Datong Plc : - Result of Patent Litigation

Press Release

25 January 2012

DATONG PLC

("DATONG" or "the Company")

Result of Patent Litigation

DATONG PLC (DTE.L), a leading provider of covert intelligence gathering solutions, announces that, further to previous announcements that DATONG has been subject to a patent infringement claim, the Court of Appeal has judged that the patent in suit is invalid.

Since 2006, the Company has been a party to court proceedings in which MMI Research Limited ("MMI") alleged that a Third Party product for which the Company acts as a reseller infringes the UK element of a patent that MMI jointly owns. The proceedings were brought against the Company's supplier and the Company (the "Defendants") by virtue of its reselling activities.

The judgment was delivered by the Court of Appeal on 24 January 2012 who held that the patent in suit is invalid. The patent will be revoked and no damages will be payable by the Defendants under the claim.

As disclosed in the Company's annual report and accounts, a provision for £0.30 million is currently being carried in respect of the expected share of costs and damages to be borne by the Company for the sums that may have ultimately become payable.  As a result of the judgment, damages will not be payable by the Company.  The court has still not ruled on the amount of costs that will be payable by either the claimant or the Defendants and a further hearing may be required to determine the amount of costs.  In the event that the Company is required to pay any costs at all, these are expected to be substantially lower than the level of the provision.

Paul Lever, Non-executive Chairman of DATONG commented: "We are delighted with the outcome of the judgment of the Court of Appeal today.  There are no restrictions on DATONG's ability to sell any of these Third Party products into our chosen markets and the judgment removes any lingering doubt that may have existed.  The Company looks forward to continued success from this area of the business."

- Ends -

Enquiries:

DATONG PLC	Tel: [phone]
Mark Cook, Chief Executive Officer
Stephen Ayres, Finance Director

Nominated adviser and broker

Canaccord Genuity	Tel: [phone]
Simon Bridges / Kit Stephenson

Media enquiries

Abchurch Communications	Tel: [phone]
Sarah Hollins / Mark Dixon / Oliver Hibberd

Notes to Editors

DATONG PLC provides a range of advanced high performance covert intelligence gathering solutions, supplying defence, homeland security and law enforcement agencies around the world.  Intelligence strength continues to play an increasingly central role within governmental agencies and police forces, supporting the fight against terrorism and organised crime.

DATONG is headquartered in Leeds, United Kingdom and employs 95 staff. The Group has a wholly owned subsidiary in the United States, DATONG Electronics Inc., with a sales and service office in Chantilly, Virginia. DATONG's proprietary products (as well as Third Party products) are sold internationally into more than 37 countries using both the Group's direct sales force and a network of independent overseas distributors. 

DATONG (DTE.L) listed on the AIM market in London in October 2005 and is included in the FTSE Electronic Equipment sector.  Group revenue for the 12 months to 30 September 2011 was £11.75 million (2010: £14.06 million).