NVMI Nova Ltd

Nova's March 2005 Suit, Approaching Trial Date, Seeks Permanent Injunction Preventing Nanometrics From Selling Integrated Metrology Products REHOVOTH, Israel, October 16 /PRNewswire-FirstCall/ -- Nova Measuring Instruments, Ltd. (NASDAQ:NVMI), the market leader in integrated metrology and process control for the semiconductor industry, today indicated that it believes the patent infringement suit filed by Nanometrics Incorporated (NASDAQ:NANO) on October 10, 2006 has no foundation. Commenting on the latest lawsuit, Gabi Seligsohn, President and CEO of Nova noted that, "The action taken last week by Nanometrics continues to demonstrate its concern over the strength of the suit we brought against them over 18 months ago, in which we have prevailed at every stage, and which is close to going to trial. It is also an indication of Nanometrics' anxiety over significant recent competitive losses at leading semiconductor manufacturing sites." The October 10th suit was filed with the District Court of Northern California alleging Nova infringes U.S. Patent Numbers 5,867,276, and 7,115,858 B1. Nova believes these patents have no foundation and no bearings on Nova's products. Mr. Seligsohn added, "Given the breadth of our IP portfolio in the relevant field of Optical CD, we will determine appropriate measures to counter the claim, while we continue increasing our sales and market share in this space and providing leading edge products to our customers." Background Nova Measuring Instruments, Ltd. filed suit against Nanometrics Incorporated alleging infringement of its U.S. Pat. No. 6,752,689, covering integrated metrology systems, in March 2005. Nova filed an Amended Complaint in April 2006, adding a claim of willful infringement and seeking treble damages and attorneys' fees. In January 2006, Nanometrics filed a Motion for Summary Judgment, seeking to invalidate Nova's patent. This motion was denied in March 2006, and Nova's case is now scheduled to go to trial in May, 2007. In addition to damages for willful infringement, Nova is seeking a permanent injunction to prevent Nanometrics from continuing to sell integrated metrology products. In March 2006, shortly after its motion for summary judgment was denied, Nanometrics Incorporated filed an action against Nova alleging infringement of its U.S. Pat. No. Re 34,783, twelve years after the patent was re-issued in 1994. Nova believes that the '783 patent, which relates to a method of calibration, is not valid, and filed in August 2006, a request to have the patent reexamined by the U.S. Patent and Trademark Office. Nova's reexamination request is pending, and Nova expects the request to result in a stay of the Nanometrics lawsuit. In its Answer to Nanometrics' Complaint, Nova alleges that Nanometrics committed numerous acts of inequitable conduct during prosecution of the '783 patent and its parent, such that the patent is unenforceable. Nanometrics moved to "strike" Nova's allegations of inequitable conduct, but the Motion to Strike was denied by the Court in September 2006. This case is in the very early stages and is not expected to go to trial for several years even if the action is not stayed. About Nova Nova Measuring Instruments Ltd. develops, designs and produces integrated process control systems in the semiconductor manufacturing industry. Nova provides a broad range of integrated process control solutions that link between different semiconductor processes and process equipment. The Company's website is http://www.nova.co.il/. This press release contains forward-looking statements within the meaning of safe harbor provisions of the Private Securities Litigation Reform Act of 1995 relating to future events or our future performance, including statements with respect to the future outcome and consequences of legal proceedings and petitions filed with the U.S. patent and Trademark Office., Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, levels of activity, performance or achievements to be materially different from any future results, levels of activity, performance or achievements expressed or implied in those forward-looking statements. These risks and other factors include but are not limited to: our ability to successfully complete our integration of HyperNex, our ability to leverage our existing channels to expand into the market for X-Ray diffraction metrology, changes in customer demands for our products, new product offerings from our competitors, changes in or an inability to execute our business strategy, risks related to our intellectual property, unanticipated manufacturing or supply problems, changes in tax requirements and changes in customer demand for our products. We cannot guarantee future results, levels of activity, performance or achievements. The matters discussed in this press release also involve risks and uncertainties summarized under the heading "Risk Factors" in Nova's Annual Report on Form 20-F for the year ended December 31, 2005, filed with the Securities and Exchange Commission on June 29, 2006. These factors are updated from time to time through the filing of reports and registration statements with the Securities and Exchange Commission. Nova Measuring Instruments Ltd. does not assume any obligation to update the forward-looking information contained in this press release. Company contact: Dror David, Chief Financial Officer Nova Measuring Instruments Ltd. Tel: +972-8-938-7505 E-mail: http://www.nova.co.il/ Investor relations contacts: Ehud Helft / Kenny Green GK Investor Relations Tel: +1-866-704-6710 E-mail: DATASOURCE: Nova Measuring Instruments Ltd CONTACT: Company Contact: Dror David, Chief Financial Officer, Nova Measuring Instruments Ltd., Tel: +972-8-938-7505, E-mail: . Investor relations Contacts: Ehud Helft / Kenny Green, GK Investor Relations, Tel: +1-866-704-6710, E-mail:,

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