Patent Office Grants Request for Reexamination of Financial Account PatentCOLUMBIA, S.C. --(Business Wire)-- June 23, 2004 -- Affinity Technology Group, Inc. (OTCBB:AFFI) today announced that the U.S. Patent and Trademark Office (PTO) has granted a request for reexamination filed by Ameritrade Holding Corporation and Federated Department Stores related to the Company's patent covering the fully automated establishment of financial and credit accounts (U.S. Patent No. 6,105,007). As previously announced, the Company has filed a lawsuit against both Ameritrade and Federated alleging infringement of U.S. Patent No. 6,105,007. The Company has agreed to stay the lawsuits pending the conclusion of the PTO's reexamination.
In other news, Affinity also announced that it is continuing its negotiations with certain investors regarding the extension of its convertible notes which became due earlier in June. Although these discussions are proceeding, there remains the risk that Affinity may be unable to extend the notes on a basis acceptable to the investors or the Company.
Joe Boyle, Affinity's President and Chief Executive Officer, stated, "This is the third time that we have had to prosecute the reexamination of one of our patents. We have successfully defended our first loan processing patent, U.S. Patent No. 5,870,721 C1, and are continuing to prosecute the reexamination of our second loan processing patent, U.S. Patent No. 5,940,811. We are disappointed that we are again confronted with the prospects of yet another potentially lengthy reexamination of one of our patents. Our short-term objectives will be to evaluate the time it will take to prosecute another reexamination and to continue to negotiate the extension of our convertible notes which became due earlier this month."
About Affinity Technology Group, Inc.
Through its subsidiary, decisioning.com, Inc., Affinity Technology Group, Inc., owns a portfolio of patents that cover the automated processing and establishment of loans, financial accounts and credit accounts through an applicant-directed remote interface, such as a personal computer or terminal touch screen. Affinity's patent portfolio includes U. S. Patent No. 5,870,721C1, No. 5,940,811, and No. 6,105,007.
Forward-looking statements in this news release are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Investors are cautioned that our business is subject to several substantial risks and uncertainties, including the possibility that we may lose all or some of the claims covered by our patents, or that the PTO may substantially limit the coverage of our patent claims, as a result of current or future challenges to our patents; the risks associated with our limited cash resources and obligations under our convertible notes that matured in June 2004, which may require us to consider alternatives for winding down our business, including filing for bankruptcy protection, and may prevent us from actively defending our patents or prosecuting ongoing litigation against infringers; the risks associated with our ongoing litigation with Temple Ligon; and the uncertainty as to whether we will be able to enter into new patent license agreements that generate meaningful revenues. It is likely that the PTO's reexamination of our financial account patent (U.S. Patent No. 6,105,007) will take an extended period of time to complete, which will delay our litigation against Ameritrade and Federated for an indefinite period and will likely have a material adverse effect on our patent licensing program and our ability to attract additional capital resources in order to continue our operations. We cannot assure you that we will have the financial resources necessary to defend ourselves in this reexamination proceeding and prosecute our related patent lawsuits against Ameritrade and Federated. Investors are cautioned that any forward-looking statements in this news release are subject to these and other risks and uncertainties that may cause actual results to differ materially from those projected.