NEWPORT BEACH, Calif. -- 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."

Conexant Systems Inc. (Nasdaq: CNXT)