Patent Enforcement And Royalties Ltd. (PEARL) (PAL)

Patent Enforcement And Royalties Ltd. (of Canada):
PEARL invests in patents and other intellectual property by financially assisting patent owners to enforce the rights given to them under patent laws. To find out more about Patent Enforcement and Royalties Ltd. (TSX VE: PAL)
Website. : http://www.pearlltd.com
Portfolio: http://www.pearlltd.com/index4.html

Chart Family: Monthly.... /........ Weekly ........ / ........ Daily .........




WEEKLY Chart


http://www.conair.com/index.jsp

PEARL's Portfolio: .C$ Cost. Judgment Comment
------------------ --------- --------- -------
1. Gaus (Conair).. C.$...... C$17.649K =US$46.14mn x25% (appealed)
2. Kinbauri- pfd.. C.$0,330K C.$1,200K =C$2.2mn Max. (won appeal)
3. Carberry/Pordy. C.$...... C.$ ???0K =US$ 3.00mn x50% (reversed)
4. Intellect.Prop. C.$...... C.$ ???0K 10% carried interest
5. UnifiedDataTech C.$...... C.$ ???0K 50% Revs.after court costs
6. Flex-Rest/Ambr. C.$...... C.$....0K 50%after Legal: ($10mn?)
.. TOTAL.......... C.$...... C$18.849K
Prior
x. ChildrensToys.. C.$....0K C.$....0K rec'd C$202,000

Shares Outstanding
Balance June 30, 2002: 18,489,417
C$0.30 x 18.5mn= Market Cap: C$5.55 Million / vs.C$18.8mn (above)
...
Warrants outstanding:
i) Warrants to purchase 600,000 common shares at a
price of $0.30 per share until January 28, 2004.
ii) Warrants to purchase 625,000 common shares at a
price of $0.50 per share until June 5, 2004.



Patent Enforcement And Royalties Ltd.
6 Adelaide Street East, Suite 220
Toronto, ON
M5C 1H6

Patent Enforcement And Royalties Ltd.
John Cocomile, President (416) 860-1438 or 1-800-827-0992
or
Ian McDonald, Chairman (416) 860-1438 or 1-800-827-0992

PATENT ENFORCEMENT AND ROYALTIES LTD.
Innovation is the life force of our modern society. Technology related to
wireless communication, software, Internet business, biotechnology and
genetic engineering has resulted in significant changes to our way of living.
The impact of innovation in these areas will be even more dramatic than
that which occurred during the industrial revolution of the 1800s.
Patent Enforcement and Royalties Ltd. is a public company that has
developed a unique method of investing in these innovations, whether in
the form of patents or other intellectual property. PEARL helps creators
and inventors of intellectual property by assisting those who have had their
creations stolen by large corporations. While the vast majority of intellectual
property never amounts to commercial success, PEARL's strategy dramati-
cally increases the odds of achieving a positive financial return by only
investing after the commercial viability of a patent has been proven.

PEARL's shareholders therefore have a unique pathway to access one of the
most exciting investment sectors of our time. A generous dividend policy
provides our investors with the lion's share of the proceeds from any
successful settlements or court awards while giving PEARL the financial
muscle to build an ever-increasing portfolio of inventions. On the following
pages is the story of PEARL's first year of public life.
* Embraced by inventor's community
* Built a portfolio of five cases
* Raised $2 million to enlarge portfolio
* Went public through reverse takeover
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(1)
Patent Enforcement and Royalties Ltd. Judgment For US$46,145,579 Entered In Gaus vs Conair Suit ... 3/4/03

TORONTO, ONTARIO, March 4, 2003 (CCNMatthews via COMTEX) --
Patent Enforcement and Royalties Ltd. (PEARL) is pleased to announce that, in the litigation between Dr. Harry Gaus and Conair Corporation, judgment against Conair Corporation has now been entered for US$46,145,579, including pre-judgment interest.
The parties have until March 17, 2003 to file an appeal, which would be brought to the Court of Appeals for the Federal Circuit in Washington, D.C. Although a notice of appeal has yet to be filed, Conair has indicated that it intends to appeal the judgment. On the issue of security should Conair elect to appeal, the court has ordered that, to stay or avoid enforcement of the judgment pending the appeal, Conair may post either a bond or an irrevocable letter of credit in the amount of US$28,500,000. Also as a condition of the stay, Conair is to provide Dr. Gaus' counsel with monthly financial reports.

Under an agreement with Dr. Harry Gaus, PEARL has a 25% (approx.) interest in any revenue from Conair as a result of this litigation.

PEARL confirms its dividend policy of paying out to shareholders, by way of a cash dividend, 50% of the net revenue from any settlement or judgment of up to CDN$10 million, and 75% of net revenue above CDN$10 million.

(2)
I asked Kerry Knoll the following:
Were you anticipating that Conair would appeal this judgement or was it a surprise?
To tie up 28 mil. they must think they have a strong case on appeal. What is their basis for appeal?
Are we still financially in a strong position to carry on without revenue?
I for one would welcome another option financing if it was offered to the shareholders as I was not able to take advantage of it the first time around.
Thanks in anticipation of your reply.

His Reply:
First of all, Conair has not yet appealed the judgement, but we expect them to. We have known all along that they could appeal, but realistically we expected them to come to the bargaining table before enduring the cost of posting a bond. Instead of doing so, they argued in court that they are such a fine, upstanding company that they should not have to post a bond. We pointed out that Enron was once a fine, upstanding company, and furthermore, that Conair's sole shareholder is in jail for cheating the tax man, and that Conair itself was fined for the same thing recently.

While I am not in a position to know the details, because Conair is a private company, we do know from research we have done that they do more than $1 billion in sales so it is not such a big deal for them to post a bond. The lawyers who have read the decision on our behalf think that they don't have such a good case to appeal. The bald statistics are that in 78% of patent verdicts (whether jury or judge), the original decision is upheld. Not all of the remaining 22% are completely reversed. So the odds are strongly in our favor. In the US Federal Circuit (where we are), it usually takes about 9 months for the hearing.

We are just in the process of paring down our operating expenses further until such time as we get some revenue. There is a chance to get some revenue from our other cases, which would alleviate the need for a financing. Otherwise, we will be raising some money over the next six months or so. Obviously, we hope not to do that. If we do, a rights offering (which I think you are refering to) is a strong possibility.

I hope this has been of some help.
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LINKS:
Website: http://www.pearlltd.com/
Archives: http://lists.w3.org/Archives/Public/www-archive/2002Jan/0001.html
Stockhouse BB (PAL): http://www.stockhouse.ca/bullboards/forum.asp?Symbol=PAL&table=LIST
Kinbauri: http://www.kinbauri-gold.com/corporate_info.html
Kinbauri/Iamgold Judgment: http://www.cafezine.com/news_template.asp?deptid=8&Id=627
IAMgold Press Release (see notes): http://www.newswire.ca/releases/March2003/20/c2665.html
Kinbauri BB: http://www.stockhouse.ca/bullboards/forum.asp?Symbol=YKB&table=LIST
Iamgold website: http://www.iamgold.com