SOURCE: TeleCommunication Systems, Inc.

TeleCommunication Systems, Inc.

August 11, 2009 07:00 ET

TeleCommunication Systems Clarifies USPTO Action in Patent Re-Exam

Routine First Office Action Not Dispositive in Sybase 365 Infringement Case

ANNAPOLIS, MD--(Marketwire - August 11, 2009) - TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS), a leading provider of mission-critical wireless communications, today clarified the first office action (FOA) issued last week by the U.S. Patent & Trademark Office in its inter partes re-examination of U.S. Patent No. 6,985,748, titled "Inter-Carrier Short Messaging Service Providing Phone Number Only Experience." The first preliminary statement of the Patent Office agreeing with some of the arguments of Sybase 365 ("Sybase") while rejecting Sybase's other arguments is a routine office action that is not a surprise to TCS. That action was based solely on Sybase's arguments made in February 2008 without the benefit of any input from TCS. If the Patent Office does not suspend the reexamination entirely, as TCS has requested, then TCS will have an opportunity to respond to Sybase's arguments and explain why the cited prior art is irrelevant.

In May 2007, a jury returned a unanimous verdict finding the '748 patent valid and willfully infringed. After trial, the trial court entered a permanent injunction against Sybase (later stayed pending the outcome of appeal) and upholding the pre- and post-issuance royalty rates. In February 2008, Sybase asked the Patent Office to reexamine the '748 patent on the basis that it was invalid even though Sybase had challenged the validity of the '748 patent before the jury and unanimously lost each of its validity arguments in the lawsuit.

On March 31, 2009, the district court entered a final judgment on the jury's verdict in favor of TCS and rejected Sybase's post-trial motions challenging the jury verdict finding the '748 patent valid and infringed. Sybase filed a notice of appeal from the judgment entered by the district court and its appeal brief is due later this month.

"Given the comprehensive trial record on highly fact-dependent issues, TCS believes that the trial court's judgment will be affirmed by the appeals court on infringement, validity, damages and permanent injunction," stated Maurice B. Tosé, chairman, president and CEO of TCS. "We further believe that Sybase's reexamination is an inappropriate 'second bite at the apple,' and have filed a petition with the Patent Office to apply prior legal precedent and suspend the reexamination pending the outcome of the appeals process," he added.

In a significant development after the filing of Sybase's reexamination request, the Patent Office allowed two additional inter-carrier messaging patent applications of TCS directly related to the '748 patent and covering the same technology after considering the very same prior art references relied upon by Sybase in the reexamination of the '748 patent. The Patent Office, after full examination, has already allowed TCS' related patent applications despite the prior art references relied upon by Sybase in the reexamination.

About TeleCommunication Systems, Inc.

TeleCommunication Systems, Inc. (TCS) (NASDAQ: TSYS) engineers and delivers highly reliable wireless communications technology. TCS is a leader in wireless text messaging and location-based technology, including E9-1-1 services and commercial applications like navigation that use the precise location of a wireless device, and secure satellite-based communications systems and services. Customers include leading wireless and VoIP carriers around the world, cable MSOs, automotive telematics vendors, and agencies of the U.S. Departments of Defense, State, and Homeland Security. TCS is one of six primary vendors on a $5 billion Army Worldwide Satellite Systems Contract vehicle. For more information, visit www.telecomsys.com.

Except for the historical information contained herein, this news release contains forward-looking statements as defined within Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities and Exchange Act of 1934, as amended. These statements are subject to risks and uncertainties and are based upon TCS' current expectations and assumptions that if incorrect would cause actual results to differ materially from those anticipated. Risks include without limitation our statements about our beliefs regarding the likely reexamination outcomes, and those detailed from time to time in the Company's SEC reports, including the report on Form 10-K for the year ended December 31, 2008, and quarter ended June 30, 2009.

Existing and prospective investors are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date hereof. The Company undertakes no obligation to update or revise the information in this press release, whether as a result of new information, future events or circumstances, or otherwise.

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