AudioFAX Strikes Licensing Agreements For Fax Technology With MCI, Xpedite and Many Others.

ATLANTA--(BUSINESS WIRE)--June 5, 1998--Continuing its strategy of marketing patents and intellectual property like traditional products, AudioFAX IP LLC announced today that it has entered into separate major licensing deals for its fax technology with several telecommunications industry leaders, including MCI, Xpedite, SmarTalk (NASDAQ: SMTK), UNIFI Communications, Inc., Omtool, Inc. (NASDAQ: OMTL) and FaxNet, Inc.

The AudioFAX patents cover a range of inventions that incorporate fax store-and-forward technologies. Many of the technologies are used daily by millions and include products and services such as fax mail, fax broadcasting, and fax-over-the-Internet. So far, MCI is the largest telecommunications company to receive a license under the AudioFAX patents. Other companies that have licensed AudioFAX patents include Delrina Corp., a subsidiary of Symantec Corp.; Northern Telecom; Premiere Technologies (NASDAQ: PTEK) and its subsidiaries, Premiere Communications and VoiceCom Systems; Digital Sound Corp. and Boston Technology.

"We are excited to have a world leader such as MCI as a licensee," said Mark Bloomfield, president of AudioFAX. "MCI's addition of the AudioFAX patents to MCI's portfolio of licensed rights is truly rewarding to the AudioFAX licensing program."

"MCI considers each technology or patent license very carefully," said Tim Casey, MCI's chief technology counsel. "In this case, the fax technologies associated with AudioFAX's patents are important to MCI's data messaging strategy. We are pleased with our arrangement with AudioFAX."

The recent agreements, reached separately over the past several months, result from the patent licensing program initiated by AudioFAX in early 1997 with the help of the consulting firm Peterson Worldwide. Dave Yurkerwich, Peterson's vice chairman, oversees the licensing campaign. In addition to Peterson Worldwide and Bloomfield, the AudioFAX licensing team includes the Atlanta-based law firms of Powell, Goldstein, Frazer & Murphy and Isaf, Vaughn & Kerr.

Unlike most technology companies, AudioFAX markets its patents like a product and uses an educational approach. Peterson serves as AudioFAX's marketing arm and primary negotiator, with the goal of making the company's technology available to those who need it.

"We become more experienced in this process every day," said Bloomfield. "The number and quality of companies that have taken a license is right on track. We are in discussions with many other companies who have indicated an interest. As the industry leaders climb on board, we are hoping others will appreciate the value of the AudioFAX patents to their company as well."

Enhanced fax communications has taken on a new dimension by using the Internet to provide low cost transmission as well as interconnection to all types of fax-enabled devices, including the typical PC.

"Even though the patents were filed 12 years ago, they clearly anticipate a low cost data network for real-time communications such as the Internet," Bloomfield said. "This is where the market is going. We have a number of new claims pending in this area and feel confident that if the claims are granted, the value of our patents will be greatly enhanced."

In the fall of 1997, the company was notified by the United States Patent and Trademark Office that a petitioner had requested a formal re-examination of one of AudioFAX's patents. This re-examination was based on alleged "prior art" that supposedly was not considered previously by the Patent Office. The Patent Office reopened the file and considered the relevance of the submitted art. In late May, AudioFAX was notified by the Patent Office that it confirmed and found valid all of the claims of the patent in review. The AudioFAX patent will be re-issued citing the new art.

Stated Lou Isaf, AudioFAX's patent counsel, "Having successfully gone through this re-examination process at this stage in the patent's life is a testament to the strength of the patent and to the uniqueness of the invention at the time it was developed."

Despite the success of its patents, AudioFAX has been forced to turn to the courts when it cannot reach agreements.

"AudioFAX will make every effort to get a deal done that is fair and reasonable for both sides," said Powell Goldstein's William Ragland, AudioFAX's chief licensing and litigation counsel. "Yet when a reasonable agreement cannot be reached, it has been necessary at times for AudioFAX to protect its interests through litigation. We have been to court before, we're in court right now, and we may be there again in the future. This is all part of the process."

AudioFAX has prevailed in every previous court battle against infringers in defense of its patents. Currently, the company is in litigation over its patents with a New Jersey-based fax services company, FaxSav (NASDAQ:FAXX).

Licensees praise AudioFax technology

The companies that recently licensed AudioFAX patents praised their agreements.

"Our highest priority is to serve our customers with the most technologically advanced enhanced fax services available in the world," said Roy B. Andersen, Jr., CEO of Xpedite. "We are pleased to have worked out an agreement with AudioFAX, which will allow us to continue to achieve this objective."

SmarTalk, an early AudioFAX licensee and leader in pre-paid long distance, recently entered into a new agreement. "If you're doing business in the fax industry, a license to the AudioFAX patents is crucial," Andrew Folck, CFO of SmarTalk, said. "SmarTalk values its relationship with AudioFAX and is pleased with the way AudioFAX approached the license restructuring process with us."

UNIFI, the leader in international enhanced fax services, also recently completed a license deal with AudioFAX.

Tom Sosnowski, vice president of UNIFI, stated, "As an inventor and holder of 12 U.S. and foreign patents, I have an appreciation for how and why patents are awarded by the Patent and Trademark Office. AudioFAX has every right to maximize its patent rights granted by the Patent Office. UNIFI found AudioFAX easy to work with, and we are also excited to be a licensee."

FaxNet is focused exclusively on providing a full line of fax products and services to telcos for sale to their end users.

"FaxNet is pleased to become a licensee," said Keith Cooper, president and CEO of FaxNet. "It has always been FaxNet's mission to bring the very best fax technologies and services to our telco and ISP clients. By taking this license, FaxNet is fulfilling its obligation to take 100 percent responsibility for the quality and availability of the products and services we provide to our clients."

Omtool designs, develops, markets and supports open, client/server facsimile software, delivering solutions which automate and integrate fax communication throughout the enterprise.

"AudioFAX's patents are pioneering in the area of fax communications and will continue to have an influence in our industry for years to come," said Martin A. Schultz, president and director of Omtool. "Since its existence, Omtool has been a pioneer of new and innovative fax products as well. It only makes sense that we incorporate a license to the AudioFAX patents as part of the total package we bring to our customers."

About AudioFAX

AudioFAX IP LLC was established to license and administrate its telecommunications patents. The company was created as a spin-off from AudioFAX, Inc., an Atlanta-based company founded in 1987, which is credited with inventing many of the technologies now used in the enhanced fax industry. Telephone [phone], fax: [phone]. Companies interested in obtaining a license to the AudioFAX patents may call either Dave Yurkerwich at 212-450-8277 or David Kennedy at 404-873-4118.

CONTACT: Baron, McDonald & Wells

Lisa Tate, 770/492-0373

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