The Delaware Chancery Court’s recent decision in Selectica, Inc. v. Versata Enterprises, Inc. approved the adoption and use of a shareholder rights plan specifically designed to protect a company’s net operating loss carryforwards (“NOLs”).1 Selectica is the first Delaware decision to uphold, under proper circumstances, the adoption of an NOL rights plan and provides guidance with respect to the substantial latitude that boards of directors are granted under Delaware law in adopting defensive measures.