Virtual Reality (VR) IP Assets Commercialization Viability Analysis

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1 Virtual Reality (VR) IP Assets Commercialization Viability Analysis December 2012

2 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 2 Objective This report assesses the viability for commercialization of Intellectual Property (IP) assets related to Virtual Reality (VR) technology, which involves computer-simulated worlds to stipulate the sense of reality. It often includes stereoscopic displays to mimic our natural visual sensory input. Other simulated sensory feedback, such as haptic or audio feedback, also form part of VR technology. VR technology has been around for many decades, but its potential was not realized until computer graphics matured and computing capacity became adequate and affordable. Today, VR is extensively used in gaming, entertainment, training and education. VR also has many important medical applications. This analysis encompasses the overall landscape of Virtual Reality IP assets in terms of the major patent holders and recorded transactions. Assignees with VR patent assets with medical or gaming applications are identified. A list of potential licensees or buyers of VR-related IP assets is arrived at. Workflow 1. Determine the major patent asset holders in the area of Virtual Reality technologies. 2. Identify relevant transactions (assignment transfers) in the area of Virtual Reality technologies. 3. Obtain the forward citations of patents related to the relevant technology and determine the patent asset holders of the more recently filed forward-cited patents. 4. Determine the patent asset holders of VR IP assets with medical and gaming applications. 5. Combine the findings from the above steps to create a short-list of potential licensees or buyers in VR technologies. Analysis The analysis contained in this report is done for VR technology in general. There are many subtechnologies involved in this domain, such as stereoscopic displays, haptic devices, tracking systems, and computer algorithms. Patent assets related to Virtual Reality are identified using a combination of keywords, IPC codes, and US classification codes to obtain the top patent asset holders in the technology area. A search of the assignment database is performed using similar parameters. This yields a list of the various buyers and sellers of patent assets addressing this technology and helps in determining the most active amongst them.

Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 3 Assignees for recently filed forward-cited patents in VR technologies are determined.

The analysis of this report is based on the patent assets of various geographies, assignment transfer data provided by the USPTO, and related corporate information available in the public domain.

3 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 3 Assignees for recently filed forward-cited patents in VR technologies are determined. Assignees with VR patent assets with applications in either assisting medical or surgical procedures; or addressing gaming are separately identified. The analysis of this report is based on the patent assets of various geographies, assignment transfer data provided by the USPTO, and related corporate information available in the public domain. All patent counts mentioned are only indicative. Patent Filings in Virtual Reality Technology The charts below show the filing trends for patents in Virtual Reality technology. Figure 1 shows the top patent holders in VR technology and Figure 2 shows the overall filing trends and the top patent asset holders from 1993 onwards. The list of top patent asset holders changes somewhat if we look at recent patent filings (from 2009 onwards). The recent filing trend (starting 2009 onwards) is shown in Figure 3. IBM, Canon, Sony; followed by Philips, Samsung and Microsoft are the key patent holders overall. Most of these assignees reappear in the list of top recent filers as well (2009 onwards). Other companies that have filed patents in this technology in recent times include Osterhout Group, Nintendo, Disney, Intuitive Surgical and Pantech. Figure 1. Top Patent Holders of Virtual Reality IP assets with indicative patent counts

Priority year 2009 2010 2011 2012 No. of Patents Assignee No.

1 16 7 1 1 4 1 1 2 1 3 2 2 10 4 1 1 2 2 3 8 1 3 2 5 2 2 2 1 1 1 1 2 3 6 1 2 8 2 5 5 7 8 8 1 4 1 3 1 3 2 1 2 1 1 5 39 3 30 31 1 1 2 1 2 3 1 3 4 4 6 6 3

16 14 9 1 7 1 1 5 21 3 4 1 2 3 1 3 25 56 31 8 3 2 1 1 1 1 1 3 4 3 2 4 3 5 1 CANON IBM PHILIPS SONY OSTERHOUT GROUP INC MICROSOFT CORP SAMSUNG

