europe this week, page-5

re: agm today I too would like to hear from anyone that went to the AGM.

Geekay, as for barriers to entry, I'm no expert but as far as I'm aware PHK has a patent or some sort of intellectual property (IP) rights to Phoslock.

The IP was developed by the CSIRO, but is now fully owned by PHK. The IP was fully acquired from the CSIRO in exchange for equity in PHK - this is all in the announcements made by the company over the last year or 2.

I don't know how iron-clad their IP rights are...I think they finished dealing with all that ages ago....and I assume they have done the work....this is the impression I have without going back and trawling through past announcements from PHK (or their old asx code IMH).

So my understanding is that noone else has the right to manufacture and sell phoslock....even if its just made of "special dirt" as you say.

As for whether some dodgy pirate out there could manufacture illegal phoslock and sell it....I seriously doubt it.

Most of PHK's potential customers are government or semi-government bodies (environmental bodies etc.), well established companies (fisheries/hatcheries/golf courses etc.).

These groups are unlikely to buy pirated phoslock in breach of IP laws as far as my understanding goes.

Then there are the other retail customers like aquariums and individuals with a goldfish tank etc...these types of customers might buy dodgy phoslock if it was available, but who is going to provide it to them? PHK's plant is in China....so to compete with them you would have to build your own illegal plant in China (or some other equally cheap manufacturing location) at least as big and efficient as the PHK plant....and then avoid having the plant shut down by authorities etc. and set up distribution agreements with customers in competition with PHK the legal supplier.

Remember this is essentially manufacturing not software development...so it doesn't lend itself to pirate sales because your production costs are going to be the same as the legitimate supplier....you can't take phoslock and pirate it using a CD burner like pirate software groups do....

So basically, as far as I understand PHK is the only company legally allowed to produce this "special dirt" and I can't see it being feasible for anyone to produce and sell it illegally, to a degree that would hurt or even impact on PHK at all.

So PHK should have a monopoly if the above is correct.

A caveat to the above is that I have no specialist knowledge of IP law or PHK's patents, other than being interested in this company and reading their announcements from time to time....in other words this is a "hack opinion" and should not be taken as advice.