2. PowerDsine Snapshot
Established in 1995 Outstanding
Most Innovative Emerging
New product line every 2-3 years Product Company
1999 - Creating “Power over Ethernet”
2003 – Power over Ethernet IEEE 802.3af
standard ratified Key Contributor to 802.3 af
5 private financing rounds raising about $60M
2004 –IPO in NASDAQ raising $80M
2006 - 155 employees
Global presence; R&D in Israel
Sales in the U.S. Taiwan, Korea
Q1 2007 Acquisition by
(MSCC) for $250M PowerDsine Headquarters
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3. What Is Power-over-Ethernet ?
Data and Power over a single Ethernet cable
Transmitting safe and uninterrupted power (15W, 48V)
over existing LAN infrastructure
IEEE 802.3af standards based Ease End
Device
VoIP Phone Deployment
PoE Enabled Power
LAN Switch Improved
1011011
Network
WLAN Access Point Reliability
Power
1011011
Cost
Ethernet
Savings
1011011
Cable
Network Security Device
Power
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4. IP Strategy – Why ??
The purpose – behave as the Market Leader, gain market share,
expand gross margins
Activity – Aggressive patent buildup and litigation
After 10 years – PowerDsine is THE Power over Ethernet (PoE)
Market leader, with over 80% market share, GM > 65%
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5. IP Strategy - How ??
Hire internal US patents register
Building internal IP legal department
Enforcement strategy – Plan and commit the budget
Management commitment
VERY active participation and leadership of standard
organizations, IEEE 802.3af standard
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6. The “gift” just before you go public…
Everything is ready for the big IPO …and then..
You get a “friendly” letter…..
Now what….. ?
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7. The Prisoner Dilemma
To Pay
Or not to Pay ?
This is ALSO the question……
We decided to go “crazy”
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8. Actual Litigation - Advantages
(1) Keeping competitors out of the market;
(2) Obtaining monetary compensation;
(3) Deterring potential infringers by sending a
message to industry that PowerDsine will enforce
its patents;
(4) Creating an additional barrier to entry (by way
of potential litigation risk)
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9. Actual Litigation - Disadvantages
Substantial actual out-of-pocket expenses
Expenditure of “soft” resources such as the time and energy that
engineers and other key company personal
Will need to devote to the litigation (depositions, discovery, review
expert reports, theories etc);
Possible “fight” challenging the validity of company patents; and
Uncertainty in the market over the validity of the patent that is being
litigated.
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10. PowerDsine Patent Summary
Date Issued US Patent Number Description
May 2006 #7,046,983 Power Supply for providing Power over Ethernet
May 2006 #7,040,926 Powered Device Interface embedded into an RJ-45 connector
Feb. 2006 #7,006,815 PoE Midspan and/or Integrated either Spare Pairs or Data Pairs
Feb. 2006 #6,996,458 Power over Ethernet Node for use in a DC Power Pool
Jan. 2006 #6,986,071 AC Disconnect for Power over Ethernet
Jan. 2006 #6,985,713 Identifying a Node via a Precision Resistor
July 2005 #6,916,206 PoE functionality in a Connector Assembly
June 2005 #6,909,943 Ethernet switch which incorporate PoE technology
Jan. 2005 #6,841,979 Digitally Controlled Power Distribution for PoE
July 2004 #6,764,343 PoE embedded into RJ 45 connector (LAN Connector)
Nov. 2003 #6,643,566 Power over Ethernet End-Span (PoE in a Switch) concept
Nov. 2003 #6,650,554 Power Factor Corrector for Power Supplies
Sept. 2002 #6,473,608 Power over Ethernet Mid-Span (Power Hubs) concept
Apr. 2000 #6,049,471 ASIC Controller (Topology & Concept)
Oct. 1998 #5,828,558 DSP Mathematical algorithm for open loop control
Additionally, PowerDsine has patents issued in 6 foreign countries: China,
Taiwan, Australia, New Zealand, Singapore, South Africa
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11. Other Intellectual Property
93 PoE related patent applications pending worldwide
3 patent families in backlighting
2 patent families in telecommunications
Copyright protection for its software protocol
Trade secrets and know-how developed over many years
PowerDsine name and logo are trademarked, or pending, in
major markets around the world
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12. IP Litigation
During the past years PDSN has utilized the court system to
enforce its intellectual property rights
Most actions taken by PowerDsine were to enforce PDSN’s
Midspan “608” patent
PowerDsine’s patents have been proven through litigation
success recently against Phihong and Systems Engineering
International
Most of PowerDsine’s IP enforcement litigation cases have
settled
Some of the active cases are in settlement negotiations
PowerDsine recently settled litigation with Texas Instruments
regarding infringement of PowerDsine’s communications
protocol
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