MAXD Update From CEO - Seite 2

For those of you who don't know or remember why this is so important to us, let me refresh your memory on what the ODT patent portfolio is and what the various lawsuits are about.

In 2014, Max Sound identified patented technology called "Optimized Data Transmission System and Method" that would complement our audio technologies and began negotiations with the owner of that technology to acquire rights to the widely used technology. In mid-2014, MAXD signed a Licensing and Representation Agreement granting MAXD the right to sue Google and its affiliates for their worldwide infringement of the ODT Patents, as discussed in our press release dated December 11, 2014 http://finance.yahoo.com/news/max-sound-corporation-files-multi-032500895.html Then in the fall of 2014, MAXD initiated patent infringement lawsuits against Google and its affiliates in the United States and abroad.

Northern District of California Action

On November 24, 2015 the Northern District Court granted Google's Motion to Dismiss based only on the issue of standing. Our legal counsel is confident that the Court improperly applied the standard applicable to a party claiming standing as a "virtual assignee" rather than the standard applicable to a party claiming standing as an "exclusive licensee" such as MAXD. This error resulted in a ripple effect of additional errors committed by the District Court resulting in the erroneous conclusion that MAXD lacked standing to sue the Google Defendants for infringement of the `339 Patent. Therefore, MAXD had appealed the ruling and was working through the due process.

However, now that Max Sound is the co-owner of the ODT patents, this eliminates all issues with standing and should the appeal not rule in our favor, Vedanti will join us in refilling a new case in the Northern district. Should it go in our favor, Vedanti will simply join us if we win the appeal, which is going to be heard on January 9^th 2017.

This is very exciting to us, as we believe that the US patent is the most IPR airtight and valuable asset we have in our global portfolio. According to the data reporting site statista.com, in 2015, 46 percent of the Google's revenue was generated in the United States. In the third quarter of 2016, Google's revenue amounted to 22.25 billion U.S. dollars, up from 21.32 billion U.S. dollars in the preceding quarter. Google's main revenue source is advertising through Google sites and its network that use the ODT technology.