Good afternoon and welcome, ladies and gentlemen, to the Acacia Research Fourth Quarter and Year-End Earnings Release Conference Call. At this time, I’d like to inform you that this conference is being recorded and that all participants are in a listen-only mode. At the request of the Company, we will open the conference up for questions-and-answers after the presentation. I will now turn the conference over to Mr. Matthew Vella. Please go ahead, sir.

Thanks Steve. Thank you for being with us today. Today’s call may involve what the SEC considers to be forward-looking statements. Please refer to our 8-K which was filed with the SEC today for our forward-looking statement disclaimer. In today’s call, the terms “we,” “us” and “our” refer to Acacia Research Corporation and its wholly and majority-owned operating subsidiaries. All intellectual property rights acquisitions, development, licensing and enforcement activities are conducted solely by certain of Acacia Research Corporation’s wholly and majority-owned operating subsidiaries. With us today are Clayton Haynes, our Chief Financial Officer; and Ed Treska, our General Counsel. Acacia’s mission statement remains the same. We empower patent owners and reward invention by providing a path to patent monetization for the people and companies that have contributed valuable patented inventions to an industry, but need a professional, experienced, independent third-party licensing partner to get rewarded for those inventions. We call these people and companies our customers the patent-disenfranchised. In so doing, Acacia is placing itself at the forefront of an emerging secondary market in patent assets under which all holders of high-quality patents, including the patent-disenfranchised, can get rewarded for their patents, even if they do not have the finances and expertise to engage in lengthy, costly, and risky patent litigation. Today, I will provide an overview of Acacia’s patent licensing business during this past quarter and during much of the past year. In doing so, I will reemphasize the following three aspects of Acacia’s business. First, we remain financially strong with over $250 million in cash and no debt. Second, as stated in previous earnings calls, Acacia has evolved into a company that will be even more determined to get the right prices for licenses under its own, under its customers, patent portfolios. It will be more patient even…

Thank you, Matt, and thank you to everyone joining us for today’s quarterly and year-end earnings conference call. Beginning with the fourth quarter of 2013, on a consolidated basis, revenues totaled $15.1 million as compared to $66.3 million in the comparable prior year quarter. Fourth quarter 2013 revenues included license fees from 24 new licensing agreements covering 23 of our technology licensing programs as compared to 27 new license agreements covering 27 of our technology licensing programs in the comparable prior year quarter. For additional details, please refer to today’s earnings press release for a summary of the technology licensing programs contributing to revenues during the quarter. Consolidated trailing 12-month revenues totaled $130.6 million as of December 31, 2013, as compared to $250.7 million as of the end of the comparable prior year quarter. License fee revenues continue to be uneven from period-to-period based on the various factors discussed by Matt earlier on this call and on previous earnings conference calls and in our periodic filings with the SEC. For the fourth quarter of 2013, we reported a GAAP net loss of $33.3 million or $0.69 per share versus GAAP net income of $9.8 million or $0.20 per share for the comparable prior year quarter. The GAAP net loss for the current quarter included the impact of non-cash stock compensation charges of $7.1 million versus $8.3 million in the prior year quarter and non-cash patent amortization charges of $16.7 million versus $18.1 million in the prior year quarter. Fourth quarter 2013 non-GAAP net loss, which excludes the impact of non-cash patent amortization and stock compensation, was $10.6 million as compared to $41.8 million for the comparable prior year quarter. Please refer to our disclosures regarding the presentation of non-GAAP financial measures in today’s earnings release and 8-K filed with the…

Thanks Keith. Let’s open the call for questions.

Thank you, sir. The question-and-answer session will begin. (Operator Instructions) Our first question comes from Tim Quillin with Stephens Incorporated. Please state your question. Timothy J. Quillin – Stephens, Inc.: Hey, good afternoon, and that was a nice overview today, Matt. I appreciate that. And I just wanted to confirm, I think close to 10 marquee portfolios means nine, and I think you named all nine of them in your prepared comments, and that’s Rambus and Adaptix, NSN and Palm, Boston Scientific, Breed, Bonutti – I’m not sure you mentioned those, and then the voice, the new HD voice and the silicon image patent portfolio. Are those the nine?

Yes, pretty close. Timothy J. Quillin – Stephens, Inc.: Okay. And could you help us understand the timeline on some of those trials or getting to trials or when the trial dates might come or what we should be keeping an eye on in terms of either Markman hearings or trial dates?

