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01 COMMUNIQUE LABORATORY INC Conference Call to Provide an Update on Patent Litigation against Citrix - Final.

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Original Source: FD (FAIR DISCLOSURE) WIRE

OPERATOR: Good morning, ladies and gentlemen. Welcome to the 01 conference call. I would now like to turn the meeting over to Mr. Brian Stringer, Chief Financial Officer. Please go ahead, Mr. Stringer.

BRIAN STRINGER, CFO, 01 COMMUNIQUE: Thank you, operator. Thank you all for joining us today. Joining me on the call is Andrew Cheung, our President and Chief Executive Officer, along with Ken Sheehan, from Baker & Hostetler in Washington. Ken is one of the senior attorneys on the team representing us from Baker & Hostetler.

Now, I'm going to turn the call over to Ken in a few moments. He'll give you an overview of the events of the past few weeks talking about the Markman ruling and the recent scheduling order. Now, a bit of background on the case and the events leading up to today.

We initiated legal action in Cleveland against Citrix just over a year ago in February 2006 alleging patent infringement against their GoToMyPC product offering. In early November, the Markman hearing took place at the court in Cleveland.

The results of the hearing were recently issued by the judge -- is around March 16th, just a couple of weeks ago. And subsequent to that, there was a scheduling hearing that took place. And it took place last Friday.

We consider these two events to be significant developments in the case. And we thought we should hold this press conference to let you all have a chance to hear from our attorney and ask questions of both our attorneys represented by Ken and, of course, 01 represented by Andrew and myself.

At the end of the presentation, there will be a Q&A period. And I would ask that you limit your questions to the matter at hand, the Citrix litigation. Thank you.

And now I'll turn it over to Ken. Ken, go ahead.

KEN SHEEHAN, ATTORNEY, BAKER & HOSTETLER: Yes, and good morning, everyone. This is Ken Sheehan. And just the two events that Andrew had mentioned -- the Markman hearing and the scheduling hearing, I'll just walk through those, the background of that.

The Markman hearing, which the court held a claim construction hearing also referred to as the Markman hearing on November 2nd of last year. This was following briefing on the construction of 20 terms of 01's patent.

The purpose of the claim construction process is to construe the claims in view of the written description provided in the patent and the prosecution history of the patent. This is something that the court is required to do by law. And so, the court did construe those terms. And as Brian mentioned, the court issued a ruling on the claim construction on March 13.

Following the claim construction hearing on November 2nd, there was additional briefing on the claim construction issues. And just a few weeks ago, the court issued that ruling on the claim construction. The court issued an order which adopted 01's construction of 19 of the terms -- 19 of the constructions provided for the claim terms by 01.

It adopted Citrix's construction of one of the claim terms. And it also required Citrix to produce financial information that was being withheld. So, it was both combination of a claim construction ruling and a discovery ruling.

In addition, the court also, in that order, set a date for a scheduling hearing, which was just last week, the 23rd of March. With respect to the one claim term, which the court adopted Citrix's construction, we believe that that construction contains language which was not required by the intrinsic record of the patent.

But even under that construction, we believe there's still infringement of the patent. We firmly believe there's still infringement.

In the Markman ruling on March 13th, the...

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