VANCOUVER, B.C., May 28, 2014 (GLOBE NEWSWIRE) -- After a key victory in a U.S. courtroom last week, a little known Canadian tech company may be set to join the ranks of the country's better known stocks.
Vancouver-based Zecotek, which is listed on the TSX Venture Exchange under the symbol "ZMS," reported it had received a favourable ruling in its patent infringement case against giants St. Gobain and Philips.
Zecotek alleges that Saint-Gobain's LYSO crystals infringe Zecotek's patent, and that Philips infringes by using those crystals in the Positron emission tomography (PET) scanners it sells.
A PET scanner is nuclear medicine imaging test that can be used for early detection of diseases such as Cancer. The devices, which can cost up to two-million dollars, are considered to be so essential that World Health Organization recommends two of them for every million people in a population, a number that most countries fall far short of, leading many to believe that the production of PET scanners will be robust for decades to come.
A Markman Hearing, which looks to determine the use of relevant key words in a patent, claims is seen as a key stage in an infringement trial because, as Ladenburg Thalmann analyst Jon R. Hickman pointed out to Forbes in late 2012, firms that win them have an 80% chance of a successful outcome at trial.
Back in the U.S., investors have begun jumping on board firms that have won Markman claims.
In 2011 Parkervision was mired in a near two year slump as a penny stock. But in July of that year, the company filed a claim U.S. in the District Court in Florida alleging that, as early as 2006 tech giant Qualcomm had been "unlawfully incorporating ParkerVision's RF energy sampling technology into the Qualcomm baseband chipsets and has been illegally using the technology since then." Shares of the company soared, hitting a high of $6.39 by October of 2013.
Another company, Vringo, was trading at $.90 in January of 2012. But after a U.S. district judge upheld most of the company's claims against media and internet giants including AOL and Google, the penny stock spiked to nearly five dollars in October, 2012.
Whether or not Zecotek, which closed trading on May 16th at $0.75, will enjoy similar success remains to be seen, but Zacks analyst Brian Marckx says the outcome could mean "several hundred million dollars" to the company. In a report recommending Zecotek released before the outcome of the Markman Hearing, the analyst said there are multiple alternative outcomes for the company.
"The lawsuit may also afford olive branch value for Zecotek in terms of cultivating potentially valuable trade relations with Philips," said Marckx. "In addition to, or perhaps in lieu of a damages award against Philips, the lawsuit potentially offers the opportunity for a settlement agreement in return for a supply/purchase agreement with Philips for Zecotek's PET components."
Another possible outcome, says Marckx, is that Zecotek will simply be bought out.
"…we believe valuation of Zecotek should account for the (not unlikely) possibility of Zecotek being acquired at a premium," he said.
http://business.financialpost.com/2014/05/28/why-zecotek-might-be-canadas-next-big-tech-stock/