Exhibit 99.1
KFX'S PEGASUS SUBSIDIARY FILES ANSWER TO PAVILION PATENT INFRINGEMENT
ALLEGATIONS AND ASSERTS VARIOUS COUNTERCLAIMS
FOR RELEASE MONDAY, OCTOBER 30, 2000 CONTACT: TED VENNERS
AT 9:00 AM, EST 303-293-2992
Denver, CO, October 30, 2000--KFx Inc. (AMEX: KFX) today reported that on
October 27, 2000 its Pegasus Technologies, Inc. subsidiary ("Pegasus")
filed its answer ("Answer") to the patent infringement claims alleged by
Pavilion Technologies, Inc. ("Pavilion") in a lawsuit that was filed in the
Southern District of Texas on August 14, 2000 ("Pavilion Claim"). The
Answer denies all of the infringement allegations in the Pavilion Claim.
In addition, Pegasus' Answer asserts various counterclaims
("Counterclaims") against Pavilion including unfair competition, deceptive
trade practices, defamation, tortious interference with business
relationships and attempted monopolization in violation of Section 2 of the
Sherman Antitrust Act. After consultation with counsel, Pegasus believes
that the substantive allegations in the Pavilion Claims are objectively
baseless and without merit and further that Pavilion knew that the
allegation that Pegasus infringes 26 patents was baseless at the time the
Pavilion Claim was filed.
"Our initial views of the merits of Pavilion's allegations have been
confirmed by the additional analysis of our lawyers necessary to file our
Answer and Counterclaims," said Ted Venners, Chairman of Pegasus. "We are
working with our lawyers and customers to minimize the unjustified
disruption to our marketing efforts that Pavilion's unfounded allegations
have caused. Baseless claims such as these detract from our focus on
developing new and improved products and enhancing our services for the
benefit of our customers. We believe that Pavilion has stepped over the
line in using the legal system to interfere with our business." Venners
added.
Pegasus management believes that Pavilion filed the Pavilion Claim and
undertook related actions in an attempt to interfere directly with the
business relationships of Pegasus through the use of the legal process to
impose collateral, anticompetitive injury rather than to obtain a legal
remedy.
Pegasus' Answer seeks, among other remedies, a judgment that Pegasus does
not infringe as is alleged in the Pavilion Claim and that the twenty-six
patents alleged to be owned by or licensed to Pavilion that are the subject
of the Pavilion Claim are invalid and/or unenforceable against Pegasus. In
connection with the Counterclaims, Pegasus seeks, among other remedies,
trebled compensatory damages, punitive damages, and injunctive and
declaratory relief.
Pegasus is the industry leader in neural network applications to optimize
utility boiler operations resulting in a reduction in harmful emissions,
reduced power generation costs, and increased efficiency for the power
generation industry. KFx focuses on providing total solutions for the power
industry through its patented clean fuel production process technology and
Pegasus products and services--enhancing the operational efficiency of
power production while preserving the environment. More information about
KFx and Pegasus may be found on the Company's web site at www.kfx.com.
The discussion above contains, in addition to historical information,
forward-looking statements that include various risks and uncertainties.
Such forward looking-statements include statements regarding the Company's
expectations. The Company's actual results may differ materially from those
anticipated in such statements. Factors that might cause such a difference
include matters discussed in "Business Risk Factors" at item 1 and in
"Management's Discussion and Analysis of Financial Condition and Results of
Operations" at item 7 of the Company's Annual Report on Form 10-K/A for the
year ended December 31, 1999, and in "Management's Discussion and Analysis
of Financial Condition and Results of Operations" at Part I, Item 2 of the
Company's Quarterly Report on Form 10-Q for the quarter ended June 30,
2000.
