Court Ruling on 802.11a, 802.11g Patent Shakes Up Wireless Industry

A federal court in Tyler, Texas has ruled that a patent owned by an agency of the Australian government is valid and covers the core technology found in current wireless devices.

In February, 2005 the Commonwealth Scientific and Industrial Research Organisation (“CSIRO”) filed suit against Buffalo Technology, a Japanese manufacturer and Buffalo USA, its Austin, Texas-based subsidiary. The action alleged that Buffalo’s 802.11a and 802.11g wireless devices infringe claims of United States Patent 5,487,069 (“the ’069 patent”). The patent issued in September, 1996 and claims priority to an Australian filing in November, 1991.

In a ruling that greatly enhances CSIRO’s prospects, Judge Leonard Davis granted CSIRO’s motions for summary judgment of validity and infringement. Under the federal law, summary judgment is appropriate when the court finds the evidence so strong that there are no genuine issues of material fact. Summary judgments of patent validity are rare. Judge Davis also found there was no question that Buffalo’s 802.11g compliant devices infringe multiple claims of the ’069 patent.

The ruling could have broad implications for the wireless industry as a whole. In May 2005, Intel, Dell, Microsoft, Hewlett-Packard and Netgear sued CSIRO in Federal District Court in San Francisco seeking a declaratory judgment that the ’069 patent was invalid and not infringed. That action had been on hold while CSIRO appealed a trial court ruling rejecting its claim of sovereign immunity. The Federal Circuit affirmed that ruling in July, 2006. CSIRO has moved to transfer the cases to Judge Davis, arguing that the Texas court has already become familiar with the case and ruled on the key issues. A hearing on that motion is scheduled for November 17, 2006.

The 802.11a and g standards were adopted by the IEEE in 1999 and 2003. Virtually all laptop computers include 802.11g capability and Buffalo, Netgear and many others have sold 802.11a and g products to the consumer market. CSIRO estimates U.S. sales of 802.11g devises at more than 200 million units over the last three years and says the market is growing.

Intel is a major supplier of 802.11a and g chipsets providing essentially all of the chips incorporated into laptop computers. Dell and Hewlett-Packard are major sellers of laptops while Netgear supplies wireless access points and network cards for consumer use. Microsoft offers wireless capability for its X-Box video games. Perhaps, more significantly, Microsoft’s new MP3 player – the “Zune” – will feature 802.11g wireless capability presumably to differentiate the Zune from Apple’s extremely successful iPod.

According to CSIRO, the Texas court’s ruling will apply to all 802.11a and g wireless devices. “The core technology embodied in the wireless standards was invented by CSIRO scientists based on their pioneering work in radioastronomy. The ruling that the Buffalo products infringe will apply across-the-board,” said Daniel J. Furniss, a partner at Townsend and Townsend and Crew which represents CSIRO. The amount of patent damages in the Buffalo case, based on a “reasonable royalty,” will likely be decided early next year, Furniss said.