DTS Files Trademark Infringement Lawsuit against Shinco

AGOURA HILLS, Calif. - Sept. 2, 2004 - DTS (Digital Theater Systems, Inc.) and DTS China Licensing (Hong Kong) Ltd. announced the commencement of legal proceedings against Shinco International AV Co. Ltd., Jiangsu Shinco Electronic Group Co. Ltd., and Changzhou Shinco Digital Technology Co. for breach of contract, copyright infringement, trademark infringement, and passing off. Representing part of a larger program to aggressively seek to eradicate the unlawful use of DTS trademarks and other intellectual property, these proceedings underscore DTS' dedication to protecting both the value of its intellectual property and the competitive advantage that its intellectual property provides to the company's valued consumer electronics manufacturer licensees.

"This lawsuit represents DTS' continuing efforts to enforce our intellectual property rights, and protect our company, our licensees, and consumers," said Brian Towne, Vice President, Consumer/Pro Audio Division at DTS. "We will continue to be very active in preventing the illegal use of our name and technologies."

Companies that wish to clarify whether they are properly using DTS trademarks and intellectual property should contact DTS' Consumer at consumerlicensing@dtsonline.com .

About DTS
DTS (Digital Theater Systems, Inc.) is a digital technology company dedicated to delivering the ultimate entertainment experience. DTS decoders are in virtually every major brand of 5.1-channel surround processors, and there are more than 280 million DTS-licensed consumer electronics products available worldwide. A pioneer in multi-channel audio, DTS technology is in home theatre, car audio, PC, and game console products, as well as 5.1 Music Discs, DVD-Video, DVD-Audio, and DVD-ROM software. Additionally, DTS is featured on more than 22,000 motion picture screens worldwide. Founded in 1993, DTS is headquartered in Agoura Hills, and has offices in the United Kingdom, Japan, and China. For further information, please visit www.dtsonline.com .

***DTS is a trademark of Digital Theater Systems, Inc.***

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that involve risks, uncertainties, assumptions, and other factors which, if they do not materialize or prove correct, could cause DTS' results to differ materially from historical results or those expressed or implied by such forward-looking statements. All statements, other than statements of historical fact, are statements that could be deemed forward-looking statements, including statements containing the words "planned," "expects," "believes," "strategy," "opportunity," "anticipates," and similar words. These statements may include, among others, plans, strategies, and objectives of management for future operations; any statements regarding proposed new products, services, or developments; any statements regarding future economic conditions or financial or operating performance; statements of belief; and any statements of assumptions underlying any of the foregoing. The potential risks and uncertainties that could cause actual growth and results to differ materially include, but are not limited to, the rapidly changing and competitive nature of the digital audio, consumer electronics, and entertainment markets; the company's inclusion in or exclusion from governmental and industry standards; customer acceptance of the company's technology, products, services, and pricing; risks related to ownership and enforcement of intellectual property; the continued release and availability of entertainment content containing DTS audio soundtracks; changes in domestic and international market and political conditions; and other risks and uncertainties more fully described in the Company's public filings with the Securities and Exchange Commission, available at www.sec.gov . DTS assumes no obligation to update any forward-looking statement to reflect events or circumstances arising after the date on which it was made.