Pci-pal Regulatory News (PCIP)

PCI-PAL PLC

("PCI Pal", "the Company" or "the Group")

Patent Case Update

PCI-PAL PLC (AIM: PCIP), the global cloud provider of secure payment solutions for business communications, provides an update on the on-going lawsuit filed by its competitor in the UK and US in September 2021.

As notified on 16 September 2021, one of PCI Pal's competitors, the US private equity owned, UK company, Semafone Limited, commenced litigation proceedings against the Company in the UK and the US for alleged patent infringement, which relates to one aspect of how one of the Company's products functions. As previously stated, PCI Pal strongly refutes these claims.

PCI Pal has this week filed its UK defence and counterclaim to the UK Court in response to the claims, and has summarised two headline points from this filing below:

1. PCI Pal does not infringe the patents as claimed by Semafone;

2. The patent is invalid. It lacks novelty and inventive step over the prior art1;

PCI Pal believes that the filing shows a strong defence and, in addition to non-infringement, has provided the Court with information on prior art and invalidity arguments. The Court will assess these points and Semafone's arguments and opine accordingly.

In the US, PCI Pal has also started the defence of the claims being made.

In the last week, PCI Pal has made an application to the US Court for it to invalidate the Semafone US patents under section 101 of the US Patent Act. The Company believes those patents are overly abstract and thus do not qualify for patentable subject matter under the US patent laws. PCI Pal has made this application to ensure it does not spend significant time and resources on further defence points, based around non-infringement and prior art based invalidity, before having the eligibility of the patents reviewed by the US Court. PCI Pal expects to understand the Court's position on this motion in the next few months.

PCI Pal is well funded, with no debt, and given the continued strong trading announced today is in a good position to deal with these allegations. The Group will be reporting costs associated with its defence of these allegations as exceptional items in its accounts.

PCI Pal is working with its well-established team of advisors to work towards an outcome that it believes will best benefit the Company, whilst at the same time focusing on delivering its strategic growth plans based on the established momentum within the Group.

Given the nature of the claims being made against PCI Pal, it is limited in the information it can provide on the case, but the Board will endeavour to keep investors updated as appropriate.

1Section 2(1) of the Patents Act 1977 Act states that an invention shall be taken to be new if it does not form part of the state of the art. Section 2(2) then goes on to define the state of the art as to be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has at any time before the priority date of the invention been made available to the public (whether in the UK or elsewhere) by written or oral description, by use or in any other way. This is generally known as "prior art".

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About PCI Pal:

PCI Pal is a leading provider of Software-as-a-Service ("SaaS") solutions that empower companies to take payments from their customers securely, adhere to strict industry governance, and remove their business from the significant risks posed by non-compliance and data loss. Our products secure payments and data in any business communications environment including voice, chat, social, email, and contact centre. We are integrated to, and resold by, some of the worlds' leading business communications vendors, as well as major payment service providers.

The entirety of our product-base is available from our global cloud platform hosted in Amazon Web Services ("AWS"), with regional instances across EMEA, North America, and ANZ.

For more information visit www.pcipal.com or follow the team on Linkedin: https://www.linkedin.com/company/pci-pal/