Microsoft Challenges Avistar Patents

Avistar Communications Corporation has received notification that Microsoft Corporation has filed requests for re-examination of 24 of Avistar’s 29 U.S. patents. This follows 6 months of unsuccessful business discussions. Thus far, four of the requests have been rejected by the United States Patent and Trademark Office (USPTO) on procedural grounds. If all procedural flaws are corrected, the USPTO has approximately two months to decide whether to grant the requests and engage in a formal re-examination. Patent re-examination, if undertaken by the USPTO, could take between six months to two years.

The challenged Avistar patents have an important early priority date (1993), have already been examined over a large body of prior art, and include patents that have successfully withstood two litigations. Accordingly, Avistar is confident it can and will overcome these re-examination requests.

Avistar has elected to withdraw and re-submit for examination seven about-to-issue patent applications. This will give the USPTO the opportunity to evaluate Microsoft’s re-examination documents in these applications as well. Although this action will likely delay the formal issuance of this set of seven patents, the Company believes the prior art cited by Microsoft will have no impact on these patent applications’ claims, and likely will result in even stronger patents when they issue.

Avistar will continue to be represented by Paul Carmichael as its primary licensing advisor. Among many executive assignments, Paul has served as Apple Computer Inc.’s Associate General Counsel for Patent and Trademark and Acting General Counsel, and in prior work, as IBM’s Senior Corporate Counsel for Intellectual Property Law during a thirty year career at IBM.

“Avistar’s patent portfolio has been challenged previously in two significant litigations without effect,” stated Paul Carmichael. “We fully believe that this action on Microsoft’s part is motivated by its recognition of the applicability of our patents to its products and services. We expect the USPTO will concur that the challenge is without merit.”

“It is unfortunate that we have arrived at this,” stated Avistar’s CEO Simon Moss. “We are frankly quite surprised by Microsoft’s action given our lengthy discussions with them. Avistar is going through a significant organizational, technological, financial and cultural transformation. This seems to have been taken by Microsoft as a sign of weakness. All of us at Avistar, in our Board of Directors, in our management team, and in our trusted global advisors, stand behind these patents and will take any steps necessary to ensure their current issuance status.”

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