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  • Decision from Canadian Court in

  • AutoDriller Litigation

FOR IMMEDIATE RELEASE

CALGARY, Alberta (July 5, 2013) – Pason Systems Inc. (TSX: PSI) (“Pason” or the “Company”) announced today that a judgment against Pason has been issued from the Federal Court of Canada, Trial Division in the ongoing patent dispute with the Company’s primary competitor around Pason’s automatic driller product (the “AutoDriller”).

The plaintiff was awarded damages in the amount of $52.9 million, plus interest and court costs. The amounts of interest and court costs will be determined upon further submissions to the Court.

The Company is reviewing the lengthy and complex judgment and is considering its legal options including post-judgment motions and appeals to the Federal Court of Appeal. The Company believes this judgment will have no material adverse impact on its day-to-day business operations in light of the April 19, 2013 expiration of the patent at issue.

Litigation between the Company and the plaintiff regarding the AutoDriller has been ongoing since 2003. The plaintiff has alleged that the Company’s AutoDriller infringes on a patent owned by the plaintiff (the “142 Patent”) which also expired on April 19, 2013. The original suit was filed in Colorado and included a jury trial in 2008 and subsequent bench trial in 2011, with a resulting judgment entered on June 18, 2012. That judgment from the Colorado court is on appeal to the US Court of Appeals for the Federal Circuit where a decision is pending. That Colorado case relates only to the technology used in Pason’s AutoDriller in the US prior to March 2009. The plaintiff is also challenging Pason’s use in the US of its modified technology implemented in March 2009 in a case commenced in Texas in 2012. Pleadings have been exchanged in that Texas case and pre-trial hearings have been tentatively schedule for the fall of 2013.

The Canadian case, that is the subject of the judgment identified in this press release, has been ongoing since 2005. It represents the plaintiff’s parallel suit based on the equivalent Canadian registration of the 142 Patent.

As at March 31, 2013, the Company had reserved $53.1 million in its consolidated financial statements for the three AutoDriller cases described above.

Pason Systems Inc.
Pason Systems Inc. is a leading provider of instrumentation systems to land-based and offshore drilling rigs worldwide. The company’s rental solutions, which include data acquisition, wellsite reporting, remote communications, and web-based information management, maximize rig uptime, improve work efficiency, and minimize operating costs. Pason’s common shares trade on the Toronto Stock Exchange under the symbol PSI.

For more information about Pason Systems Inc., visit the company’s website at www.pason.com or contact:

Marcel Kessler
President and CEO
403-301-3400

David Elliott
Chief Financial Officer
403-301-3441

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