The Australian government got an early Christmas present yesterday. A federal court in Texas ruled in favor of the Commonwealth Scientific and Industrial Research Organisation (CSIRO), an Australian agency. The federal court ruled that the agency’s 802.11a and 802.11g patent is valid and the agency is entitled to a reasonable royalty.
Holy Wi-Fi! How did this happen? The 802.11a and g standards were adopted by the IEEE in 1999 and 2003. CSIRO was issued a U.S. patent in September of 1996. Didn’t anyone do any research on this? And why didn’t CSIRO come forward earlier? It’s not like the IEEE adopts standards in secret.
According to CSIRO, the U.S. sold over 200 million 802.11g devices over the last three years. So if licensing is 10 cents per unit, that comes out to $20 million for 802.11g devices sold in the states in the last three years. If the royalty is $1 per unit, the figure becomes $200 million. That figure doesn’t even include 802.11a devices, future sales, or sales outside of the U.S. This is going to hurt the wireless industry.
There’s still the possibility the patent made be declared invalid. In another case last year, Intel, Dell, Microsoft, Hewlett Packard, and Netgear sued CSIRO seeking a declaratory judgment that the patent was invalid and not infringed. That action had been on hold. Currently, CSIRO is seeking to transfer the case from San Francisco to Texas. Stay tuned. This could be a very interesting Christmas.