Assignee trends by filing year (from 1993 onwards) 1 4 3 5 1 KOREA ELECTRONICS TELECOMM 12 1 PANTECH CO LTD 10 2 2 QUALCOMM INC 10 2 2 INTUITIVE

4 Priority year No. of Patents Assignee No. of Patents Assignee Virtual Reality (VR) IP Assets - Commercialization Viability Analysis CANON IBM PHILIPS SONY OSTERHOUT GROUP INC MICROSOFT CORP SAMSUNG PANASONIC SHARP DISNEY SIEMENS ALCATEL LUCENT NINTENDO CO LTD KOREA ELECTRONICS TELECOMM IMMERSION CORP Filing Date Figure 2. Assignee trends by filing year (from 1993 onwards) KOREA ELECTRONICS TELECOMM 12 1 PANTECH CO LTD QUALCOMM INC INTUITIVE SURGICAL INC DISNEY CANON MICROSOFT CORP IBM SONY NINTENDO CO LTD OSTERHOUT GROUP INC SAMSUNG Filing Year Figure 3. Assignee trends by filing year (from 2009 onwards) Figure 4. Filing trends of the technology

5 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 5 Transactions in Virtual Reality Technology Patents Table 1 is a compiles a list of the top companies that acquired patent assets (execution date from 1993 onwards) after analyzing the transactions (assignment transfers) in the area of Virtual Reality technology. Assignee count GEOMAGIC, INC. 16 AVAYA INC. 14 IMMERSION CORP 13 CANON 11 NATIONAL SCIENCE FOUNDATION 11 SUN MICROSYSTEMS 9 KAPERNELLY ASSETS AG, LLC 8 NASA 7 NIH 7 BONANZA TECHNOLOGIES LLC 6 NANT HOLDINGS IP, LLC 5 INTELLECTUAL VENTURES HOLDING LLC 4 LIGHTSPACE TECHNOLOGIES AB 4 CAE HEALTHCARE INC. 3 CARESTREAM HEALTH INC. 3 GC NORTH ACQUISITION, LLC 3 GOOGLE 3 INDIGO TECHNOLOGIES, LLC 3 KWOK, CHU & SHINDLER LLC 3 ROXIO INC. 3 TEXTRON INNOVATIONS INC. 3 TRANSPACIFIC IMAGE, LLC 3 Table 1. Top New Assignees (Buyers) of Virtual Reality patents showing transaction count The seller (Assignor) and buyer (Assignee) matrix shown in Figure 5 is created using assignment transfer data for patent assets addressing Virtual Reality technology. Some of the sellers of patent assets include Sensable Technologies, Nortel, Virtual Technologies and Mixed Realty Systems Lab. Buyers of these patent assets include Geomagic, Avaya, Immersion Corp and Canon. Government organizations like the National Science Foundation (NSF), National Institute of Health (NIH) and NASA have funded research at various U.S. Universities in this technology area. This is indicated by patent assignment transfers from the Universities to these organizations. The Universities may however still continue to enjoy IP rights to the research as under the Bayh-Dole Act.

OF TRANSACTIONS ASSIGNEE (BUYERS) Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 6 162 81 0 16 1 6 1 5 4 OTHER ASSIGNEES 4 INTELLECTUAL VENTURES HOLDING LLC 4 LIGHTSPACE

6 NO. OF TRANSACTIONS SENSABLE TECHNOLOGIES NORTEL VIRTUAL TECHNOLOGIES MIXED REALITY SYSTEMS LAB VPL NEWCO, INC. GEOPHOENIX, INC. SOUTHWEST RES INST INTERSENSE INC CALIFORNIA INST OF TECH Intellectual Property Group, Inc. EVRYX ACQUISITION, LLC VIZTA 3D, INC IBM OTHER ASSIGNORS NO. OF TRANSACTIONS ASSIGNEE (BUYERS) Virtual Reality (VR) IP Assets - Commercialization Viability Analysis OTHER ASSIGNEES 4 INTELLECTUAL VENTURES HOLDING LLC 4 LIGHTSPACE TECHNOLOGIES AB NANT HOLDINGS IP, LLC BONANZA TECHNOLOGIES LLC NASA 8 NIH 9 KAPERNELLY ASSETS AG 11 SUN MICROSYSTEMS INC 2 9 CANON KK 12 1 NSF 13 1 IMMERSION CORP AVAYA INC GEOMAGIC, INC. ASSIGNORS (SELLERS) Figure 5. Top Assignee and Assignor matrix showing transaction counts Figure 6 shows the trend plot for the total number of transactions in the area of Virtual Reality technology by execution year. There has been a marked increase in the number of transactions beginning in the period. The upward trend in the number of transactions continues till EXECUTION YEAR Figure 6. Transaction trend based on Execution Year Figure 7 shows the top buyers of patent assets in this technology area by the execution year of assignment transfer.

