Aust IP company gets boost in Ericsson legal assault

QPSX, an Australian firm that develops and licences emerging technologies, has received a boost in its legal case against telecommunications vendor Ericsson over alleged intellectual property infringements with the execution of a funding agreement with litigation financier IMF.

QPSX, an Australian firm that develops and licences emerging technologies, has received a boost in its legal case against telecommunications vendor Ericsson over alleged intellectual property infringements with the execution of a funding agreement with litigation financier IMF.

QPSX told the Australian Stock Exchange today the agreement provided for IMF -- a publicly listed company which provides funding of legal claims and other related services where the claim size is more than AU$2 million -- to fund the Ericsson litigation and other cases.

QPSX is taking Ericsson to court over communications technology used in many of the Swedish firm's high-end network switches.

According to Graham Griffiths, chief executive of QPSX, the dispute relates to royalties that should have been paid for a technology called segmentation and reassembly (SAR), which is used in ATM-based network switches.

"The development of SAR goes back to research and design QPSX did in the early 90s. We spent about AU$29 million developing SAR technology and it was adopted by the IEEE as the (802.6) metropolitan area network standard. Subsequently it was utilised in ATM," said Griffiths.

According to Griffiths, QPSX struck a deal with Ericsson in July last year that required the networking giant to pay a certain percentage of its sales revenue generated from ATM products that use SAR technology.

"We don't know Ericsson's exact ATM sales globally. When we look at their annual report they combine the value of ATM sales with that of another business so we are looking for the court to have Ericsson provide us with the royalty statements based on actual sales -- and pay us the money they owe," said Griffiths.

Although the dispute is being dealt with in Australia, Griffiths said the dispute is based upon Ericsson's global sales of ATM-based equipment.

"This is global as far as we are concerned. It affects Ericsson Australia, Sweden and all related bodies. As far as we are concerned it is royalties based on the global manufacture and sales of any ATM-based equipment," said Griffiths.

The legal process started in February 2004, where Griffiths said lawyers representing both parties held directions hearings -- to discuss how to approach a potential trial.

Although a firm date has not yet been set for the hearing, Griffiths expects the trial to commence within the next six months.

Ericsson was not available for comment.

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