01 Communique Reports Results for Second Quarter Fiscal 2014 and Provides an Update on its Patent Litigation

TORONTO, June 9, 2014 /CNW/ - 01 Communique Laboratory Inc. (ONE:TSX) today announced results for its second quarter 2014 which ended April 30, 2014. The loss for the second quarter 2014 was $369,632 compared to a loss of $1,169,030 for the same period in 2013, a decrease of $799,398. Excluding non-cash expenses for stock-based compensation and depreciation the adjusted loss for the second quarter 2014 was $324,559 (2013 - $1,066,559) a decrease of $674,625. The Company completed the quarter with $2,101,469 of cash and cash equivalents.   

"As we move forward our plan is to continue to monitor our expenses closely and adjust them as we see necessary with the primary goal of continuing in the defense of our intellectual property and then to accelerate our product development," said Andrew Cheung, President and CEO for 01 Communique. "In respect of our patent litigation against Citrix and LogMeIn there have been several recent developments which are highlighted below."     

"In the LogMein case the Federal Circuit affirmed the district court's finding of non-infringement as well as affirming the validity of our patent. We are disappointed with the finding of non-infringement but believe that decision is limited to that case," said Andrew Cheung, President and CEO of 01 Communique. "As we move forward with our lawsuit against Citrix we do so with a patent that has had its validity confirmed by the Federal Circuit."   

"On May 30, 2014 Citrix filed a patent infringement case in the central district of California alleging infringement of one of their patents by our I'm InTouch Meeting product and as well requested a declaratory judgment against us alleging that their GoToMeeting product offering does not infringe the "479 Patent". Shortly thereafter on June 3, 2014 the Judge presiding over the litigation in the Northern District of Ohio issued an Opinion and Order granting our motion to amend our original complaint to include alleged infringement of the "479 Patent" by their GoToMeeting product offering, which we did on June 6, 2014, as well as their GoToMyPC product offering," said Andrew Cheung. "We believe their patent infringement allegation is without merit and we will defend ourselves against it. In respect of the declaratory judgment issue, we feel confident that the case will proceed with respect to their GoToMeeting product offering in Ohio."    

Background on the Company's patent lawsuits against Citrix Systems Inc. ("Citrix") and LogMeIn Inc. ("LogMeIn") follows.  

Citrix Litigation –
On February 2, 2006, a lawsuit was filed by the Company in the United States District Court, Northern District of Ohio, Eastern Division, against Citrix alleging infringement of our patent number 6928479 (the "'479 Patent"). As part of the litigation Citrix requested an inter partes reexamination of the '479 Patent by United States Patent and Trademark Office ("USPTO"), and also requested a stay in the Court proceedings. The stay was granted by the Judge in the case on March 12, 2008.

On March 16, 2007, prior to the stay being implemented, the court issued a patent claim construction ruling adopting the Company's claim construction for 19 of the 20 disputed claim terms (commonly referred to as a "Markman Ruling"). 

On July 6, 2010 a Right of Appeal Notice was issued by the USPTO confirming the patentability of the '479 Patent. Citrix appealed that decision to the USPTO's Patent Trial and Appeals Board ("PTAB").

On October 29, 2013 the PTAB rendered their decision affirming the validity of the '479 Patent. The appeal process is now complete at the USPTO. Citrix has appealed that decision to the United States Court of Appeal for the Federal Circuit and that appeal is now in process. We are confident that we will prevail in this appeal as well.

On February 28, 2014 a Court Order was issued granting 01 Communique's motion to lift the stay and proceed to trial. A pretrial conference was requested for October 17, 2014 at which time a trial date is expected to be set. Between now and the pretrial conference the Company and its legal team will be working in earnest to complete everything that is required in preparation for trial.

On May 30, 2014 Citrix filed a complaint in the United States District Court Central District of California alleging infringement of their U.S. Patent No. 7,219,233  by the Company's I'm InTouch Meeting product and requesting a declaratory judgment against the Company alleging that that Citrix's GoToMeeting product offering does not infringe the "479 Patent". On June 3, 2014 the Judge presiding over the litigation in the Northern District of Ohio issued an Opinion and Order granting the Company's motion to amend the original complaint, which was done on June 6, 2014, to include alleged infringement of the "479 Patent" by Citrix's GoToMeeting product offering as well as their GoToMyPC product offering.     

LogMeIn Appeal –
On September 8, 2010, the Company filed a lawsuit in the Eastern District of Virginia, against LogMeIn alleging infringement of the '479 Patent. The case against LogMeIn proceeded to trial and on March 26, 2013 the Jury in the trial rendered its verdict concluding that 01 Communique's '479 Patent is valid but that LogMeIn does not infringe the patent.

Earlier today, on June 9, 2014, the United States Court of Appeals for the Federal Circuit issued its Order in respect of the Company's appeal affirming the district court's finding that LogMeIn did not infringe 01 Communique's patent while also affirming the district court's finding that the patent is valid.

The Toronto Stock Exchange has not reviewed and does not accept responsibility for the adequacy or the accuracy of this release.

