Re-Examination to Proceed in Synopsys-Magma Patent Litigation

Magma(R) Design Automation Inc. (Nasdaq:LAVA) said that a U.S. district court’s decision in the patent litigation between Magma and Synopsys Inc. (Nasdaq:SNPS) denied Synopsys’ requests to halt the re-examination process of one of the patents at issue.

“Synopsys proposed remedies to the court that would have stood in the way of the patent office’s re-examination of the patents, but the remedy in today’s ruling permits the re-examination process to continue on its normal schedule,” said David Stanley, Magma’s corporate vice president, Corporate Affairs. “The discovery process has revealed that the patents in question are likely invalid, so Synopsys’ claims of infringement have no merit.”

Today’s order requires Magma to assign title to U.S. Patents 6,453,446 and 6,725,438 (the ’446 and ’438 patents) to Synopsys so it can participate in the re-examination conducted by the U.S. Patent and Trademark Office (PTO). The ’446 and ’438 patents are two of three patents at issue in the companies’ litigation pending before the U.S. District Court for the Northern District of California in a case that began in 2004, and re-examination has been requested for all three patents. The PTO announced in November that it will re-examine the ’438 patent, and it will determine by Feb. 10, 2007 whether to re-examine the ’446 patent. The third patent at issue in this litigation, U.S. Patent Number 6,378,114 (the ’114 patent), is the subject of a separate re-examination in which all the claims were rejected last year by the PTO, and Magma filed an additional request for re-examination of the ’114 patent on Dec. 22, 2006.

From April through June, the court conducted a trial focusing on ownership of the three patents. In that trial Magma argued that if Synopsys has any interest in the patents, that interest derives from a joint development project with IBM and that IBM therefore shares ownership in the patents. The court has yet to render its decision on ownership and today’s order specifically stated “This order is not intended to reflect a determination as to any rights IBM may have in the subject patents.”

In a second patent dispute between the companies, a lawsuit Synopsys filed in 2005 in the U.S. District Court for the District of Delaware, Synopsys claimed Magma infringes three additional Synopsys patents. Magma has asserted that two of those patents are not only invalid but were also fraudulently obtained, constituting a violation of U.S. antitrust law by Synopsys. Synopsys has abandoned those two patents and they are no longer part of the case, but antitrust claims remain part of the case. In addition to the antitrust violation, Synopsys is also defending itself against claims that its products – including Design Compiler and IC Compiler – infringe four of Magma’s patents.

Filings, court orders and other documents relevant to these matters are available on the Magma website.

About Magma
Magma’s software for integrated circuit (IC) design is recognized as embodying the best in semiconductor technology. The world’s top chip companies use Magma’s EDA software to design and verify complex, high-performance ICs for communications, computing, consumer electronics and networking applications, while at the same time reducing design time and costs. Magma provides software for IC implementation, analysis, physical verification, characterization and programmable logic design, and the company’s integrated RTL-to-GDSII design flow offers “The Fastest Path from RTL to Silicon”(TM). Magma is headquartered in Santa Clara, Calif. with offices around the world. Magma’s stock trades on Nasdaq under the ticker symbol LAVA.

Magma is a registered trademark and “The Fastest Path from RTL to Silicon” is a trademark of Magma Design Automation Inc.