7 NO. OF TRANSACTIONS ASSIGNEE(BUYER) Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 7 Sun Microsystems emerges as one of the early buyers of IP assets in this technology, acquiring patents from VPL Newco Inc. in Other early buyers of patents include Immersion Corp which purchased patents from Virtual Technologies in 2000 and 2002; and Canon which acquired patent assets from Mixed Reality Systems in Recent acquirers have included Avaya Inc. in 2009, Kapernelly Systems in 2008, and NANT Holdings in The most recent recorded transactions in 2012 have been Geomagic acquiring assets from Sensable Technologies and Bonanza Technologies acquiring assets from Southwest Research Institute CANON KK NSF IMMERSION CORP AVAYA INC NIH GEOMAGIC, INC. BONANZA TECHNOLOGIES LLC NASA OTHER ASSIGNEES LIGHTSPACE TECHNOLOGIES AB NANT HOLDINGS IP, LLC KAPERNELLY ASSETS AG SUN MICROSYSTEMS INC INTELLECTUAL VENTURES HOLDING LLC EXECUTION YEAR Figure 7. Transaction trends of Top Assignees based on Execution Year Citation Analysis The overall patent assets related to Virtual Reality technology are initially obtained and their forward citations are identified. The filing date of the documents in the forward citation set is then restricted to Jan 2009 or later, to obtain a list of assignees who have recently cited VR patent assets. This list is shown in Table 2. Recent citations by these companies indicate that they are working on, and have recently filed patents addressing, VR technologies and could well be potential licensees or interested buyers for similar patents. Within the set of Virtual Reality patents, we have picked a couple of applications for closer study. These are the application of VR in (i) Assisting medical or surgical procedures, and (ii) Gaming. Some of these recently filed forward citations have been manually scanned to verify that the inventions disclosed

8 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 8 address one of these two applications. Assignees holding VR patent assets that address either or both the abovementioned technologies have been highlighted in Table 2. ASSIGNEE COUNT SILVERBROOK RES PTY LTD 8 MICROSOFT 8 SAMSUNG 4 LG 4 PHILIPS 3 HONEYWELL INT 3 MWI VETERINARY SUPPLY CO 3 DIGITALOPTICS CORP 3 IBM 3 YOOSTAR ENTERTAINMENT GROUP 2 PANASONIC 2 RESEARCH IN MOTION LTD 2 AT&T 2 INVENSENSE INC. 2 VEDERI, LLC 2 Table 2. Assignees with recent filings citing patents related to Virtual Reality (filing date from Jan 2009) [Highlighted assignees hold VR patents with Medical or Gaming applications] Virtual Reality in Medical applications and Gaming Table 3 provides a list of VR patent holders having assets with applications in assisting medical or surgical procedures. The top patent holders in this sub-technology include Intuitive Surgical Inc., Siemens, Bracco Imaging; followed by Immersion Corp and Kapernelly Assets AG.

