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I think BPO are saying that the patents SLA hold do not cover the production of CGNC (Bioeffective A). I think they are trying to say that the recipe for CGNC is public domain and therefore not exclusive to SLA.


I guess if they argue this they can 1) put forward that they can make/procure their own without needing to pay SLA anything, and 2) that if they do undertake studies in its use and commercialise it as an agricultural product is not worth the risk without exclusivity. And its hard to control exclusivity of a natural product which is not covered by a patent.


I might go and read the extration patient and see which part of the process is covered in the patent. I doubt though that you would ever be able to cover something like ethanol extraction, it would be like patenting treading on grapes.

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The way I read it the issue is probably whether or not alternative means of manufacturing CNGC are around that are can be used to reproduce SLAs products. If there are and SLA knew about it at the time of deal they could be in some trouble. BUT, BPO would have to show that Vagif and or Kilroy had this knowledge. That might be hard.


The issue for us is that if there are other means of producing SLAs products, we might find ourselves with a whole lot of competition if any of SLAs products start to sell really well.


Any experienced chemists out there?



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Don't confuse CC-CP with CGNC


"The raw material known as Coniferous Chlorophyll Carotene Paste (CC-CP) in Russia, has

been adopted in Australia as Conifer Green Needle Complex (CGNC). CGNC has been added

to the Therapeutic Goods Administration (TGA) list of substances that may be used in

ingestible and topical listed medicines, and is required to be tested against significantly

tighter quality control specifications than CC-CP; thereby ensuring a more highly

standardised material."


See Bespalov's paper


CGNC is Solagran's version of CC-CP via the St Petersburg Forest Academy

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Thanks Jezz - that is probably what they are trying to argue.


52 Misleading or deceptive conduct


(1) A corporation shall not, in trade or commerce, engage in conduct


that is misleading or deceptive or is likely to mislead or deceive.


(2) Nothing in the succeeding provisions of this Division shall be


taken as limiting by implication the generality of subsection (1).




53 False or misleading representations


A corporation shall not, in trade or commerce, in connexion with


the supply or possible supply of goods or services or in connexion


with the promotion by any means of the supply or use of goods or




(f) make a false or misleading representation concerning the


need for any goods or services


So what BPO are claiming is that SLA do not have a patent which gave them exclusive rights to manufacture CGNC (BioA).

So BPO are claiming that they believed that SLA had a patent over the rights to exclusively manufacture CGNC.


So from BPO's view, anybody else could actually manufacture CGNC through other means outside of the patented method held by SLA? I dont dispute that (as mentioned by Pfloyd in a later post)- in fact CGNC has been extracted by many before SLA. Just not to the exact specifications required to produce the benefits seen in BioA. This is clearly stated in their patents, so the question is whether or not BPO can prove that they were mislead by SLA representing that only they could manufacture CGNC.


Well I think BPO will have to produce very specific representation whereby SLA clearly represent that they have sole manufacturing rights to CGNC. Given that SLA know all about CGNC, I'd find it very hard to believe that they'd make such a statement. I guess BPO's case will be around proving that SLA intended to mislead BPO into believing that nobody else could actually manufacture CGNC other than SLA.


I think BPO are trying to play the 'ignorance' card.


A very simple defence could be for SLA to prove that through representations made to BPO that they did not represent that SLA were the only party able to manufacture CGNC, rather SLA were the only party able to extract the specific quality of CGNC required to manufacture BioA.


SLA can easily do this by presenting to the courts the actual patents which were applied for (ideally state that they were provided to BPO for inspection prior to executing the DA) and showing that the first page i.e. paragraph [0004] to [0010] clearly disclose the fact that there are already known methods to extract CGNC. And that SLA are applying for the extraction of a newly improved type of CGNC unique only to SLA's patented process.


Support would include:


BPO and SLA accouncement


29/5/2007 'Completion of BioProspect Due Diligence' which stated:


"BioProspect's due diligence focused on evidence of efficiacy under animal feed trial and direct application conditions; toxicology in humans and animals; manufacturing systems; and Intellectual Property and patent protection"


"BioProspect has informed Solagran that it is satisfied with the information provided by Solagran. "


One would assume that BPO had a look at the patents.



