Update Regarding the In Re Bilski Case

Update Regarding the In Re Bilski Case

October 31, 2008- NeoMedia is providing the following update to its shareholders regarding the In re Bilski case which was decided by the US Court of Appeals for the Federal Circuit on October 30th. Specifically, the appeals court has rejected patenting a way to smooth energy costs. The case focused on whether an inventor can patent an abstract process, something that involves nothing more than thoughts. While the Court refined the test for determining if a proposed claim contains patentable subject matter, it clearly reaffirmed that there is still no preclusion of so-called "business method patents". That is, the Court reaffirmed its holding in State Street that a "business method exception" was unlawful and that such claims are subject to the same legal requirements for patentability as applied to any other process or method. The Court expressly declined to adopt a broad exclusion over software patents. The Court has now clarified a prior U.S. Supreme Court ruling that a claim may have patentable subject matter if (1) it is tied to a particular machine or apparatus, or (2) it transforms a particular article into a different state or thing. Yesterday’s ruling has no bearing on the validity of NeoMedia Technologies’ existing patents as they are not mere business method patents. NeoMedia’s innovative 2D barcoding technology is not only tied to a piece of hardware, but also requires the processing of scanned information to be shared through the interoperation of several computers over a network. It therefore comfortably operates within the Supreme Court’s view on what constitutes a valid, patentable technology. This press release contains forward-looking statements within the meaning of section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. With the exception of historical information contained herein, the matters discussed in this press release involve risk and uncertainties. Actual results could differ materially from those expressed in any forward-looking statement.