octopus

ERG frets about reach of Octopus
Simon Hayes
JULY 12, 2005

ERG, a Perth smartcard vendor, has warned it may consider legal action against competitor Octopus Cards over intellectual property issues relating to the Hong Kong company's moves to market smartcard systems overseas.

Octopus has been shortlisted for Melbourne's public transport ticketing contract, a deal for which ERG is no longer in the running.
A decision on that contract is expected shortly.

The links between the two companies go back to 1997, when ERG built the Hong Kong MTR Railway ticketing system.

Octopus is a joint venture between MTR Corp and several other Hong Kong public transport companies, to commercialise and market smartcard systems.

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ERG corporate affairs general manager Mark Giles says Octopus has the rights to sell the software in Hong Kong, but overseas intellectual property rights are a "grey area".

The company does not intend to take legal action "at the moment", he says.

"It is something we've looked at and will probably continue to look at," he says.

"We've certainly let them know that in our view they have intellectual property rights to the system in Hong Kong, but they don't have it elsewhere in the world, and we're conscious of what they do elsewhere in the world."

Octopus has responded with an assurance it will only provide services not covered by ERG's intellectual property rights, Giles says.

An Octopus spokeswoman says there are "no issues" between the two companies that affect the development of international smartcard projects.

"Our new system is unrelated to the technologies of the 1990s and is different from the original system," she says.

"ERG was one of the contractors in our Octopus development back in the mid-1990s.

"The original back-office system was developed based on our specifications in the early 1990s and can no longer meet the business needs of Octopus.

"Our technical team has since developed a completely new clearing house system."

ERG continues to provide maintenance services to MTR Corp.

The intellectual property issue remains a sore point, though, particularly because MTR Corp is one of two companies shortlisted for Melbourne's public transport smartcard project, a contract that ERG missed out on.

MTR is part of the Manta.T consortium, which includes defence contractor ADI.

The other shortlisted provider is Keane, a US company.

"This is a disappointing decision, as IBM and ERG believe they offered a compelling package for the TTA and Victoria," ERG told the Australian Stock Exchange in March.

The Australian