UNECE April 2009 Commercialization of IPR A Business Perspective Jason Bucha, Compliance Counsel April 2, 2009

Dolby Laboratories, Inc. Dolby Laboratories is the global leader in technologies that are essential elements in the best entertainment experiences. Founded in 1965 and best known for high- quality audio and surround sound, Dolby creates innovations that enrich entertainment at the movies, at home, or on the go.  Over 670 licensed consumer electronics manufacturers and software developers in 35 countries  Over 3.4 Billion licensed products reported sold 2UNECE April 2009

The Importance of Innovation and IPR Commercialization to Business Success  Stay competitive  Better products and efficiencies  Fund research and development  Company valuation 3UNECE April 2009

Broad Benefits of Innovation and IPR Commercialization  Increased competition  Better consumer experiences  Increased jobs and spending  Technology diffusion  General uplift of experience and capability 4UNECE April 2009

IPR BUSINESS STRATEGY 5UNECE April 2009

IPR Generally  Types of IPR  Patents, trademarks, copyrights, trade secrets, know-how  Sources of IPR  Internal research and development  Co-development  Acquisition from third parties  Licensing (In) 6UNECE April 2009 IPR Business Strategy

Patent Portfolio Strategy  Barrier to competitors  Offensive  Assertions against infringers  Defensive  Shield against third party IPR assertions  Cross-licensing option  Removal of threats by acquisition of underlying rights  Considerations  Key patents vs. Broad coverage  Territories 7UNECE April 2009 IPR Business Strategy

 Differentiate your products and services  Develop goodwill that can be used in many ways  Relative ease of enforcement  Considerations:  Conduct searches prior to investment  Territories 8UNECE April 2009 IPR Business Strategy Trademark Portfolio Strategy

Internal Management of IPR  Periodic internal audits  Invention disclosure policy  Education and awareness  Invention review committee  Applications and registrations  For TMs: Education regarding proper use  Employment Agreements  Non-Disclosure Agreements (NDAs) 9UNECE April 2009 IPR Business Strategy

Preparing for Commercialization  Market analysis  Financial  Market pull vs. Technology push  Competitors’ IPR  Continual evaluation of innovation from the perspective of commercialization  IPR valuation 10UNECE April 2009 IPR Business Strategy

IPR Commercialization Strategies  “Do it yourself”  Consider outsourcing certain aspects  Joint Venture / Spin-Out  Sale of IPR  Licensing 11UNECE April 2009 IPR Business Strategy

Licensing as a Business Strategy  Benefits  Sharing of risk  Less resource commitment  Shorter time to market  Drawbacks  Loss of control  Dependent on licensees  Sharing of IPR value with licensee 12UNECE April 2009 Granting someone the right under your IPR to make, use or sell a product, process or service in return for payment or other consideration.

Licensing Considerations  What is being licensed?  Who should be licensed?  What should the scope of the license be so as to maximize value and achieve goals?  Geographic, field of use, exclusivity, sublicensing, term  What payment terms are most appropriate?  Flat fee, royalties, minimums, milestones, combination  Who will pay? 13UNECE April 2009 Licensing as a Business Strategy

Licensing Considerations  What responsibilities will the company have to the licensee?  Deliverables, support, maintenance, etc.  Standards (if applicable)  Patent Pools 14UNECE April 2009 Licensing as a Business Strategy

Administration of a Licensing Program  Research and Development  Sales and Marketing  Licensee Support  Accounting  Legal  Compliance 15UNECE April 2009 Licensing as a Business Strategy

The License Agreement  There is no “Standard License Agreement”  Agreements must account for differences in:  Licensing strategies  Who is being licensed?  Risk tolerance  Market position  Territory and Jurisdiction 16UNECE April 2009

The License Agreement – Key Terms  License Grant  Grant Back  Trademark Terms  Marking Requirements  Payment Terms  Reporting Obligations  Audit Rights  Confidentiality  Publicity  Notification of Infringement  Term of Agreement  Termination  Bankruptcy  Continued… 17UNECE April 2009 The License Agreement

The License Agreement – Key Terms  Warranties  Indemnification  Assignment Rights  Notice Requirements  Governing Law  Dispute Resolution 18UNECE April 2009 The License Agreement

Thank you! Jason Bucha

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