9 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 9 Patent Holder Count INTUITIVE SURGICAL INC. 17 SIEMENS 12 BRACCO IMAGING SPA 11 IMMERSION CORP 10 KAPERNELLY ASSETS AG, LLC 8 VIRTUAL PROTEINS B V 4 CAE INC. 3 GENERAL ELECTRIC 3 IMPERIAL INNOVATIONS LIMITED 3 UNIV ALABAMA 3 UNIV MONASH 3 UNIV TEXAS TECH 3 US NASA 3 Table 3. List of VR patent holders addressing medical applications Table 4 provides a list of the VR patent holders having assets with applications in gaming. The top patent holders of VR technology patents addressing this sub-technology include Nintendo Co Ltd., Sony, Microsoft followed by Konami Corp and Namco Ltd. Patent Holder Count NINTENDO CO LTD 20 SONY 17 MICROSOFT CORP 12 KONAMI CORP 8 NAMCO LTD 8 EDGE 3 TECHNOLOGIES INC. 5 IBM 5 MOTION GAMES LLC 5 ATLANTIS CYBERSPACE INC. 4 GAMECASTER INC. 4 KICO SOUND LLC 4 NANT HOLDINGS IP, LLC 4 PHILIPS 4 SEARETE LLC 4 VIRTUAL PROTEINS B V 4 Table 4. List of VR patent holders addressing gaming applications

10 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 10 Potential Licensees or Buyers We synthesize our findings from each of the preceding analyses to arrive at a list of potential licensees or buyers for Virtual Reality patent assets. These potential licensees or buyers are enumerated in Table 5 along with the rationale for including them in the list. Potential Licensee or Buyer IMMERSION CORP IBM MICROSOFT PHILIPS SIEMENS INTUITIVE SURGICAL INC. KAPERNELLY ASSETS AG, LLC CAE INC. NINTENDO CO LTD Rationale Reference One of the top patent asset holders Figure 1, Figure 2 Acquired patents in VR technology Table 1, Figure 5, Figure 7 Holds VR patents with medical applications Table 3 One of the top patent asset holders with recent filings Figure 1, Figure 2, Figure 3 Citation analysis indicates current development of similar technologies Table 2 Holds VR patents with gaming applications Table 4 One of the top patent asset holders with recent filings Figure 1, Figure 2, Figure 3 Citation analysis indicates current development of similar technologies Table 2 Holds VR patents with gaming applications Table 4 One of the top patent asset holders Figure 1, Figure 2 Citation analysis indicates current development of similar technologies Table 2 Holds VR patents with gaming applications Table 4 One of the top patent asset holders with recent filings Figure 1, Figure 2, Figure 3 Holds VR patents with medical applications Table 3 One of the top patent asset holders with recent filings Figure 3 Holds VR patents with medical applications Table 3 Acquired patents in VR technology Table 1, Figure 5, Figure 7 Holds VR patents with medical applications Table 3 Acquired patents in VR technology Table 1, Figure 5, Figure 7 Holds VR patents with medical applications Table 3 One of the top patent asset holders with recent filings Figure 1, Figure 2, Figure 3 Holds VR patents with gaming applications Table 4 Table 5. List of Potential Licensees or Buyers for VR patent assets

11 Virtual Reality (VR) IP Assets - Commercialization Viability Analysis 11 About Relecura Relecura is the flagship product of INDUS TechInnovations. It is a web-based patent and portfolio analysis platform that uses a knowledge discovery framework to simplify IP analysis for prior art searches and IP commercialization activities. For more details visit or write to us at info@relecura.com. Disclaimer This document is provided for information purposes only and the contents hereof are subject to change without notice. This document, including the information and analysis and any opinion or recommendation, is neither legal advice nor intended for investment purposes. This document is not warranted to be error-free, nor subject to any other warranties or conditions, whether expressed orally or implied in law, including implied warranties and conditions of merchantability or fitness for a particular purpose. INDUS TechInnovations specifically disclaims any liability with respect to this document and no contractual obligations are formed either directly or indirectly by this document.

TAKE 5 ON PATENTS. and Trademark Office is increasing every year, with over 18,000 issuing in January 2015 according

TAKE 5 ON PATENTS. and Trademark Office is increasing every year, with over 18,000 issuing in January 2015 according TAKE 5 ON PATENTS POWERED BY THE OCEAN TOMO RATINGS SYSTEM / JANUARY, 215 Take 5: On Patents is a monthly report prepared by Ocean Tomo, driven by insight gleaned from the Ocean Tomo Ratings System. The