QPX qpsx limited


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    HOMEX - Perth

    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'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.


    Tel: 08 9381 9518
    Email: [email protected]
    Websites: http://www.qpsx.com

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