Sixth Annual CLE/Golf/Spa at Barton Creek Resort. May 13, 2011 WELCOME!

Transcription

1 Sixth Annual CLE/Golf/Spa at Barton Creek Resort May 13, 2011 WELCOME!

2 Schedule of Events 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort 07:30AM - 08:15AM Registration Wildflower Atrium 07:30AM - 08:30AM Breakfast Wildflower Atrium 08:15AM - 08:30AM Welcome / Opening Comments Live Oak Room 08:30AM - 11:20AM CLE Sessions Session 1 - Developing and Getting Your Company to Embrace an Effective Ethics & Compliance Program Live Oak Room Session 2 What to Do When Your Corporate Client Gets Sued Session 3 Hot Topics in IP Law 11:30AM - 12:30PM Buffet Lunch Foothills Dining Room 11:30AM - 04:30PM Hospitality Suite available Fairway Suite :30PM - 01:24PM Tee Time for golf (4-person scramble format) Crenshaw Cliffside 12:30PM - 04:30PM Spa Treatments Three Springs Spa 04:00PM - 06:00PM Cocktail Reception and Door Prize Drawing Barton s Lounge

3 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort MAP OF FACILITIES Breakfast/Registration (Wildflower Atrium) CLE Sessions (Live Oak Room, A, B & C) Lunch (Foothills Room) Golf (Crenshaw Cliffside Pro Shop) Spa (Three Springs Spa) Reception (Barton s Lounge)

4 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort Golf Attendee Information You are registered to play 18 holes of golf at Barton Creek s Crenshaw Cliffside course. Pairings will be announce at the morning CLE session (please arrive on the tee box 5-10 minutes before your scheduled tee time) Attire: Softspikes are mandatory MEN Acceptable: Shirts with collars and sleeves, slacks, Bermuda or walking shorts Prohibited: Tank tops, t-shirts, cut-offs, bathing suits, jogging shorts, and jeans WOMEN Prohibited: Halter-tops, t-shirts, bathing suits, tennis dresses, cut-offs, and extremely short shorts Your Payment Includes: Greens fee Use of practice facility Use of range balls Shared cart rental Cart cooler provided (no other coolers allowed) Beverages and cigars on the course Services and gratuities are included

5 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort Golf Attendee Information Lunch A buffet lunch is being served in the main resort building beginning at 11:30am and running through 12:30pm. Please note that we will not have boxed lunches on the course. Driving Range Feel free to warm-up on the driving range before your tee time. Range balls are included. Format Scramble In a scramble, each player tees off on each hole. The best of the tee shots is selected and all players play their next shot within one club length (except on the green) from that spot (keeping the ball in like condition). The best of the next shots is determined, and so on until the ball is holed. Gentlemen will play from the Gold tees. Ladies will play from the White tees. Gifts In lieu of prizes this year, each participant will receive a gift card Cheating Since we aren t keeping score, cheat as much as you want. After the Round You are encouraged to stay and join us in the lounge in the main resort building for an ACC-sponsored happy hour.

6 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort Spa Attendee Information You will receive your appointment time at registration Please check in 30 minutes prior to your spa appointment Between events, you are welcome to relax (or catch up on ) in our Hospitality Suite - Fairway Suite #741 Your Payment Includes: Gratuity Use of the following amenities: Indoor heated pool Outdoor pool Nature Trail Gym Facilities Locker Rooms Private lockers with key Showers Toiletries Whirlpool Dry Sauna (women s locker room only)

