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EXHIBIT 1
Trend Micro Interim Report filed with Kanto Finance Bureau
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Interim Report
Trend Micro Kabushiki Kaisha
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Interim Report
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TO: Chief Officer,
Kanto Finance Bureau
Submitted June 1, 2000
Company name: Trend Micro Kabushiki Kaisha
English name: Trend Micro Incorporated
Name and title of representative: Ming-Jang Chang
Head Office: Odakyu Southern Tower 10F, 2-2-1 Yoyogi, Shibuya-ku, Tokyo
Telephone: 03-5334-3600
Contact: Hiroyuki Nakanishi
Director
Chief Financial Officer
General Manager, Financial Control Division
Immediate contact address: same as above
Telephone: same as above
Contact: same as above
Location at which copies of the Interim Report may be inspected
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Name Location
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Japan Securities Dealers Association 7-2 Kabuto-cho, Nihonbashi, Chuo-ku, Tokyo
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1. Reasons for Submission
As the settlement of the lawsuit of our affiliated subsidiary which was
pending in the U.S. is to have a significant effect on the financial status and
operating results of our affiliated subsidiary, we are therefore submitting this
document pursuant to Article 24-5-3 of the Securities Exchange Law and Article
19-2-19 of the Ministerial Ordinance concerning disclosure of corporate details.
2. Details and Date of Incident
On May 13, 1997, Trend Micro Incorporated (a U.S. corporation), a wholly-
owned subsidiary of Trend Micro K.K., filed suit in the U.S. Federal District
Court for the Northern District of California against the U.S. corporation
Network Associates, Inc., on the grounds that Network Associates' virus
scanning technologies were infringing on a U.S. patent held by Trend Micro U.S.
(Registration No. 5,623,600) and seeking an injunction on production, sale,
maintenance and support services of the infringing products, as well as monetary
damages. Trend Micro's U.S. patent covers technology for packet-filtering
detection of viruses on the internet, and forms the core of Trend Micro Group's
internet server products.
In response, Network Associates challenged all of Trend Micro's claims,
and filed a counterclaim seeking compensatory damages on the grounds that the
patent infringement claims amounted to unfair competition and wrongful acts.
Further, Network Associates alleged that one component of a product being sold
in the U.S. by Trend Micro U.S. infringed on a patent Network Associates had
obtained in the U.S. in February 2000 (Patent Registration No. 6,029,256), and
on April 19, 2000, filed suit against Trend Micro in the U.S. Federal District
Court for the Northern District of Texas.
On May 31, 2000, the parties entered into a settlement agreement in which
they agreed that, among other things, all claims would be dropped and that
Network Associates would pay U.S. $12.5 million to Trend Micro U.S. as
compensation for a license.
3. Extent of effect on consolidated earnings
An increase equivalent to approximately 800 million yen(*) is forecast for
Trend Micro's consolidated earnings for the current fiscal year as a result of
the compensation to be paid by Network Associates in accordance with the
settlement agreement.
(*) Calculated at U.S. $1 = 108 yen.
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