Administrative Law Judge Recommends Order Excluding Epistar's Infringing LEDs and Downstream Products.

SAN JOSE, Calif. -- On January 11, Administrative Law Judge Harris of the International Trade Commission ("ITC") recommended that Epistar's infringing LED chips, along with certain products incorporating those infringing chips, should be the subject of a limited exclusion order. If the ITC adopts Judge Harris' recommendation, Epistar and others will be prevented from importing those infringing LED chips, packaged LEDs, and boards containing the packaged LEDs, into the United States.

Philips Lumileds intends to ask the Commission to exclude additional downstream products, such as traffic signals and automotive brake light assemblies that include the infringing LEDs. The Judge also recommended that Epistar be required to post a bond based on the value of its infringing LEDs for any importation that may occur during the 60-day Presidential review period following the issuance of the Commission's decision. This recommendation follows from Judge Harris' January 8 Initial Determination that Philips Lumileds asserted patents are valid, enforceable, are not licensed by Epistar, and that Epistar's metal bond ("MB") and MB II products infringe Philips Lumileds' U.S. Patent No. 5,008,718 ("the 718 Patent"). This Initial Determination found infringement of all commercially available versions of Epistar's MB LEDs of which Philips Lumileds is aware.

Philips Lumileds expects that the ITC will adopt Judge Harris' recommendation to exclude Epistar's MB LEDs and remains confident that the ITC will also exclude Epistar's OMA and GB LEDs. In his Initial Determination, Judge Harris found that Epistar's OMA, OMA II, GB, and GB II LEDs include the current-spreading "transparent window layer" that laterally spreads the current away from the metal contact and that this is the "critical feature of the claimed invention" of the 718 Patent. Based primarily on an unduly restrictive interpretation of a single word of one claim of the patent, the Judge did not find infringement of the 718 patent by the OMA and GB products. Thus, Lumileds intends to petition the Commission to adopt an interpretation consistent with the broad scope of the invention of the 718 Patent that covers not only Epistar's MB, but also the OMA and GB LEDs. Philips Lumileds similarly intends to petition the Commission to adopt a broader interpretation of the claims of its wafer bonding patents (US Patent Nos. 5,376,580 and 5,502,316) that cover Epistar's OMA, MB and GB products. Based on these petitions, Philips Lumileds is seeking an exclusion order against Epistar's MB, OMA and GB LEDs as well as downstream products including these LEDs. The Commission is expected to complete the investigation on or before May 8, 2007.

About Philips Lumileds Lighting Company 

Philips Lumileds Lighting Company is the world's leading high-volume manufacturer of power LEDs and a pioneer in the use of solid-state lighting solutions for everyday purposes including automotive lighting, camera flash, LCD displays, portable lighting and general lighting. The company's patented LUXEON([R]) Power Light Sources are the first to combine the brightness of conventional lighting with the small footprint, long life and other advantages of LEDs. Philips Lumileds also supplies core LED material and LED packaging, and manufactures billions of LEDs annually. The company is headquartered in San Jose, California, with operations and sales offices throughout the world. For more information, contact Philips Lumileds Lighting Company at 408-964-2900 or visit www.philipslumileds.com.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands (NYSE:PHG)(AEX:PHI) is a global leader in healthcare, lifestyle and technology, delivering products, services and solutions through the brand promise of "sense and simplicity". Headquartered in the Netherlands, Philips employs approximately 126,000 employees in more than 60 countries worldwide. With sales of EUR 30.4 billion in 2005, the company is a market leader in medical diagnostic imaging and patient monitoring systems, energy efficient lighting solutions, personal care and home appliances, as well as consumer electronics. News from Philips is located at www.philips.com/newscenter.