7 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort CLE SESSION 1 Developing and Getting Your Company to Embrace an Effective Ethics & Compliance Program Catherine Q. Morse General Counsel and Director of Public Affairs Samsung Austin Semiconductor Larry M. Parsons Vice President, Business Conduct and Ethics Freescale Semiconductor, Inc. Inspired by her family s journey with their youngest son, Robbie, who has profound special needs, Catherine has been actively involved in various non-profit causes throughout Austin over the past 14 years. A graduate of Louisiana State University and the University of Houston Law School, Catherine has augmented her day job as an attorney with turns on the Boards of Directors of The Travis Light House for the Blind, Any Baby Can Child and Family Resource Center, Goodwill of Central Texas and Mobile Loaves and Fishes. Catherine recently joined the Austin Advisory Board of Citizen School and serves on The University of Texas Service Scholar Community Advisory Committee. Catherine is also a Board Member of Envision Central Texas, a non-profit regional civic planning organization. Catherine joined Samsung Austin Semiconductor as its local General Counsel in August of 2007 and earlier this year, she added Public Affairs to her role. Among other duties, Catherine is responsible for leading Samsung Austin Semiconductor s corporate philanthropy activities. Larry currently holds the position of Vice President, Business Conduct and Ethics for Freescale Semiconductor, Inc. In this role he has responsibility for all ethics, compliance, labor and employment law and litigation, immigration, corporate social responsibility and investigation matters worldwide for Freescale. Freescale is a private company headquartered in Austin, Texas with over 20,000 employees in 24 countries. Prior to assuming this role for Freescale, Larry was Senior Director, Labor and Employment Law for Motorola, Inc. and its Semiconductor Products Sector, the predecessor to Freescale. Before joining Motorola, Larry practiced labor and employment law in the Austin office of Fulbright & Jaworski, L.L.P. and in the Dallas office of Jones, Day, Reavis & Pogue, L.L.P. Larry received his B.S. from Texas Christian University (cum laude, University Honors and Departmental Honors) and his J.D. from Vanderbilt University School of Law (Order of the Coif, Law Review). Following law school he clerked for the Hon. Jerre S. Williams, Circuit Judge, United States Court of Appeals for the Fifth Circuit. Larry is a member of the Society of Corporate Compliance and Ethics, the Association of Corporate Counsel, the Texas General Counsel Forum and is a Certified Compliance and Ethics Professional. He has served on the Board of Directors for several non-profit organizations including Marywood Child and Family Services, the Austin Theater Alliance, Volunteer Legal Services of Central Texas, Chorus Austin and the Austin Summer Musical for Children.

8 Developing and Getting Your Company to Embrace an Effective Ethics & Compliance Program Association of Corporate Counsel Austin Chapter May 13, 2011 Larry Parsons Vice President, Business Conduct and Ethics Freescale Semiconductor, Inc. Catherine Morse General Counsel and Director of Public Affairs Samsung Austin Semiconductor, LLC Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 1 TM

9 Freescale s Vision Be the leader of embedded processing solutions in every major market segment where we compete Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 2 TM

10 (Some) Goals of an Effective Compliance Program Help good people behave well Guide good people quickly when a mistake is made so they don t do it again Minimize opportunities for bad people to do bad things Identify and remove bad people quickly before they can do (more) damage Minimize expense to investigate, settle, or litigate Minimize occurrence of imposed actions/requirements Minimize the cost of imposed actions/requirements Minimize penalties/maximize penalty relief Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 3 3 TM

11 Top 5 Signs You Might Have a Compliance Problem 5. In meetings, frequent references to off-shore drilling in Idaho. 4. Monthly bills for Dubai subsidiary for $200,000 at upscale Dubai store in the name of John Smith. 3. Russian subsidiary office manager keeps telling you that s the way we did it in the KGB. 2. Nigerian joint venture partner jokes about lack of extradition treaty with U.S. 1. Following up on a hotline tip about accounting gimmicks, you call the Chief Accountant who says that she s seen the HBO series the Wire and thinks you should meet with her in person and not speak on the phone or use . * Courtesy Ryan McConnell, Haynes and Boone, LLP Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 4 4 TM

12 Federal Sentencing Guidelines and DOJ Memos United States Federal Sentencing Guidelines Chapter 8 Sentencing of Organizations Implemented 1991; amended November 1, 2004 and November 1, 2010 FSG 8B2.1 elements of an effective compliance & ethics program Reduction of culpability score Department of Justice guidance (pre-prosecution) Memos Holder (1999), Thompson (2003), McNulty (2006) U.S. Attorneys Manual, Ch. 9 Principles of Federal Prosecution of Business Organizations ( Filip Memo ) (2008) Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 5 TM

