SUNNYVALE, Calif., September 28, 1999 - UMC Group today announced that the U.S. International Trade Commission (ITC) has affirmed that there was no act of unfair competition by United Microelectronics Corporation or MediaTek in the case petitioned by Oak Technology. This ultimate conclusion is in agreement with the initial determination by Judge Sydney Harris, in favor of UMC and MediaTek and against Oak Technology. According to the ITC, there was no act of unfair competition by any of the respondents and Oak's petition to that effect has once again been rejected. As a result, UMC will press claims against Oak in U.S. District Court. In particular, UMC alleges that Oak breached a settlement agreement and illegally attempted to create a false impression that UMC wrongfully used Oak intellectual property.

While the final reasoning from the ITC is not expected to be published for another week (or more), the order clearly establishes that UMC, MediaTek and their customers have once again been cleared of Oak's allegations. Under this recent order, the MediaTek chips, including MediaTek's CD ROM decoder and combo chips, "do not infringe" the Oak patent, directly or under the doctrine of equivalents.

In the initial determination, Judge Harris also found the Oak patent to be invalid on several independent grounds and further that Oak was guilty of "inequitable conduct" in the prosecution of that patent. Although the decision on these points does not change the conclusion that there were absolutely no unfair acts by UMC or by Mediatek (or their customers), the ITC reversed the findings of invalidity and inequitable conduct. As a result, even though UMC and MediaTek effectively "won" in the ITC, they are expected to appeal those reversals to establish before the Federal Circuit what they allege is wrongdoing by Oak. In addition, and regardless of the outcome of the appeals to the Federal Circuit, UMC and MediaTek expect to pursue these parallel claims in the District Court for the Northern District of California where a companion case has been pending since last year.