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"Creative seems to prefer to bring these issues to a courthouse rather than resolving them either directly or in the marketplace," said Brendan O’Flaherty, Aureal’s Vice President and General Counsel. "They and other competitors have made and published misleading statements regarding Aureal’s technology in the past – in Web sites and other marketing materials. If we ran to a judge each time this happened, no one would have time to develop products, let alone improve upon them. Now, we challenge Creative to join us in efforts to clarify information published by both our companies regarding both companies’ products and present it to the market in a useful fashion. This has to be in the best interests of all parties involved – especially the consumers."

This most recent Creative complaint centers primarily on a comparison chart prepared by Aureal several weeks ago and published by third parties on the World Wide Web. This feature comparison was requested by several Aureal customers and potential customers as well as industry press to better evaluate the differences between the Diamond Multimedia’s Monster Sound MX 300 product (which is based on Aureal’s Vortex 2 chip) and the Creative Sound Blaster Live! product. These requests were in response to an inaccurate comparison chart published on a Web site in Singapore. Aureal used Creative’s own publicly available product description material and Creative-released software driver information to prepare the comparison. In the chart, Aureal identified the Creative material it was using as the source for the Sound Blaster Live! feature information. Aureal received no notification from Creative that it disagreed with information on this comparison chart. Instead, Creative filed yet another lawsuit against Aureal.

Aureal’s practice is to provide such product comparisons based on the most current publicly available information regarding competitors’ products. As any inaccuracies in this information are identified or brought to our attention or updates to competitors’ information are made available, Aureal periodically revises any such charts and redistributes them. This is common and proper practice in any competitive market, as it is in all parties’ best interests to have accurate product information in the market.

"As a co-founder of the IASIG (Interactive Audio Special Interest Group), I wanted to form an industry organization that prevented this very sort of thing," said Bob Safir, Aureal’s Director of Marketing Communications. "Users deserve a level playing field in order to judge technology and make purchase decisions based on the merits of products."

As with Creative’s previous lawsuit against Aureal, Aureal believes that the complaint is without merit and designed to slow Aureal’s growing momentum as an alternative PC audio supplier to Creative. Aureal has made significant inroads in providing the PC marketplace with advanced PCI-based audio solutions, including Aureal’s patented and award-winning A3D positional 3D audio. Recent market wins have included major PC audio card vendors as well as the top-tier PC OEMs.

"While we are disturbed by this type of behavior in the legal arena, and consider it highly counterproductive to both the business environment for technology development and the legal system in this country, we take all lawsuits seriously and will vigorously defend our right to provide meaningful product comparison information to the marketplace," said Brendan O’Flaherty. "We hope that Creative will come to the table to work together on improving marketing information flow rather than pursuing such lawsuits. The absence of such productive actions will only force us to file counterclaims and further fill the court calendar – not our preferable course of action."

About A3D

A3D allows users to hear interactive entertainment in a 360-degree space around them, creating a realistic, three-dimensional, immersive audio experience - all from a standard two-speaker or four-speaker set-up or headphones. Today, numerous game titles from over 100 developers feature or plan on featuring A3D positional audio technology. These games include Unreal from Epic Megagames/GT Interactive, Incoming from Rage Software, Descent: Freespace from Interplay, Battlezone from Activision, and Jedi Knight from LucasArts.

About Aureal

Aureal builds advanced audio semiconductor and software solutions that increase functionality and features for personal computers and consumer electronics devices. Aureal develops audio processing semiconductor chips, audio processing boards and also licenses technology designed to define and improve advanced audio standards in the marketplace. For information on Aureal, its products, and its industry leading A3D audio technologies, please call Corporate Communications at 510-252-4582 or visit our Website at www.aureal.com

Forward-looking statements in this release are made pursuant to the safe harbor provisions of the Private Securities Litigation Act of 1995. Investors are cautioned that such forward-looking statements involve risk and uncertainties, including, but not limited to, dependence on the PC and consumer electronics industries and on product lines based on new technologies; foundry capacity, availability and reliability; competition and pricing pressures; and other risks detailed from time to time in the company's periodic reports filed with the Securities and Exchange Commission.

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Note to Editors: Aureal, the Aureal logo, Aureal 3D, A3D and Vortex 2 are trademarks of Aureal Semiconductor Inc. All other names may be trademarks of their respective owners.