Avistar Announces Polycom, Inc. Agrees to Drop Counterclaims Infringement Suit; Avistar's Original Infringement Lawsuit Against Polycom on Four Patents Continues.

REDWOOD SHORES, Calif. -- Avistar Communications Corporation (NASDAQ:AVSR), a provider of business video collaboration solutions, and Collaboration Properties, Inc. (CPI), its wholly owned subsidiary, today announced that they have reached agreement with Polycom, Inc. (NASDAQ:PLCM) wherein Polycom agrees to drop its counterclaim lawsuit against Avistar regarding infringement of U.S. Patent No. 5,767,897. CPI's original infringement lawsuit against Polycom on four Collaboration Properties patents continues. A trial date is currently set for January 24, 2005.

In the original patent lawsuit, CPI alleged that several Polycom videoconferencing products infringe four of its patents: U.S. Patent No. 5,867,654; No. 5,896,500; No. 6,212,547; and No. 6,343,314. The suit was filed in the U.S. District Court for the Northern District of California by the law firm of Simpson Thacher & Bartlett LLP on September 23, 2002. In a response to this lawsuit, Polycom brought countersuit against Avistar on four patents, three of which were previously dropped. This agreement drops the last of the four.

"Our claims remain intact while Polycom has dropped all four of its counterclaims," said William L. Campbell, CEO of CPI. "We believe that we have a strong case in CPI's original infringement suit, which we will pursue at the upcoming trial. While we are committed to protecting the integrity of our intellectual property, our hope would be to leverage it by making the Avistar products and underlying technology available to partners for the growth of the industry."

CPI holds a current portfolio of 65 patents for inventions in primary areas of video technology, including Avistar's video operating system and networked video collaboration products in both digital and analog networks. CPI makes its collaborative video intellectual property available to potential partners through licensing. Inquiries regarding CPI's licensing may be directed to Paul Carmichael, primary licensing advisor, by arrangement with Amanda Redd at 650-610-2900.

About Avistar Communications Corporation

Avistar develops, markets, and supports video collaboration solutions for the enterprise, all powered by the AvistarVOS(TM) software. From the desktop, Avistar delivers TV-quality video calling, recording, publishing to web and emails, video-on-demand, broadcast origination and distribution, and document sharing. Avistar delivers on vBusiness -- video-enabling business -- by integrating visual communications into the daily workflow and connecting communities of users within and across enterprises. By offering both IP and circuit-switched products, which are fully interoperable, Avistar provides customers with a unique choice of how they implement high-quality video.

Founded in 1993, Avistar Communications Corporation is headquartered in Redwood Shores, California, with sales offices in New York and London. Avistar's technology is used in more than 35 countries. Collaboration Properties, Inc., a wholly owned subsidiary of Avistar Communications Corporation, holds a broad portfolio of patents covering the AvistarVOS platform as well as multiple software and hardware video collaboration products. For more information, visit www.avistar.com.

Forward Looking Statements

Statements made in this news release that are not purely historical, including but not limited to statements regarding the strength of CPI's infringement case against Polycom and the impact of such case on the market for Avistar's products and technology, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. Such statements are subject to risks and uncertainties that could cause actual results to differ materially, including such factors, among others, as unforeseen developments and judicial determinations in CPI's litigation with Polycom, Inc. As a result of these and other factors, there can be no assurance as to the outcome of the litigation or the impact of such outcome on Avistar, CPI and market demand for CPI's technologies. These and other risk factors are discussed in Avistar's Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. Avistar disclaims any intent or obligation to update these forward-looking statements.

Copyright (c) 2004 Avistar Communications Corporation. All rights reserved. Avistar, AvistarVOS, and the Avistar logo are trademarks or registered trademarks of Avistar Communications Corporation.