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
QPSX LIMITED 2001-05-31 ASX-SIGNAL-G
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.
QPX Price at posting:
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