The study reviewed patents covering
active matrix LCDs, optics and LCDs and various electronic and optical
components used in conjunction with video display systems. Counsel has
determined that the combination of features disclosed in the Company's patent
application would not constitute literal infringement of the patents reviewed.
Counsel also has reviewed certain of the patents covered by the literal
infringement study to determine whether the combination of features described in
the Company's application would infringe such patents under the doctrine of
equivalents. Under this doctrine, a product which does not literally infringe a
patent because it does not have all features of any of the patent claims might,
nevertheless, be deemed to infringe such patent, if and only if the difference
between the patented product and accused products are insubstantial. Counsel has
concluded that the combination of features described in the Company's patent
application would not infringe any of the patents included in counsel's doctrine
of equivalents study under the doctrine of equivalents. With respect to those
patents which were not included in the doctrine of equivalents study, counsel
has advised the Company that even if the combination of features described in
the Company's application would infringe such patents under the doctrine of
equivalents it is likely that either (i) suitable non-infringing alternative
components would be available, or (ii) the Company will be able to obtain a
license from the owner of such patent. In order for the Company to obtain such a
license it may be necessary for the Company to grant a cross license of the
Company's patent-pending technologies to a potential licensor.
Counsel also has reviewed the patents to determine whether the
components of the Company's video display systems set forth in the Company's
patents constitute literal infringement of the other patents reviewed. Counsel
has concluded that the manufacture, use or sale in the United States of the
Projector including such components would not constitute literal infringement of
the patents reviewed; however, Counsel will not be able to determine whether the
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components of the Projector would infringe the remaining patents reviewed until
certain components to be used in the Projector are definitively selected.
Counsel has not reviewed the patents to determine whether the components of the
Projector disclosed in the Company's patent application would constitute
infringement of the patents directed to such components under the doctrine of
equivalents. However, counsel has advised the Company that, as a matter of law,
any component purchased from a seller in the normal course of business ("off the
shelf") is purchased with a warranty from the seller that such component does
not constitute literal or equivalents infringement of patents of others. In
addition, counsel has advised that if the Company arranges to have certain
components manufactured to its specifications and, therefore, is not deemed to
have purchased such components off the shelf it is likely that either (i) the
seller of such component will indemnify the Company from patent infringement
claims, or (ii) the Company will be able to obtain a license from the owner of
the patent which is infringed. However, there can be no assurance that the
Company will enter into any such arrangements and if the Company is unable to
enter into such arrangements, its business may be adversely affected. In
addition, the officers and certain employees of the Company are also required to
agree not to compete with the Company for periods ranging from one to two years
after the termination of their employment. However, there can be no assurance
that such confidentiality or non-compete agreements will be complied with or
will be enforceable. |
