SOURCE: Composite Technology Corporation

August 31, 2009 13:01 ET

Composite Technology Provides Information Regarding Patent Actions

Actions Following Established USPTO Path

IRVINE, CA--(Marketwire - August 31, 2009) - Composite Technology Corporation (CTC) (OTCBB: CPTC) takes this opportunity to provide information regarding its ongoing patent actions against Mercury Cable and Energy LLC to correct misrepresentations and innuendos of the process recently made public.

CTC initiated a lawsuit 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 that may have bearing on the patents. The USPTO granted the re-examinations on August 17, 2009.

The request for re-examination of a patent by a defendant in a patent infringement suit is now common practice. The courts prefer to defer to the USPTO regarding highly technical aspects of patent validity, and the courts routinely grant stays in patent infringement actions pending the re-examination petitions. These actions have occurred in the CTC case, and were fully expected.

As a matter of historical course, 92% of all re-examination requests are granted by the USPTO, but only 11% of patents that are re-examined result in the patents being canceled. Of the remaining 89%, 25% are upheld completely and 64% are upheld with some claim amendments. The CTC patents questioned contain 65 claims. CTC is confident that the two patents in question will be upheld with meaningful claims. In any case, only two of CTC's eight patents covering ACCC™ conductor technologies are involved, leaving the bulk of its patent base virtually unaffected.

The USPTO re-examination process will take time. The average pendency per the USPTO statistics is 25 months, with the median time being less than 20 months. However US law still affords protection to the patent holder from frivolous and unsubstantiated reviews. The patent infringement suit by CTC is not invalidated. If CTC prevails, the infringing parties are still accountable for all 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 manufacturers 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 six 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 fiber composite core conductor in widespread use in the world. The evidence is its use. To date CTC Cable has sold over 8,000 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, ISO9001:2000 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 electrical transmission and renewable energy generation products through its subsidiaries:

CTC Cable Corporation produces composite rod for use in its patented high efficiency ACCC* conductors, used in electrical transmission grids. ACCC conductors have less line loss 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. Our conductors have demonstrated significant savings in upgrade capital costs as well as operating expenses when substituted in grid systems. ACCC conductors 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. ACCC conductors are an economical solution for reconductoring power lines, constructing new lines and crossing large spans. ACCC core is produced by CTC Cable and delivered to licensed qualified conductor manufacturers worldwide for ACCC conductor production and resale into local markets.

DeWind Inc. designs, produces, and sells the DeWind series of wind energy turbines, including the new 2 megawatt (MW) D8.2 model in both 60Hz and 50Hz, the 2MW D8 model in 50Hz, and the 1.25MW D6 model in 50Hz. The D8.2 turbine uses a WinDrive® hydrodynamic torque converter, by Voith AG, in combination with a synchronous high voltage generator that is synchronized directly to the grid without the use of power conversion electronics. DeWind D8.2 turbines are assembled at TECO Westinghouse Motor Co., in Texas.

*ACCC is a trademark of CTC Cable Corporation

For further information visit our website: www.compositetechcorp.com. Investor Relations Contact: 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, new or revised governmental laws and regulations (or the lack thereof) that affect wind energy, competition with larger companies, development of and demand for a new technology, risks associated with a startup company, the ability of the company to convert quotations and framework agreements into firm orders, our customers' fulfillment of payment obligations under the respective supply agreement, our ability to deliver reliable turbines on a timely basis, 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 produce the turbines and acquire their components, 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

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