Yes, I mean two parts of the answer. One, it’s all discernible from our website, if you go into the portfolio section and you drive into PACER. I know that’s difficult to lot of folks, so having said all of that, and the visibility we do have and the visibility got into my mind right now extends out through midway of 2015. And the first marquee that goes to trial will be – I’m not going to get the sequence exactly right; Adaptix should be early January of 2015. We are going to have Palm actually going before then the PalmSource portfolio in March and June of this year. There will be German litigation in March. There will be U.S. Litigation District Court in June. You’ve got the David Breed Car portfolio American Vehicular Systems. That’s going to go and I believe in March or April of 2015. You have Nokia Siemens, which is going to start to hit trial and I believe February or March of 2015. And there are I think one of the Bonutti matters on the suture anchors is scheduled to go to trial in Q1 of 2015 as well, perhaps early Q2 of 2015. So those are the ones that come to mind and of course, a lot of the trial dates have to get set down, and so we expect that filling of the trial date pipeline to continue in the coming weeks and months. Timothy J. Quillin – Stephens, Inc.: Okay, that’s fair. And on the Palm pilot assertions that are coming up here relatively quickly, are the remaining litigants Huawei and ZTE?

The litigants on those matters are Huawei and ZTE, When you say remaining, they might be the only two outstanding right now, but bear in mind that for that portfolio, it turns out that the cars are all going to outfitted effectively Android smartphones, and so we expect a lot more licensing activity to occur as that rollout happens. And we understand that rollout is supposed to start this year. Timothy J. Quillin – Stephens, Inc.: Yes, yes. No, that’s fair. And then in terms of the temporary revenue trough and I think given kind of what you see in terms of the timing of trial dates, how should – how prepared should we be in terms of that trough continuing for a while? It did sounds like most of the marquee patent portfolios would have 2015 trials. Should we think about 2014 still as a little bit of a transition year?

It is a transition year. But how much of a transition year meaning will the revenues come in now or they come in closer to Q4, that’s the question we’ve been wrestling with at Acacia, and all we know though for certain, there is trail dates. We know that historically the correlation between trial dates and revenue events, and the correlation materializes in the weeks and months prior to the trial dates. Timothy J. Quillin – Stephens, Inc.: Yes, that’s fair. Thank you, very much. That’s all I have.

Thanks Tim.

We’ll take our next question from Mark Argento with Lake Street Capital Markets. Please state your question. Mark N. Argento – Lake Street Capital Markets LLC: Hi, good afternoon guys.

Hi, Mark. Mark N. Argento – Lake Street Capital Markets LLC: I know you talked a little bit about streamlining the operations now that you’re focusing a little bit more on some of the marquee portfolios. Could you talk a little bit about any kind of headcount reductions you’ve done or what you’ve done to realigning the cost structure, streamlining things?

Bear in mind we’ve done two things. We’ve made the teams that work with marquee portfolios a little more large and a little more complex. So, in the first half of 2013, we added about 10% to our headcount and the lot of those hires were the high profile talents that we took with us to our Shareholder Day in New York City, the Jaime Siegels, the Charlotte Rutherfords, and very good engineers. But then what we did and this is where your is question is going, after that in the latter half of the year and in the early part of this year, we reduce our headcount by about 20%, and we did that effectively with folks that were working on the non-marquee portfolios. So, that’s been the headcount reduction. It’s been about 20% after we added the 10% before, so overall the number now is 58, and I see that number as a good long-term number for us, maybe the odd pick up here or there, but I think we are in a nice solid position. Mark N. Argento – Lake Street Capital Markets LLC: Great. And then in terms of being able to service the existing portfolios that you have, maybe the non-marquee portfolios, are you outsourcing a lot of that work, or how are you guys handling that going forward?

No, we hung on to it. We take our obligations to our customers very seriously. There is quite a bit of it in the pipeline and that will continue to yield revenues and profits going forward, but what we’re really saying is that we are going to change our behavior on the intake end. Mark N. Argento – Lake Street Capital Markets LLC: Got you. Okay. In terms of the – I think you mentioned the buyback. How much stock did you guys buy back in the quarter?

About 600,000 shares Clayton mentioned a number I think it was $7.9 million.

Correct. Mark N. Argento – Lake Street Capital Markets LLC: And what do you still have available on the – was it a – did you guys renew? Was it a $75 million…

$70 million and I think it keeps going until May 15, roughly the authorization. But I said this before we are going to keep the authorization open for quite a while we’ll renew it. Mark N. Argento – Lake Street Capital Markets LLC: Okay. And in terms of the political environment out there, I know it seems like things have died down a little bit. It’s not as popular right now, see stories about patent rules as it was over the last few months. Are you feeling any kind of sentiment shift within – or at least maybe an educational shift within kind of the marketplace within some of the legislators out there? Are they getting smarter and educated finally on the topic of patents? I know there was some chatter on some lobbying efforts or some industry group coming together. Any updates there?

