Amphion Innovations plc

Subsidiary Company DataTern Receives
Favourable Ruling

London and New York, 10 September 2015 - Amphion Innovations plc (LSE: AMP) (“Amphion” or the “Company”), the developer of medical, life science and technology businesses, announces today that DataTern Inc. (“DataTern”), a wholly-owned subsidiary of the Company, has received a favourable ruling by the U.S. District Court in Massachusetts (the “Court”), which denied two motions for summary judgment filed by MicroStrategy Inc. (“MicroStrategy”) seeking dismissal of DataTern’s claims on the grounds of validity and infringement.  In May of this year, there was a hearing on the two motions: one motion argued that DataTern’s ‘502 patent is invalid under section 101 of the United States Patent Act, and the second argued that MicroStrategy did not infringe the ‘502 patent. 

The Court found that the ‘502 patent solved a specific problem in computing using an inventive concept and concluded that the invention was eligible for patent protection under the U.S. Supreme Court’s most recent precedent.  On the second motion, concerning the issue of infringement, the Court denied MicroStrategy’s motion seeking a determination that it did not infringe because its Business Platform did not use an “object model”, leaving the door open to revisit related issues in the future.

Previously, in late December 2014, DataTern received a ruling from the Federal Circuit Court of Appeals (“FCCA”) of its appeal in the MicroStrategy case that the Company’s legal advisers considered to be clearly favourable.

MicroStrategy sells business intelligence and analytics software platforms used by other defendants.  There are 7 defendants in the MicroStrategy case.

In a separate but related case, in April 2014, DataTern received a ruling from the FCCA of the appeal filed in relation to the Microsoft declaratory judgment motion heard earlier in New York, which its legal advisers considered favourable. In July 2014, the ruling received in April became final. As a result, the case in New York was terminated, with the result that the previously unfavourable Markman ruling of August 2012 was, in the case of Microsoft, nullified.

The cases in Texas, which were on hold pending the Microsoft appeal, are now expected to move ahead in the next six months and the Company’s Board expects to have a Markman hearing in Texas in 2016.  Following some settlements and dismissals there are now 5 defendants remaining in Texas. 

The Company’s legal team, supported by the Company’s extensive team of technical and patent experts, continues to believe in the strength of its intellectual property.  Both of DataTern’s key patents have completed a comprehensive re-examination by the United States Patent and Trademark Office (“USPTO”) and successfully emerged both fully validated and with additional claims added.  It remains the firm and considered opinion of the Company’s team that the two patents are both valid and being infringed by a wide range of companies that are practicing this critical art. The Board believes that a Claim Construction ruling, which is fully reflective of its interpretation of the claims of the patents, would establish significant infringement by a large number of companies and it believes that DataTern should be able to generate a significant amount of revenue from this asset over the next few years. 

Under the revenue sharing agreement with DataTern, Amphion Partner Company FireStar Software Inc. (where the technology and patents were originally developed) would share directly in the revenue stream.

Richard Morgan, CEO of Amphion, said: "This result confirms our view that our patents have been infringed.  The ‘502 patent and the ‘402 patent are directed to how object oriented software applications access data stored in relational databases.  Such applications are widely used and most databases in use today are relational databases.  We continue to believe that companies that are using or want to use our patented technology will wish to enter into equitable licensing agreements.  Our goal remains to generate a fair and reasonable return on the very substantial investment made by DataTern and FireStar over many years in the development of this innovative technology.  If we are successful, we believe that the value of the net income to DataTern should be substantially in excess of its carrying value.”

For further information please contact

Amphion Innovations
Charlie Morgan
+1 212 210 6224

Yellow Jersey PR
Dominic Barretto / Charles Goodwin
+44 7768 537 739

Panmure Gordon Limited (Nominated Advisor and Joint Corporate Broker)
Freddy Crossley / Duncan Monteith (Corporate Finance)
Charlie Leigh-Pemberton (Corporate Broking)
+44 020 7886 2500

Northland Capital Partners Limited (Joint Corporate Broker)
Gerry Beaney/ David Hignell (Corporate Finance)
John Howes/ Mark Treharne (Corporate Broking)
+44 020 7382 1100

Plumtree Capital Limited (Financial Advisor)
Stephen Austin
+44 020 7183 2493
+646 568 7502

About Amphion Innovations plc
Amphion Innovations is a developer of medical, life science and technology businesses.

We use our extensive experience in company building to invest and build shareholder value in high growth companies in the US and UK. Amphion has significant shareholding in 7 Partner Companies developing proven technologies targeting substantial commercial marketplaces. The Amphion model has been refined to optimise the commercialisation of patents and other intellectual property within the Partner Companies. The Partner Companies collectively own or control over 200 separately identified pieces of intellectual property, a number which grows rapidly each year.

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