ACE DuraFlo(R) Wins Motion for Summary Judgment of Noninfringement in Patent Dispute.

LOS ANGELES -- ACE DuraFlo[R] Systems, LLC (ACE) announced today that the U.S. District Court for the Central District of California granted ACE's motion for summary judgment, ruling that ACE has not infringed, induced others to infringe or contributed to the infringement of United States Patent No. 5,707,702 (the "702 patent"). The '702 patent generally involves a method for manufacturing an epoxy pipelining composition. The '702 patent, owned by the US, is licensed to American Pipe Lining Inc. (APL) and sublicensed to Nu Flow America, Inc. ACE had sought a declaration of noninfringement as part of an ongoing dispute with APL, Nu Flow America, Inc, Nu Flow 2000, Bill Howe Plumbing and others. In granting summary judgment, the court found that APL had not presented any evidence from which a reasonable fact-finder could find that ACE infringed the '702 patent. APL failed to provide any evidence of infringement.

Larry Gillanders, CEO, Chief Technology Officer for ACE, commented, "APL thought it could bully ACE and its licensees into paying royalties even though there was no infringement. APL's assertions were so baseless that APL could not and did not provide any evidence whatever of infringement. Even the '702 patent owner, the US Government, distanced itself from APL's baseless allegations. It would appear that APL was reckless in bringing this infringement case against us. Therefore, we intend to file a motion asking the Court to require APL to pay ACE's attorneys' fees incurred in defending this baseless claim.

In August 2005, ACE was threatened with patent infringement claims by APL. APL refused to provide any evidence of infringement. To clear the matter, ACE filed a lawsuit against APL in the United States District Court seeking a declaration that ACE had not infringed, induced others to infringe or contributed to the infringement of the '702 patent (U.S. District Court, Central District of California, Case No. SACV05-1039 DDP (CTx)). ACE, right from the onset of APL's allegations always contended it did not infringe for several reasons. In September 2006, ACE filed for a Motion of Summary Judgment of noninfringement. The US District Court's January 31, 2007 ruling resolves this issue in favor of ACE.