Deputy Chief Executive of CSIRO, Dr Colin Adam, stated today that any legal proceedings initiated against CSIRO by Charter Pacific Corporation Ltd over the Exelgram technology would be vigorously defended.
Dr Adam was responding to an announcement to the Australian Stock Exchange by Charter Pacific that it intended to sue CSIRO over alleged breaches of a 1994 royalties agreement.
"CSIRO completely rejects the claims made in the CPC statement, which contains many errors of fact," he said.
"CSIRO's Exelgram technology is world class and this is now being recognised by a number of potential customers", Dr Adam said.
"However, this is a very difficult market to break into because it involves becoming accepted into a very small club of high security providers."
Dr Adam said that, following an earlier settlement of legal proceedings, Charter Pacific had been given a "free ride" in the form of a 50 per cent interest in any royalty streams which CSIRO was able to generate from the technology.
This "free ride" included an advance of $2 million in royalties.
"Charter Pacific has never contributed a single dollar to research or development of the technology, and therefore has no grounds for complaint," said Dr Adam. " All the effort is being made by CSIRO and its licensees, and they are bearing all the risks."
"The real tragedy will be if these ill-judged legal proceedings destabilise present international marketing efforts by CSIRO. The market is a fragile one, and all CSIRO's good work could be undone if Charter Pacific persists with its unfounded claims."
CSIRO has worked for the past three years to establish its optical security technology as a viable competitor to the well-established Hologram and Kinegram technologies, both of which have been widely used throughout the world for the past decade on a variety of credit cards, currencies and products susceptible to counterfeiting.
To break into this tightly controlled and very conservative market, CSIRO has chosen to work with two highly reputable European security foil manufacturing groups who have access to high level banks and security printing organisations worldwide.
The more expensive CSIRO technology has some cost disadvantages compared to cheaper hologram technologies, and a range of potential customers are currently assessing CSIRO-generated images for applications which are considered to be too sensitive for the most sophisticated holographic devices.
More information: from Dr Colin Adam (03) 9662 7435, mobile 0419 352 126 or Julian Cribb (06) 276 6244 (bh), (06) 286 6022 (ah)