Patent Injunction Could Roil Wi-Fi Industry
http://www.informationweek.com/news/showArticle.jhtml?articleID=199905713
An Australian federal agency won a patent for Wi-Fi technology in
September, 1996, and now a federal judge has ordered a vendor to stop
selling wireless LAN products until it obtains a license.
By _Richard Martin_ <mailto:[EMAIL PROTECTED]>
InformationWeek
<http://www.informationweek.com/;jsessionid=AZQLI1I01NXE2QSNDLPCKHSCJUNN2JVN>
Jun 20, 2007 01:15 PM
A little-noticed federal court decision on June 15
<http://www.townsend.com/news/pressrelease.asp?o=8258>, issuing an
injunction against wireless-LAN equipment vendor Buffalo Technology in
its patent fight with the Australian science agency CSIRO, could have
broad implications for the entire Wi-Fi
<http://www.techweb.com/encyclopedia/defineterm.jhtml?term=Wi-Fi&x=&y=>
industry.
Judge Leonard Davis of the Eastern District Court of Texas found that
Buffalo was violating CSIRO's 1996 patent underlying 802.11a/g
technology -- the core of all corporate wireless
<http://www.techweb.com/encyclopedia/defineterm.jhtml?term=wireless&x=&y=>
LANs and public Wi-Fi networks -- and that the Japanese manufacturer,
which has a U.S. subsidiary based in Austin, Texas, must cease selling
WLAN
<http://www.techweb.com/encyclopedia/defineterm.jhtml?term=WLAN&x=&y=>
products until it reaches a license agreement with CSIRO.
Recognizing that the CSIRO patent poses a universal threat to makers of
Wi-Fi gear, a group of major tech companies that includes Intel, Dell
and Hewlett-Packard filed countersuits in May 2005, seeking to have the
CSIRO patent invalidated.
Judge Davis' decision <http://www.townsend.com/files/CSIROOrderG.pdf>
could lead to hefty licensing fees to CSIRO from makers of Wi-Fi-based
products from laptops to smartphones to semiconductors to gaming consoles.
"The ruling that the Buffalo products infringe will apply
across-the-board," said Dan Furniss, in an interview. Furniss is a
partner at Bay Area law firm Townsend and Townsend and Crew, which
represents CSIRO.
An Australian federal agency akin to the National Science Foundation in
the U.S., the Commonwealth Scientific and Industrial Research
Organization <http://www.csiro.au/> (CSIRO) conducts scientific research
for the public good. After carrying out research seeking to solve a set
of problems around connecting computers wirelessly in the mid-'90s, the
agency in 1996 was awarded U.S. patent No. 5,487,069 (known as the "'069
patent") in September, 1996.
In 1999, the Institute of Electrical and Electronics Engineers (IEEE)
finalized the 802.11a standard, and four years later 802.11g was issued.
Collectively known as Wi-Fi, the 802.11
<http://www.techweb.com/encyclopedia/defineterm.jhtml?term=802.11&x=&y=>
family of standard led to an explosion of in-office wireless networks
and of public hotspots, rapidly creating a multi-billion dollar industry
in which close to a quarter-of-a-billion devices have been sold in the
last three years. CSIRO is not a patent troll, asserted Furniss in an
interview, but a government agency seeking reasonable license agreements
with the companies profiting from the patented technology.
"CSIRO invented the .11a and g technology, and they want people to
license it," said Furniss. "They tried for two years to get people to
license it, but everybody had lawyers who said 'It's not valid,' or 'We
don't infringe because we do something different,' which is ridiculous."
Judge Davis' decision is noteworthy because it seemingly contradicts the
Supreme Court's May 2006 ruling in another patent case, eBay v.
MercExchange
<http://www.informationweek.com/showArticle.jhtml?articleID=188100570>,
in which the Court found that an injunction could be issued in an
infringement case only if the plaintiff is actually in competition with
the defendant -- in other words, companies or individuals who seek to
make money from patent holdings, rather than actual products and
services, were unlikely to get injunctive relief.
"The Supreme Court has been engaged in its own campgn in the area of
'patent reform,'" said Bruce Sunstein, in an interview. Sunstein an
attorney at the Boston law firm of Bromberg & Sunstein, which
specializes in intellectual property cases, said the high court "has
issued a series of decisions in the past year or so that have uniformly
come down against patent enforcement."
In this case, Judge Davis noted that a research institution like CSIRO
could suffer irreparable harm <http://mcsmith.blogs.com/> in terms of
"lost opportunities" for future research and development programs.
"This is the first decision since eBay in which a non-comptitor has
gotten an injunction," pointed out Furniss.
There are currently three other cases in the Texas court involving CSIRO
and big tech companies, and Davis has ordered mediation in those suits
to be completed by November. Noting that the court has now bolstered the
validity of the Australian agency's claims, Furniss said that talks with
other alleged infringers are ongoing and that CSIRO is open to a
settlement. CSIRO originally offered license rates starting at $4 per
unit and going down to $1.80 per unit depending on volume, the lawyer
said, and is open to negotiation.
"They're not looking for a dime a unit, that's for sure," Furniss added.
Buffalo will likely appeal the decision and seek a stay of injunction
pending the appeal so that it can continue to sell wireless LAN
<http://www.techweb.com/encyclopedia/defineterm.jhtml?term=LAN&x=&y=>
equipment in the United States.
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