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Bluetooth Faces Legal Snag

Bluetooth technology, which after years of slow growth has finally gained a significant presence in products sold worldwide, is now under threat from a patent-infringement lawsuit. A suit filed by the Seattle-based Washington Research Foundation, which licenses and manages patents for technology developed at universities and research institutes in Washington State, charges three major consumer electronics makers -- Nokia Corp. (NYSE: NOK), Samsung Electronics Co. Ltd. (Korea: SEC), and Panasonic Corp. (NYSE: PC) -- with violating four patents held by the Foundation.

The patents at issue were filed between 1996 and 2003, and involve "certain RF receiver technology used in that wireless data communication system known commercially as 'Bluetooth technology,' " according to the complaint, which was filed in U.S. District Court in Seattle. Now held by the WRF, the patents were originally issued to Edwin Suominen, an undergraduate at the University of Washington in the mid-1990s, when he developed the technology covered by them.

Originally approved by an industry consortium in 1998, Bluetooth was invented by Jaap Haartsen, an engineer at Ericsson, and is distributed free by the Bluetooth Special Interest Group, a trade association that comprises more than 6000 companies. The overlapping dates of the original Bluetooth approval and Suominen's patents could become an issue if the case actually goes to trial.

Citing data from ABI Research , the Special Interest Group said in November that the number of Bluetooth-enabled devices shipped worldwide to date had hit 1 billion. The association says that weekly shipments of devices containing the technology total 12 million.

The lawsuit specifically targets devices using chipsets from CSR plc, a U.K. chipmaker that supplies Samsung, Panasonic, and Nokia. Exempted from the complaint is Broadcom Corp. (Nasdaq: BRCM), the only company that has licensed the technology from the Foundation. Thus the suit could wind up being a huge boost to sales of Broadcom chipsets. "As a result of the Broadcom license," says the complaint, "each of the Defendants has an option to avoid infringement ... by purchasing Bluetooth chipsets from Broadcom, an approved licensee of the Washington Research Foundation."

The Foundation has attempted over a period of years to negotiate licenses with the three manufacturers who use CSR silicon without success, says Lisa. Because the U.S. court has only national jurisdiction, the lawsuit would not affect devices sold in other countries. The U.S. has about 15-20 percent of the worldwide Bluetooth market, according to the SIG.

— Richard Martin, Senior Editor, Unstrung

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