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Dolby Wins Motion for Summary Judgment of Noninfringement in Patent Dispute with Lucent

April 25, 2005 Announcement

SAN FRANCISCO, CA (April 25, 2005) – Dolby Laboratories, Inc. (NYSE: DLB) announced today that on April 22, 2005 the U.S. District Court for the Northern District of California granted Dolby’s motion for summary judgment, ruling that Dolby has not infringed, induced others to infringe or contributed to the infringement of United States Patent No. 5,341,457 (the “’457 patent”) and United States Patent No. 5,627,938 (the “’938 patent”).  The ’457 patent and the ’938 patent generally involve a process and means for encoding and decoding audio signals.  Dolby had sought a declaration of noninfringement as part of an ongoing dispute with Lucent Technologies, Inc. and Lucent Technologies Guardian I, LLC (together “Lucent”)  In granting summary judgment, the court found that Lucent had not presented evidence from which a reasonable fact-finder could find that Dolby’s AC-3 technology, which is used in DVD’s, HDTV and other entertainment technologies and is licensed to hundred of companies around the world, infringes either the ‘457 or ’938 patents.

John Cooper, lead counsel for Dolby on the case and a partner at the law firm of Farella Braun + Martel, commented, “Lucent thought it could bully Dolby and its licensees into paying royalties even though there was no infringement — Friday’s ruling indicates just how wrong they were.”

In May 2001, after a number of its customers had been threatened with patent infringement claims by Lucent, Dolby filed a lawsuit against Lucent in the United States District Court seeking a declaration that the ’457 and ’938 patents are invalid and that Dolby has not infringed, induced others to infringe or contributed to the infringement of any of the claims of these patents (U.S. District Court, Northern District of California, Case No. C01-20709 JF(RS)). In August 2002, Lucent filed counterclaims alleging that Dolby has infringed the two patents directly and by inducing or contributing to the infringement of those patents by others. Lucent contended that products incorporating Dolby’s AC-3 technology infringe those patents. The court’s April 22, 2005 ruling resolves these issues in favor of Dolby.    As part of the court’s action, the trial date with respect to Dolby’s lawsuit seeking to invalidate the ’457 and ’938 patents was rescheduled to September 2005. 

About Farella Braun + Martel LLP
Since its founding in 1962, Farella Braun + Martel has achieved a national reputation for the acumen of its business practice, the high profile cases of its complex commercial litigation practice and its prestigious client base. The San Francisco-based firm serves a diverse group of clients from multinational corporations to emerging businesses. The firm also has an office in the Napa Valley focused on the wine industry and related businesses. 

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