Cognex Wins Landmark Ruling Against Lemelson Partnership; Court Rules Lemelson Patents Invalid and Unenforceable.

Business Editors/Legal Writers

NATICK, Mass.--(BUSINESS WIRE)--Jan. 26, 2004

Cognex Corporation (NASDAQ: CGNX), the world's leading supplier of machine vision systems, announced today that Chief Judge Philip Pro of the U.S. District Court in Las Vegas has ruled in favor of Cognex in its lawsuit against the Lemelson Medical, Education & Research Foundation, Limited Partnership. Judge Pro held that the claims of 14 patents asserted by the Lemelson Partnership are invalid and unenforceable, and not infringed by Cognex.

Cognex filed suit against the Lemelson Partnership in September of 1998, seeking a declaration that certain patents issued to Mr. Lemelson that purportedly cover machine vision are invalid, unenforceable, and not infringed by either Cognex or users of Cognex products. In 2000, the Court combined Cognex's lawsuit with a similar suit against the Lemelson Partnership (filed at a later date) by Symbol Technologies and seven other manufacturers of bar code readers. The case was tried in the U.S. District Court in Las Vegas from November 18, 2002 to January 17, 2003. Post-trial briefs were submitted to the Court on June 26, 2003.

In summarizing his 30-page decision, which was issued late Friday, Judge Pro wrote, "Having concluded that Lemelson's patent claims are unenforceable under the equitable doctrine of prosecution laches; that the asserted patent claims as construed by the Court are not infringed by Cognex because use of the accused products does not satisfy one or more of the limitations of each and every asserted claim; and that the claims are invalid for lack of written description and enablement even if construed in the manner urged by Lemelson, the Court finds that Judgment should be entered in favor of Plaintiffs." The complete text of Judge Pro's decision can be found on Cognex's web site: http://www.cognex.com.

Since the early 1990s, the late Jerome Lemelson and the Lemelson Partnership...which never built or sold a single vision system or bar code reader...have collected in excess of $1.5 billion in license fees by asserting their patent portfolio and the threat of complex and costly patent litigation against hundreds of companies around the world that use machine vision or bar code readers. As a result of Friday's ruling, every company will now be able to use machine vision systems and bar code readers, anywhere in their operations, without the threat of litigation from the Lemelson Partnership, and without having to pay licensing fees to them.

"This ruling is truly a cause for celebration...for Cognex and for every company around the world that makes, sells or uses machine vision systems or bar code readers," said Dr. Robert J. Shillman, Chairman and CEO of Cognex. "It is also a victory for consumers everywhere, because every one of us has paid a hidden tax to Lemelson each and every time that we made a purchase of virtually any item that was manufactured since the start of Lemelson's licensing onslaught."

Dr. Shillman continued, "Much of the litigation in our society is motivated by greed, but that was not Cognex's reason for suing Lemelson. Cognex has spent millions of dollars on this case, and even though we won, we won't receive a single cent from Lemelson. We pursued this litigation because we knew that what Lemelson and his Partnership were doing was terribly wrong, and only Cognex had both the technical knowledge and the fortitude to put an end to their campaign of legalized extortion. Our only reward is the knowledge that we did the right thing...we stood up to wrongdoing and we triumphed. Our success in this case is a testament to two of Cognex's core values: Integrity and Perseverance...we do the right thing, and we don't quit until the job is finished."

Dr. Shillman concluded, "By determining that the Lemelson patents are invalid and unenforceable, the U.S. District Court has done a great service to the patent process, and it has lifted the hearts of the thousands of true inventors who patent inventions that are then perfected and brought to market for the benefit of both the inventor and society. Cognex also appreciates the effort and intellect invested in this case by Jesse Jenner and his legal team at the law firm of Fish & Neave, based in New York City."

Cognex Corporation designs, develops, manufactures, and markets machine vision systems, or computers that can "see." Cognex is the world's leader in the machine vision industry, having shipped more than 200,000 vision systems, representing over $1.5 billion in cumulative revenue, since the company's founding in 1981. Cognex's Modular Vision Systems Division, headquartered in Natick, Massachusetts, specializes in machine vision systems that are used for automating the manufacture of a wide range of discrete items and for assuring their quality. Cognex's Surface Inspection Systems Division, headquartered in Alameda, California, specializes in machine vision systems that are used for inspecting the surfaces of products manufactured in a continuous fashion, such as metals, paper and plastics. In addition to its corporate headquarters in Natick, Massachusetts, Cognex also has regional offices located throughout North America, Japan, Europe, and Southeast Asia. For more information, visit Cognex on-line at http://www.cognex.com.