PAID Inc. Update on Intellectual Property and Proposed Spinoff

July 16, 2012

Westborough, MA – July 16, 2012 – PAID Inc. (OTCBB: PAYD) has been making progress expanding and monetizing its intellectual property (IP) relating to online shipping calculations systems and methods.  PAID’s strategic plan to monetize its IP includes the following phases:

1. Apply for first patent to protect intellectual Property: Online Auction Shipping
Calculator – Applied 3/2002;
2. Receive first patent and apply for a child patent: – Patent 1 received 2/2008;
3. Pursue IP licensing and sale opportunities – Ongoing;
4. Research and analysis of parties potentially infringing on PAID’s IP now and in the
future – Ongoing;
5. Receive child method patent – 4/2011;
6. Work on a child system patent to protect the IP from changes in Business Method
Process patent law and to broaden the current patent to focus on a system and
method. – Applied 4/2011, In progress;
7. Adjust corporate structure to protect PAID’s businesses, In progress; and
8. Maximize opportunity to capitalize on IP.

“PAID has been following its strategic plan to monetize its IP and has adjusted the plan to accommodate changes that have occurred in the IP environment as needed,” stated Greg Rotman, PAID CEO.  “We’ve solidified our patents, applied for a third patent in response to changes in the evolving landscape of patent law, and we have verified that there are infringers.”

Corporate Structure Change
PAID has decided to form new subsidiaries for its celebrity services operations and a second subsidiary for managing its patent portfolio.  These corporate structure changes are designed to enable the company to eventually spin-off the celebrity and fulfillment services operations into one or more public companies, subject to review of the tax effects for the spinoff and SEC compliance requirements.

Rotman noted, “We believe the separate corporate entities for managing the patent portfolio and celebrity services will help to best manage PAID’s assets and foster future growth for PAID and our shareholders.”

Third Patent Application
PAID’s third patent application, currently in progress with the U.S. Patent & Trademark Office (USPTO), addresses the systems and technology of the shipping calculation whereas the first and second patents focus more on the methods and processes.  If approved, the third patent application has the potential to further broaden the scope of PAID’s IP relating to shipping calculation. PAID will provide updates on the third patent application as they develop. PAID is proceeding with strategic monetization activities for its IP portfolio while the application is in process.

Legal Representation
PAID is working closely with the law firm of Hunton & Williams LLP in matters relating to its intellectual property.  The Company also is consulting with additional patent legal experts regarding specific monetization actions on PAID’s behalf.

“Transitioning from a single attorney to a team of counselors has brought a new set of eyes and vision to the table and is proving to be advantageous to PAID,” Richard Rotman, PAID COO and co-inventor of PAID’s patents and patent applications.  “Patent law and prosecuting patent infringers is a very complex and continually changing process, as well as very expensive and risky.  It takes extensive planning and calculation to strike the delicate balance where we protect our company and IP, while attempting to monetize our IP as best as possible.  Fortunately, we’ve built relationships with patent legal experts to help PAID pursue the best monetization strategy for the company and its shareholders.”

PAID currently licenses its AuctionInc shopping cart platform and its proprietary shipping rate engine, both of which integrate and operate off of PAID’s patented technology, to more than a thousand users.  The Company also licenses a customized application protocol interface (API) to multiple corporations.  PAID is actively researching and identifying companies that are licensing candidates and will continue to pursue licensing opportunities of its IP.

Protection from Infringement
The Company has been strategizing enforcement options with legal experts and patent law firms. PAID is taking actions necessary to protect its IP from infringement.

“As we move forward in our monetization strategy, at each step, together with our legal experts, we analyze the landscape and weigh our options of what is in PAID’s shareholders’ best interest,” stated Rich Rotman.  “There are a lot of pieces in the patent monetization puzzle that are currently in motion and we are fully committed to supporting the IP monetization initiative to a successful conclusion. We are working with our legal experts to make sure we have all of our bases covered as we proceed with activities in each phase of our plan.”

Greg Rotman noted, “We firmly believe that our IP is extremely valuable and are aggressively pursuing monetization strategies that have been developed in conjunction with our team of legal experts who are some of the best in the patent law field.  PAID has dedicated additional staff resources to drive the IP monetization strategy to fruition.  Going forward, our primary focus will be on licensing and protection from infringement.  However, PAID remains open to all other options, including sale, licensing and partnering agreements.”
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About PAID Inc.:
PAID Inc. is a one-stop brand management and marketing resource to music, entertainment and sports personalities and organizations, and offers AuctionInc™ online shipping calculation and shopping cart software employing its patented technology to streamline ecommerce. Known for quality and customer service, PAID offers turnkey online, mobile, social media and traditional marketing campaigns, as well as award-winning video & film production, VIP ticketing, web site design, merchandising, ecommerce and fan community management programs.  More details are available at

Safe Harbor statement under the Private Securities Litigation Reform Act of 1995:  
Statements in this news release looking forward in time involve risks and uncertainties, including the risks associated with the effect of changing economic conditions, trends in the markets, the effect and possibility of a spinoff, the successful monetization of the patent, variations in the company’s cash flow, competition, celebrity programs, business development efforts, technology availability and cost of materials and other risk factors. Factors that could cause actual results to differ materially are discussed in the Company’s most recent filings with the Securities and Exchange Commission.


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