We definitely see a news report just like the one you’re seeing were for example, [indiscernible] universities, trying to flex their lobbying muscles, right? So, we definitely see data points like that, but really overall in terms of the larger market, meaning the public market, the market of legislators, I think things have remained relatively unchanged. In terms of the market that counts, which is the folks we are dealing with, I definitely think of that we are perceived as a company that is going to be around, the company that’s going to survive whatever patent reform goes through and issue of patent reform just does not come up that often when we are dealing with them. Mark N. Argento – Lake Street Capital Markets LLC: Last question. I know you guys had done a handful of these kind of term based license deals. I believe there could be a couple coming up for renewal. Any thoughts on progress made in that vein? Do you expect up till you renew – what are you doing there to see if you can continue that business or grow that business?

Well, I think first of all, when you have this many marquee portfolios as we do, on a smartphone for example and Tim was doing the count five, six and then soon 7, 8, you end up getting into structured or comprehensive deals. The question is what’s inside them, right? They are going be very quite a bit, because when people pay you as much money as we think we roll into those portfolios. The payor, the licensee is going to need some kind of regulated system of dealing with us or regulated set of encounters with us going forward. So at least under that definition of the structure deal we expect more of those going forwards. At this time we are negotiating several. The past three quarters there simply has not been the right time to close, had it because of the gap in pricing or because there has been a disagreement over how to regulate that future interaction? And so I think that’s the response. We are negotiating several of these deals right now, but again it’s difficult to forecast when they’re going coming in. And in terms of forecasting, I think our remarks – our prepared remarks vis-à-vis trial dates speaks for themselves. Mark N. Argento – Lake Street Capital Markets LLC: Great, thank you.

We’ll take our next question from Craig Hoagland with Anderson Hoagland and Company. Please take your question. Craig C. Hoagland – Anderson Hoagland & Co., Inc.: I was just wondering if you would comment on the cases being reviewed by the Supreme Court and a recent decision relative to the discovery process in patent litigation.

You’ll have to give me a little more data on, because I end up seeing a lot of data feeds on patent cases decided on the discovery issue? I can tell you this though. There are some cases before the Supreme Court that have to do with fee shifting. And our position on fee shifting is quite well known. As long it cuts both ways we are for it, and if that is the issue you’re dealing with, when you’re talking about discovery, the Octane Fitness case and Highmark then again report fee shifting as long it cuts both ways. Craig C. Hoagland – Anderson Hoagland & Co., Inc.: Yes.

There are some cases that deal with patentability of software and of business methods. And our position on those cases is that we haven’t really been heavily invested in those portfolios for the last couple of years. We’ve detected the uncertainty in that law. And we haven’t done too many acquisitions in that area. And so we’ll react once those decisions have been laid down. : Craig C. Hoagland – Anderson Hoagland & Co., Inc.: Yes. The case I was reading about had to do with the obligation to incur discovery expenses being shifted from the defendant to the plaintiff.

Okay, in that case I kind of see that in the same vein as a fee shifting, as long it cuts both ways. Right, in other words, as long as you’re both punishing plaintiffs for abuse of discovery practices, as well as defendants who are for the source of changes that are being contemplated in those cases. Craig C. Hoagland – Anderson Hoagland & Co., Inc.: Okay. Thanks a lot, Matt.

You’re welcome.

We’ll take our next question from Wayne Cadwallader from Elkhorn. Please take your question. Wayne G. Cadwallader – Elkhorn Partners LP: I actually have a couple of questions here. One is, if some of these marquee portfolios end up going to trial and therefore go through the whole process and appeal process, has that been factored into your thinking? And if so, how long do you think that would take? And then I’ll get to the next couple of questions after that one.

Sure and I appreciate you chopping the questions up one by one. Not all, big patent cases that are heading towards trial. In fact settle out before trial, some might go through trial and some might even go to appeal. The good thing is that we’ve 10, 15, 20 of these cases coming up. And so we definitely expect some to proceed to trial we hope none do, but we are prepared for that and it had been factored into our modeling. Wayne G. Cadwallader – Elkhorn Partners LP: Okay, second question. First, you did touch a little bit on the share buyback program. About 600,000 shares actually expires May 14 and then – or the press release. I’m just wondering why the share buyback was as small from November 15 on as it was, or where are the restrictions and how is it going here today like…

