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Wi-Fi Patent Ruling Puts Tech Industry on Notice

The Texas court ruling in favor of Commonwealth Scientific and Industrial Research Organization, part of the Australian government, could mean big liability for the industries biggest companies.

A Texas court ruled that a patent owned by an Australian government agency covers core Wi-Fi technology, a decision that raises the likelihood of liability for some of the computer industry's biggest companies.

Commonwealth Scientific and Industrial Research Organisation (CSIRO), part of the Australian government, sued Japan's Buffalo Technology and its Austin, Texas-based subsidiary in February of 2005. The agency claimed that Buffalo's 802.11a and 802.11g wireless devices violated a patent filed by CSIRO in the early '90s.

Judge Leonard Davis granted CSIRO's motions for summary judgment, affirming the validity of the patent and that infringement had occurred. Unless an appeal reverses the ruling, Buffalo faces the prospect of damages next year.

The decision demonstrates the strength of CSIRO's position, claims Townsend and Townsend and Crew, the law firm representing the agency, and "has broad implications for the wireless industry as a whole."

In May 2005, Dell, Intel, Hewlett-Packard, Microsoft, and Netgear sued CSIRO in federal court in San Francisco to obtain a declaratory judgment that the agency's patent was invalid. Each of these companies sells wireless products that may infringe on the patent.

The San Francisco case has been on hold pending a ruling in the Texas case. CSIRO wants to transfer all related litigation to Texas and the judge in the San Francisco case is expected to rule on that motion next week.

"The [Texas] ruling found that Buffalo's devices infringed," says Daniel J. Furniss, a partner at Townsend and Townsend and Crew, who believes that the patent applies to any product using the 802.11a or 802.11g standards for wireless communication.

One such product is Microsoft's new Zune music player, which includes 802.11g technology. A Microsoft spokesperson was not immediately available to comment.

CSIRO spent several years attempting to get companies to license its technology without success. "A lot them said we'll pay it if the other guy pays it," explains Furniss. "No one wants to pay a royalty if the competition doesn't pay too."

Furniss estimates that there are about 100 companies infringing on the CSIRO patent. "Our hope is that one way or the other, eventually, the patent will be held valid and we won't have to sue everybody," he says.

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