Ottawa, Canada - November 12, 2004 - Galazar Networks™ Inc. issued the following statement regarding the ongoing litigation between Galazar Networks Inc. and TranSwitch® Corporation.

TranSwitch filed this lawsuit on February 4, 2003 without prior notice to Galazar. Since that time Galazar has sought to have a meaningful discussion of the merits of Galazar's strong patent non-infringement positions, but TranSwitch rebuffed Galazar's requests.

TranSwitch has instead, forced Galazar to incur significant expenses to defend itself in an intense litigation process. Through this process, TranSwitch was provided with extensive technical information regarding Galazar's accused products. This information and documentation proved non-infringement of the asserted patents, and brought into question the validity and enforceability of TranSwitch's patents.

Faced with such evidence, and the possibility of having its patents ruled invalid and unenforceable, TranSwitch filed a motion with the court to dismiss its claims of patent infringement against Galazar.

On September 30, 2004, upon hearing TranSwitch's voluntary motion to dismiss its patent infringement claims, a U.S. Magistrate Judge from the United States District Court for the District of Massachusetts issued a report and recommendation and order regarding TranSwitch Corporation's request to drop its patent infringement allegations. The report recommends that the Federal District Judge grant TranSwitch's request to dismiss its patent infringement claims.

In papers filed with the Court, TranSwitch unequivocally stated that its covenant not to sue Galazar "encompasses all the accused products in this lawsuit." As a result, the Court stated that, "..Transwitch is therefore estopped from asserting infringement of the patents in suit as to all of the accused products in this lawsuit, including the foregoing products. The representations remove any reasonable apprehension that Galazar will face an infringement suit in the future." (United States District Court, District of Massachusetts, Court document dated September 30, 2004, page 16, paragraphs 1 and 2).

As a result of TranSwitch's actions, Galazar intends to investigate whether TranSwitch and its counsel are accountable for the expenses that TranSwitch forced Galazar to incur to defend itself against what Galazar believes were unfounded allegations and improper use of the courts and the litigation discovery process. If TranSwitch and their counsel are found accountable for their actions, Galazar intends to pursue the maximum amount of damages permitted by law, including compensatory, and any punitive damages. Moreover, in view of the history of TranSwitch's pleadings in the litigation, we believe that TranSwitch may be engaged in sham litigation to further their business plans and we believe that TranSwitch's activities may also violate U.S. antitrust laws. If TranSwitch had performed a reasonable, good-faith pre-filing investigation of the Galazar products, TranSwitch would have known what they now admit, that Galazar's products do not infringe any TranSwitch patent. TranSwitch's failure to openly discuss Galazar's prevailing non-infringement defenses at the commencement of this suit leads to troublesome questions regarding the motives for their conduct.

Meanwhile, our team will continue to focus on customers and leading edge products, bringing them quickly and effectively to market - all the things that have made us successful from the beginning.

About Galazar Networks Inc.
Galazar Networks Inc. is a leading semiconductor vendor focused on framers for carrier grade Ethernet over SONET/SDH (EoS) and Multi-Service line cards. Our products support SONET/SDH, PDH (DS3/E3, DS1/E1), data (Ethernet, packet, private line) and SAN services (Fibre Channel, FICON, ESCON, Gigabit Ethernet). Galazar is a technology leader in Generic Framing Protocol (GFP), Virtual Concatenation (VCAT) of both High and Low Order paths, and Link Capacity Adjustment Scheme (LCAS). Galazar's products are ideal for Ethernet, SAN and Multi-Service CPE/CLE platforms as well as EoS, PoS and SAN line cards for ADMs, routers, MSTPs and Metro Core switches. For more information, visit www.galazar.com.

For more information please contact us.