System General Announces Judge's Initial Determination of ITC Investigation 337-541

System General Announces Judge's Initial Determination of ITC Investigation 337-541

May 16, 2006

    TAIPEI, Taiwan, May 16 /Xinhua-PRNewswire/ -- System
General Corporation (SG) announced today that the
Administrative Law Judge (ALJ) of the United States
International Trade Commission (ITC) has made an Initial
Determination in the patent infringement case in which SG
and Power Integrations, Inc. (PI) are the parties
(ITC-337-TA-541).  The ALJ has Initially Determined that SG
has infringed certain claims of US Patent numbers 6,351,398
and 6,538,908.  While SG respects this Initial
Determination, it strongly disagrees with the same and is
considering an appeal.  According to SG, most of its
products including its new-generation power ICs have been
withdrawn from this investigation and shall not be
negatively impacted when being imported to the United
States, regardless of the final result of this case.

    The complaint was filed by Power Integrations (PI) on
May 9, 2005, and originally alleged that 20 of SG's
products had infringed a total of 34 claims from four of
PI's US patents.  During the ITC investigation, however, PI
withdrew its allegations with respect to most of the
allegedly infringed claims of the four patents, leaving
four claims of the 6,351,398 patent and two claims of the
6,538,908 patent in dispute; the products being disputed
are essentially limited to six chips.  The Initial
Determination yesterday found that SG's power supply
controller ICs infringed the 6,351,398 patent and 6,538,908
patent.  This Initial Determination is preliminary in
nature, and the full Commission will issue a Final
Determination by mid-August of this year.  If the Final
Determination is unfavorable to SG, an exclusion order will
issue and may become effective within 60 days of its
issuance.  However, a Final Determination by the Commission
is still subject to Presidential Review and appeal to the
United States Court of Appeals for the Federal Circuit,
where SG will continue to defend its products and seek a
favorable decision.

    To protect the interests of our valued customers, SG
has already introduced its new-generation, power IC
products.  These successor products have improved
performance with respect to power conversion efficiency and
standby power reduction, and PI and the presiding
administrative law judge withdrew these products from the
scope of the investigation.  Thus, these products are
protected from any exclusion order.  Moreover, these new
products have been manufactured according to SG's patents. 
amples of these new IC products have been sent out for field
verification beginning in December 2005 and have received
very positive feedback from many power adaptor
manufacturers. 

    "We are disappointed with this ruling because SG
respects intellectual property rights, as SG itself
develops many new technologies and obtains patents for the
same.  We will wait to review the Commission's Final
Determination, and decide upon our strategy for appealing
the same, if it is indeed unfavorable to SG," said Tom
Yang, CEO and founder of SG.  "SG's products are all
covered by our own patents," said Mr. Tom Yang.  He
further emphasized that SG has always endeavored to protect
patent rights, stating, "And over the years, SG has
received more than one hundred patents worldwide, including
50 US patents."  He continued, "Regardless of the
outcome reflected in the Final Determination, we fully
support the United States patent system and recognize the
importance of patent protection to the industry." 
 
    About System General

    System General was founded in 1983.  Initially, the
company primarily offered power system design services.  In
1985, it began R&D, manufacturing, and marketing of IC
programming and testing instruments.  After endeavors of
more than a decade, SG has earned a reputation for high
quality goods and has received recognition from customers
in Taiwan and abroad.  In 1999, SG established its
semiconductor branch, and began officially offering IC
design services.  Its principal products are power
management ICs, which were introduced to the market in
2002.  Most Taiwan IC design firms concentrate on the DC-DC
field, while SG is the only IC design firm in Taiwan
possessing comprehensive AC-DC power management chip
production lines with products used on the power management
systems of various kinds of computers, peripherals, wireless
communications equipment, and home appliances.

    SG is headquartered in Taiwan with subsidiaries in the
US and China and an office in Korea, and has established
several marketing channels in Europe, America, and the Asia
Pacific region, actively paving the way for globalization.

    The two SG business groups currently offer the
following products:

     1. Power control and management IC: ATX SMPS control
IC; energy-saving 
        PWM control IC; scanner analog front end control
IC
     2. IC programming and testing instrument: fully
automatic IC 
        programming and testing system; universal/special
component IC 
        burner; mass produced/R&D IC burner

    SG Web site: http://www.sg.com.tw/

    For more information, please contact:

    Spokesperson: 
     Yu-lin Chen (Director, President's Office)
     Tel:   [phone] x533
     Email: [e-mail]

    Deputy spokesperson: 
     Chilli Hsieh (Manager, President's Office,)
     Tel:   [phone] x520
     Email: [e-mail]

     Fax:   [phone]
     Web:   http:// www.sg.com.tw

SOURCE  System General Corporation