Licensing technology pays dividends for QPSX

PERTH technology and licensing company QPSX has risen above the tough tech industry climate to post a $400,000 net profit, in place of a forecasted loss of $32,000.

The profit comes from net revenues of $1.8 million, up from the November 2000 prospectus prediction of $1.1 million.

QPSX chief executive officer Graham Griffiths said the figures were the result of increased licensing revenues, including a significant deal brokered in July with Ericsson. The multi-million dollar agreement allows the mobile phone manufacturer to use QPSX’s patented asynchronous transfer mode (ATM) technology and segmentation and reassembly (SAR) licence.

Mr Griffiths said the SAR licence would generate net revenues of $18 million for this financial year.

“Segmentation and reassembly is the key program we have initiated and the majority of our revenue forecast of $18 million for this financial year and profit relates around this licensing program,” he said.

SAR is used in broadband Internet infrastructure and has become the industry standard. SAR allows large pieces of data to pass through the broadband net-work by breaking them up into packets and reassembling them at the user end.

Mr Griffiths believed QPSX’s ability to weather the tough economic climate was due to the company’s focus on identifying and licensing new technologies.

“Clearly we are following on from the tech wreck, so the difference between QPSX and a lot of other technology companies is they’re out there typically with only one type of technology, burning a lot of cash in creating that technology and marketing it,” he said.

“We differ from that model in that we go out and assess technologies from various sources – companies, individuals, institutions and universities. We do a lot of due diligence on those technologies and the ones we get involved in are the ones we believe have a strong commercial oppor-tunity.

“Our risk is not one of R and D, it’s one of doing the correct due diligence and choosing the correct technologies to commercialise.”

QPSX was established in 1987 in conjunction with Telstra and the University of Western Australia.

It initially focused on research and development of tele-communications technology but shifted to licensing.

Mr Griffiths attributes the company’s positive cash position, valued at just under $4.5 million, to this shift in strategy.

“Our cash position is better than forecast because we no longer have hundreds of engineers doing R and D,” he said.

“We are much more able to select the good technologies and take an equity share.”

The protection of intellectual property has emerged as a significant issue for QPSX, but Mr Griffiths said it was one that was not well understood in Australia compared with the US, where IP licences were worth a total of $US10 billion in 1999.

“IP is key to our business and it should be the key to any business. Intellectual property is a huge, huge thing in that, if you have the right technology and you protect it properly, it can be a big business for companies,” he said.

“But it’s not well understood in Australia, it is very poorly under-stood and we’ve been doing a lot of education of the market here and they’re now under-standing it a little better.

“We see the opportunity for us to be the premier licensing company in the Asia Pacific region.”

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