EX-99.1 2 exhibit1.htm EX-99.1 EX-99.1

Editorial Contact: Investor Relations Contact:

     
Gwen Carlson
Conexant Systems, Inc.
(949) 483-7363
  Bruce Thomas
Conexant Systems, Inc.
(949) 483-2698

CONEXANT ANNOUNCES UNFAVORABLE OUTCOME IN FIRST PHASE OF GLOBESPANVIRATA-DERIVED LITIGATION WITH
TEXAS INSTRUMENTS

Federal Jury Affirms Patent Infringement Counterclaims; Second Phase
of Case to Follow

NEWPORT BEACH, Calif., Feb. 6, 2006 – Conexant Systems, Inc. (NASDAQ: CNXT) today announced that a jury in the U.S. District Court for the District of New Jersey reached a verdict on patent infringement counterclaims filed by Texas Instruments, Inc., Stanford University and its Board of Trustees, and Stanford University OTL, LLC (Texas Instruments) and found that GlobespanVirata, now a subsidiary of Conexant, willfully infringed three patents related to asymmetric digital subscriber line (ADSL) technology.

In June 2003, GlobespanVirata, which merged with Conexant in February 2004, filed a complaint against Texas Instruments in the U.S. District Court for the District of New Jersey claiming that Texas Instruments violated U.S. antitrust law by creating an illegal patent pool, manipulating the patent process, and abusing the process for setting standards related to ADSL technology. In August 2003, Texas Instruments filed counterclaims alleging that GlobespanVirata infringed certain ADSL patents. In mid-2004, the case was split into two phases, patent and antitrust, with the patent phase going to trial first. Upon the merger of GlobespanVirata and Conexant in February 2004, Conexant inherited this legal dispute.

The trial on the patent phase commenced on Jan. 4, 2006 in federal district court in Trenton, New Jersey. Today, the jury announced its verdict and awarded $112 million in damages to Texas Instruments, which the judge in the case has the authority to enhance.

In this two-phase case, no payment of damages, whether from Conexant to Texas Instruments, or from Texas Instruments to Conexant, will be required until the conclusion of the second phase. The jury trial for the second phase is currently scheduled for October of this year.

“We are extremely disappointed with the jury’s verdict in the first phase of the case and plan to file several post-trial motions and an appeal,” said Dennis O’Reilly, Conexant senior vice president and chief legal officer. “The second phase of the case, which we believe involves a serious violation of U.S. antitrust law by Texas Instruments, is scheduled to begin in the fall. Should we prevail on all claims in the antitrust phase, the damages awarded today would be eliminated, and we would expect significant damages to be awarded to Conexant from Texas Instruments.”

About Conexant

Conexant’s innovative semiconductor solutions are driving broadband communications and digital home networks worldwide. The company has leveraged its expertise and leadership position in modem technologies to enable more Internet connections than all of its competitors combined, and continues to develop highly integrated silicon solutions for broadband data and media processing networks.

Key products include client-side xDSL and cable modem solutions, home network processors, broadcast video encoders and decoders, digital set-top box components and systems solutions, and dial-up modems. Conexant’s suite of networking components includes a leadership portfolio of IEEE 802.11a/b/g-compliant WLAN chipsets, software and reference designs, as well as solutions for applications based on HomePlug and HomePNA. The company also offers a complete line of asymmetric and symmetric DSL central office solutions, which are used by service providers worldwide to deliver broadband data, voice, and video over copper telephone lines.

Conexant is a fabless semiconductor company with an annual revenue run-rate in excess of $900 million. The company has approximately 2,500 employees worldwide, and is headquartered in Newport Beach, Calif. To learn more, please visit www.conexant.com.

Safe Harbor Statement

Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995: This release includes forward-looking statements intended to qualify for the safe harbor from liability established by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified by phrases such as Conexant or its management “believes,” “expects,” “anticipates,” “foresees,” “forecasts,” “estimates” or other words or phrases of similar import. Similarly, statements in this release that describe our business strategy, outlook, objectives, plans, intentions or goals also are forward-looking statements. All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those in forward-looking statements.

These risks and uncertainties include, but are not limited to: general economic and political conditions and conditions in the markets we address; the substantial losses the company has incurred recently; the cyclical nature of the semiconductor industry and the markets addressed by the company’s and its customers’ products; continuing volatility in the technology sector and the semiconductor industry; demand for and market acceptance of new and existing products; successful development of new products; the timing of new product introductions and product quality; the company’s ability to anticipate trends and develop products for which there will be market demand; the availability of manufacturing capacity; pricing pressures and other competitive factors; changes in product mix; product obsolescence; the ability of our customers to manage inventory; the ability to develop and implement new technologies and to obtain protection for the related intellectual property; the uncertainties of litigation and the demands it may place on the time and attention of company management; and possible disruptions in commerce related to terrorist activity or armed conflict, as well as other risks and uncertainties, including those detailed from time to time in our Securities and Exchange Commission filings.

The forward-looking statements are made only as of the date hereof. We undertake no obligation to update or revise the forward-looking statements, whether as a result of new information, future events or otherwise.

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Conexant is a registered trademark of Conexant Systems, Inc. Other brands and names contained in this release are the property of their respective owners.