Wi-LAN's Patent Ensemble

The $7.5 million deal announced by Wi-LAN Inc. (Toronto: WIN) last week for patents related to future WiMax-certified equipment is believed to have been negotiated with defunct broadband wireless access vendor Ensemble Communications.

According to a company statement, Wi-LAN is to pay approximately $3.9 million in cash and $3.6 million in “special warrants exercisable into Wi-LAN common shares” for 17 U.S. patents (see Wi-LAN Acquires 802.16 Patent Portfolio).

Spokesman Ken Wetherall says the company is unable to announce the identity of the seller “until next week.” But a source close to the deal confirms Ensemble as the mystery vendor. The San Diego-based startup closed its doors in April.

“The patents they bought were from Ensemble,” says the source. “The MAC [media access control, a.k.a. radio control] layer that was built for above 10GHz and was the original focus of WiMax is basically Ensemble’s core technology.”

WiMax is the WiMax Forum's marketing term for the 802.16a wireless MAN standard, operating in the 2GHz to 11GHz bands. Initial products bearing the WiMax badge are expected to be based on the 802.16a revision d specification, intended as a high-speed fixed wireless technology. The future 802.16a revision e specification should support faster handoffs between base stations, facilitating mobile applications (see Working for the MAN).

Analysts believe the deal could give Wi-LAN a helping hand in its battle against larger vendors. “Ensemble was key in the early development of the 802.16 standards, potentially putting Wi-LAN in a good position if these patents materially impact other vendors' WiMAX implementations,” notes Current Analysis’s Peter Jarich. “Going up against major players, playing the patent and IP game might be a good bet for them.”

— Justin Springham, Senior Editor, Europe, Unstrung