Zoran Defeats MediaTek in Second International Trade Commission Decision; MediaTek Patent Claims Declared Invalid

SUNNYVALE, Calif. -- Oct. 3, 2005 -- On September, 30, 2005, Judge Robert L. Barton, Jr. of the International Trade Commission ("ITC") issued his Initial Determination regarding MediaTek's retaliatory patent infringement countersuit against Zoran in the ITC.

Judge Barton found that none of Zoran's optical disk controller chips infringe any claim of the two patents asserted against Zoran, United States Patent Nos. 6,170,043 and 5,970,031. In a further blow to MediaTek, Judge Barton found each of the asserted claims of the '031 patent invalid.

Judge Barton further found that MediaTek failed to establish that it has a domestic industry in the United States relating to the MediaTek patents -- a basic requirement for obtaining a remedy in the International Trade Commission. The result of these findings is a complete victory for Zoran over MediaTek's retaliatory counter-suit.

Judge Barton's Initial Determination stands in stark contrast to MediaTek's assessment of its own case less than 48 hours before the decision was announced, when MediaTek announced in a press release that its ITC case against Zoran was "progressing smoothly." Erroneous statements by MediaTek such as this should raise a red flag to any MediaTek customer who is relying upon MediaTek's public statements that MediaTek's newest generation of optical disk controller chips will not be barred from entry into the United States under the exclusion order that the ITC issued against MediaTek and certain MediaTek customers on September 28.

Zoran remains confident that MediaTek's newest generation of chips, including what MediaTek calls its "design-around" chip, will be excluded entry into the United States, as will the products of any specified MediaTek customer that uses those chips.

MediaTek's pending lawsuit against Zoran in China is based upon the Chinese counterpart of the U.S. '031 patent, which Judge Barton found both invalid and not infringed by Zoran. Zoran believes that the counterpart Chinese patent also is invalid and non-infringed.

Zoran's wholly-owned subsidiary, Oak Technology, Inc., also was named as a respondent in the ITC investigation that is the subject of Judge Barton's Initial Determination. Judge Barton found that Oak did not infringe the '043 patent. Judge Barton also found invalid claims 1, 2 and 3 of MediaTek's United States Patent No. 6,229,773 -- the other patent asserted by MediaTek against Oak.

MediaTek's claims against Sunext Technology Co., Ltd., the Taiwanese corporation that purchased Oak's optical storage business in 2003, met a similar fate. Judge Barton found no violation by Sunext.

Any inquiries should be sent to designated media or investor contacts.

 SOURCE: Zoran Corporation