Thanks Chand. That is not good. This occurred just before I...

Thanks Chand. That is not good. This occurred just before I first bought in I think. I had been under the definite impression when I bought in that the specific application for lanthanum bonded to bentonite clay was fully patented wrt both production and for its use to bind phosphate in open water. Such patents give PET a Unique Selling Proposition. Without patent protection the product can easily be replicated with impunity I suspect.

From A PET Announcement of 3/10/19:

"... Phoslock Environmental Technologies Limited is listed on the Australian Stock Exchange (ASX Code: PET).

Phoslock Environmental Technologies Limited (ASX: PET) is an international environmental company specialising in engineering solutions and water treatment products to remediate polluted lakes, rivers, canals and drinking water reservoirs.
PET has its headquarters in Sydney, Australia with offices in Brisbane, Beijing & Changxing, China; and Manchester, UK. PET is represented by licensees, distributors and agents in ten other countries including SePRO Corporation in the United States and HidroScience in Brazil. PET has a number of marketing and co-operation agreements in China with various environmental companies and government agencies.
In 2017 Phoslock (Beijing) was formed to help remediate the massive Chinese algae and water pollution problem. This 100% owned subsidiary undertakes design, engineering, and implementation of rivers, canals, reservoirs and lakes, along with construction of wetland areas. The significant broadening of the historical PET business allows for work on a greatly increased array of projects both in China and elsewhere.
PET owns the patent for PHOSLOCK, a unique water treatment product that permanently binds excess phosphorus in the water column and sediments. This in turn inhibits the growth of Harmful Algal Blooms (HAB) that lead to detrimental effects to both aquatic and human life.
PHOSLOCK is certified to be used in drinking water in North America, Europe, UK, Brazil, Australia and China. ..."

This statement has been repeated multiple times in PET's announcements through to 26/3/20, 30/4/20, 5/5/20 announcing the FY2019 audited accounts and giving the business update going forward, right through to the AGM.

In more recent announcements from 31/7/20, following the AGM, I now read that:

"... Phoslock Environmental Technologies Limited (ASX: PET) specialises in engineering solutions and water treatment products to remediate polluted lakes, rivers, canals and drinking water reservoirs.
Headquartered in Melbourne, PET has offices in Brisbane, Beijing, Bremen (Europe) and Manchester (UK). PET also has registered entities in Canada, USA and Belgium, and manufacturing operations based in Changxing, China. PET is represented by licensees, distributors and agents in numerous other countries including HydroScience in Brazil.
Phoslock® is a proprietary and unique water treatment product that permanently binds excess phosphorus in the water column and sediments.
Phoslock is certified for use in drinking water in North America, Europe, Brazil, Australia, and China. Along with Phoslock, PET also supplies zeolites and specialised solutions that address water pollution issues. ..."

This change in description of Phoslock from a patented product to a proprietary product is significant but appears to have not been communicated in any way to shareholders, or at least not that I can see.

A patent legally entitles its owner to sell its product exclusively without competitors being permitted to copy it. It provides the company with a USP. In many cases a patent is a company's most significant asset.

A proprietary product effectively just means that the company keeps its production processes secret from potential competitors.

If Phoslock is proprietary then it can presumably be copied and competitors can offer alternatives, and there is no law that prevents them from doing so. If Chinese patents over Phoslock are still valid in China and elsewhere then PET would presumably have to take competitors to court to defend its patent rights. If the patents are lapsed in USA I do not know whether a rival Chinese competitor could sell its own proprietary product in USA against PET, also based in China.

When I look at the planned developments announced in early 2020 at the AGM I can see several of the product developments that Eastern Node is now talking about, but that PET is now not talking about. Instead it has licensed a product from elsewhere that it plans to sell.




Based on these developments I have lost confidence in the company's ability to fully recover its unique opportunity as owning a defensible product that nobody could copy. I'm out. 95% loss incurred. Sentiment and position both updated. However I may buy back once the situation clarifies. The company has made a good start but pain to come I think. It deserves to improve under the new management, but it needs to show exactly what it is doing to move forwards.