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General Scanning Announces Summary Judgement Decision

8 October 1998

General Scanning Announces Summary Judgement Decision

    WATERTOWN, Mass., Oct. 7 -- General Scanning Inc.
today announced that the United States District Court for the
Northern District of California late last week issued a decision on motions
for summary judgment in lieu of a trial in an action filed against the Company
for alleged patent infringement by Electro Scientific Industries, Inc. ("ESI")
.  In December 1996, ESI filed a complaint of patent
infringement against the Company alleging infringement of two patents relating
to the use of 1.32 micron wavelength lasers for laser repair of memory
devices.  General Scanning had previously carefully studied the claims of the
patents and had determined that the patents were invalid in light of prior
art.
    The Court granted ESI's motions for summary judgment on infringement and
on the issue of whether ESI committed inequitable conduct by intentionally
failing to cite prior art to the U.S. Patent Office in connection with one its
patents. The Court denied General Scanning's motion for summary judgment that
the ESI patents are invalid due to prior art.
    A substantial burden is placed upon a party seeking to invalidate a patent
in a motion for summary judgement. The party seeking to invalidate a patent
must show that the patent is invalid by clear and convincing evidence and must
prove that no genuine issues of material fact exist.  While General Scanning
believes that the prior art demonstrates the invalidity of ESI patents, the
Court decided that certain issues of fact were raised which must be determined
at trial.
    The case now moves into a phase of further discovery and, subsequently, to
trial where General Scanning will have the opportunity to prove the invalidity
of the asserted claims of the two ESI patents.
    Laser memory repair accounts for a relatively small part of General
Scanning's total sales.  To date, a limited number of systems using the
disputed technology have been sold, since use of other laser wavelengths is
satisfactory for many applications involving laser repair of memory devices.
    To the extent this news release discusses information or expectations
about General Scanning's products or markets, or otherwise makes statements
about the future, such statements are forward looking and are subject to a
number of risks and uncertainties that could cause actual results to differ
materially from the statements made.  Such risks include risks that ongoing
litigation may be determined in a manner adverse to General Scanning, and
other risks detailed in General Scanning's Annual Report on Form 10-K that has
been filed with respect to the 1997 fiscal year and the Quarterly Report on
Form 10-Q with respect to the fiscal second quarter 1998.
    General Scanning, headquartered in Watertown, MA, develops and
manufactures a broad line of laser systems for a wide range of applications in
the electronics, semiconductor, medical, automotive and aircraft industries.
In addition, the Company produces a line of laser subsystems and components
which are used in the Company's own systems as well as sold to other
manufacturers of laser systems.  General Scanning also designs and
manufactures under ISO 9001 certification a line of thermal printers for
leading medical instrument companies.  For more information about General
Scanning, visit the Company on the Internet at http://www.genscan.com.