Wi-Fi Faces New Patent Woes

A federal judge in Tyler, Texas, ruled last week that an Australian government 
agency holds the rights to patents on  the underlying technology used in two 
Wi-Fi standards and a  third proposed standard. The decision could have a  
wide-ranging impact on wireless equipment makers and consumer  electronics 

Australias Commonwealth Scientific and Industrial Research Organisation filed a 
patent in 1996 that it says is employed  in some IEEE standards, potentially 
including 802.11. The  group said that Microsoft, Dell, HP, Intel, Apple, and 
Netgear  have initiated legal action in an attempt to overturn the  patent. The 
organisation says it intends to fight the action.

This isn't the first time a company or organisation has tried  to pursue 
companies in the 802.11 space for patent  infringement.
Last year a patent buying firm called Acacia  began sending letters to access 
point makers that use redirect  technologies, saying those firms owed royalties 
for a patent  Acacia owns on redirect technologies. Its unclear how  vigorously 
Acacia followed up on its pursuits, but the move  caused an uproar in the 

The question remains why the Australian organisation is  deciding to pursue 
this patent at this stage in the market.  While companies must be able to reap 
the rewards of their own  research and development, there also must be 
consideration for  the positive effects that low cost products can have on a  

"One reason that Wi-Fi has proliferated as it has is because it's reached a point where it's incredibly cheap, so it's easy to just stick a Wi-Fi chip in a consumer electronics device," said Stan Schatt, a vice president at ABI Research. "But if the cost of the technology goes up to pay for the license, even a little bit, it could throw off the economics."

Indeed, Wi-Fi products generate billions of dollars in revenue for equipment makers. Just the access points that provide the actual Wi-Fi signals in local area networks are expected to generate USD 1.9 billion in 2006, according to ABI Research. That figure is expected to jump to USD 3.7 billion in 2010.

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