Court Rules in Favor of Extended Systems in Patent Litigation

8/6/2003 - Extended Systems (NASDAQ: XTND) announced that the Court has ruled in favor of Extended Systems regarding claim construction for six of the eight patents involved in the patent infringement action brought against it by Pumatech, Inc. This follows news disclosed on July 28 in Extended Systems' earnings release that three of Pumatech patents are undergoing reexamination in the Patent Office.

The suit, Case Number C-02-1916 DLJ, in the United States District Court for the Northern District of California, filed on April 22, 2002, alleges Extended Systems infringes eight patents owned by Pumatech. On August 1, 2003 the Hon. Judge D. Lowell Jensen, US District Judge, issued his Claims Construction Ruling on the interpretation, definition, and scope of the claims in the suit. The Court's ruling follows a "Markman" hearing, named after a 1995 decision by the United States Supreme Court that decided that judges, rather than juries, should determine the proper interpretation of patent claims, held in early July of this year.

The Courts agreed with Extended Systems' interpretations of the meaning of "status file" and "history file" which occur in five of the Pumatech patents - the '990, '676, '218, '529, and '664. The Court rejected Pumatech's positions that the "status file" was any file that contained "status information" and that a "history file" was any file that contains (unspecified) history information about prior synchronizations. These five patents have all been significantly narrowed by the Court's ruling. Extended Systems believes that as a result of these rulings, the majority, if not all of the company's products, do not infringe any of these patents.

In addition, the Court construed the scope of four separate "means-plus-function" clauses. The Court ruled in Extended Systems' favor on all four issues, narrowing the permissible scope of each of the four terms - "means for comparing," "means for updating the status file," "means for updating the first and second databases," and "means for providing a status file." These terms all appear in Pumatech's '990 patent.

The Court also ruled that it could not correct an error that appears in all asserted claims of Pumatech's '676 patent. This error must be corrected in reissue proceedings in the US Patent Office. Until the Patent Office issues corrected claims, no synchronization software can infringe the '676 patent, and such a correction can have no retroactive effect.

As Extended Systems previously announced, three of Pumatech's patents are undergoing reexamination in the Patent Office, which found a "substantial new question of patentability" for each of the '390, '529, and '664 patents. One of the patents (the '390 patent) has received an "Office Action" by the examiner, and the examiner has rejected all Pumatech claims in the '390 patent over the prior art. The company is awaiting further action by the Patent Office on the other two patents.

Following the Court's recent rulings, Extended Systems is more confident than ever that the company does not infringe any valid Pumatech claim asserted in the litigation. "After conferring with our legal advisors, we believe that these rulings limit our potential liability under the Pumatech patents," said Extended Systems CEO and President Steve Simpson.

About Extended Systems
Extended Systems provides the expertise, strategy and solutions to help enterprise organizations streamline their business processes through mobile technology. The company's mobile solutions suite enables companies to mobilize critical enterprise applications such as e-mail, field service, sales force automation (SFA), enterprise resource planning (ERP), and customer relationship management (CRM). Extended Systems has more than 3,000 enterprise customers worldwide and key alliance relationships with Ericsson, HP, Handspring, IBM, Microsoft, Motorola, Nokia, Palm, RIM, Sharp, Siemens and Toshiba.

Founded in 1984, Extended Systems has offices and subsidiaries in the United States and worldwide. For more information, call 1-800-235-7576 or visit the company Web site. Adherence to a proven strategy is critical to future success. For more than 18 years, Extended Systems has provided enterprise organizations worldwide with industry-leading technology solutions. Sound business practices, combined with an understanding of corporate IT organizations and the needs of end users, have enabled us to build a highly successful business.

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