard project plan

29 Inc, 2009 Page 29 – leadership and lead consultants Phil Stern (co-founder), CEO –Leads yet2.coms Assessment practice. Harvard MBA with prior strategic and management experience at Polaroid, McKinsey, and Bain Ben DuPont (co-founder), President –Leads yet2.coms Connecting services. Prior experience at DuPont, including licensing numerous Lycra® technologies. Material sciences background Tim Bernstein, COO –Leads yet2.coms Deal-Making practice. Stanford MBA, with prior startup and IP experience, including Masters Thesis on University licensing Hideyuki Fujii, Director, Asia –Prior consulting experience with Bain, Nippon Polaroid K.K., and Reebok Japan Emma Hughes, Director, Europe –Extensive European connections Eugene Buff, VP, Consulting (M.D., Ph.D., genetics) –Extensive experience in technology acquisition and technology out-licensing projects Tracey Dodenhoff, VP –Entrepreneurial background, including founding and funding technology companies

30 Inc, 2009 Page 30 Best Practices: Counteracting the corporate immune response Companies setting aside funds to acquire early stage technologies for R&D-funded searches –even requiring that certain monies go only to externally-sourced technologies. Later stage technologies aimed toward BUs and near term product launches – overcoming the immune response remains uncharted territory Many companies taking advantage of R&D-downsizing system shocks to shift focus toward external-sourcing Want Find Get Manage Enabling the environment Articulating the needs Managing the process Organizing for success

31 Inc, 2009 Page 31 Best Practices: Managing the process Enabling the environment Articulating the needs Managing the process Organizing for success Prioritizing needs –Some companies shifting from team consensus to BU-leadership- centralized prioritizing –Critical to start with a list of the needs being sought by the BUs, even if the list is not well-vetted or prioritized Ideally includes what is NOT of interest Evaluating responses –The team doing the searching may have to own the resources for evaluating responses search integrated into the BU; OR, scouting team have dedicated technical review resources

32 Inc, 2009 Page 32 Best Practices: Organizing for Success Employ Top-Down support –Give job promotions to open innovation visionaries –Insert external-search stage gates into R&D/product development processes –Command that intel-risk cannot be used as a blocking excuse Employ Bottom-up approach –Focus first on a few BUs more receptive to the concept Personal risk-taking –Necessary and/or good in order to move companies? Incentives –Grant attention-focusing incentives? Just to the scout to the exclusion of other contributors? Or just integrate w existing internal innovation incentives Process Metrics –% of new products enabled – simple, measurable –Companies experimenting with incorporating a measure of incremental revenue generated. Enabling the environment Articulating the needs Managing the process Organizing for success

33 Patent Selling Methodology Key Activities: Understand clients objectives Conduct due diligence on portfolio background Review portfolio strength Develop target contact list Prepare portfolio marketing materials Promote using direct communications to decision makers at target companies Interact with buyers to provide due diligence information (confidential) Develop list of interested bidders Set bidding process and timing Solicit and review bids from buyers Review restrictions and amendments to PPA Conduct further rounds of bidding, if required Finalize details of PPA Assist client in sending necessary documentation Ensure closing is completed in a timely fashion Client Disclose encumbrances and title issues Review target list Respond as questions arise Provide draft confidentiality agreement Provide draft PPA Determine which bidder is successful based on all criteria Provide necessary documentation Edit and execute final documents

34 Patent Acquisition Process Overview Portfolio clarification Seller disclosure Buyer evaluation Negotiation Price & Terms Closing If Buyer approaches seller: Buyer provides listing of patents to seller Seller confirms whether patents are saleable If Seller is actively marketing: Buyer reviews listing of patents from seller Seller completes questionnaire conducts background interview reviews publicly available data on portfolio Buyer reviews seller disclosure information facilitates interaction on remaining issues Buyer confirms interest and estimates value Both parties interact regarding transaction value and structure, reach agreement Both parties agree to key terms related to seller retained rights and indemnities in non-binding term sheet facilitates, buyer remains anonymous Buyer provides draft patent assignment agreement (PPA) based on term sheet Seller provides specific feedback on PPA facilitates finalizing agreement If purchasing on clients behalf: signs PPA, accepts and reviews documents, makes payment If Buyer purchasing directly: Seller signs PPA Buyer signs PPA, accepts and reviews documents, makes payment Assignment agreement Portfolio clarification Seller disclosure Buyer evaluation Portfolio clarification Seller disclosure Negotiation Price & Terms Buyer evaluation Portfolio clarification Seller disclosure Assignment agreement Negotiation Price & Terms Buyer evaluation Portfolio clarification Seller disclosure Closing Assignment agreement Negotiation Price & Terms Buyer evaluation Portfolio clarification Seller disclosure

35 Discovery Stage Idea Screen Second Screen Go to Development Go to Testing Go to Launch Post Launch Review Scoping Build Business CaseDevelopment Testing and ValidationLaunch Gate 1Gate 2Gate 3Gate 4Gate 5Stage 1Stage 2Stage 3Stage 4Stage 5 Known consumer need; No idea how to solve yet2 services: Broad Search Known approach; Dont want to reinvent the wheel yet2 services: Deep-dive Search Ensure competitive advantage yet2 services: - Technology Competitive Landscape Review - Specific- component Searches Development stopped yet2 services: Out-licensing Integrating with Stage Gate Processes

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