German Court Fines Lycatel for Infringing IDT Corp. Patent

IDT Corporation (NYSE: IDT; IDT.C) said today that a German court recently fined Lycatel (Ireland) Limited and its managing director 30,000 Euros each for violating the court’s injunction in a patent infringement case brought by Prepaid Cards BVBA, a Belgian affiliate of IDT.

The District Court of Duesseldorf imposed the fines on November 17, 2008. The decision is subject to appeal.

The current decision came after the District Court of Duesseldorf, Germany, found on May 13, 2008 in a first instance decision that Lycatel (Ireland) Limited, Lycatel Services Limited, and certain of their present and former directors infringed upon the German part of the European patent EP 0 572 991. This patent relates to a procedure for processing prepaid telephone calls, and is the subject of an action brought by Prepaid Cards BVBA, the exclusive licensee of this patent.

The District Court of Duesseldorf found that the defendants committed the asserted patent infringing actions by providing prepaid calling card services in Germany with respect to the calling cards according to the type "Messenger”, "Matrix”, "GHANAtel”, "Nigeriatel”, "Turkeytel”, "IndiaTEL”, "PAKISTANTEL”, "Banglatel”, "EUROPETEL”, "ArabTel”, "AFRICATEL”, "MAXIAsia”, "AsiaTel”, "MaxiEUROPE”, "MaxiAfrica”, "MAXIWORLD”, "GLOBALTEL” and "EASTERNTEL”.

An appeal by defendants is currently pending against this decision with the Court of Appeals of Duesseldorf (court docket: I-2 U 51/08). Further, a nullity complaint dated July 23, 2008 was filed by Lycatel Services Ltd. against the German part of the patent with the German Federal Patent Court (court docket: 4 Ni 77/08 (EU)).

On July 30, 2008, Prepaid Card BVBA preliminarily enforced the entire first instance judgment against the defendants amongst others by providing a security bond in the amount of 250,000 Euros. Thereby, the defendants are enjoined from continuing the infringing actions (namely by offering and selling prepaid calling cards of the above mentioned type using the patented method), and obliged to provide accounting information so that damages may be calculated. Defendants filed a petition to provisionally suspend the preliminary enforcement with the Court of Appeals of Duesseldorf which rejected the petition as unfounded with a decision dated August 28, 2008.

As Prepaid Cards BVBA became aware of Lycatel (Ireland) Limited’s continued violation of the preliminary enforced injunction, Prepaid Cards BVBA initiated a penalty proceeding against Lycatel (Ireland) Limited and its managing director with the District Court of Duesseldorf. The District Court of Duesseldorf imposed the fines on November 17, 2008 as above mentioned. These fines are to be paid to the benefit of the court cashier, and are independent of any damages that may be awarded in this case.

In an earlier lawsuit, Prepaid Cards BVBA, was successful in a finally decided patent infringement action against the German company Europacom.net GmbH, for infringement of the German part of the mentioned patent. In a parallel nullity procedure, the patent was fully upheld with respect to its effect in Germany by a final decision of the German Federal Supreme Court dated March 7, 2006.

IDT’s large range of prepaid and rechargeable calling card products and services are sold throughout Europe, including in Germany. "We aim to provide quality calling cards which give the consumer fair value for their money. We believe that our patent protected calling card products offer a compelling value proposition for consumers and distributors,” said Alex Moraga, Director of IDT Retail-Europe.

IDT Corporation

IDT Corporation (www.idt.net) is a consumer-focused multinational holding company.

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