Subject: [NEXTEL-1] Cisco Sued over 802.11a/g

From: NEXTEL-1
Date: Wed, 23 Jun 2004 17:53:08 -0400

June 23, 2004

Cisco Sued over 802.11a/g
Product Sales
By Eric Griffith

Wi-LAN, a Canadian company that
makes broadband wireless equipment, is
trying to make a name for itself for the
future WiMax market.

It may also end up making just as big a
name for itself in the courts. The
company said today that it is suing
network giant Cisco Systems (Quote,
Chart) in Canada for patent infringement.
This is the second time they've sued
them, in fact.

Wi-LAN was established in 1992 based
in part on patents on Orthogonal
Frequency Division Multiplexing
(OFDM) filed by its founders. The
patents specifically cover wide-band
ODFM (or W-OFDM). The Canadian
patent number is 2,064,975 and the
United States patents are No. 5,282,222
and 5,555,268. According to Ken
Wetherell, vice president of corporate
communications at Wi-LAN, W-ODFM is
part of the very foundation of the Physical
Layer of the 802.11a and 802.11g specifications.

In 2000, Wi-LAN took a company named Radiata to court for selling
pre-certified 802.11a products in Canada. This coincided with Cisco
buying the company. Wetherell says that Cisco successfully argued that
no actual 11a products were available at the time and that it had no
intension of selling 11a products in Canada in the future. The suite was
dropped.
Of course, since then, not only have Cisco's own Aironet WLAN products
become easily available in Canada, it also bought Linksys, the largest
seller of consumer WLAN products in North America and the world -- most
of which are 802.11g or dual-band 11a/g.

"We felt it was appropriate at this time to go back to Cisco and seek
royalties," says Wetherell.
Cisco's official comment on the law suit is: "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. We will respond as appropriate
after reviewing the claims."
Part of Wi-LAN's future revenue plans hinge on licensing its
intellectual property (IP), and this move is their way of escalating
that program. The company just settled a suit against Redline
Communications in May, in which Redline agreed to pay royalties to
Wi-LAN without admitting any wrong doing. The two year old suite
revolved around the same W-OFDM patents.

Earlier this month, Wi-LAN said it had purchased 17 U.S. patents and
patent applications for U.S. $3.9 million in cash and $3.6 in special
warrants that could be exercised into Wi-LAN shares. The seller,
revealed as Ensemble Communications, will have the option to license the
patents in the future... but the company appears to be defunct. The
purchased patents relate to the media access control (MAC) layer of the
various 802.16 standards, which are high-speed, long-distance wireless
specifications that will see use under the umbrella "brand name" of
WiMax.

Wi-LAN is working with Fujitsu Microelectronics America to make WiMax
sample chips available that they hope to have in testing by the end of
the year -- Fujitsu will pay Wi-LAN a royalty for use of its IP.

Wi-LAN has a similar deal with Philips for its development of 802.11a
and 11g chips (done without litigation).
This current litigation against Cisco is Wi-LAN's way of drawing the
attention of what it sees as the real patent infringers: the wireless
LAN chipset makers.

Wetherell says they could go after the likes of Broadcom (Quote, Chart)
or Atheros (Quote, Chart), two leading Wi-Fi chip vendors, but runs the
risk of the defense being "we don't know where are chips are sold."
Cisco can't say that. Plus, by going after a large player like Cisco,
Wi-LAN expects to eventually set a precedent that will bring more
players to the table.
"We don't want to do the Qualcomm thing and go after every product
builder. We want the large chip makers," Wetherell says.
By bringing the lawsuit in Canada instead of the U.S., Wi-LAN will be in
a country where the cost is lower and the onus is on the defendant. He
says, "If there are any smoking guns -- and we don't expect to see any
-- then you get to see it up front and formulate your attack on that
basis." Plus, it would set a precedent that could be viewed for future
patent suits in the U.S. if needed.

Ultimately, Wetherell says his company wants to stay out of the courts
and just get "reasonable royalties, typical fees that would be paid for
any IP.... We think we can settle this quickly and move on. Our main
business is enabling wireless broadband equipment, but our shareholders
expect us to protect our patents."

http://www.wi-fiplanet.com/news/article.php/3372611

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