The TPL Group Backgrounder June 6, 2007

The TPL Group

Founded in 1988 by Daniel E. Leckrone, Technology Properties Limited (The TPL Group) has emerged as a global coalition of high technology enterprises involved in the design, manufacture and sales of proprietary semiconductor products as well as the development, management and commercialization of Intellectual Property (IP) assets. Among the advanced semiconductor solutions that The TPL Group and its enterprise companies continue to bring to market are multicore processors, memory controllers and content secure connectivity devices for distributed digital media processing applications.
Mr. Leckrone continues to serve as Chairman of The TPL Group, which is headquartered in Silicon Valley (Cupertino, CA). The company has six US product design centers, three of which are in California plus three others based in Arizona, Colorado and Ohio. Internationally, the company also manages product design and/or IP licensing activity from locations throughout Europe (London, Lugano, Vienna and Sofia) as well as from Taipei, Taiwan and Chennai, India.

TPL on Patent System Reform

A fair and balanced patent system is the key to success for The TPL Group and other entrepreneurial companies that adopt the fabless business model. Since the Supreme Court has already corrected perceived abuses in the patent system. TPL believes that any further reform should focus on areas where the Supreme Court does not have a role such as the improvement of patent quality. TPL further believes that The Patent Reform Act of 2007 embodies several extreme proposals that will weaken the patent system. The strong support this Act is receiving from large companies should be of great concern to individual inventors and small technology companies. Indeed, if the proposed reforms are enacted, they will clearly favor the infringer over the inventor – and as a result, will inhibit the development of innovative technologies and products. Our legendary Patent System is fair and continues to work well. It may need some fine tuning, but it does not need the major type of reform proposed by The Patent Reform Act of 2007 now before Congress.

TPL Background Highlights Self-funded since its inception, TPL has operated with only a handful of employees until very recently. Over nearly two decades, TPL has supported the development of a variety of innovative and ground-breaking technologies by structuring relationships that enable the effective development of innovative technology and products as well as their protection against being appropriated and replicated by competitors once such technology and products proved their worth in the marketplace.

The TPL Group currently employs more than 100 experienced technologists with nearly half of them holding MS and/or PhD degrees. The technologists are engaged in developing advanced semiconductor products, some of which are currently shipping.

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TPL‘s global marketing/sales force provides coverage throughout North America, Europe, Japan and Pacific-Asia.

Operating as a TPL Group Enterprise, IntellaSys specializes in developing distributed digital media semiconductor solutions via three major product brands: SEAforth™ multicore processors, Indigita® content secure connectivity devices and OnSpec™ secure storage controllers
The SEAforth multicore processor, which was formally launched at the Microprocessor Summit on May 15, 2006, won recognition as “Product of the Year” from Portable Design Magazine.

One of the first TPL-supported Inventors, Charles “Chuck” Moore, led the invention and development of a remarkable technology that enabled the revolutionary performance we see in microprocessor devices today. With the support of TPL and others, Moore’s innovative technology was embodied in a series of patents called the Moore Microprocessor Patent™ (MMP) Portfolio, which today protects Intellectual Property that is fundamental to the design and architecture of state-of-the art microprocessor devices.

Operating as a TPL Group Enterprise, Alliacense focuses on the commercialization of IP assets through licensing. The success of the MMP Portfolio Licensing Program, is clearly evident by the world renowned electronic system manufacturers that have purchased MMP licenses, including HP, Casio, Fujitsu, Sony, Nikon, Seiko Epson, Pentax, Olympus, Kenwood, Agilent, Lexmark, Schneider Electric, NEC Corporation, Funai Electric, SanDisk, Sharp Corporation and Nokia.

Proceeds from MMP licensing transactions are being used by Mr. Moore and TPL to jointly develop revolutionary new microprocessor technologies and microprocessor devices, some of which have been introduced by TPL and heralded by microprocessor industry analysts and trade media. These new technologies are the subject of a variety of new patent applications, which, if the patent system remains reliable and predictable, should support yet another round of innovation by Mr. Moore and TPL.
TPL product development activity also extends to Sub Acoustic Wavelength Technology (SWAT) an exciting field that promises to result in the production of much improved hearing aids as well as consumer audio products.

TPL has been self-funded since its inception, and has supported the development of a variety of innovative and ground-breaking technologies by structuring relationships which enable the development of innovative technology and products --- but only in those instances where the technology and the products could be protected from being appropriated and replicated by competitors once the technology and the products had proven their worth in the marketplace.

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OnSpec Background vis-à-vis Patent Reform

OnSpec Electronic Inc. (“OnSpec”) was formed by Swamy Venkidu and Larry Jones in March 1990 to develop “Controller” chip solutions for the then ground-breaking “Flash Memory” products as they became available. OnSpec Controller chips enable Flash Memory to be used in conjunction with a microprocessor to implement a variety of computer and computer-related products and functions.
As a struggling start-up, OnSpec had to divert a portion of its development resources in order to protect the technology it was developing, and filed a series of some 50 patent applications over a decade of innovation and product development, approximately 25 of which have issued in the United States and around the world.
Unfortunately, the market for Flash Memory evolved slowly and even though OnSpec developed a “blue-chip” customer list based on its superior technology, OnSpec had to be entirely self-funded by founders Venkidu and Jones. Meanwhile, OnSpec’s Controller products have been and continue to be exploited by many manufacturers of consumer electronics and computer products.
Much of the technology developed by OnSpec has been exploited by the well-funded companies that have entered the Flash Controller business as it matured, and the OnSpec technology is now in wide use by OnSpec competitors large and small -- competitors who now have distinct cost advantages because they have not had to pay for the research and development that created the technology upon which they base their products.
Not surprisingly, OnSpec now struggles in a marketplace enabled by the technology it developed, disclosed, and funded -- an anomalous turn of events that is not at all uncommon in the world of “Hi-Tech” where effective protection of Intellectual Property makes the difference between a company thriving or failing. This anomaly may even be the norm as well funded companies simply take what they want while the entrepreneurial pioneers struggle for survival, often being required to surrender and accept fire-sale prices in “shot-gun” acquisitions by competitors who gained unfair cost advantages by infringing upon IP developed by the entrepreneurial pioneers.
Fortunately, OnSpec was able to avoid that fate, choosing to join forces with an enterprise with the resources to fund and implement a Program to make OnSpec technology licensing a “core business.” As a result, all those who wish to use OnSpec technology – now embodied in the CORE Flash™ Patent Portfolio –cab secure the right to do so in exchange for the payment of a royalty.

It is clear that OnSpec’s new “life expectancy” is directly and inversely related to the success of the Petitioner and its Amici whose ability to fund their assault on the patent system is unfairly based on a litany of OnSpec-esque episodic “triumphs”.