e.Digital Provides Update on eVU(TM) IFE Business, Flash-R(TM) Case Status and New IP Developments

SOURCE: e.Digital Corporation

SAN DIEGO, CA–(Marketwire – September 29, 2010) – e.Digital Corporation (OTCBB: EDIG), a leading innovator of dedicated portable entertainment systems and patented flash memory-related technology, today announced that its eVU™ portable in flight entertainment (IFE) system featuring an enhanced new look and feel was shown in private meetings held earlier this month in connection with the Airline Passenger Experience Association (APEX) Conference & Exhibition. The Company is scheduled to publicly debut eVU’s new look in AVION, the official magazine of APEX, next quarter.

“While the portable IFE industry remains slow, we’re encouraged with new and follow-on business opportunities that have recently developed,” commented Fred Falk, president and CEO of e.Digital. “Because of eVU’s extended battery life and its reputation as the most reliable dedicated portable IFE system available, we’re receiving new hardware order interest from current and prospective airline customers. We’re also working to grow recurring revenues derived from our internal IFE services business.” 

Regarding the status of the Company’s flash memory-related enforcement actions, e.Digital announced that on September 17th, the U.S. District Court in Colorado lifted the stay on discovery sought by the remaining defendants in the Company’s second round of Flash-R™ intellectual property (IP) cases.

“We’re pleased with the Court’s decision that should yield information to determine the extent of the potential infringement of the remaining defendants in the current round of patent enforcement cases,” remarked Falk.

e.Digital’s Flash-R™ patent portfolio is comprised of fundamental technology related to the use of flash memory in the large and growing portable electronic products market. The Company introduced the first portable recorder with removable flash memory in 1993 and believes its patent portfolio to be essential to many consumer electronics products that utilize flash memory including cell phones, digital cameras, camcorders, PDAs and other popular devices.

e.Digital filed enforcement actions against 19 companies in November 2009 after settling with and licensing seven companies in its first round of cases. To date, three of the 19 companies in the second round have settled and entered into licensing agreements. A Markman hearing has been scheduled for January 28, 2011 in connection with the second round of Flash-R intellectual property cases.

“Our new IP developments beyond Flash-R and eVU are progressing rapidly,” added Falk. “We’re on schedule to file patents and announce these new technologies next quarter. Also, we’ve received and responded to the second USPTO office action on our active digital storage media encryption patent application.”

“Due to increasing Flash-R and new IP-related activity, and the expected timing of material events related to new business developments, we will hold our next meeting of stockholders in February,” concluded Falk. “We will provide more information on business activities and developments in Company communications next quarter.”

About e.Digital Corporation: e.Digital is a leading innovator of dedicated portable in flight entertainment systems. More than 30 airlines have made dedicated portable systems powered by e.Digital technology their in flight entertainment choice. e.Digital also owns and is monetizing its Flash-R™ portfolio of flash memory-related patents. e.Digital was the first company to develop, patent, and productize fundamental techniques that opened the door to the widespread use of flash memory in many of today’s popular electronic products. For more information about e.Digital , please visit: www.edigital.com.

Safe Harbor statement under the Private Securities Litigation Reform of 1995: All statements made in this document, other than statements of historical fact, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. You should not place undue reliance on these statements. We base these statements on particular assumptions that we have made in light of our industry experience, the stage of product and market development, expected future developments and other factors that we believe are appropriate under the circumstances. These forward-looking statements are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the businesses of the Company and the industries and markets in which the Company operates. Actual outcomes and results may differ materially from what is expressed or implied by the forward-looking statements. More information about potential factors that could affect the Company can be found in its most recent Form 10-K, Form 10-Q and other reports and statements filed with the Securities and Exchange Commission (“SEC”). e.Digital Corporation disclaims any intent or obligation to update these or any forward-looking statements, except as otherwise specifically stated by it.