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Message from the CEO: Ensemble Patent Portfolio Purchase


Ensemble Patent Portfolio Purchase

We recently acquired a patent portfolio consisting of 17 US patents, patent applications and their foreign counterparts. We agreed with the seller that we would not release their name for two weeks after we signed the agreement. The two weeks has passed, so now I can share with our shareholders, employees and customers that the seller was Ensemble Communications, a US broadband wireless equipment supplier that recently decided to wind up its business.

The purchase of Ensemble's 802.16-related patent portfolio has enhanced Wi-LAN's Intellectual Property (IP)portfolio considerably. These patents are critical to design and implementation of the Media Access Control (MAC) layer of the WiMAX standard. Wi-LAN's patent position to date has been based on a fundamental patent relating to the use of W-OFDM for wireless two-way data communications with channel estimation and Forward-Error Correction. This basic concept has become the foundation for all of the newer standards in Broadband Wireless Access, be it Wireless Local Area Networks (Second generation WiFi - IEEE 802.11a/g(1)), Wireless Metropolitan Area Networks (WiMAX Certified(1) products), Wireless Personal Area Networks (IEEE 802.15.3 proposal) and in the future Mobile Wireless Wide-Area Networks (IEEE standard 802.16e).

Wi-LAN believes that by purchasing these MAC related patents we both enhance the likelihood of success in negotiating licensing revenues, as well as increase the royalty stream from these agreements. The patents will also help us to be first to market with WiMAX Certified products, and we pre-empted others from acquiring the patents and, at best, forcing us to pay additional royalties, or perhaps reducing the proliferation of WiMAX equipment by demanding uneconomic royalties. Furthermore, some of the patents and patent applications have been issued in key countries outside the US, such as South Korea, Israel, Australia, and Europe. This helps to ensure that potential licensees will come to the table faster rather than trying to circumvent the patents by not shipping product to the US or Canada. We are very excited to be in a position to move this cutting edge technology forward as we get closer to our goal of producing the world's first WiMAX Certifiedbroadband wireless systems in the first half of 2005.

I look forward to being able to announce further concrete steps to move forward our licensing strategy in the near future.

Dr. Sayed-Amr (Sisso) El-Hamamsy
President and Chief Executive Officer

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