+++++++++++++++++++++++++ Technology commercialisation company QPSX Ltd (ASX: QPX) today announced that the Munich District Court had ruled favourably on key issues in QPSX Europe GmbH's court action against Siemens and Deutsche Telekom.
The Court today rejected the formal objections of the defendants to the standing of QPSX Europe GmbH, overruled the defendant's requests to discontinue the action and opened the door for the case to proceed to the "expert evidence stage" of the proceedings, in which an independent technical advisor would assist the court in assessing the nature of the infringement of QPSX's patented technology.
In April, 2001, QPSX Europe GmbH, a wholly owned subsidiary of QPSX and European licensee, filed a DM125 million (A$115 million) writ against Siemens and Deutsche Telekom for infringement of QPSX's patent covering the Segmentation and Reassembly ('SAR') technology. The lawsuit is an integral part of a wider licensing program launched by QPSX Europe, targeting negotiations with leading European manufacturers and users of Asynchronous Transfer Mode ("ATM") telecommunications equipment.
"We are delighted that the Court has affirmed the position of QPSX Europe GmbH as a valid plaintiff and active licensor of the German SAR patent", QPSX Europe GmbH General Manager Matt Callahan commented this morning, "we can now concentrate on the real issue of infringement and accelerate the exploration of the defendant's unlicensed use of the technology".
The decision specifically overrules voluminous arguments put forward by Siemens and Deutsche Telekom that the case should be immediately dismissed. Accordingly, the Court is expected to proceed to appoint a technical expert following submissions to the court on January 10th 2003. The expert would explore the use of the SAR technology in equipment manufactured by Siemens as well as equipment used by Deutsche Telekom to support its entire network in Germany and more widely in Europe.
"The achievement of this milestone is not only significant for the German litigation", QPSX Europe GmbH General Manager Matt Callahan commented this morning, "it indicates to other potential licensees the benefits of taking an early strategic licence in order to gain a competitive advantage".
In July 2001, the company announced the first SAR licensing deal, with European telecommunications giant Ericsson. The agreement specified a royalty bearing license for QPSX technology, including the SAR patent. Negotiations with Ericsson continue with a view to expanding the coverage of a SAR licence beyond the products covered by the initial agreement to the wider Ericsson ATM product portfolio.
"QPSX has demonstrated its resolve and capacity in pursuing patent enforcement in conjunction with a wider licensing program and we will continue to ensure that wherever possible negotiations are amicable and not unduly drawn out," Mr Callahan said.
QPSX has engaged German Frohwitter Law Firm, which specialises in all aspects of intellectual property, including procuring, enforcing and licensing of patents in Europe and the United States. In conjunction with QPSX Europe GmbH management and it's licensing partners, Frohwitter's intellectual property lawyers coordinate and direct the patent litigation and prosecution.
QPSX has minimised its exposure to the costs and risks associated with litigation by sourcing up to US$4 million of funding from Lloyds to support the action. This amount is considerably higher than the anticipated costs of the current litigation. In addition, a US venture capital partner is contributing 25% of QPSX costs.
QPSX selected Germany on legal and financial advice to launch its SAR licensing program. However, Germany and the UK represent only 10% of the world market. A second licensing phase in North America, with a market some eight times larger than the initial market addressed by QPSX, is currently being planned.
QPSX invested over $29 million in cell switch technology which paved the way for the adoption of its patented SAR technology in the International Telecommunications Standard (IEEE 802.6) - a first for an Australian company. Subsequently, SAR became embedded in the broadband Asynchronous Transfer Mode ("ATM") communications protocol.
"SAR technology is fundamental to broadband telecommunications. It provides a foundation for ensuring quality of service for Internet communications. QPSX's intellectual property is utilised in core telecom switch infrastructure over which the majority of Internet traffic flows," Matt Callahan, QPSX Europe GmbH General Manager said.
QPSX
QPSX's focus is the profitable commercialisation of a range of technologies on a global basis. QPSX works with research institutions and companies across Asia Pacific to identify and then capture value in such technologies. This value is realised by QPSX and its licensees and commercial partners through products that shape the future within their global markets.