ShieldIP Announces Close of Initial Round of Funding

Digital Rights Protection Firm Strengthens Management Team with
Addition of Industry Veteran Peter Felgentreff

NEW YORK, NY, August 21, 2002 – ShieldIP, Inc., a provider of flexible Digital Rights Protection (DRP) solutions, today announced that it has received an initial round of funding and has introduced its product offering for independent software vendors (ISVs) and content vendors. The $4.2 million investment round was led by Charter Ventures of Palo Alto, California.

“Products that help ISVs and content vendors address piracy issues as well as enforce license agreements are an immense opportunity. We believe that ShieldIP’s patented approach strikes the ideal balance of meeting the needs of software developers and respecting users’ rights,” said Barr Dolan, General Partner at Charter Ventures. “We are delighted to partner with ShieldIP’s co-founders, Michael Rabin and Dennis Shasha, leading cryptography and computer security experts who have teamed up to architect products that help software publishers and vendors achieve the ‘3 P's’ of IP protection - piracy prevention, privacy and improved profits.”

Four out of every ten software programs are pirated worldwide, according to the Business Software Alliance’s (BSA) annual survey on global software piracy. ShieldIP technology allows software, game developers, and other digital content providers to prevent these losses freeing them to focus on core product development instead of license management hassles.

“We spent the past two years designing this system,” commented co-founder, Michael Rabin. “The objective was to simplify the process so developers could sell software in a variety of channels with the assurance that software licenses are being respected. This is all done without the use of key disks, unlocking codes, digital wrappers or hardware tokens and without changing the software. On the end-user side, the system respects fair use and privacy while allowing software license agreements to be easily managed by licensed users. We feel like we’ve come up with the right solution.”

By allowing ISVs to protect content without using developer resources or affecting the customer's purchase and usage experience, ShieldIP mitigates end-user and distribution chain backlash. ShieldIP allows licensed users fair product use and freedom to transfer usage rights between user and devices or make backup copies as needed while protecting end-user privacy.

ShieldIP also announced that it has named H. Peter Felgentreff to the position of Vice President, Business Development. In this role Mr. Felgentreff is tasked with forging relationships with providers of operating systems, ISVs, content vendors, and electronic game developers. Mr. Felgentreff brings more than 16 years of technology sales and marketing experience to the Company. Most recently Vice President of Sales at Zone Labs, a provider of Internet security solutions, Mr. Felgentreff built a sales organization that recorded triple-digit quarterly growth and added numerous Fortune 1000 companies as customers. Prior to Zone Labs Mr. Felgentreff was Vice President of Sales for Aladdin Knowledge Systems, a provider of content security and electronic licensing technology.

“We are fortunate to add someone with Peter’s experience to our team. His direct knowledge of the security industry and personal relationships with our potential customers and partners will accelerate the adoption of ShieldIP’s security solutions,” said Yossi Beinart, ShieldIP’s President and Chief Executive Officer.

About Charter Ventures
Charter Ventures is a leading early-stage venture capital firm that has helped entrepreneurs turn great ideas into great companies for more than 20 years. Based in Palo Alto, CA, Charter invests in the areas of software, communications and life sciences. Recent investments in the network and content security area include Widevine Technologies, Imperito Networks, and Cradle Technologies. More information on Charter Ventures can be found at www.charterventures.com.

About ShieldIP
Founded in January 2000, ShieldIP is a provider of Digital Rights Protection (DRP) technologies for independent software vendors and content vendors, offering end-users transportable licensing options, fair use and privacy. Solutions target software and content developers who are concerned about software piracy and illegal use of their digital content. ShieldIP, a privately held company, is headquartered in New York with active Business Development offices in Silicon Valley. The lead investor is Charter Venture Capital of Palo Alto, California. Customers include a broad range of Independent Software Vendors (ISVs) and content vendors within the consumer and business spaces. ShieldIP is building strategic partnerships with operating system and computing platform providers. For more information please visit www.shieldip.com

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