PCI-PAL PLC

("PCI Pal", "the Company" or "the Group")

Update on Patent Infringement Claims

PCI-PAL PLC (AIM: PCIP), the global cloud provider of secure payment solutions for business communications, provides an update on the unfounded patent infringement claims made by a competitor.

As previously announced, in the first step in its defence and counterclaims associated to the U.S. aspects of the case, the Company had filed a motion to dismiss the case based on the argument that the U.S. patents  of Sycurio Limited (a UK-headquartered company formerly known as Semafone) were invalid because they are too abstract to be patentable (an "Alice Motion").

Contrary to representations made by Sycurio last week, both in trade press and on social media, that the Court rejected PCI Pal's assertions regarding invalidity of the patents, the Court in fact determined that PCI Pal had made "strong arguments" regarding invalidity, but that it could not make a final ruling on invalidity at this early stage of the case and that the record needed to be further developed before such a ruling.  With a U.S. court date not expected until mid-2024, the Board believes it likely that it will resubmit the Alice Motion, as well as other invalidity arguments, at a later date once claim construction is further advanced.

The Board is encouraged by a number of statements made by the Court in its ruling.  As a result, the Board believes, even at this very early stage of the U.S. litigation process, that the validity of Sycurio's patents is in serious doubt given PCI Pal also has strong invalidity arguments based on prior art.

Examples of statements from the Court's ruling that have helped strengthen the Board's view on its arguments that Sycurio's U.S. Patents are invalid include:

·   "The Court finds that Defendant (PCI Pal) does raise strong arguments that Plaintiff's patents may be invalid, but the Court cannot reach that conclusion-and effectively declare Plaintiff's patents invalid-on the strength of the evidence and arguments before it, while drawing all factual inferences in Plaintiff's favor (as the Court must on this procedural posture). Claim construction and further development of a factual record is needed."

·      "While Defendant raises strong arguments that Plaintiff only purports to patent the idea of a phone system that blocks sensitive information rather than specifically disclosing how to do so, as the patents must do to be valid under Alice, the Court cannot reach this conclusion (and rule that Plaintiff's patents are invalid) on the current record and drawing all factual inferences in Plaintiff's favor (as it must on this procedural posture). Because the patents contain technical subject matter, the Court is unable to effectively evaluate them on their face alone. Claim construction and further development of the record is needed."

Based on these statements and others, the Board is confident in continuing to vigorously pursue its multi-faceted strategy across a strong defence on non-infringement, as well as a number of counterclaims to invalidate Sycurio's patents.

Commenting, James Barham, Chief Executive Officer, said:

"As the fastest growing company in our market, and recently ranked as the 56^th fastest growing company in the U.K. by Oresa Growth Index, the current financial year has seen the Company continue to make strong progress despite these unfounded claims of patent infringement. Whilst the claims have been an unwelcome distraction, it has not stopped the Company from continuing to deliver against its strategy and demonstrating excellent growth.

"PCI Pal was the first in the market to launch globally available, cloud-based secure payment services for business communications.  PCI Pal's patented technology was reviewed only very recently by the U.S. IPO against Sycurio's patents and it was found to be innovative and novel over them.

"We are encouraged by the U.S. Court's findings during the Alice motion process regarding the strength of our arguments around Sycurio's patents being invalid, and we will continue to robustly defend our position against the claims being made against us.

"We will continue to use all the routes available to us to bring this matter to a close, and are confident in our position on both the defence of the claims made and on the counterclaims we are making."

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About PCI Pal:

PCI Pal is a leading provider of Software-as-a-Service ("SaaS") solutions that empower companies to take payments from their customers securely, adhere to strict industry governance, and remove their business from the significant risks posed by non-compliance and data loss. Our products secure payments and data in any business communications environment including voice, chat, social, email, and contact centre. We are integrated to, and resold by, some of the worlds' leading business communications vendors, as well as major payment service providers.

The entirety of our product-base is available from our global cloud platform hosted in Amazon Web Services ("AWS"), with regional instances across EMEA, North America, and ANZ.

For more information visit www.pcipal.com or follow the team on Linkedin: https://www.linkedin.com/company/pci-pal/