Federal Circuit Court Reverses District Court on e.Digital's Collateral Estoppel Appeal

Ruling Is an Important Win for e.Digital

http://www.marketwired.com/press-release/federal-circuit-court-reverses-district-court-on-edigitals-collateral-estoppel-appeal-otcqb-edig-1970134.htm

SAN DIEGO, CA--(Marketwired - November 19, 2014) - e.Digital Corporation (OTCQB: EDIG), a long standing source of innovation and future-defining patented technologies, today announced that the Federal Circuit Court of Appeals issued a ruling on the Company's appeal, formally reversing the ruling by the District Court to apply the collateral estoppel doctrine against e.Digital's US Patent No. 5,839,108 ("the '108 patent").

Background

e.Digital filed multiple lawsuits in the Federal Court in and for the Southern District of California asserting claims of patent infringement against several companies. The defendants as a group filed a joint motion asking the District Court to prevent the Company from relitigating the meaning of certain terms of the Company's US Patent No. 5,491,774 ("the '774 patent") which are also present in its unrelated '108 patent. The Company's law firm, Handal & Associates, opposed the motion on a number of grounds. In spite of the Company's opposition, the District Court in San Diego granted the defendants' joint motion to apply collateral estoppel. The ruling meant that the Company was bound to the interpretations of certain claim terms reached in the 2010 Colorado District Court action. The Company appealed the lower court's decision to the United States Federal Circuit Court of Appeal.

Federal Circuit Court's Ruling

The Federal Circuit Court of Appeal ("the Appellate Court") accepted briefing and held oral argument on the Company's appeal. Today, the Appellate Court in a written opinion, found that the lower court's holding to apply collateral estoppel as to the Company's '108 patent was in error and should be reversed. This means that the Company is not bound to the construction of certain terms in the '108 patent that were construed by the Colorado action as to the '774 patent. This opens the door for the Company to argue at a new claim construction hearing the meaning of those terms unencumbered by the 2010 Colorado construction. The Appellate Court, however, did uphold the lower court's application of collateral estoppel to the '774 patent, which is now expired.

Moving Forward

As a result of the decision, unless the defendants appeal the Appellate Court's ruling, several outstanding cases that have been stayed pending the Appellate Court's proceedings will move forward towards final determination. Cases affected by today's ruling include the Company's actions against Huawei, GoPro, SanDisk and Pantech.

Management Statement

"e.Digital takes very seriously its obligations to its shareholders as evidenced by its digging in and asserting its intellectual property rights wherever and whenever it can. It is not easy to maneuver the litigation landscape but thanks to the efforts of the Company's employees and its attorneys we have and we will continue to advocate for the assertion and protection of e.Digital's intellectual property rights," said Fred Falk, president and CEO of e.Digital.

About e.Digital Corporation: For more than 20 years, e.Digital's ideas and inventions have impacted the evolution of consumer products. Today, e.Digital innovations, including its Flash-R™ portfolio of flash memory-related patents, are essential to many portable consumer electronic products. The Company pioneered dedicated portable in-flight entertainment systems and more than 30 airlines have made e.Digital powered products their in-flight entertainment choice. For more information about e.Digital, please visit: www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: This press release includes forward-looking information and statements. Except for historical information contained in this release, statements in this release may constitute forward-looking statements regarding assumptions, projections, expectations, targets, intentions or beliefs about future events that are based on management's belief, as well as assumptions made by, and information currently available to, management. While the Company believes that expectations are based upon reasonable assumptions, there can be no assurances that goals and strategy will be realized. Numerous factors, including risks and uncertainties, may affect actual results and may cause results to differ materially from those expressed in forward-looking statements made by the Company or on its behalf. Some of these factors include the substantial uncertainties inherent in pursuing patent enforcement activities including, but not limited to the risks and costs of litigation and support activities, the timing and amount of settlements/licenses if any, the acceptance of existing and future products and technologies, the difficulty of commercializing and protecting new technology such as the Company's Nunchi, microSignet and other technologies, the impact of competitive products, technologies and pricing, general business and economic conditions, and other factors detailed in the Company's Annual Report on Form 10-K and other periodic reports filed with the SEC. Except as required by law, the Company specifically disclaims any obligation to update or revise any forward-looking statement whether as a result of new information, future developments or otherwise.