SOURCE: Composite Technology Corporation

Composite Technology Corporation

November 24, 2009 08:05 ET

Composite Technology Provides Information Regarding Patent Actions

Actions Following Established USPTO Path

IRVINE, CA--(Marketwire - November 24, 2009) - Composite Technology Corporation (CTC) (OTCBB: CPTC) takes this opportunity to provide updated information regarding its patent actions against Mercury Cable and Energy LLC (Mercury) and to correct further misrepresentations of the process recently made public by Mercury's November 23, 2009 press release.

Contrary to misleading and erroneous information, none of CTC's patents or claims have been invalidated.

CTC initiated a suit against Mercury Cable and Energy in the US District Court, Central District of California, on March 3, 2009, asserting infringement of two of CTC's issued patents for composite core technology used in bare overhead transmission conductor (U.S. Patent No. 7,368,162 and U.S. Patent No. 7,211,319). In a defensive move Mercury petitioned the United States Patent and Trademark Office (USPTO) to re-examine the issued patents claiming the discovery of prior art patents that Mercury claims bear on the validity of CTC's issued patents. Statistically, the USPTO grants most petitions for re-examination, and in this matter, the USPTO granted the re-examinations on August 17, 2009 despite the fact that one of the prior art patents relied on by Mercury relates to a golf club shaft.

The request for re-examination of the patents in question by a defendant in a patent infringement suit is now common practice. Many courts prefer that the USPTO deal with the often highly technical aspects of patent validity, and routinely grant stays in patent infringement actions pending the re-examination petitions. These routine actions have occurred in CTC's suit against Mercury.

On November 4, 2009, the USPTO issued a first Office Action in the re-examination of U.S. Patent No. 7,211,319. As is common practice, the USPTO has initially rejected most of the claims based on the prior art patents submitted with Mercury's re-examination request pending response by CTC. However, the USPTO did confirm the validity of claim 17 of the patent. CTC is currently preparing a full and complete response to this Office Action. Contrary to Mercury's latest press release, the USPTO Office Action did not serve to invalidate any claims of the patent. Patent claims being re-examined are in force during the pendency of the re-examination.

Furthermore, CTC is confident that the validity of its patent will be upheld with meaningful claims upon the USPTO's consideration of CTC's response. If necessary, any adverse final decision by the patent examiner with respect to any claim can be appealed to the USPTO Board of Patent Appeals for complete review. In any case, only two of CTC's nine issued patents covering ACCC™ conductor technologies are involved in the re-examinations, leaving the bulk of CTC's patent portfolio virtually unaffected.

Again, during the pendency of the re-examination proceeding, the patent claims are not invalidated. Furthermore, the patent infringement suit by CTC against Mercury is stayed pending the re-examination, and the Office Action itself does not otherwise affect the suit. If, as expected, CTC's patents emerge from re-examination with claims that are substantially the same, and if CTC prevails in its suit, the infringing party is still accountable for all infringing actions before, during and after the review, which can give rise to willful and wanton conduct and the award of treble damages. Furthermore, any entity that makes, uses, or sells the infringing products would also be infringing and subject to the same form of damage judgment and injunction. This extends to manufactures of the infringing products, and to customers who use infringing products. This creates quite a risk for parties involved with the infringing actions and parties, whether they are technology developers, financiers, manufacturers, suppliers, or customers, in the U.S. and abroad.

CTC wishes to remind its shareholders, investors, partners and customers that it is acting completely within its rights utilizing and capitalizing on the patents and intellectual property it rightfully owns. The two patents in question were legally issued to CTC by the USPTO along with the other seven patents covering its ACCC composite core conductor and hardware. CTC will continue to manufacture and market its efficient ACCC conductor technology to the global transmission community through its CTC Cable subsidiary. Business will continue without impact.

CTC has spent eight years developing its products and markets which demonstrate to the world the benefits of efficient power transmission. This efficiency is accomplished using its patented ACCC™ conductor, which is the only proven carbon/glass fiber composite core conductor in widespread use in the world. The evidence is its use, as to date, CTC Cable has sold over 8000 kilometers of ACCC conductor and composite core to transmission customers worldwide. The company has done this through independent testing and by exposing its products to test regimes and conditions that exceed worst case applications in the field. ACCC conductor has been installed in over 130 projects in the U.S., Europe, China, and Latin America. CTC Cable maintains a tightly controlled, high capacity, ISO9001:2008 certified manufacturing facility in Irvine, California for its customers and technical evaluators to see and audit; real production assets. The company possesses a global footprint with sales and distribution resources around the world and six qualified stranding sources to serve geographic markets. The stranding capabilities are being expanded further with new operations undergoing qualification in other geographic regions. ACCC conductor continues to be the most efficient bare overhead conductor with the highest energy throughput of any conductor in widespread use in the industry.

CTC offers the information provided above to reassure shareholders, investors, licensees and customers that its intellectual property remains protected and unimpaired. CTC will continue to defend its intellectual property against attack and it will protect its markets and customers against copycat products and unproven imitations.

About CTC:

Composite Technology Corporation, based in Irvine, California, USA, develops, manufactures and sells innovative, high performance, energy efficient electrical transmission conductors through its subsidiary, CTC Cable Corporation. CTC Cable produces composite core rod for use in its patented high efficiency ACCC* conductors, which are used in electrical transmission and distribution grids. ACCC conductors perform with less line losses when compared to similar diameter conventional conductors and therefore enable power generators to reduce the amount of generation while still delivering the same power to customers. ACCC conductors also enable grid operators to reduce blackouts and brownouts by providing reserve electrical capacity, since they can be operated at higher temperatures without significant thermal line sag. The performance and longevity of CTC's ACCC conductor technology have been independently verified by certifying agencies, test centers and power grids around the world and have consistently demonstrated significant savings in upgrade capital costs and operating expenses when substituted for traditional conductors in reconductoring upgrades as well as new line construction. ACCC core, the key component of ACCC conductor, is produced by CTC Cable and delivered to licensed, qualified conductor manufacturers worldwide for ACCC conductor production and sale into local markets. Over 8000 kilometers of ACCC conductor have been installed on five continents.

*ACCC is a trademark of CTC Cable Corporation

For further information visit our website: www.compositetechcorp.com or contact Investor Relations, James Carswell, +1-949-428-8500.

This press release may contain forward-looking statements, as defined in the Securities Reform Act of 1995 (the "Reform Act"). The safe harbor for forward-looking statements provided to companies by the Reform Act does not apply to Composite Technology Corporation (the "Company"). However, actual events or results may differ from the Company's expectations on a negative or positive basis and are subject to a number of known and unknown risks and uncertainties including, but not limited to, resolution of pending and threatened litigation matters involving CTC or its subsidiaries, resolution of disputes with CTC's or subsidiaries' creditors competition with larger companies, development of and demand for a new technology, general economic conditions, the availability of funds for capital expenditure and financing in general by us and our customers, availability of timely financing, cash flow, securing sufficient quantities of essential raw materials, timely delivery by suppliers, ability to maintain quality control, collection-related and currency risks from international transactions, the successful outcome of joint venture negotiations, or the Company's ability to manage growth. Other risk factors attributable to the Company's business may affect the actual results achieved by the Company, including those that are found in the Company's Annual Report filed with the SEC on Form 10-K/A for fiscal year ended September 30, 2008 and subsequent Quarterly Reports on Form 10-Q and subsequent Current Reports filed on Form 8-K that will be included with or prior to the filing of the Company's next Quarterly or Annual Report.

Contact Information

  • Contact:
    Investor Relations
    James Carswell
    +1-949-428-8500