Buffalo Issues a Statement About the CSIRO Appeal

November 21, 2007

AUSTIN, TX– November 21, 2007 - Buffalo Americas, a global leader in the design, development and manufacturing of wired and wireless networking, storage and memory solutions today released a statement, which provides an update regarding the status of the injunction imposed by the Eastern District of Texas with respect to the offer to sale, sell, use, import or manufacture of Buffalo’s IEEE 802.11a and 802.11g standard compliant products in Commonwealth Scientific Research and Industrial Organization v. Buffalo Americas USA, Inc. and Buffalo, Inc. 

As you may recall, from Melco’s letter of September 30, 2007, Buffalo appealed the district court’s summary judgment ruling and its entry of the permanent injunction to the United States Court of Appeals for the Federal Circuit.  As part of that appeal, Buffalo sought a stay of the injunction.  After a delay of two months, the Federal Circuit issued a disappointing order denying the stay of the injunction without providing any substantive analysis.  The decision also did not address the looming issue of when and whether research organizations that do not manufacture or sell a product are entitled to an injunction in light of the Supreme Court’s decision in Ebay v. MercExchange.  The Court of Appeals also failed to address similar concerns raised in by three amicus groups of 19 leading companies (including, Intel, Microsoft, Atheros, Accton, etc.) in the wireless LAN equipment industry.  Notably, however, the Court of Appeals stated that its decision with respect to the stay was “without prejudice[e to] the ultimate disposition of this case by a merits panel.”

In direct contrast, on November 22, 2007, Buffalo obtained the decision from the Japanese Patent Office (JPO) that CSIRO’s Japanese counterpart patent to the U.S. litigation was invalid.  Despite having issued the CSIRO’s patent in the first place, the JPO was convinced by Buffalo’s overwhelming evidence of invalidity.

Due to the foregoing reasons, Buffalo believes that the Court of Appeals will ultimately issue a decision in Buffalo’s favor, finding CSIRO’s patent invalid and not infringed and vacating the injunction.  Buffalo expects that a decision will be obtained within the next 7-12 months           

Under the current circumstances, however, Buffalo is obliged to stop shipment of Wireless-LAN products until the case is decided on its merits and the injunction lifted.  Buffalo sincerely regrets the necessity of this action.

Any questions regarding this matter shall be directed to the attention of the undersigned, Mr. Tsuneoka, the General Manager of the Legal Department at Melco Holdings Inc. at Kayabacho Tower 16F, 21-2 Shinkawa 1-Chome, Chuo-ku, Tokyo, 104-0033 JAPAN, www.melcoinc.com, Tel:81(Country Code) -33-523-3406 /Fax 81(Country code)-33-3523-3300.

Buffalo Americas, Inc., based in Austin, Texas, is a leading global provider of award-winning networking, storage, multimedia and memory solutions for the home and small business environments as well as for system builders and integrators. With almost three decades of networking and computer peripheral experience, Buffalo has proven its commitment to delivering innovative, best-of-breed solutions that have put the company at the forefront of infrastructure technology. For more information about Buffalo Americas and its products, please visit www.buffaloamericas.com.

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