BPO and SLA announcement





"All of Solagran's Bioeffectives are obtained from sophisticated and patented extraction processes for which the feedstock is green foliage from plantation timber felled in the course of commercial forestry production."



Can SLA be any clearer about the 'extraction'?


Maybe they already have, see below:


SLA announcement


16/4/2007 "Agreement with BioProspect"



"SLA owns the rights to a unique extraction process technology which enables it to obtain natural substances with high levels of biological activity from green tree cells".



Again it does not show any representation from SLA that they have sole 'manufacturing' rights to CGNC, purely the unique extraction of it.


The alternative argument is that SLA knew that a like-for-like CGNC could be produced from another means and would be an equal competitor to BioA, but as PFloyd suggested it would be very hard to prove that SLA knew of this and secondly to my knowledge no clear substitute has been put to market by a competitor. So again.. a dead end for BPO.

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Just because BPO threw the first legal punch, doesnt mean that they were the ones to pull the plug. If you look at announcements coming from BPO just a month or so ago they were still 'committed' to going forth with the DA. It seems they were the recipient of a slap in the face by SLA and not the other way around.


One possible scenario (and I'll leave it up to you to decide) that I believe is the case - is that SLA decided to cut ties with BPO for reasons unknown at the moment. Although one can possibly come to a reasonable conclusion as to why they would do such a thing (commerically it makes sense).


Since then SLA basically had bigger fish to fry in Russia with some Ropren. The DA does not directly impact SLA's cashflow in the short term, and thus they just let it be and continue to grow the Ropren sales in Russia.


BPO on the other hand have a hell of a lot riding on Bioeffectives and the DA. Now that they realise that SLA have no intention of continuing with the DA, they are trying to get as much cash back as possible. Crying foul and causing as much noise as possible. I mean there is some obvious sour grapes in BPO, and justifiable so. But the more I think about it, BPO are basically arguing that they were pretty much 'negligent' in entering into the DA if they really believed that SLA represented that SLA either:


i) had the sole rights to manufacture all forms of CGNC; or

ii) knew of a substitute CGNC which could be manufactured using a seperate extraction process outside of SLA's patent


Anyhow I have given this enough time.


I'm waiting for Ropren updates!!

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I doubt BPO can argue that they didn't know that SLA had a patented extraction method and not a patent on CGNC, they only had to ask their director, Charlie Pelligrino, who was a former SLA director.


From my memory of corporate law, if a director knows something, the company also knows it.


They can't claim that a statement deceived them if they knew that the statement was wrong.



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Oops, I've just realised that DA was signed in August 07, but Charlie didn't become director until 2008, however

When BPO announced the heads of agreement on 16 April 2007 they stated at point 5:

"All of SolagranÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¾Ãƒâہ¡ÃƒÆ’‚¢s Bioeffectivesare obtained from a patented extraction process ÃÆâ€â„¢ÃƒÆ’ƒâہ¡ÃƒÆ’‚¢ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â€š¬Ã…¡Ãƒâ€šÃ‚¬ÃƒÆ’…¡Ãƒâہ¡ÃƒÆ’‚¬ÃƒÆ’¢Ã¢Ã¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã‚¡ÃƒÆ’‚¬Ãƒâ€Â¦ÃƒÆ’¢Ã¢Ã¢â‚¬Å¡Ã‚¬Ãƒâ€¦Ã¢â‚¬Å“ the feedstock source for which is the green foliage from plantation timber felled in the course of commercial forestry production. This provides a virtually unlimited supply of low cost materials."

Seems they had been advised of the patent status





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Well it seems at the crux of it - BPO are challenging SLA's IP rights.


That in my mind is possibly BPO having a cheap shot at SLA. Especially if BPO are basing their case on 'ONE experienced patent attorney'. I wonder if the lawyers referred the 'experienced patent attorney' to BPO?


Anyhow - if BPO were after a sanction against SLA dumping BPO shares prior to/or during the upcoming equity raising.. they have achieved that. In terms of successfully challenging SLA's IP rights... that in my mind... is a very long shot.


Hence the head scratching. :wacko:

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