1. hobbies and interests
2. inventors and patents

ACACIA
RESEARCH
GROUP LLC
NASDAQ: ACTG
UNLOCKING
patentGROUP,
POTENTIAL
ACACIA RESEARCH
LLC
ACACIA RESEARCH GROUP, LLC
A Subsidiary of Acacia Research Corporation
Forward Looking Statements
This presentation contains forward looking statements within the meaning of
the “safe” harbor provisions of the Private Securities Litigation Reform Act of
1995. These statements address future events and conditions concerning the
company’s business plans. Such statements are based on management’s
current expectations and are subject to a number of factors and uncertainties,
such as future economic conditions, changes in consumer demand, legislative,
regulatory and competitive developments, and other circumstances affecting
anticipated revenues and costs, which may cause actual results to differ
materially. The company expressly disclaims any future obligation or
undertaking to update or revise any forward looking statement contained
herein.
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
2
ACACIA
is at the
TRANSACTIONAL
CENTER of
INNOVATION.
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
3
Unlocking
Patent Potential
Acacia is the No. 1 outsourced partner for monetizing patented technologies
• Intermediates transactions between
patent owners & patent infringers by
partnering with patent owners
• Facilitates efficiency and delivers
monetary rewards to the patent owner
• Approximately $691M returned to patent
partners
Key Financial Information
NASDAQ Listing
ACTG
Stock Price*
$9.83
Market Capitalization
$546M
2014 Revenue
$131M
Cash and Investments (No Debt)
$166M
Dividend Yield
4.7%
*as of 4/22/2015
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
4
Investment Highlights
Empowering Inventors and Patent Owners
•
Leading outsourced patent licensing company  an emerging patent
clearinghouse
•
Strategic focus on more consistent, predictable and profitable business model
•
Robust portfolio of diverse licensing programs across multiple industries
•
Accelerating trial calendar—2015 and 2016 more than 20 trials
•
Strong operating leverage with highly scalable business model
•
Deep legal and technology expertise
•
Deep industry knowledge
•
Presently proposed patent reform legislation is good for Acacia
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
5
Rewarding the Idea Makers
and the World Changers
Acacia is a leading player in the secondary patent
market
•
Most patents are owned by entities that do not
make products covered by their patents
•
Acacia partners with patent owners to bridge
the gap between invention and production,
helping patent owners get paid by licensing
their patents to the companies that use them
•
Outsourced IP licensing transactions help
promote a secondary market for these patents
Patent Owners
ACACIA
(Clearinghouse)
Products
& Services
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
6
Demand: Needs Driving Patent Holders To Outsource Monetization
or Why Do Patent Owners Partner With Acacia?
Licensing
Expertise
• Complexity of current environment
• Interdisciplinary experience (Licensing, Business,
Engineering)
• History and track record of success
• High cost for internal licensing programs
• Longer time to revenue
• Scale: Serial vs. Parallel Licensing
Risk Mitigation
Liquidity
• Transforming patents into cash
• Short term cash flow
• Long term royalty stream
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
7
Financial Models
Partnership
Typical partners
for Acacia:
• Major corporations
• Research labs and universities
• Individual inventors
Protects patent owner from
countersuits
High margins with
upside leverage
Patent
Diligence
Split net
profit 50/50
with patent
owner
40%
40%
Patent Acacia
Owner
License
patents to
corporate
users
20%
Law Firm
Hybrid Partnership
Acquisition Model
How it works:
• Up-front capital infusion as an
advance on future licensing
• Acacia receives 100% of return
until capital infusion is returned
Objectives:
• Recover capital infusion in 18-24
months
• Upon return of capital infusion,
net profit revenue split with
patent partner begins
• 3x return of capital in 5 years
Purpose:
• Increases Acacia’s total
addressable market
• Strong Balance Sheet yields
competitive advantage
Acacia buys 100% of the
patents for 100% of the profits
Typical partners:
• Distressed Corporations
• Failed Corporations
Controlled by VCs
Higher margins with increased
upside potential
Acacia
70-100%
Legal
0-30%
Pay legal
ACACIA RESEARCH
costs GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
8
Creating Opportunity
Marquee Portfolios + New Industry Verticals
Smart Phones, Tablets, PCs and TVs
•
•
•
•
•
•
•
•
•
Palmsource mobile computing
Adaptix 4/4.5G wireless air interface
Nokia Siemens Networks 2G/3G wireless air interface
Rambus backlighting units
Silicon Image high speed chip interconnects
Silicon Image high speed display interfaces
VoiceAge high definition voice
ST Micro shared memory architectures for application processors
Renesas semiconductors
Medical Devices and Technology (Launched 2011)
•
•
Bonutti Skeletal Innovations
Boston Scientific stent grafts
Automotive (Launched 2013)
•
•
•
Automotive Technologies International safety, diagnostics and navigation
Telematics
Smartphones portfolios, as set out above, (Adaptix, 4/4.5G, Palmsource Mobile
Computing etc.)
