General Patent Corporation Settles Patent Suit with Smart Modular Technologies, Inc.

SUFFERN, NY, October 31, 2000 - General Patent Corporation (GPC), an intellectual property management firm based in Suffern, NY, has reached a settlement with Smart Modular Technologies, Inc., Fremont, CA (NASDAQ: SMOD), in a patent infringement suit brought by GPC in 1998. GPC sued Smart Modular Technologies in April of 1998 in the Federal Court, Northern District of California for patent infringement.

GPC's complaint alleged infringement by Smart Modular Technologies of four of GPC's patents that cover specific aspects of PCMCIA devices, PC card modems and other computer communications devices.

The award-winning smart connector technology that was the subject of this lawsuit is based on U.S. Patent Nos. 4,603,320 ("Connector Interface"), 4,686,506 ("Multiple Connector Interface"), 4,972,470 ("Programmable Connector") and 4,543,450 ("Integrated Connector and Modem").

Prior to commencing this action against Smart Modular Technologies, GPC had filed a lawsuit in the Central District of California against Hayes, Xircom and several other PC card modem manufacturers. The Smart Modular Technologies case, which had been stayed pending resolution of the previously filed Hayes case, proceeded after all of the defendants in the Hayes case licensed GPC's patents and settled the litigation.

While the stay was in effect, GPC spun off its portfolio of the four patents in suit into a wholly-owned subsidiary, Acticon Technologies LLC.

At a court sanctioned settlement conference, mediated by Magistrate Judge Infante, Smart Modular Technologies agreed to license Acticon's patents and to pay royalties on past and future sales of its PC card modems.

"We consider this to be a significant victory for GPC," said Alexander Poltorak, GPC's Chairman and CEO. "This license by Smart Modular Technologies is one more sign of the overwhelming industry acceptance of these patents."

GPC was represented in this lawsuit by two well-known law firms, Fish & Richardson and Strook & Strook & Lavan.

"We have now licensed over 85% of the PC card industry, and we intend to license the remaining 15%," said Paul Lerner, GPC's Senior VP and General Counsel. "We can only hope that companies infringing GPC's patents will get the message and we won't have to litigate again."

Dr. Steven Farago, Chief Technologist of the Acticon Technologies LLC and the inventor of three of the four patents-in-suit stated: "It is a significant moral victory for us. The technology which we had developed in the early eighties has finally been accepted as the de facto industry standard."