Selectica Announces Lawsuit Over Rights Plan

Selectica, Inc. (Nasdaq:SLTC) today announced that it has filed a lawsuit against Versata Enterprises, Inc. and Trilogy, Inc. in the Delaware Court of Chancery seeking a determination as to the validity of the terms of its shareholder rights plan, as amended on November 17, 2008. Selectica filed the lawsuit in response to defendants’ statements questioning the validity of the amended rights plan as well as recent trading volumes raising issues as to whether the rights plan has been triggered. The company has also asked the Court to expedite the proceedings.

As previously disclosed, the amended rights plan has a 4.99% beneficial ownership trigger, subject to a grandfather clause, in order to help protect the value of the company’s net operating loss carryforwards while continuing to provide customary protections against abusive takeover tactics.

Separately, on December 22, 2008 the defendants filed an amended Schedule 13D with the SEC indicating that they have acquired an additional 154,061 shares, or more than 0.5%, of Selectica’s outstanding common stock subsequent to the effective date of the amendment to the shareholder rights plan and now hold 1,913,072 shares. As a result, the rights will detach and trade separately, and become exercisable in accordance with the terms of the plan, ten business days after December 19, 2008, unless Selectica exercises certain rights under the plan which include creating an exemption for the acquisition or exchanging the rights for common stock.

About Selectica, Inc.

Selectica (Nasdaq:SLTC) provides its customers with software solutions that automate the complexities of enterprise contract management and sales configuration lifecycles. The company's high-performance solutions underlie and unify critical business functions including sourcing, procurement, governance, sales and revenue recognition. Selectica has been providing innovative, enterprise-class solutions for the world's largest companies for over 10 years and has generated substantial savings for its customers. Selectica customers represent leaders in manufacturing, technology, retail, healthcare and telecommunications, including: ABB, Ace Hardware, Bell Canada, Cisco, Covad Communications, General Electric, Hitachi, International Paper, Juniper Networks, Levi Strauss & Co., Rockwell Automation, Tellabs, and 7-Eleven. Selectica is headquartered in San Jose, CA. For more information, visit the company's Web site at www.selectica.com.

"Safe Harbor” Statement under the Private Securities Litigation Reform Act of 1995

Certain statements in this release and elsewhere by Selectica are forward-looking statements within the meaning of the federal securities laws and the Private Securities Litigation Reform Act of 1995. Such information includes, without limitation, business outlook, assessment of market conditions, anticipated financial and operating results, strategies, future plans, contingencies and contemplated transactions of the Company. Such forward-looking statements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors which may cause or contribute to actual results of Company operations, or the performance or achievements of the Company or industry results, to differ materially from those expressed, or implied by the forward-looking statements. In addition to any such risks, uncertainties and other factors discussed elsewhere herein, risks, uncertainties and other factors that could cause or contribute to actual results differing materially from those expressed or implied for the forward-looking statements include, but are not limited to fluctuations in demand for Selectica's products and services; changes to economic growth in the U.S. economy; government policies and regulations, including, but not limited to those affecting the Company's industry; and risks related to the Company's past stock granting policies and related restatement of financial statements. Selectica undertakes no obligation to publicly update any forward-looking statements, whether as a result of new information, future events or otherwise. Additional risk factors concerning the Company can be found in the Company's most recent Form 10-KSB, and other reports filed by the Company with the Securities and Exchange Commission.