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2005-10-20 - TEAC CLARIFIES LIMITED EFFECT OF ITC ORDER UPON PRODUCT LINE

Montebello, California — October 20, 2005 — TEAC America, Inc. (“TEAC”) clarified that recent actions by the International Trade Commission concerning MediaTek optical chips will impact only a limited range of its products.

On September 28, 2005, the International Trade Commission (“ITC”) published its determination that certain MediaTek optical disk controller chips and chipsets violate claim three of United States Patent No. 6,584,527. As a result of this action, the ITC issued an exclusion order barring imports of any devices containing MediaTek chips that violate the patent. The ITC also issued cease and desist orders preventing companies that use MediaTek chips from importing, selling, or distributing devices that contain chips violating the patent.

As a result of these ITC orders, there have been a number of recent articles linking the MediaTek chipset in general fashion to all TEAC optical drive devices. However, a large number of TEAC computer storage devices do not include any MediaTek chips, and therefore, are not subject to the ITC order. As such, TEAC recently clarified that its Slimline and Slimline Slotload devices do not include MediaTek chips in order to ensure the smooth, uninterrupted supply of their various devices that fall outside the ITC action.

However certain of its desktop devices may be subject to the order depending on the specific MediaTek chip included within the device.

TEAC indicated that they will make arrangements to continue importing and selling models that contain MediaTek chips during the 60-day Presidential review of the ITC’s decision in this investigation, which is in effect until November 27, 2005. Should the President affirm the ITC’s decision, TEAC indicated that it will seek alternative strategies to either replace MediaTek chips or seek licensing with the patent holders for activity scheduled to occur after the review period. TEAC customers that have purchased and received materials into inventory prior to the ITC order are free to use the merchandise for its intended purposes.

TEAC continues to assure its clients that it will work closely with all suppliers and distributors to ensure smooth operations during this action. Questions concerning TEAC devices coverage pursuant to the ITC action can be directed to Gary Beckerman at (323) 727-4770.


Doc #:CHI02 (281452-00037) 60411725v1;10/05/2005/Time:17:30