Patriot Scientific Corporation (Patriot Scientific) announced that Lexmark Inc. (NYSE: LXK-$74.16) purchased a license that gives it the right to use technologies protected by the Moore Microprocessor Patent (MMP) Portfolio. Patriot Scientific and The TPL Group are coowners of the MMP Portfolio, which Alliacense, a TPL Group enterprise, exclusively manages. The Lexmark license is the second license announced in the past 15 days and Lexmark is the eleventh licensee to purchase MMP Portfolio licenses during 2006.

Lexmark's market capitalization is approximately $7.26 billion and revenue for the trailing 12-month period was approximately $5.1 billion.

Patriot Scientific and TPL Group jointly own the MMP Portfolio that is managed by Alliacense. In 2006, Alliacense has licensed Casio (CSIOF: PK-$20.35), Fujitsu, Hewlett Packard (NYSE:HPQ-$38.00), Kenwood (KNWCF.PK-$2.55), SeikoEpson (SEKEF.PK-$28.50), Sony (NYSE:SNE-$38.46), Nikon (NINOF.PK-$19.00), Olympus (OCPNF.PK-$28.90), and Pentax (PXCPF.PK-$5.60). According to the agreement with Alliacense, Patriot and TPL Group share equally in the license fees after expenses. In FY 2005, prior to the signing of the TPL agreement and before the agreement between TPL and Phoenix Digital, Advanced Micro Devices (NYSE:AMD-$20.42) and Intel Corporation (Nasdaq NM:INTC-$21.33) entered into license agreements with Patriot Scientific for certain rights to the microprocessor patents. Revenue of approximately $2.9 million from Advanced Micro was recognized in FY2005. Revenue of approximately $10.0 million from Intel was recognized in FY2006.

Patriot Scientific's management and board again indicated that they are engaging in ongoing negotiations for a potential joint venture to enhance their Ignite chip as well as engaging in communications with another technology company whose attractive potential may lead to an investment or acquisition.

SUMMARY

On November 27, 2006, we began research coverage on Patriot Scientific with a rating of Speculative Buy and a 12-month price target

of $1.12. Since then, Patriot Scientific's stock has traded in a range of a $0.58 low to a $0.72 high (the high of $0.72 was registered on November 28, 2006, the day after our report), and the common stock trading may be suffering from year-end tax selling. As detailed in our November 27, 2006, Research Report, Alliacense has contacted approximately 300 possible infringers of the MMP portfolio and is busily negotiating with additional possible licensees. The two additional licensees are not small companies, both have market caps in the billions, and both have revenue over $5.0 billion.In recognition of the tax-selling pressure on the common stock, and the two additional licenses for the MMP portfolio with prospects of additional licenses in the coming months, we are increasing our rating to a Strong Speculative Buy, while maintaining our 12-month price target of $1.12.

http://www.duttonassociates.com/research/PTSC/index.html