YANGAROO US Patent Status - The Facts

January 16, 2008

Following our update on January 11, 2008 that the Examiner of our US Patent Application #10/431,854 titled "Content Distribution System and Method" has agreed to submit the application for allowance, Destiny Media Technologies Inc. (OTCBB:DSNY) apparently issued a letter implying that they have a US patent application (#09/980,582) that is a material prior art precedent to our granted Canadian patent and our pending US patent application.

Both the US and Canadian patent offices disagree with Destiny.

We disclosed Destiny's US and Canadian applications and all other art they cited in the Canadian litigation to the US patent office, as we are under a duty to do. Reference can be made to page 2 of our Third Supplementary Information Disclosure Statement, which was filed August 17, 2006 (shown on the USPTO website under PAIR as of August 22, 2006).

If you look at the first pag e of the "List of References cited by applicant and considered by examiner" from January 5, 2007, you will see the Examiner has initialed the two "Vestergaard" references listed. Indeed, the Examiner has initialed every reference we have submitted in all the disclosure statements we have filed. The Examiner has before her every piece of prior art raised by Destiny in the Canadian litigation and our comments on the relevancy of each piece of prior art. It appears the Examiner does not consider the Destiny applications to be material to the patentability of our claims.

Further, Destiny abandoned its corresponding Canadian application, likely due to the strong prior art references cited by the Examiner. The US application has been outstanding since 2000, nearly eight years, and has a 24 page Non-final rejection awaiting a response since July 2007. In summary, the application Destiny refers to describes a digital music play er and a method of packaging a player together with a song, a concept that appears to have been previously patented by others. It does not describe a process or system for distributing music on behalf of content providers to a set of designated recipients, as our Canadian patent and pending US patent application does.

We will continue to work diligently expand and enforce our intellectual property rights. It is important to note that YANGAROO has been granted patents for its technology and Destiny has not.