13 Federal Sentencing Guidelines - 8B2.1. Effective Compliance and Ethics Program Guidelines Standard (a) To have an effective compliance and ethics program, for purposes of subsection 8B2.1 (b) : (f) of 8C2.5 (Culpability Score) (b) and Due subsection diligence (c)(1) and of 8D1.4 the (Recommended promotion of Conditions an organizational of Probation - Organizations), an organization shall culture that encourages a commitment to compliance with (1) exercise due diligence the law to prevent within and the detect meaning criminal conduct; of subsection and (a) minimally (2) otherwise promote require an organizational the following culture that steps encourages : ethical conduct and a commitment to compliance with the law. (5) The organization shall take reasonable steps - (B) to evaluate periodically the effectiveness detecting criminal conduct. of the organization s compliance and ethics program Such compliance and ethics program shall be reasonably designed, implemented, and enforced so that the program is generally effective in preventing and detecting criminal conduct. The failure to prevent or detect the instant offense does not necessarily mean that the program is not generally effective in preventing and (b) Due diligence and the promotion of an organizational culture that encourages ethical conduct and a commitment to compliance with the law within the meaning of subsection (a) minimally require the following: (1) The organization shall establish standards and procedures to prevent and detect criminal conduct. (2) (A) The organization s governing authority shall be knowledgeable about the content and operation of the compliance and ethics program and shall exercise reasonable oversight with respect to the implementation and effectiveness of the compliance and ethics program. (B) High-level personnel of the organization shall ensure that the organization has an effective compliance and ethics program, as described in this guideline. Specific individual(s) within high-level personnel shall be assigned overall responsibility for the compliance and ethics program. Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. Slid e 6 6 TM

14 The Federal Sentencing Guidelines: Seven Elements of an Effective Ethics and Compliance Program Management Support & Resources VP, Ethics & Compliance Funded and Resourced Freescale Business Conduct & Ethics Leadership Team ( FBCELT ) Board Knowledge and Oversight Consistent Enforcement Standards & Controls To Detect and Prevent Misconduct FSL Code of Business Conduct & Ethics Ethics & Compliance policies Corporate Assurance SOX Disclosure Committee Due Care in Delegating Authority Effective Training & Communication Initial & Ongoing All Employee Training Senior Leadership, including Board Regular Communications Variety of Vehicles Response & Continuous Improvement Monitoring, Evaluation & Reporting FSL ETHICSline FBCELT Audit & Legal Committee SOX Disclosure Committee ERM Process; Periodic Risk Assessment Business Integrity Questionnaires FSL Leadership Expectations Performance Mgt. & incentives aligned Disciplinary Actions Track record of integrity prior to delegation Screening of new hires Review & amend program after problems occur Senior Leader Meetings Lessons Learned Communications Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 7 TM

15 Element 1 Management Support and Resources The Office (2009) Business Ethics Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 8 8 TM

16 Business Conduct & Ethics Organization Larry Parsons Vice President, Business Conduct and Ethics Code of Business Conduct and Ethics Human Resources Compliance Issues Regulatory Compliance Compliance Special Projects Labor and Employment Law and Litigation Code of Business Conduct and Ethics ETHICSline BCE Committees EEO Immigration OFCCP Regulatory Compliance Trade Compliance EPP Function FCC/CE Risk Assessment Records Management Data Privacy Corporate Social Responsibility Supplier Certifications Ethics and Compliance Training Investigations Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 9 TM

17 Freescale: Audit and Legal Committee Charter Business Conduct, Ethics and Compliance 16. The Committee will review the Company s business conduct and compliance policies and programs. In connection with such review, the Committee will: Receive periodic reports from the ethics and compliance officer regarding ethics and compliance. Periodically meet separately with the ethics and compliance officer without other senior management present. Obtain reports from management, the Company s internal audit director and the independent auditor that the Company and its subsidiary/foreign affiliated entities are in conformity with applicable legal requirements and the Company s Code of Business Conduct. Advise the Board with respect to the Company s policies and procedures regarding compliance with applicable laws and regulations and with the Company s Code of Business Conduct. Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

