IP, Reports & Roadmaps | Jul 13, 2007

Philips Lumileds Initiates Notification of Epistar Infringement and ITC Exclusion Order to Chip Packagers and Users of Epistar`s OMA, MB, and GB LED Products

Philips Lumileds is notifying chip packagers, distributors and others using Epistar`s OMA, MB and GB LEDs that the U.S. International Trade Commission (ITC) has issued an order excluding importation of these products into the United States because they infringe Philips Lumileds` patent rights. The exclusion order prohibits importation of Epistar`s infringing LEDs as well as packaged LEDs containing the infringing LEDs and boards primarily consisting of arrays of such packaged LEDs. The Presidential Review period has ended and the ITC`s Exclusion Order is now final and in full force.

As a result of the ITC ruling and current litigation, Philips Lumileds is notifying LED chip packagers, downstream customers and distributors of the following key points:

1. The manufacture, use, sale, offer for sale, or importation into the United States of Epistar`s MB, OMA or GB LEDs or products incorporating those LEDs is an infringement of Philips Lumileds` patent rights.

2. Unlicensed manufacturers should not rely on indemnity agreements to excuse their infringement of Philips Lumileds patents. A promise by a manufacturer to "indemnify" its customer against an action by Philips Lumileds will not prevent Philips Lumileds from asserting its patents and seeking damages directly from that customer. Likewise, indemnification will have no effect on exclusion of the infringing products by Customs officials.

3. Companies that use, import, or sell unlicensed infringing products, even unknowingly, are direct infringers of the Philips Lumileds` patents.

4. During the ITC investigation, Epistar was required to disclose all of its currently available AlInGaP LED products and its "next generation" products and these were all found to infringe the `718 patent. Given the broad scope and critical importance of the `718 Patent to the making of a commercially viable AlInGaP LED, Philips Lumileds does not believe that Epistar will be able to suddenly devise a non-infringing alternative after having been unable to do so for the last decade or more.

Given that the infringing products may not be imported into the U.S., customers have several other options for sourcing the AlInGaP LED products they need. These options include but are not limited to working through chip packagers, such as Avago, or distributors, such as Lastertech, Marubeni, Promate and Future Electronics that offer AlInGaP products that are licensed under Philips Lumileds` patents.

Philips Lumileds also has a pending action in U.S. District Court for the Northern District of California, in which it is asserting its patent rights against Epistar`s OMA, MB, and GB products and seeking both damages and an injunction.

About Philips Lumileds Lighting Company
Philips Lumileds Lighting Company pioneered power LED technology and is the world`s leading provider of power LEDs for everyday lighting applications. The company`s recent records for light output, efficacy and thermal management are direct results of the ongoing commitment to advancing solid-state lighting technology and enabling lighting solutions that are more environmentally friendly, help reduce CO2 emissions and reduce the need for power plant expansion. Philips Lumileds` LUXEON LEDs are enabling never before possible applications in the automotive, camera flash, display, general lighting, and signage markets.

About Royal Philips Electronics
Royal Philips Electronics of the Netherlands is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of "sense and simplicity". Headquartered in the Netherlands, Philips employs approximately 124,300 employees in more than 60 countries worldwide. With sales of EUR 27 billion in 2006, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics.

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