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Taxing Times for WiFi?

The Australian government has won the first skirmish in a legal battle that could allow it to charge vendor royalties for all WiFi equipment and deployments.

Australia's Commonwealth Scientific and Industrial Research Organization (CSIRO) claims that U.S. patent 5487069, which it obtained in 1996, covers technology used in the Institute of Electrical and Electronics Engineers Inc. (IEEE) 's 802.11 standards. The patent is related to a wireless data transport technology that the agency developed back in the early 90s, a spokesperson for CSIRO tells Melbourne newspaper The Age.

The firm filed a patent lawsuit against WiFi manufacturer Buffalo Technology (USA) Inc. in the U.S. last year. Two separate countersuits, one from Dell Technologies (Nasdaq: DELL) and Intel Corp. (Nasdaq: INTC) and one from HP Inc. (NYSE: HPQ) and Microsoft Corp. (Nasdaq: MSFT), seek to prevent the royalty claims.

A U.S. federal court in Texas ruled today in a summary judgment that the patent is valid and Buffalo was infringing on it. Nonetheless, analysts say that it will be hard for CSIRO to enforce a wide-ranging patent claim on the whole industry.

"One case doesn't prove anything -- Buffalo might just need a better legal team," notes Craig Mathias, principal at the Farpoint Group and an Unstrung columnist. "Appeals are likely nonetheless."

It would be especially difficult to enforce this worldwide, says Ken Dulaney at Gartner Inc. : "Did they file the patents in all the countries where they are going to pursue this? ... These things take forever."

Dulaney does allow, however, that if CSIRO manages to take this case further then it could potentially "cost us all more" for WiFi technology.

Buffalo has not replied to inquiries about a possible appeal. And the Wi-Fi Alliance , whose members are most directly effected by the case, has not issued an official comment.

The WiFi industry in general has a rich and colorful history of patent disputes. (See AirTight's Patent Play, Broadcom Suits Up, Broadcom Suits Up, and AirTight's Patent Play.)

In fact, Canadian infrastructure vendor Wi-LAN Inc. (Toronto: WIN) (Nasdaq: WILN) has already succeeded in getting Cisco Systems Inc. (Nasdaq: CSCO) and others to license its patents relating to the underlying modulation technology used in some variants of WLAN specifications. Typically, however, these are long and hard-fought legal cases.

"There could be many, many claims on 802.11 technology from many players," says Gartner's Dulaney, "but most [plaintiffs] have given up on them."

— Dan Jones, Site Editor, Unstrung

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