Wi-LAN Sues Cisco over Data-Transfer PatentsBy Carmen Nobel | Posted 2004-06-24 Email Print
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The Canadian broadband wireless provider says Cisco is one of many companies infringing on its patents relating to high-speed data transfers for the 802.11g and 802.11a standards.Canadian broadband wireless technology provider Wi-LAN is suing industry giant Cisco Systems for patent infringement, Wi-LAN officials announced Thursday. And if the lawsuit goes well, the company may keep on suing.
All of the patents in question relate to OFDM (orthogonal frequency division multiplexing), the modulation technique that enables high-speed data transfers for both the 802.11g and 802.11a IEEE WLAN (wireless LAN) standards.
Wi-LAN Inc., of Calgary, Alberta, maintains that it is illegal for Cisco Systems Inc. to sell 802.11g and 802.11a devices in Canada without a license from Wi-LAN.
"We wanted a big name because they [Cisco] are selling more than anyone else," said Sayed-Amr El-Hamamsy, president and CEO of Wi-LAN in Calgary. "It seems like people will not even have a negotiation with you until you turn nasty. Now, it's time to seek what's rightfully ours."
Excepted from Wi-LAN's ire are Philips Semiconductors, which licensed OFDM technology from Wi-LAN in 1999, and Fujitsu Microelectronics, which licensed Wi-LAN technology in 2003. The Fujitsu agreement was amended last month to reflect that Wi-LAN and Fujitsu are co-developing chip sets for the upcoming WiMax wireless broadband standard.
"We had filed with the IEEE that we would license our patents under nondiscriminatory rates," El-Hamamsy said. "We kind of expected that some companies would come to us directly, and some of them we'd have to sue, and some companies would come along after we sued someone else."
Wi-LAN has tangential experience in suing Cisco. In 2000, Wi-LAN sued a company named Radiata for selling prestandard OFDM products in Canada. At the same time, Cisco was buying Radiata, with plans to use the technology to build 802.11a chip sets in-house.
The suit was dropped, but El-Hamamsy said it was dropped with the understanding that Cisco had no plans to sell OFDM-based products in Canada. Now, Cisco sells plenty of OFDM-based WLAN products in Canada.
Cisco does not create OFDM chip sets in-house, having nixed its Radiata plans earlier this year. Wi-LAN officials noted that this may hurt the case.
"It may turn out they've been indemnified by their chip-set makers, in which case we'd negotiate with them instead," said Ken Wetherell, vice president of corporate communications at Wi-LAN.
Next Page: Cisco responds to the lawsuit.
Cisco responded briefly to point out that the suit seems to address technology that is based on more than just Cisco productswhich is essentially the point Wi-LAN wants to make anyway.
"Wi-LAN claims that its patents are related to industry standards and appears to be applying the patents to the Wi-Fi industry as a whole," said Linda Horiuchi, a spokeswoman for Cisco in San Jose, Calif. "We will respond as appropriate after reviewing the claims."
El-Hamamsy said his company might eventually sue Cisco in the United States because the Canadian OFDM patent is similar to the U.S. one. Canada, he said, is sort of a test run.
"Canada is home-court advantage," El-Hamamsy said. "The Canadian rules tend to be bent a bit more toward the plaintiffs, whereas in the U.S. it's more toward the defendants. ... In general, [Canada is] a friendlier environment for a small company like us."
One analyst compared Wi-LAN's suit with NTP Inc.'s patent infringement case against Canadian BlackBerry e-mail device manufacturer Research in Motion Ltd. Last August, a federal court ruled in favor of NTP, issuing an injunction enjoining RIM from selling, using or importing its BlackBerry handhelds and server software in the United States. The court stayed that injunction pending an appeal period; RIM is still appealing the decision.
"Maybe this is Canada getting back at the U.S., since NTP in the U.S. is going after RIM in Canada," said Ken Dulaney, vice president of mobile computing at Gartner Inc. in San Jose, Calif. "It's the same kind of deal: trying to make a buck off the legal system when you cannot make a buck yourself. The only way we will know if this has merit is to go through the courts. They might as well start off with Cisco since they have the lawyer power."
El-Hamamsy said his case and NTP's aren't comparable because Wi-LAN actively pursues product development more than NTP does. Wi-LAN was one of the companies that lobbied the FCC to allow OFDM in the 2.4GHz band, where 802.11g runs.
"We have not just taken the technology and sat on it," El-Hamamsy said. "We licensed it to Philips; we developed our own systems; we founded the OFDM forum; we participated actively."
Wi-LAN has had litigious success in the past. In May, the company settledout of courta two-year-old suit against the Canadian wireless hardware manufacturer Redline Communications Inc. Redline never admitted wrongdoing but did agree to pay royalties on future OFDM products.
El-Hamamsy said he considered it a successful test run in preparation to go after a company such as Cisco.
"At the time we initiated the Redline case, Wi-LAN wasn't in the same financial position as we are today," he said. "We knew going into the lawsuit would test the patent. We got the benefit of knowing what the defense looks like."