18 Element 2 Standards and Controls RealBiz Shorts - Cracking the Code Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

19 Code of Business Conduct and Ethics Standards and Controls Wait! You have to take me to shore. According to the Code of the Order of the Brethren... Ethics Policies Anti-Bribery and FCPA Insider Trading Conflicts of Interest Corporate Assurance Audits Disclosure Committee First, your return to shore was not part of our negotiations nor our agreement so I must do nothing. And secondly, you must be a pirate for the pirate's code to apply and you're not. And thirdly, the code is more what you'd call "guidelines" than actual rules. Welcome aboard the Black Pearl, Miss Turner. Audit and Legal Committee Meetings * Courtesy Ryan McConnell, Haynes and Boone, LLP Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

20 Element 3 Training and Communications The Office (2009) Business Ethics Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

21 Freescale Training Plan - General Areas Covered by Training Code of Business Conduct and Ethics (all employees) Insider Trading Foreign Corrupt Practices Act Protecting Confidential Information Conflicts of Interest Antitrust One other course (e.g., E-Compliance, Export Controls; Social Media) Training Delivery and Cadence Corpedia online training Each course delivered every other year (3-4 course per year for some employees) Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

22 Freescale Ethics Communications Plan Planning Develop communications plan at beginning of year. Elements Real Biz Shorts (Monthly- Short article accompanying videos) Summit (Freescale Employee Intranet Portal) Articles Ethics in Action Ethics IQ Recurring specific subjects (Insider Trading, Confidential Information, Export Compliance) External Communications Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

23 Element 4 Monitoring, Evaluation and Reporting RealBiz Shorts - If Found Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

24 Governance Quarterly meetings (16 meetings total) Business Conduct and Ethics Leadership Team AsiaPac, EMEA, and Latin America/Canada Business Conduct and Ethics Regional Committee Reporting Monthly OBCE Contacts Report to BCELT Report provided to Board Audit and Legal Committee prior to each meeting Quarterly report to Freescale Disclosure Committee Quarterly meeting with KPMG Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. Slide 17 TM

25 ETHICSline Contacts OBCE Contact Statistics Total Contacts Received by the OBCE *** *** *** Anonymous Contacts Unsubstantiated Allegations Anonymous with Unsubstantiated Allegations Contacts Immediately Reported to the Audit/Legal Committee ** ** ** Contacts Leading to Employee Termination Total Employee Terminations Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

26 Contact Cycle Time 31+ Days ETHICSline Contacts Days 3-14 Days 0-2 Days Contacts 2007 by 2008 Category Security Misc & Other Contacts by Region US Unknown LatAm/Ca n EMEA Human Resources AsiaPac Finance EHS Code of Conduct Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. Slide 19 TM

27 Element 5 Due Care in Delegating Authority The Office (2010) Stress Release Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

28 Element 6 Consistent Enforcement The Office (2010) Stress Release Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

29 Consistent Enforcement FSL Leadership Expectations. Strives For Excellence: Keeps quality and continuous improvement foremost in mind when doing work. Acts With Integrity: Earns the trust of others by acting in an ethical and honorable way. Performance Mgt. & Incentives Aligned Disciplinary Actions Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc. 22 TM

30 Element 7 Response and Continuous Improvement (2008) - Forgetting Sarah Marshall Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

31 (Some) Impacts of an Effective Compliance Program A good reputation for consistent ethical and compliant operating procedures opens up tremendous opportunities for business growth and profitability. Good reputation as a responsible corporate citizen allows a company to get faster government approvals. Companies with reputations for ethical business practices and good corporate governance tend to have higher stock prices and more satisfied employees. Compliance is not about what a Company cannot do, it s about what it can do. Acting legally and ethically can serve as a catalyst for success. Realistically, no company can eliminate all compliance violations, but by building a successful Compliance Program, it can minimize the frequency and severity of compliance violations. *Courtesy of Ryan McConnell, Haynes and Boone, LLP Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

