News Release Details

Message from the CEO: Implications of the Redline Lawsuit Settlement

06/17/2004


Implications of the Redline Lawsuit Settlement

Wi-LAN recently announced the resolution of the Redline patent infringement lawsuit. As part of the settlement it was agreed that Redline would pay Wi-LAN a royalty for every unit sold. A royalty payable on each unit is very important because it covers any form of sale: to customers, original equipment manufacturers, and competitors around the world. Wi-LAN now receives licensing revenue from every OFDM product Redline sells worldwide.

Wi-LAN's approach to this litigation was to derive the best business result for the company. The end result, the settlement, provides Wi-LAN with the precedent required when approaching future potential licensees. The key message in this settlement is that Redline considered defending against infringement and decided to settle instead. Our stated goal for many years has been to make available our proprietary technology for licensing at a price that is fair, reasonable and non-discriminatory. This ensures that unduly onerous licensing terms do not deter other companies from selecting the best technological solution that meets their needs. Our licensing strategy is structured to maintain the momentum towards the use of W-OFDM in all aspects of two-way wireless data communications and encourages potential licensees to choose a settlement instead of a long litigation cycle.

Redline was a timely target because of their non-standard implementation of W-OFDM. When we launched the Redline suit in 2002 we did not want to impede the development of the 802.11a/g markets because they were in an embryonic phase. Now that the market for WiFi is growing and becoming a readily accepted business practice/solution it no longer needs to be shielded or nurtured by Wi-LAN. Therefore, closing the Redline chapter sets an important precedent for Wi-LAN and its shareholders and allows us to move forward and target bigger potential licensees in the near future.

We will continue to execute our long-term plan for licensing to WiFi semiconductor companies implementing the 802.11a and 802.11g standards. As well, we will move forward with our more recent strategy of targeting semiconductor companies intent on building chipsets for WiMAX Certified equipment, as this market develops. The recent addition of the 802.16 MAC patents to our robust W-OFDM patent strengthens our licensing position. We are very confident in our ability to execute this licensing strategy and we expect that our loyal shareholders will be rewarded as the financial impacts of this plan are reflected in our operating results.

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

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