On April 22, 2010 we filed a second action against TPL and Alliacense LLC in Santa Clara Superior Court alleging claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and interference with contract, constructive fraud, for preliminary and permanent injunctions and for an accounting. The Action stemmed from TPL's notification of a license written in April 2010 which included a license of the MMP patents and other patent to use portfolios and technologies co-owned and potentially owned by TPL in the future. We objected to the amount of license consideration allocated to the MMP patent license as too low relative to the other license components.

On April 26, 2010, the Court granted our application for a Temporary Restraining Order ("TRO") precluding TPL from executing any license of the MMP patents without providing us five business days' notice of the proposed MMP license and any other proposed license with the licensor, in order to allow us time to seek redress if we are dissatisfied by the proposed licenses. At that time, TPL filed motions to seal the file and to bar press releases commenting on the contents of the court file, and a motion to compel private arbitration of the dispute.

The Court granted the motion to seal provisionally until TPL's motions were fully briefed and argued and set a hearing on our request that the TRO become a Preliminary Injunction through trial.

Following this, the parties entered into negotiations to restructure their relationship by providing generally for PDS and PTSC oversight of Alliacense operations and to finance Alliacense's operations in pursuit of MMP licensing. Those negotiations proceeded for nearly three months. While the negotiations were underway, the parties stipulated to postpone the briefing on the motions several times. Those negotiations failed and are not continuing. However TPL stipulated on August 3, 2010 that the TRO already in place would become a Preliminary Injunction. On August 12, 2010, the Court considered defendants' request to seal the file indefinitely and to compel private arbitration of the dispute and denied both Motions. On August 13, 2010 the Court provisionally allowed some file redactions pursuant to a Motion filed by TPL and will decide the appropriateness of those redactions on September 30, 2010.

10-K (Filed: 16-08-2010)

TPL Litigation

Our actions against TPL in San Diego Superior Court for breach of a promissory note of $1 million and our actions against TPL and Alliacense LLC in Santa Clara Superior Court alleging claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and interference with contract, constructive fraud, for preliminary and permanent injunctions and for an accounting as described in Item 3 – “Legal Proceedings” in our Annual Report, are still ongoing, but there have been no material developments in such litigation since our Annual Report.

10-Q (Filed: 12-10-2010)

TPL Litigation

Our action against TPL in San Diego Superior Court for breach of a promissory note of $1 million and our actions against TPL and Alliacense LLC in Santa Clara Superior Court alleging claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and interference with contract, constructive fraud, for preliminary and permanent injunctions and for an accounting as described in Item 3 – “Legal Proceedings” in our Annual Report, are still ongoing, but there have been no material developments in such litigation since our Annual Report.

10-Q (Filed: 14-01-2011)

TPL Litigation

Our action against TPL and Alliacense LLC in Santa Clara Superior Court alleging claims for breach of contract, breach of fiduciary duty, aiding and abetting breach of fiduciary duty, and interference with contract, constructive fraud, for preliminary and permanent injunctions and for an accounting as described in Item 3 – “Legal Proceedings” in our Annual Report, is still ongoing, but there have been no material developments in such litigation since our Annual Report.

Our action against TPL in San Diego Superior Court for breach of a promissory note of $1 million was settled on January 19, 2011.

10-Q (Filed: 11-04-2011)

Pursuant to the 1st amended complaint filed Oct 20, 2010, key points provided by me in a prior post:

1. TPL’s response has been to threaten to shut down the licensing program. Further to try to coerce Patriot to loan it more money, TPL has focused on a new strategy of improperly diverting licensing revenue to itself through its licensing division Alliacense, contrary to its authority under the ComAg

It would seem that TPL has been successful in shutting down the licensing program as we haven’t heard of any other licenses since Stryker in May of this year.

My questions are: Since the 10K last year, each quarterly report has stated there have been no material developments in this litigation. Why did PTSC’s case management conference in Jan 2011 end up being continued in Sept. 2011? Wouldn’t you think that PTSC would be pushing for an earlier court date to press the court for what they “prayed for” in the 1st amended complaint (i.e. cancellation of the ComAg)?