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The lawsuit relates to a series of misstatements made by Aureal concerning Creative's Sound Blaster Live! product and related technology. The lawsuit, which seeks injunctive relief and damages, was filed on September 30, 1998. The lawsuit is separate from -- but involves some of the same products as -- a patent case filed by Creative Technology against Aureal last February. That patent case against Aureal is still pending.

``Creative should not be required to police Aureal or its public statements to ensure their honesty,'' said John Danforth, vice president and general counsel at Creative Labs. ``However, with its series of objective misstatements about Creative's shipping products, Aureal has simply gone too far.

``This is not a case of a simple product spec that has been misstated or misunderstood,'' Danforth continued. ``Neither is this simply a case of a competitor's excessive enthusiasm about its own promised (but not yet delivered) specs. Rather this case arises because of a series of inexcusable misstatements through which Aureal attempts to compare its own not-yet-shipping product against a shipping product of Creative -- a product whose specifications and capabilities are public and bear no resemblance to Aureal's repeated misstatements. We are confident that we will prevail in this matter. ''

Creative Labs is the US subsidiary of Creative Technology Ltd., which develops, manufactures and markets a wide array of advanced multimedia solutions for the PC, entertainment, education, music and productivity tools markets. Creative's products are marketed through both the OEM and retail channels under a variety of trademarks, including the ``Blaster'' family name. Sound Blaster(R) has become the multimedia industry's de facto audio standard. Sound Blaster is an audio platform consisting of a sound card or chipset, software drivers and bundled software applications that enable PCs to produce high quality audio. Creative's corporate headquarters and primary manufacturing are based in Singapore, with sales, distribution and research and development being carried out through an extensive, global network of subsidiaries located in North America, Europe, Asia and Africa.

SOURCE: Creative Labs, Inc.