About 01 Communique
Established in 1992, 01 Communique Laboratory Inc. (TSX: ONE) offers a suite of remote access services designed for small-medium sized business, mobile professionals and IT service providers. 01's software as a service offerings are deployed on-demand and include functionality enabling on-line meetings, remote computing and IT support. 01's suite of products includes its remote access offering I'm InTouch (www.imintouch.com), its online meeting offering (www.imintouchmeeting.com) and its remote support offering I'm OnCall (www.imoncall.com ) products are protected in the U.S.A. by its patents #6,928,479 / #6,938,076 / #8,234,701 and in  Canada by its patents #2,309,398 / #2,524,039 and Japan by its patent #4,875,094. For more information, visit www.01com.com or call (905) 795-888 or [phone] (North America only).

Cautionary Note Regarding Forward-looking Statements.
Certain statements in this news release may constitute "forward-looking" statements which involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the company, or industry results, to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. When used in this news release, such statements use such words as "may", "will", "expect", "believe", "plan", "intend", "are confident" and other similar terminology. These statements reflect current expectations regarding future events and operating performance and speak only as of the date of this news release.  Forward-looking statements involve significant risks and uncertainties, should not be read as guarantees of future performance or results, and will not necessarily be accurate indications of whether or not such results will be achieved.  A number of factors could cause actual results to differ materially from the results discussed in the forward-looking statements, including, but not limited to, the factors discussed under "Risk Factors" in the company's Annual Information Form filed on SEDAR. Although the forward-looking statements contained in this news release are based upon what management of the Company believes are reasonable assumptions, the company cannot assure investors that actual results will be consistent with these forward looking statements. These forward-looking statements are made as of the date of this news release, and the company assumes no obligation to update or revise them to reflect new events or circumstances.

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Financial Position
Unaudited

	30-Apr-14	31-Oct-13
Assets
Current assets
Cash and cash equivalents	$2,101,469	$3,072,281
Accounts receivable	190,458	225,007
Prepaid expenses and other assets	80,924	36,073
	2,372,849	3,333,361
Plant and equipment	13,591	17,816
	$2,386,440	$3,351,177
Liabilities & Shareholders' Equity
Current liabilities
Accounts payable & accruals	$689,224	$1,048,164
Deferred revenue	22,034	24,582
	711,258	1,072,746
Shareholders' equity
Share capital	40,072,877	39,997,277
Contributed surplus	4,558,194	4,468,044
Agent options	111,780	111,780
Deficit	(43,067,669)	(42,298,670)
	$1,675,182	$2,278,431
	$2,386,440	$3,351,177

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Operations and Comprehensive Income
For the 3 and 6 month periods ended April 30, 2014 and 2013
Unaudited

	for the 3 months ending			for the 6 months ending
	30-Apr-14	30-Apr-13		30-Apr-14	30-Apr-13
Revenue	$84,665	$191,964		$159,588	$366,439
Cost of revenue	-	-		-	-
	84,665	191,964		159,588	366,439
Expenses (income)
Selling, general and administrative	249,428	343,236		539,321	776,015
Patent enforcement and re-examination expenses	18,516	818,393		29,696	1,397,100
Research and development	188,579	208,136		362,479	441,692
Interest	(2,226)	(8,771)		(2,909)	(18,860)
	454,297	1,360,994		928,587	2,595,947
Loss for the period and comprehensive loss	(369,632)	(1,169,030)		(768,999)	(2,229,508)
Loss per common share
Basic	$(0.006)	$(0.018)		$(0.012)	$(0.034)
Diluted	$(0.006)	$(0.018)		$(0.012)	$(0.034)
Weighted average number of common shares
Basic	65,294,818	65,012,745		65,248,312	65,019,357
Diluted	65,294,818	65,012,745		65,248,312	65,019,357

01 Communique Laboratory Inc.
SELECTED FINANCIAL INFORMATION
Consolidated Statements of Cash Flows
For the 3 and 6 month periods ended April 30, 2014 and 2013
Unaudited

		for the 3 months ending						for the 6 months ending
		30-Apr-14		30-Apr-13				30-Apr-14		30-Apr-13
Cash provided by (used in):
Operating activities:
Loss for the period	$(369,632)		$(1,169,030)				$(768,999)		$(2,229,508)
Adjustments to reconcile the loss for
the period to net cash flows from operating activities
Depreciation	1,873		1,829				4,224		3,903
Stock-based compensation	43,200		100,500				90,150		283,356
Interest income	(2,226)		(8,771)				(2,909)		(18,860)
Change in non-cash working capital	(223,167)		564,366				(371,787)		909,621
	(549,952)		(511,106)				(1,049,321)		(1,051,488)
Interest income received	2,226		8,771				2,909		18,860
	(547,726)		(502,335)				(1,046,412)		(1,032,628)
Financing activities:
Issue of common shares	75,600		189,750				75,600		294,250
Investing activities:
Purchase of capital assets			(452)						(5,785)
Increase (decrease) in cash	(472,126)		(313,037)				(970,812)		(744,163)
Cash and cash equivalents, beginning of period	2,573,595		4,116,249				3,072,281		4,547,375
Cash and cash equivalents, end of period	$2,101,469		$3,803,212				$2,101,469		$3,803,212

SOURCE: 01 Communique Laboratory Inc.

INVESTOR CONTACT: Brian Stringer, Chief Financial Officer, 01 Communique, [phone] x204, [email protected]