In a move that has mystified the optical networking community, Nortel recently claimed intellectual property rights relating to the SFI-5 interface -- a standard being developed by the Optical Internetworking Forum (OIF) for interconnecting SerDes and framer chips at OC768 (40 Gbit/s) line rates.
The upshot? Last week, the OIF summarily shut down the current development process for the SFI-5 standard.
This could turn out to be a huge deal, industry insiders tell Light Reading. Nortel's move could set back the development of 40 Gbit/s systems by months or more, further delaying technology that has already been pushed out by a struggling economy (see 40 Gbit/s: Ready for Prime Time? and 40 Gbit/s Takes the Slow Lane). Standards are put in place to help components and systems vendors ensure interoperability and hence speed up product development times.
Nortel says it's just a misunderstanding, however. The company says a new OIF process has been created that requires them to disclose all intellectual property initiatives related to a standard in development. They say they're simply disclosing the patent applications as a matter of procedure.
"The OIF has just created a new policy for disclosing IPR (intellectual property rights) and there has been some confusion regarding how the policy was to be implemented into the standards process," wrote Ann Fuller, a Nortel spokeswoman, in an e-mail to Light Reading. "It was a learning experience for everyone. Now we are all working to resolve this confusion and ensure the process moves forward."
But the fact remains that standards activity has been put on hold, at least temporarily. In an email to OIF members dated March 27, 2002, OIF's president, Sid Chaudhuri from Tellium Inc. (Nasdaq: TELM), wrote:
Notice of Ballot Termination
This is to notify you that the OIF Board of Directors has declared
that the Principal Ballot for SFI-5 (2001.145.10 Serdes Framer
Interface Level 5 (SFI-5): Implementation Agreement for 40Gb/s
Interface for Physical Layer Devices) is hereby terminated, and shall
for all purposes be considered null and void.
The reason for this is a written notice disclosing intellectual
property rights on this specification was just received yesterday
from OIF Member Nortel Networks Limited. Nortel has also indicated
that it is prepared to license such intellectual property rights.
(The actual letter has been uploaded as contribution 2002.146 -
Nortel IPR disclosure on SFI-5)
Since neither this Ballot, nor the Straw Ballot which preceded it, were conducted with the Members' knowledge of this disclosure regarding Nortel's intellectual property rights, the OIF Board has decided that it is in the best interests of all concerned to terminate the current Ballot. Once the technical committee (TC) has had a chance to understand the new information, the TC must decide whether the SFI-5 document should go to principal ballot under these new circumstances. If the TC Committee does approve this document going to Principal Ballot, it then goes to the Board of Directors for their approval.
Initially, the industry was buzzing with conspiracy theories. "You don't send the technical guys in to help define the standard and then turn around and try to screw money out of it," says an executive from a network processor vendor, who did not wish to be named.
There's no denying that the process for creating standards is open to manipulation: Big companies want their own approach to be standardized, while the smaller fry want changes that could take away some of the incumbent's competitive advantage. Take a look at the wrangles surrounding the standard for resilient packet ring (RPR), for example (see RPR Moves Forward).
In Nortel's case, some think the motive -- if indeed there was one -- was financial. There's considerable money to be made from exercising intellectual property rights. Nortel's lawyers have been turning up the heat in other cases, such as the patent-infringement case against ONI Systems Inc. (Nasdaq: ONIS) (see ONI/Nortel Lawsuit Moves to Next Level).
Yet, confoundingly, Nortel stands to gain little financially -- at least not in the immediate future -- because carriers aren't actually deploying 40 Gbit/s systems yet. "The only reason I can see is financial gain, and what financial gain is Nortel going to get out of this because there's no 40-gig market," says one industry source, who wished to remain anonymous.
Nortel maintains that things have been blown out of all proportion -- it disclosed the patent applications as a result of a new OIF policy. The company says it seeks to resolve the confusion that has arisen.
It's not yet clear whether the company's explanation will be accepted by the members of the OIF, many of which are competitors. Nor is it clear whether the OIF's 40-Gig standards process will manage to get back on track. This story will be updated when more information becomes available.
— Pauline Rigby, Senior Editor, Light Reading