32 It Can Pay to Be Ethical Ethisphere s World s Most Ethical Companies designation recognizes companies that truly go beyond making statements about doing business ethically and translate those words into action. Investing in ethics is beneficial for any company, even in a recession. The below graph compares the WME Index, or all publicly traded 2011 World s Most Ethical Company honorees, against the S&P 500 since the initial World s Most Ethical Companies recognition from *Freescale has been included on the World s Most Ethical Companies List each year since 2008 Freescale, the Freescale logo, AltiVec, C-5, CodeTEST, CodeWarrior, ColdFire, C-Ware, the Energy Efficient Solutions logo, mobilegt, PowerQUICC, QorIQ, StarCore and Symphony are trademarks of Freescale Semiconductor, Inc., Reg. U.S. Pat. & Tm. Off. BeeKit, BeeStack, ColdFire+, CoreNet, Flexis, Kinetis, MXC, Platform in a Package, Processor Expert, QorIQ Qonverge, Qorivva, QUICC Engine, SMARTMOS, TurboLink, VortiQa and Xtrinsic are trademarks of Freescale Semiconductor, Inc. All other product or service names are the property of their respective owners Freescale Semiconductor, Inc TM

33 TM

34 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort CLE SESSION 2 What to Do When Your Corporate Client Gets Sued Marc Vockell Executive Director of Litigation Dell Inc. Beth Ozmun Corporate Vice President, Litigation and Employment Law Advanced Micro Devices, Inc. Marc Vockell currently serves as Executive Director of Litigation for Dell Inc. Since 2004, he has been responsible for managing outside counsel and general litigation including pretrial, trial, and appeal in the US and across borders including intellectual property litigation, complex commercial litigation, class actions, securities litigation, and governmental matters. Marc is a graduate of UT Law. Prior to joining Dell, he was a general litigator at Vinson & Elkins in Austin, and was a clerk for U.S. District Judge Sam Sparks. Marc is a commissioner for the Texas Access to Justice Commission, board president of Volunteer Legal Services of Central Texas, and is the past-president of the Austin Chapter of the Federal Bar Association. Beth Collum Ozmun is Corporate Vice President of Litigation and Employment Law at Advanced Micro Devices, Inc. (AMD). Beth oversees all worldwide litigation, including intellectual property, antitrust, securities, regulatory matters, and employment law actions. Beth is also an Assistant Secretary at AMD and supports the Compensation Committee of the AMD Board of Directors. Prior to joining AMD in 1994, Beth worked as an associate in the Austin office of Fulbright & Jaworski, where she practiced employment law and commercial litigation. Beth has also served as an Adjunct Professor that the University of Texas School of Law, where she developed and taught a writing seminar on the Americans with Disabilities Act for ten years. Beth is a 1987 cum laude graduate of the University of Texas School of Law, where she was a member of the Order of Barristers, and member of the Order of the Coif. Beth is a member (Master) of the Austin IP Inn of Court. Beth was a 2006 nominee by the Texas General Counsel Forum for the Magna Stella Award for Major Litigation. She was selected as a 2005 Pathfinder for the Travis County Women Lawyers Association and is a founding member of AMD s Executive Women s Forum.