No restrictions. Wherever we look at the share – I mean the restriction is the number that – well, there is a blackout period. Right, so we can’t always buy back shares, and then we’re rolling off right up to the pre-set amount which we told you guys about. But having said that, your question still needs to be addressed, because we obviously didn’t get to the ceiling on the authorization. Wherever we think about capital allocation, we obviously think about dividends, buyback, as well as investments in the business whether it’s through portfolio acquisitions or other activities. And for our current formation, our current business as we have been running it, we don’t need to go out and raise more cash. We are very happy with our cash position and we think we’re going to start generating positive cash flows. Having said that, there are some factors out there that make us stop and think before we just decide to do a significant buyback. One is, for example, the kinds of changes in the law you were just referencing, be they legislative or judicial. Right? If there is any kind of major change in fee shifting, then even though we think that benefits our business in the long run we still have to revisit our capital structure to make sure that we can accommodate that world. So that’s one factor we’re looking at. We also obviously look at what’s happening with the patent market and the intake opportunities, and so we pay attention to that as well. I can tell you though that the issue of whether or not to do the buyback, the issue of how much has dividend add, it’s something that we’re continually revisiting, we’re continually thinking about it and that’s why we’re going to keep the authorization open even after May 14. We’ll extend it or we’ll open a new one up. Wayne G. Cadwallader – Elkhorn Partners LP: Okay. You got me to think of another question then. Well, your response to that, which was terrific. You talked about capital structure. Is this sort of a floor on the amount of cash you’d like to keep to be able to go after all the various strategies that you’ve implemented within your organization?

Well, in some sense – go ahead. Wayne G. Cadwallader – Elkhorn Partners LP: How do you think about that I guess a little bit more?

Well, I’ll tell you how I think about it. I really shouldn’t be giving you the number because I think there’s companies out there that would love to know that number. But we… Wayne G. Cadwallader – Elkhorn Partners LP: Sorry, step change

What we think about is we think about what a loser – a fee shifting award might look like, even with the sorts of high-quality litigation we’re engaged in and even with the high level of ethics, which we engage in litigation. We have to think about that. We have to obviously think about the acquisition opportunities out there. We have to think about our expectations for cash flow in the future from licensing. And obviously we have to think about our loyal shareholders, which is where the dividend and the buyback comes in. Wayne G. Cadwallader – Elkhorn Partners LP: Okay, terrific. Last question. If you look at the company and say is it – and I think this question has been asked before. I’m just curious as to where you think you might be today or if there’s any change in the thinking? Would the company be better as a private company or a public company, and therefore why do you continue to stay as a public company?

Well, right now, we think it’s better as public company. In the next 12 months to 24 months we’ll find what the data tells us on that score. But let me tell you why we think it’s better off as a public company now. First, as we’ve said before, it is the transparency of being a public company. It’s transparency for both our customers, our patent partners, as well as our future customers, right? They know there’s no Hollywood accounting and they can exactly what we’ve done. It’s also good from a transparency perspective that our licensees know what we’re up to, especially given the way we recognize revenue. We don’t amortize or defer on revenue recognition. We recognize it as it comes in. And so as a result, our licensees can often tell what other licensees have paid on major portfolios and I think that’s useful data. So that’s one issue, the transparency. The second, it is still great for talent retention even when the stock price is down as it is now, as long as the belief is there in our employees that the stock price will go back up. And believe you me, there is belief. Our license executives know as much as anyone what those portfolios are made of and how they’re positioned. And it’s really – I mean the only person I can think of that we’ve wanted to keep, that has quit the last couple of years was Paul Ryan. And so, it’s been a good talent retention tool for us. Finally, and perhaps most importantly from the long-term perspective, even though, the way we’re running our business now, I don’t see a need for us to go and raise capital for the reasons I mentioned before. It’s clear to us the long-term trend is that this business is becoming the sport of kings. What big companies are doing, what Washington is doing as a result of lobbying by big companies, they are making patent litigation more costly, more risky, more complex. Now, that helps us because it means that our customer intake looks a lot better, but it also means that remind you to go and revisit the market at some point in the future for capital and so being public lets us do that. Final thing, I’ll mention is, there are a number of small licensing entities out there that are buying shell companies that are public and kind of fork lifting their operations into those shell companies, right. And I think the reason you see that happening is because they are seeing the same rationale we are seeing. Wayne G. Cadwallader – Elkhorn Partners LP: Okay, that’s very helpful. Thank you.

Ladies and gentlemen, this concludes the question-and-answer session. I will now turn the conference back to Mr. Vella.

Thank you, very much for your attention, for your time, to our shareholders for your loyalty and we look forward to reporting on our progress in three months time. Thank you.