JF Tech confident it will prevail in US patent infringement case

By Goh Thean Eu August 8, 2014

Malaysian company says it officially accepted complaint on Aug 5
Remains uncertain on the maximum exposure to liabilities

JF Tech confident it will prevail in US patent infringement case SEMICONDUCTOR test probe maker JF Technology Bhd believes it will prevail in a pending patent infringement case with US-based Johnstech International Corp.

On June 20, Johnstech filed a complaint in the US District Court of the Northern District of California against the JF Group – comprising JF Tech, its subsidiaries JF Microtechnology Sdn Bhd and J Foong Technologies Sdn Bhd – alleging the infringement of US Patent No 7,059,866 entitled ‘Integrated Circuit Test Contact to Test Apparatus.’

“The board wishes to inform that the above complaint has been officially accepted on Aug 5 2014 by the defendants following the appointment of a local intellectual property consultant,” JF Tech said in its filing to Bursa Malaysia on Aug 7.

Nevertheless, the company said it remains uncertain on the maximum exposure to liabilities it may face as the amount of the claim was not indicated in the complaint.

JF Tech also argued that US patent laws do not apply outside the United States, and that the manufacture, use, sale and offering for sale of its Zigma (pic) products outside the United States are not affected by this case.

“In addition, Johnstech has not to date taken the necessary steps to pursue any judicial or customs restrictions on JF Tech’s activities inside the United States … there is no current credible threat that this case will disrupt JF Tech’s activities inside the United States.

“Even in the unlikely event that monetary liability ultimate is determined to exist, the litigation process, including appeals, is expected to last approximately two to three years or more before the final outcome is known.

“The board is confident that it will prevail in this case,” JF Tech said in its filing.

The company’s share price on Bursa Malaysia appears to be relatively unhurt over the legal complaint. Since June 27, when investors were first notified about the case, its shares have risen 13% to 55.5sen, its Aug 7 closing price.

For the nine months ended March 31, 2014, it managed to return to the black with a net profit of RM814,000 versus an RM451,000 net loss same period a year ago. During the period, revenue rose 30% to RM7.61 million.

[RM1 = US$0.31]

“The increase in profit was mainly driven from the increase in sales, reversal of impairment loss of receivables, reversal of deposit of machine written off and reimbursement of research and development expenditure from government grants,” the company said in its filing to Bursa Malaysia.

JF Tech, which was listed on Bursa Malaysia in 2008, is 50.73% owned by executive chairman and managing director Foong Wei Kuong.

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