35 6th Annual CLE/Golf/Spa Event May 13, 2011, 8:00am-6:00pm Barton Creek Resort CLE SESSION 3 Hot Topics in IP Law Mark S. Walker Counsel, Software Group IBM Corporation Mark S. Walker is Counsel for Tivoli Service Availability and Performance Management products in the Software Group of IBM Corp. in Austin, Texas. Mr. Walker advises product management on product licensing, product clearance and acquisition and divestiture issues. He prepares and negotiates agreements with suppliers, partners and customers in collaboration with the sales and procurement organizations. Mark previously managed a team of patent professionals who provide patent and trademark strategy, preparation, prosecution and licensing counsel to IBM Tivoli brand technical leaders. Mr. Walker has led intellectual property due diligence investigations for corporate acquisitions and intellectual property licensing projects. Mark advises his clients on open source code issues and participation in standards organizations. Mark was Chair of the Intellectual Property Owners Association Patent Office Practice (US) Committee from and continues to work with the committee to improve practice before the US PTO. He is also a member of AIPLA and ACCA. Before coming to IBM he was in private practice and later served as Chief Intellectual Property Counsel for Gateway, Inc. Mr. Walker has spoken frequently on the development of patent strategies, intellectual property portfolio management and intellectual property licensing. Mark is a graduate of the George Washington University National Law Center. Jennifer B. Wuammett Vice President & Chief Intellectual Property Counsel Freescale Semiconductor, Inc. Jennifer Wuamett serves as Vice President & Chief Intellectual Property Counsel for Freescale Semiconductor, Inc. Jennifer is responsible for all aspects of Freescale Semiconductor, Inc. s worldwide intellectual property legal operations, including patent procurement and portfolio management, intellectual property licensing and enforcement, intellectual property defensive matters, IP transactional matters, trademark legal matters, and management of both internal and external legal counsel performing such functions. Jennifer leads and manages an internal global team of 18 intellectual property professionals, including 11 patent attorneys. Prior to joining Freescale, Jennifer served as IP Law Director with Motorola s Global Strategic IP Counseling Team and other roles. Before joining Motorola, Jennifer was an Intellectual Property Attorney in private practice with the national law firm Quarles & Brady and was located in the firm's Phoenix, Arizona office. Jennifer's practice included patent and trademark prosecution and IP transaction and litigation support. Jennifer is the Immediate-Past President of the Austin/San Antonio Chapter of the Texas General Counsel Forum. She was a founding member of the Austin Chapter of the Association of Corporate Counsel. She is also is a Technical Advisory Committee Member for Girlstart, a non-profit organization empowering young girls to excel in math and science. Jennifer received her Law Degree from the Arizona State University College of Law, where she served as Editor-in-Chief of the Arizona State Law Journal from

36 Mark Walker Counsel - SWG Tivoli IBM Corp. Jennifer Wuamett Vice President & Chief Intellectual Property Counsel Freescale Semiconductor, Inc.

37 Intellectual Property in the News Slide 2

38 Intellectual Property in the News Slide 3

39 Slide 4 Recent IP Headlines

40 Hot Topics for Today ITC Trends and Challenges The Rising Tide of NPE Litigation IP Indemnification Trends and Challenges Open Source Risk Management 5 5

41 Patent Litigation Trends Section 337 ITC investigations initiated District Court patent cases filed Source: Source:

42 Challenging IP Litigation Landscape Damage Awards: Annual median patent damages awards range from $2.4 - $10.5M since NPEs : Average damage awards to NPEs have nearly tripled those to practicing entities since Jury v Judge: Juries awarded substantially higher damages in the last decade. Judicial awards have decreased thus maintaining the average. Legal Costs: Average legal fees for a patent case range from $1M - $10M depending on complexity and exposure and nature of suit (average $1-6M for Federal Case, often up to $10M for ITC case) 60% of expense incurred through discovery phase. Complexity, uncertainty, and e-discovery issues are major cost drivers. Venue: Certain federal district courts (particularly Virginia Eastern, Delaware and Texas Eastern) tend to be more favorable to patent holders (higher success rates and damages awards). 7 7

43 What is an ITC Patent Case? Section 337(a)(1)(B) of the Tariff Act of 1930 declares unlawful importation into the United States or the sale within the United States articles that - (i) infringe a valid and enforceable United States patent... or (ii) are made, produced, processed, or mined under, or by means of, a process covered by the claims of a valid and enforceable United States patent." See 19 U.S.C. ' 1337(a)(1)(B)(1994). Section 332 of the Tariff Act authorizes the International Trade Commission (the "ITC") to perform such investigations. Thus, ITC actions provide an alternative venue to the federal courts for Complainants to seek redress for patent infringement. 8 8

