[Ecommerce] Yale Blog: Wi-Fi Patent Infringement Case Underscores Open Standards Issues by Laura DeNardis

[Manon Ress]

Wi-Fi Patent Infringement Case Underscores Open Standards Issues

Laura DeNardis (December 4, 2006)
http://research.yale.edu/lawmeme/

I learned about a Wi-Fi patent infringement problem via some Wi-Fi
Internet browsing at the WIPO colloquium on patents and standards I
attended last week in Geneva.  A federal judge in Tyler, Texas,
issued a summary judgment ruling that an Australian government agency
holds patent rights to technologies implementing two Wi-Fi standards
(802.11a and 802.11g) and one proposed standard (802.11n).  What we
call =93Wi-Fi=94 is actually a series of specifications (e.g. 802.11a,
802.11b, 802.11g) developed and maintained by the Institute of
Electrical and Electronics Engineers (IEEE), the standards setting
organization responsible for several popular LAN standards.
Australia=92s Commonwealth Scientific Industrial Research Organization
(CSIRO) apparently holds a U.S. patent, granted in 1996, describing a
frequency division multiplexing technique the 802.11 standards
apply.  My first question was one of timing.  CSIRO=92s interest in
enforcing the patent appears to have emerged a decade after its
patent award and only after Wi-Fi=92s massive global proliferation.

Assuming the ruling withstands the inevitable appeals process, there
are several possible economic consequences.  More than 100 million Wi-
Fi enabled computing devices use the 802.11a and 802.11g standards.
Some of the companies implementing the standards in question include
industry heavyweights like Cisco, HP, NetGear, Intel, and Microsoft.
The Texas ruling singled out a relatively obscure Wi-Fi router
company, Buffalo Technology, which may eventually have to pay damages
to CSIRO.  A hypothetical royalty fee of $3 per implementation would
generate approximately a third of a billion dollars for Australia=92s
small science agency and the increase in the costs of Wi-Fi gear
costs would ultimately be passed on to consumers.  Another
consequence is the possibility that any royalty fees could serve as
an economic disincentive to Wi-Fi product innovation, right at the
historical moment in which inexpensive Wi-Fi chipsets and wireless
Internet expectations are providing opportunities for emerging (and
dominant) companies to develop new applications for mobile wireless
devices using the IEEE 802.11 standards.  More generally, this patent
case will encourage companies to defensively file for as many patents
as possible relative to their contributions to standards
specifications and implementations.  Patent zealotry in the standards
process is already the norm, as I was reminded of at the WIPO
conference when one of the speakers alluded to the more than 300
patents surrounding Wi-Max, the broadband metropolitan wireless
standard poised to become a significant competitor to broadband cable
and telecom Internet access duopolies.

While the ruling faces an inevitable appeals process, I=92d like to
make an appeal for greater attention to open standards issues.  Legal
decisions related to standards arrangements intersect with issues of
economic growth, public policy, and innovation.  The intellectual
property arrangements underlying standards determine the competitive
openness of ICT product markets and are frequently used as economic
barriers to trade. My view, historically grounded in the success of
the TCP/IP protocols, is that to maximize innovation,
interoperability, and access to knowledge, standards should be
available on a royalty free basis.  In contrast, many standards
setting organizations use the nebulous term =93reasonable and non-
discriminatory terms=94 to allow for royalties.  I have yet to hear a
lucid or even consistent explanation of what =93reasonable and non-
discriminatory=94 means.  These types of problems emphasize the
importance of the ongoing work of the Dynamic Coalition on Open
Standards (DCOS) launched at the inaugural Internet Governance Forum
(IGF) in Athens, Greece, this year.

The upcoming (February 3, 2007) Open Standards International
Symposium (OSIS) at Yale Law School will explore these issues and
examine how standards serve as a transnational cite of rulemaking at
the intersection of technology, law, markets, and politics.  The Wi-
Fi patent infringement ruling underscores how these are not lofty
academic issues but a reflection of the conditions on the ground in
ICT markets.



************************************************
Manon Anne Ress
manon.ress@cptech.org,
www.cptech.org

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