AT first glance QPSX seems to be just another relic of the dot.com boom.
AT first glance QPSX seems to be just another relic of the dot.com boom.
It has one of those odd ‘new economy’ names, minimal operating revenue and a history of losses since listing on the Australian Stock Exchange in 2000.
Yet first impressions can be deceptive.
The company is carving out a global niche in the commercialisation of intellectual property and taking on some of the world’s biggest companies in the process.
“The strategy was to become the pre-eminent IP commercialisation company in the region,” managing director Graham Griffiths said.
“We see ourselves as a global company that happens to be located in the south-west corner of Western Australia.”
While QPSX is a stock market minnow, its shareholders include billionaires Kerry Packer and Dick Pratt.
“We’ve also had very strong support from people like [former Communications Minister] Senator Alston through to the universities and large corporations in Australia who said its fantastic there is an organisation prepared to stand up and defend its intellectual property,” Mr Griffiths said.
“We’ve done it professionally and it’s going extremely well.”
QPSX has the distinction of being the first Australian company to have its patented technology accepted as an international telecommunications standard.
Mr Griffiths said the company was pursuing a comprehensive ‘carrot and stick’ licensing program for its segmentation and reassembly (SAR) patents, which are an integral part of global broadband telecommunications.
The stick comes in the form of litigation against Siemens and Deutsche Telekom.
“That case has been going well,” Mr Griffiths said.
“The court has dismissed the legal arguments for throwing out the case and now they are looking at the technical infringement issues.
“About 50 to 60 per cent of cases in Germany settle during this stage.”
The court decision allowed QPSX to proceed with the ‘carrot’ side of the program, in the form of licensing deals with other users of its patented technology.
It has targeted seven major companies which control 90 per cent of the global market, and in November signed its first deal.
“With Ericsson we have seen the first of the dominoes falling,” said Mr Griffiths, who expects positive cash flows from licensing programs this year.
QPSX obtained an important boost, financially and strategically, when Lloyds of London agreed to provide $US4 million to help fund the litigation.
“They came to the view that we had a very strong and enforceable patent,” Mr Griffiths said.
While the SAR program is based on technology developed in-house, QPSX’s second flagship program involves database software developed by Melbourne company Financial Systems Technology.
QPSX acquired exclusive rights to its patent portfolio and last year launched legal action against JP Morgan Chase.
Mr Griffiths said this reflected QPSX’s strategy of partnering with a range of technology developers.
The strategy took a big step forward last year when it won a tender, in partnership with UK firm BTG, for the right to commercialise all of CSIRO’s intellectual property.
Mr Griffiths said QPSX’s main focus was on licensing deals, in contrast to other groups looking to spin out new companies through a stock market float.
“There are many technologies that are not significant enough to [justify] forming a company,” Mr Griffiths said.
“But there are many technologies that make an incremental contribution
“We take that to a global player who has some other pieces of the puzzle and then there is some value in that technology.
“As a stand alone it probably has very little value.
“We believe we are the only significant player in the region focused on the licensing model.”
