QPX qpsx limited

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    31/05/2001 US Patent to open door to world`s biggest market

    US Patent to open door to world`s biggest market
    Document date: Thu 31 May 2001
    Published: Thu 31 May 2001 09:16:30
    Document No: 196799
    Document part: A
    Market Flag: N
    Classification: Other


    HOMEX - Perth

    Australian technology commercialisation and investment company QPSX
    Ltd (ASX: QPX) has received formal Notice of Allowance for a US
    Patent covering its Segmentation and Reassembly ("SAR") technology -
    intellectual property utilised in core telecoms switching
    infrastructure. The patent term will run retrospectively from 1991
    through to 2008.

    "This is one of the most significant events in the company's history.
    It opens the door to the world's biggest technology market in the
    United States, estimated to be worth $48 billion over the life of the
    patent," Graham Griffiths, QPSX Chief Executive Officer said.

    "This market is five times larger than the European market which QPSX
    is currently pursuing in anticipation of significant licensing
    royalties," he added.

    Today's major milestone comes after QPSX launched its global
    licensing program in April 2001, taking initial action in Europe to
    enforce the company's SAR patents with a view to reaping substantial
    new royalty streams.

    QPSX was the first Australian company to have its patented technology
    accepted as an International Telecommunications Standard (IEEE
    802.6). SAR is a fundamental component of global broadband
    telecommunications and has become embedded in the Asynchronous
    Transfer Mode ("ATM") networking protocols.

    ATM is used in global communications networks and the total market
    for the technology is approximately $97 billion through to 2008, when
    the QPSX patents expire.

    QPSX had previously been granted SAR patents for the United Kingdom
    and Germany (which represent 10% of the world market) and for Canada
    (30%). The US patent will provide QPSX with access to an additional
    50% of the global market.

    "The US Patent Office due diligence, legal and regulatory
    requirements are extremely rigorous," Mr Griffiths said.

    QPSX were informed of the Notice of Allowance by the US Patent and
    Trademark Office and the issue of the formal patent certificate is
    expected within eight to ten weeks.

    "This will represent a major addition to the QPSX patent portfolio
    since the US is home to many world leaders in the manufacture and
    sale of ATM equipment," Mr Griffiths added.

    The QPSX Initial Public Offering in December 2000 raised $10 million
    at 25 cents per share. The primary purpose of the capital raising was
    to pursue licensing opportunities for the company's SAR technology in
    Europe, a market which is estimated to represent just 10% of the
    global opportunity.

    Mr Griffiths said QPSX would now look at combining its proposed SAR
    licensing activity in the US and Canada, and planning was already
    underway for the launch of a North American licensing program. This
    is likely to proceed in conjunction with the European program.
    Additional fund raising to support the North American program will be
    considered by the QPSX Board in due course.

    "The QPSX Prospectus assumed nil revenues from the North American
    market, so it's all potential upside for our shareholders as we
    progressively roll out our licensing program," Mr Griffiths said.

    In April, QPSX announced it was launching its global licensing
    program, targeting negotiations with leading European manufacturers.
    As part of the program, QPSX filed a DM125 million (A$115 million)
    writ in Germany against Siemens and Deutsche Telekom for infringement
    of its SAR patent. Subsequent discussions with a number of the other
    major vendors have commenced.

    In March, QPSX Ltd reported a half-year net profit after tax of
    $238,000 on revenues of $808,000. The projections for the full year
    contained in the QPSX November 2000 prospectus were for a net loss
    after tax of $32,000 on revenues of $829,000. The company expects to
    maintain profitability in the second half.

    QPSX was formed in 1987 to develop and commercialise cell switch
    technology invented at the University of Western Australia. This
    technology formed the basis of the International Standard for
    Metropolitan Area Networks ("MAN"). The company invested over $29
    million in cell switch technology which paved the way for the
    adoption of its SAR technology as an International Standard.

    QPSX has been successful in building strategic partnerships with
    leaders in the telecommunications industry. Subsequent licence
    agreements established the market for QPSX-based products throughout
    the world and enabled carriers in the USA, Europe and South America
    to offer advanced data services enabled by QPSX products.

    Over the last decade, worldwide distribution of licensed products
    resulting from QPSX technology have resulted in gross sales and
    licensing revenues exceeding $420 million.

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