44 How is an ITC Patent Case Different? Speed: Section 337 investigations (once initiated) move quickly! Approximately 16 months to decision much faster the Federal Court Violation: basic elements of a Section 337 violation are proof of infringement of a valid U.S. patent that relates to an imported product, where the patent is being used in an existing domestic industry. Doctrine of Res Judicata does not apply to 337 actions Jurisdiction is in rem not in personam Remedies: no damages award but successful Complainants secure powerful exclusion orders ( LEO or GEO ). 9

45 Polling Question 1 What percent of Section 337 patent cases result in early termination? a % b % c % d % 10 10

46 Polling Question 2 Patent holders are more likely to win their cases in the ITC than in federal district court: True or False 11 11

47 Varying ITC Scenarios Litigation and Settlement Strategies Vary in the ITC Depending on Factual Scenarios: Cases between competitors Cases involving complainants who are nonpracticing entities or licensing companies Cases involving multiple unrelated respondents 12 12

48 Some High Profile Competitor Disputes Complainant Respondent Action 337-TA- Related Actions Notice Date Settlement Reported Vizeo LG 733 Related US and Int l Cases 8/10 1/11 LG Vizeo 742 Related US and Int l Cases 10/10 1/11 Motorola Rim 706 N.D.TX 1/10 6/10 Funai Vizeo 617 LEO 4/09 11/07 6/10 Vizeo Funai E.D.Cal 5/09 6/10 LG Funai 687 E.D.TX 9/09 2/10 Broadcom Qualcomm 543 Related US Cases by both 5/05 4/09 QCOM paid $890M Qualcomm Nokia 578 Related US and Int l Cases 7/06 7/08 Nokia Qualcomm 614 Related US and Int l Cases 11/07 7/08 Nokia paid $2B+ Nokia Apple 701 Related US and Int l Cases 1/10 OPEN Motorola Apple 745 Related US Cases 11/10 OPEN Apple Motorola Related US Cases 11/10 OPEN 13 13

49 Considerations in Competitor Disputes Significant exposure often involved Retaliatory responses common ITC and Companion Federal District Court cases Supplemental US federal Court or international cases Settlements often involve global cross licensing arrangement, sometimes with balancing payment Understanding exposure and position critical to strategy Simplified Strategy Matrix Mediocre Case Strong Case Weak Case Risky Case Exposure/Damages Provable Liability 14 14

50 Non-Practicing Entity Patent Suits Non-Practicing Entity (NPE) Owner/Exclusive licensee of patent Does not practice patent by making or selling New FTC distinction Patent Assertion Entity (PAE) Business model seeks royalties from those using patent Excludes universities and semiconductor design houses with technology transfer business model 15

51 The Rising Tide of NPE Litigation Patent Litigation on the Rise - increasing defensive risk Non-Operating Entities (NPE) dominate patent litigation landscape 16

52 Defensive Concerns No opportunity to cross license your portfolio NPE can seek injunction w/o fear of reciprocal injunction Frequent multiple defendant suits increase complexity 17

53 Polling Question #3 What percentage of patent lawsuits relating to software technology are filed by NPEs? a. 5% b. 20% c. 40% d. 80% 18

54 Polling Question #4 In Which Federal District does Plaintiff have greatest chance of success? a. ED Virginia b. ED Texas c. MD Florida 19

55 Approach to NPE Case Engage from beginning Understand exposure Collaborate with other Defendants Focus on title, validity and infringement arguments Maintain settlement strategy 20

56 Injunctions/Exclusions Impact of ebay Equitable factors More difficult for NPE ITC Does not apply equity factors FTC recommendation that ITC not grant exclusion to PAE Based on more narrow domestic industry definition University tech transfer not impacted 21

57 Other Options Patent Aggregators RPX Allied Security Trust (AST) Open Innovation Network (OIN) (for Linux) 22

58 Indemnification Issues and Challenges Indemnification Defined: An indemnity is a sum paid by A to B by way of compensation for a particular loss suffered by B. Source: Wikipedia The indemnifying party (A) may or may not be responsible for the loss suffered by the indemnified party (B). Forms of indemnity typically include cash payments, repairs, replacement, or refund. Slide 23 23

