ACACIA RESEARCH SUBSIDIARY AWARDED
DEPARTMENT OF DEFENSE CONTRACT

Issue: July 14, 1999

PASADENA, Calif.--(BUSINESS WIRE)--July 14, 1999--

Acacia Research Corporation (Nasdaq/NM:ACRI) announced today that its subsidiary, CombiMatrix Corporation, has been awarded a Phase I SBIR Department of Defense contract to use CombiMatrix's proprietary biochip technology to develop Nanode Array Sensor Microchips.

This work is expected to enable simultaneous detection of numerous chemical and biological warfare agents using the company's proprietary technology. The chemical and biological warfare agent testing program at CombiMatrix was initiated in response to heightened interest by the U.S. government in threats posed by chemical and biological warfare.

The CombiMatrix biochip system integrates the miniaturization of semiconductors with new developments in biotechnology and chemistry. The company's core technology utilizes a unique buffering system to create "virtual reactors" -- tiny chemical flasks the size of a human hair, that are separated from each other without glass walls.

The CombiMatrix technology synthesizes DNA, peptides and other chemicals in these miniaturized electrochemical flasks on a tiny semiconductor chip. The biochips are inexpensively produced on existing semiconductor fabrication lines.

In June, CombiMatrix received a Notice of Allowance from the U.S. Patent and Trademark Office for the core patent on its novel biochip. CombiMatrix's unique biochip system may offer significant advantages over current products on the market.

Acacia Research has a 53% equity ownership in CombiMatrix, which is located in Burlingame, Calif.

Acacia Research is a diversified company with interests in several enterprises -- CombiMatrix Corp. (biochips/drug discovery technology), Greenwich Information Technologies LLC (video and audio-on-demand technology), MerkWerks Corp. (software development), Signature-mail.com LLC (personalized e-mail service), Soundbreak.com Incorporated (Internet music and e-commerce), Soundview Technologies Incorporated (V-chip technology), Whitewing Labs Inc. (marketer of nutritional supplements) and Acacia Capital Management (investment advisory services).

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