Patents

I am astonished but not dumbfounded about the low level of patent debate. That's because in my observation most Ozzie punters level of sophisticated understanding of their target stocks generally doesn't go much past betting on two flies crawling up a wall.  Disappointingly most aren't hoping to see the development of major sustainable enterprises but see success ending with a junior being taken over by an overseas company with hopefully a two plus bagger pay-off.  Not that that isn't desireable.   Funny thing is, German investors, who are probably more seriously minded, are taking a lead from the Australian market assuming that the Ozzie investors know more than them, which sadly isn't the case.

So it is not surprising to see Ozzie punters dispirited and a little confused about the patent news, whereas there is nothing unusual about patents being contested - something that happens to almost all applications, which is why there is an application process.  For example, this happened a lot between the pioneers in the early days of electricity in the nineteenth century between the likes of Eddison, Tesla, Bell and Westinghouse etc.  

The fact that EGR has a process patent now granted in the USA has great significance that seems to have escaped the average punter.  Because they already have a priority date they can proceed to get patents granted in all the PCT countries they have applied for.  It also stops any products produced under the patent from being imported to the USA without paying licence fees. The same will happen with the following grant of patents in PCT countries.  The patents in those countries may vary a little due to local parties contesting the claims but generally eventually a similar patent will be granted.

Why the market has responded negatively to this is beyond me.  Granting of this patent provides an enormous benefit to EGR in supplying product to all those markets where the patent is granted, and rivals will not be able to replicate this for about another 18 years.  It shouldn't matter a great deal to EGR's production and marketing whether or not RNU's objections hold up here in Australia.  It won't stop EGR using its own process.  However, if RNU's objections are not held up, it will limit RNU's options and increase costs in paying for someone else's process licence unless RNU can devise a different approach that does not breach anyone else's licence.   It is all up for EGR.