Intercede Regulatory News (IGP)

6 Oct 2008 07:00



6 OCTOBER 2008 

INTERCEDE GROUP plc

("Intercede" or "the Company")

Statement Relating To Possible Patent Infringement Suit

Intercede (AIM:IGP), the producer of the Intercede MyID™ Identity and Credential Management System, notes certain news reports indicating that ActivIdentity, formerly an Intercede business partner and OEM licensee of Intercede's smart card management software (see note 1 below), has filed an infringement suit against Intercede. 

Intercede has, to date, received no formal notification of action from ActivIdentity but after investigation has confirmed that a complaint was filed by ActivIdentity in the District Court of North California on 1 October 2008 concerning U.S. Patent 6,575,360. 

According to the details of the filing, this patent was issued to a 3rd party on 10 June 2003 and ownership was transferred to ActivIdentity on 6 July 2006. As such Intercede does not believe this patent was derived from ActivIdentity's own research and development activities.

As a software company, Intercede takes intellectual property rights very seriously and is scrupulous in protecting the rights of Intercede and other legitimate owners. Intercede retains leading patent lawyers to ensure that both its intellectual property and that of others is not infringed.

Intercede is aware of the '360' patent and has previously obtained expert opinion in the UK and US to confirm, beyond reasonable doubt, that none of its technology or products incorporate any intellectual property that may be protected by this patent.  

Intercede has previously discussed the patent at issue with ActivIdentity and was satisfied that it had demonstrated to ActivIdentity why none of Intercede's products infringe any valid claim of the patent. In the last eight months Intercede has received no communications from ActivIdentity to indicate they disagreed with this position.

Richard Parris, Chairman and Chief Executive of Intercede, said;

"The timing of this filing is questionable as it so closely follows recent press releases about Intercede's commercial successes in the US market. I believe ActivIdentity are resorting to the distraction tactic of litigation because their value proposition in the card management software market is failing (see note 2 below). Should ActivIdentity proceed with this action, Intercede will vigorously defend itself. 

As Intercede continues to achieve unprecedented commercial success with its technologically advanced solutions, it is inevitable that we will elicit a range of competitive responses from those companies who are threatened by Intercede's encroachment into their home markets. We welcome this particular challenge so that we can publicly demonstrate that the Intercede MyID system, supported by Intercede's own patented technology, is the most secure identity and credential management system available today. Unlike our competitors, all Intercede technology is developed in-house to ensure we do not rely on 3rd party originated intellectual property."

Intercede has today issued separately a positive trading update in respect of the 6 months ended 30 September 2008. Sales compared to the first half of the previous financial year have risen by 25% and a profit was generated at both pre and post tax level. The Directors of Intercede remain confident of the Company's future prospects.

Note 1: On 7 December 2001 and 23 April 2002, Intercede announced to the London Stock Exchange that ActivIdentity had paid Intercede an OEM license fee of $800,000 for an undisclosed number of Intercede MyID software licences (formerly branded as edefice). Full details of these announcements can be found on Intercede's web site, www.intercede.com.

Note 2: ActivIdentity reported a $2.0 million year-on-year decrease in card management software revenues in the 9 months to June 2008 (Source: Form10-Q Filing to the U.S. Securities and Exchange Commission for the Quarterly Period ended 30 June 2008). This is at a time when Intercede, a company focused exclusively on card management software, has experienced a substantial increase in revenues.

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