59 Sample Supplier Patent Indemnity Clause Scope of Indemnity. Seller will defend any lawsuit against Buyer and will indemnify Buyer for costs and damages (including reasonable attorneys fees) finally awarded in a lawsuit based on a claim that a Product furnished by Seller under this Agreement directly infringes a valid U.S.patent. Required Procedures. [Notice/Tender/Cooperation] Exclusions. Seller will have no obligation to defend or indemnify Buyer if: (1) altered the Products; (2) combined the Products with any other products not furnished by Seller; (3) Products manufactured in accordance with Buyer s designs/specs; or (4) Products designed/manufactured in compliance with a standard; and the alleged infringement would not have occurred but for the above; Injunctions. [Repair, replace or refund remedy available] Limitations on Payable Damages. Seller will not be liable for damages in excess of: xxx Slide 24 24

60 Sample Purchaser Patent Indemnity Clause Scope of Indemnity. Seller will defend, indemnify and hold harmless Buyer from any costs (including without limitation attorneys fees), award, or damage for any claim against Buyer, Authorized Purchasers, or Affiliates, that a Product, alone or in combination with other goods and services, infringes any patent. Required Procedures. [Notice/Tender/Cooperation] Exclusions. Seller will have no obligation to defend or indemnify Buyer if: (1) altered the Products in an unforeseeable manner; (2) combined the Products with any other products not furnished by Seller, but this exclusion shall apply only if (i) the patented invention is not substantially embodied by the Product, and (ii) the combination was unforeseeable; (3) Products manufactured in accordance with Buyer s custom designs/specs and such designs/specs could not have been implemented in a non-infringing way; or Injunctions. [Repair, replace or refund remedy available] Slide 25 25

61 Practical Considerations for Suppliers in Defending and Indemnifying Assume an obligation to defend is triggered (i.e. the necessary contractual elements are met), what next? Do you permit your customer to engage its own counsel while you simply reimburse the customer it s defense costs? Preferable to customer because it allows them to chose their own counsel on supplier s nickel. Limited visibility to supplier and inability to control costs Do you directly retain counsel to defend customer? Preferable to supplier since it s a law firm you have a relationship with and can more effectively control costs Customer might not like since the feeling may be that the law firm is actually working for someone else. Slide 26 26

62 Multiple Supplier Situation Challenges: Shared Control and Allocation of Cost of Defense and Liability Potential Solution: Good Faith Negotiation for Equitable Allocation or Escalation Provision for Resolution Alternative: Clear Definition of Method of Allocation (e.g., annual or quarterly) Page 27 Slide 27 27

63 Multiple Component Situation Example: Claim elements directed to memory and processor Exclusions to indemnity may apply Quanta Principle: Is invention substantially embodied in one of the components or is the inventive contribution limited only to the combination? Equitable allocation may be negotiated on a case-by-case basis Page 28 Slide 28 28

64 Open Source Challenges and Issues Companies increasingly use mixture of open source code, licensed code, and internally written code. Mixed code model increases risk of: Unclear provenance of code Potential infringement Managing license requirements Limitations on use Marking/ attribution 29

65 Managing Open Source Risks Establish formal policies for acquiring code Review of license Understand origin of code Evaluate infringement risks Track use of code Audit policy compliance 30

66 License Review Does third party license fit planned business model Royalties? Apache?, BSD?, GPL? 31

67 Code Origin/ Provenance Evaluation of licensor Stature in industry (e.g. Apache, Eclipse) Strength of community Control of maintenance Tools for identifying code content Black Duck Software Palamida Keyword scanning 32

68 Infringement Risk Copyright infringement Provenance review Patent infringement Typical lack of warranty Patterns of use by others Coverage by standards body RAND agreements 33

69 Auditing Was code in product properly procured? Use scanning tools Does scan result match expectations? Are notices/restrictions being followed? Feedback on process 34

70 Wrap Up ITC Patent Claims are on the rise and impose unique challenges and new expertise. The Rising Tide of NPE litigation also causes new risks and challenges. Negotiating effective IP indemnification clauses is increasingly important Management of the rising usage of open source software requires enhanced attention