Energy (Launched 2013)
•
•
Austin Geo 3D subsurface visualization
Covertech reflective insulation
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
9
Smart Phone Coverage
Silicon Image 2
10 Patents
High Speed Display Interfaces
NSN
74 Patents
2G/3G Power Control,
Handover, Coding
Rambus
69 Patents
LED back lighting
Adaptix
Access
205 Patents
4G/4.5G OFDM,
Cooperative Diversity
125 Patents
Sync, Apps,
User Interface
Silicon Image 1
138 Patents
High Speed Chip
Interconnect
VoiceAge
274 Patents
High Fidelity
Voice Codecs
ST Micro
13 patents
Shared memory architectures
for application processors
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
10
Emerging Opportunities
Stent Graft and Vena Cava Filter Patent Coverage
•
•
•
•
1800+ Patents
Single largest collection of US patents
covering stent graft technology
Comprehensive worldwide coverage
Portfolios come from leading
researchers and corporations
Orthopedics and Sports Medicine
•
•
Over 150 Patents and
applications
Technologies covered include:
Spine, hip, knee, shoulder,
biologics and tissue repair
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
11
Emerging Opportunities
Automotive & Transportation Industry
Vehicle Sensing
American Vehicular Sciences
•
•
230 patents covering automotive safety, navigation and diagnostics
technologies
Ranked 1st in research intensity and as 32nd overall innovator in
The Patent Board TM January 2012 Automotive & Transportation
Industry Scorecard
Rambus Automotive Illumination
•
Covering illumination applications including, headlights, taillights,
instrumentation, internal & external lighting
Rambus Backlighting Units
•
69 Patents covering LED back lighting for navigation and
infotainment displays
Driver-Assistance
Palmsource
•
125 patents covering sync, apps, user interface
Adaptix
•
205 Patents covering 4G/4.5G OFDM, cooperative diversity
NSN
•
74 Patents
covering
2G/3G
ACACIA
RESEARCH
GROUP,
LLCpower control, handover, coding
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
12
Patents: Apply To A Wide Variety Of Products
Mobile Phones &
Tablets*
Digital Home*
Laptops & PCs*
Automobiles*
Patented
Technology*
Semiconductors
Wireless Air
Interfaces
Software
Displays
*Representative sampling only
Constant
infusion of new technology creates licensing opportunities
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
13
2015 Opportunities – Strong Trial Date Calendar
• Opportunities continue ramping up throughout 2015
•
•
•
•
•
•
Multiple Adaptix trials – EDTex and NDCal (Q1-Q2)
Adaptix hearings – Japan (Ongoing Q1-4)
Multiple St. Lawrence (VoiceAge) trials – Germany (Q1-2)
PUMA (STMicro) trials – EDTex (Q4)
Lifescreen (Boston Sci) trials – DDel (Q4)
IDT (Rambus) trials – EDTex (Q1)
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
14
2016 and Beyond – Trial Dates Set and Continue to Populate
• 2016 promises to continue the momentum from 2015
•
•
•
•
•
CCE (NSN) trials set for 2016
Lifeport (Boston Sci) trials set for 2016
Additional Adaptix trials in 2016
Data Engine (Borland) trials in 2016
Patent portfolios continue to grow
• Over 90 new litigations filed in Q1-Q3 2014 without Markman
or Trial dates yet
• Trials likely to be set for 2016 and 2017
• Trials, Markmans, IPR decisions etc. all present value setting
points
• While dates may change, the revenue opportunities still exist
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
15
FINANCIAL
metrics.
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
Financial Performance
The Power of Innovation
2009
2010
2011
2012
2013
2014
Q1 2015*
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
(000’s)
$67,340
$131,829
$184,707
$250,727
$130,556
$130,876
$34,210
Non-GAAP Operating
Margin
.6%
37.5%
24.4%
54.8%
(1.1%)
7.1%
9.2%
Non-GAAP Net
Income
$409
$49,405
$45,013
$137,339
($1,424)
$9,328
$3,155
Pro-forma Non-GAAP
EPS
$.01
$1.46
$1.12
$2.80
($0.04)
$0.18
$0.06
Revenues
*Q1 2015 financials (Jan 1, 2015 – Mar 31, 2015)
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
17
Cumulative Licensing Revenue
by Size of Licensee
95% of Licensing Revenue from Companies Generating > $100 Million Annually
Licensee
Revenue
Size
Less than
$100M
$101M - $1B
> $1Billion
Percent
Of Acacia
Business
5%
15%
80%
Large Licensees Drive Acacia’s Business
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH GROUP, LLC
CONFIDENTIAL AND PROPRIETARY
18
returns to PATENT OWNERS
691,000,000
Our partnership with patent owners is the
cornerstone of Acacia’s corporate strategy.
ACACIA RESEARCH GROUP, LLC
ACACIA RESEARCH
ACACIA
RESEARCH GROUP,
GROUP, LLC
LLC
CONFIDENTIAL AND PROPRIETARY
19
ACACIA
RESEARCH
GROUP LLC
NASDAQ: ACTG
UNLEASHING
patent
POTENTIAL
ACACIA RESEARCH
GROUP,
LLC
ACACIA RESEARCH GROUP, LLC
A Subsidiary of Acacia Research Corporation