Apparent Strategic Move in Patent Portfolio Litigation SAN DIEGO--Dec. 20, 2005
--Patriot Scientific Corporation (OTC Bulletin Board: PTSC.OB), a high-tech intellectual properties company, has been named a defendant in five declaratory judgment lawsuits filed in the Federal District Court in Oakland, California, by a group of 20 Japanese electronics manufacturers. In these lawsuits, the plaintiffs seek a declaration that three patents jointly owned by Patriot Scientific, Technology Properties Ltd. Inc., and Charles H. Moore are not infringed by those electronics manufacturers, and that the subject patents are invalid.
These declaratory judgment lawsuits seek a determination by the Oakland court of the identical claims asserted against them in a patent infringement lawsuit filed by Technology Properties, on behalf of Patriot Scientific, Technology Properties and Mr. Moore, in the Eastern District of Texas approximately one month earlier.
"The transparent objective of these declaratory judgment lawsuits is to have the infringement claims determined in the California court, rather than in the Texas court where the local rules of the court make it highly likely that the patent infringement claims will be brought to trial within about one year," according to Patriot Scientific Chairman, Chief Executive Officer and President, David Pohl. "The Texas court has a reputation for expeditious handling of patent infringement claims, which has earned it the nickname 'rocket docket.'"
Pursuant to its joint venture with Technology Properties, entered into in June, 2005 in settlement of inventorship/ownership litigation between the parties, and in return for a 50-50 sharing of net licensing and enforcement revenues, Patriot Scientific granted Technology Properties the complete and exclusive right to enforce and license the subject patents, which are part of the MMP Portfolio jointly owned by Patriot Scientific, Technology Properties, and Mr. Moore.
Following the settlement agreement, Patriot Scientific dismissed its patent infringement claims against Fujitsu Computer Systems, Inc.; Matsushita Electric Corporation of America; NEC Solutions (America) Inc.; Sony Electronics Inc.; and Toshiba America Inc., which had been pending but dormant in the Oakland court for nearly two years, so that Technology Properties could file the Texas patent infringement suit in order to obtain an expeditious patent infringement determination.
Earlier this year, Patriot Scientific and Technology Properties licensed the MMP patent portfolio to Intel Corp. and Advanced Micro Devices.
"We have referred the Oakland declaratory judgment lawsuits to our attorneys," Pohl said. "These reactive lawsuits by this group of electronics manufacturers appear to be a strategic move to delay resolution of the patent infringement lawsuits brought against them. We are disappointed that these electronics manufacturers continue to resist a reasonable license; however, given that resistance, we are not surprised that they are attempting to delay resolution of the lawsuit. The attorneys for Patriot Scientific and Technology Properties are taking appropriate measures to properly respond, and to represent our interests and those of our shareholders.
"Patriot Scientific has undergone a series of dramatic, positive changes this year," Pohl explained. "These changes include:
- Patriot's first-ever profitable quarter (Q4 2005)
- Licensing of our patented core microprocessor technology to the two largest microprocessor manufacturers in the world
- The creation of a joint venture leading toward further licensing deals with the world's major electronics manufacturers who use our microprocessor technology
- The influx - from licensing - of more than $13 million in revenue in the past 9 months
- A complete board-mandated transition of executive management, heralding a break from the past and adoption of an entirely new business strategy
- Evaluation of the rest of our technology, including the proper marketing and positioning of our IGNITE(TM) microprocessor"
Patriot Scientific's move to drop the litigation in Oakland Federal District Court in October was in line with these dramatic turn-around changes, Pohl noted, and a commitment to focus on licensing and new business development.
About the Patent Portfolio
The patent portfolio, also marketed as the MMP portfolio, contains intellectual property that became jointly owned by publicly held Patriot Scientific Corporation and the privately held TPL Group in a settlement between them in June 2005. Both TPL and Patriot assert that their jointly owned patents have long been essential to the design of advanced microprocessors, digital signal processors, embedded processors and system-on-chip devices. Global sales of end products deploying chips using technologies protected by the jointly owned patents are estimated to be greater than $200 billion annually. The MMP Portfolio is exclusively managed by Alliacense, a TPL Group enterprise. While major microprocessor manufacturers such as Intel (NasdaqNM: INTC) and Advanced Micro Devices (NYSE: AMD) were early portfolio licensees, Alliacense is now focusing its licensing efforts on system manufacturers such as the four defendants cited in the broad-based complaint filed in Texas.
About Patriot Scientific
Patriot Scientific (OTC Bulletin Board: PTSC.OB) has emerged as an effective and dynamic intellectual property company, developing and marketing innovative and proprietary semiconductor technologies. The company's portfolio of proprietary designs encompasses what is believed to be fundamental ultra-low-power array microprocessor technology, as well as pending patents designed to protect Patriot's proprietary technology and architecture.
Detailed information about Patriot Scientific can be found on the website www.ptsc.com. Copies of Patriot Scientific press releases, current price quotes, stock charts and other valuable information for investors may be found at www.hawkassociates.com and www.americanmicrocaps.com. An investment profile on Patriot Scientific may be found at http://www.hawkassociates.com/patriot/profile.htm.