Destiny Media Technologies, Inc. Provides Update on Proceedings Against Musicrypt

Destiny Media Technologies, Inc. Provides Update on Proceedings Against Musicrypt

Company Responds to Defendant's Press Release

VANCOUVER, British Columbia, June 12 /PRNewswire-FirstCall/ -- Destiny Media Technologies (BULLETIN BOARD: DSNY.OB) is pleased to provide an update on the outstanding statement of claim against Musicrypt (TSX: MCT) which seeks a declaration that Canadian Patent No. 2,407,774 is invalid and that the Promo Only MPE(TM) system does not infringe.

Destiny filed a statement of claim on March 7, 2006 in the Federal Court in Ottawa which sought a declaration that the Promo Only MPE(TM) system does not infringe and a declaration that the patent is invalid.

On June 7, 2006, Destiny's counsel received a statement of defence and counterclaim from the defendants. The statement of defence alleges that Destiny's system, the first version of which was released in 1999, infringes on a number of claims in Musicrypt's patent, which has a priority date of 2002. In particular, the statement of defence argues that even though the MPE(TM) system authenticates at the level of the machine, the additional optional use of user name and password provides a form of user based access control. Although this form of access control is not based on biometric keyboard cadence techniques, the statement of defence claims that it could be construed to be covered by certain claims in the patent.

In addition, Musicrypt named Destiny and partners Promo Only in a counterclaim, requesting specified damages or audited Canadian profits from the Promo Only system as it expands into Canada.

This morning, Musicrypt released comments to the media that implied that a new suit had been filed. To date, Destiny has not been served with a new action. The company assumes that this press release is referring to the statement of defence and counterclaim as previously disclosed by Destiny on June 7th, 2006.

Destiny CEO Steve Vestergaard comments on the actions, "We are confident in our position and filed a statement of claim last March as we expect Canada to be an important market as demand continues to grow. We initiated this action to protect the rights of our customers in the Canadian market and welcome the earliest opportunity to have a judge make a ruling."

Documents associated with the case are available on Destiny's website at http://www.dsny.com/invalidity

March 8, 2006: Destiny files statement of claim
March 22, 2006: Musicrypt requests Destiny post a bond for security of
$20,000
April 12, 2006: Destiny agrees to post a bond of $10,000 for possible
costs
April 25, 2006: Destiny makes a settlement proposal
May 2, 2006: Musicrypt rejects the settlement proposal
May 4, 2006: Musicrypt requests particulars on the statement of claim
May 30, 2006: Destiny provides particulars on the statement of claim
June 6, 2006: Musicrypt files defence and counterclaim

About Destiny Media Technologies

Destiny Media Technologies, Inc. (www.dsny.com) (DSNY.OB) is a leader in developing easy-to-use tools for distributing media through the internet. The company's suite of streaming and downloadable products includes: Clipstream(TM), Destiny Media Player(TM), Radio Destiny(TM), and MPE(TM). Established in 1991, the company is headquartered in Vancouver, Canada.

Steve Vestergaard
CEO Destiny Media Technologies, Inc.
steve@dsny.com
P: 604 609 7736 x222
F: 604 609 0611

"Safe Harbor" statement under the Private Securities Litigation Reform Act of 1995: This release contains forward looking statements that are subject to risks and uncertainties, including, but not limited to, the impact of competitive products and pricing, product demand and market acceptance, new product development, reliance on key strategic alliances, availability of raw materials, the regulatory environment, fluctuations in operating results and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.

Source: Destiny Media Technologies

CONTACT: Steve Vestergaard, CEO of Destiny Media Technologies, Inc.,
steve@dsny.com, +1-604-609-7736 x222, or fax: +1-604-609-0611

Web site: http://www.dsny.com/

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