Drexler Technology Settles Patent Litigation with Sony Corporation Related to Motion Picture Digital Sound

Business Wire, Jan 24, 2001

Business Editors and High-Tech/Entertainment Writers

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--Jan. 24, 200l

Drexler Technology Corporation, of Mountain View, California, and Sony Corporation, of Japan, are pleased to announce that they have amicably resolved their pending patent infringement litigations in the United States District Court for the Northern District of California, in which Drexler had asserted that certain of its patents were infringed by Sony and users of Sony's SDDS digital sound system for motion pictures. The terms of the settlement are confidential.

Drexler Technology Corporation (Nasdaq:DRXR) manufactures and markets optical data storage products including LaserCard(R) optical memory cards, LaserCard read/write drives, "chip ready" optical memory cards for smart card applications, and related system software. LaserCard(R) optical memory cards are used in systems for immigration, visas, pay-per-use equipment, ID/access, social services, cargo manifests, motor vehicle records and registration, import duty collection, healthcare, and other wallet-card applications utilizing laser encoding. The Company does not manufacture or market products for the motion picture industry.

Drexler Technology (www.lasercard.com) is also active in patent licensing, holding more than 50 United States patents and 70 foreign-counterpart patents in a dozen countries, related to optical data storage media and laser recording technology and products and systems derived from those technologies. To date, the ten highest-value patent licenses sold by Drexler Technology have resulted in license fee revenues totaling over $30 million. In the previous quarter, ended December 31, 2000, the Company reported a 29% rise in net income, to $1,785,000, or 17 cents per share, primarily from manufacturing optical memory cards.

Forward-Looking Statements: Certain statements made above relating to plans, objectives, and economic performance go beyond historical information and may provide an indication of future results. To that extent, they are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and each is subject to factors that could cause actual results to differ from those in the forward-looking statement. Such factors are described in the Report on Form 10-K and other documents filed by Drexler Technology Corporation (the "Company") from time to time with the Securities and Exchange Commission. The Company's business plan depends upon the initiation and growth of new programs utilizing the Company's optical memory card products and is subject to adverse economic and technological developments. The results of operations for the three months ended December 31, 2000, reported on January 17, 2001, are not necessarily indicative of results to be expected for the entire fiscal year ended March 31, 2001.