Wi-Fi's Patent Problem
By Mike Masnick, Thu Jun 24 05:15:00 EEST 2004

It's the dirty secret of many technology standards processes: what do you do if someone somewhere has some patents on what's being standardized? Now that problem is rearing its ugly head in the Wi-Fi world.

The technology standardization process is designed to promote a single standard on which everyone can innovate and interoperate. However, with so many technologies being patented early and often (sometimes by companies who don't plan to do anything other than sit and wait for someone else to actually create the product), it's getting tougher and tougher to avoid the patent question in the standardization process. A few years ago there was a big debate when the web standards body, the W3C, adjusted its policy from only allowing royalty-free technology into its standards to allowing "reasonable and non-discriminatory" (RAND) patent licenses. After much arguing on the matter, the W3C adjusted its policy back again last year to suggest that all essential parts of the standard that are patented by offered royalty-free. Much of this debate was over an ongoing patent battle concerning the VoiceXML standard that many companies in the voice recognition industry are relying on. While the standard has moved forward, many companies are still worried about how such patent issues are going to impact their businesses.

A similar situation may soon play itself out in the Wi-Fi and WiMAX world. Wi-LAN, a Toronto-based wireless technology company, has been making noises about enforcing its various patents for years -- but has mostly suggested that the focus was going to be in the WiMAX space. Last month, Wi-LAN won an important victory when it convinced broadband wireless equipment maker Redline to license its patents. This out-of-court victory seemed to have emboldened Wi-LAN who used the occasion to announce it had received plenty more related patents, which it planned to enforce. That Redline only agreed to license the patents after realizing that a lawsuit would be too costly, and not admitting that the patents appeared to be valid, didn't seem to matter to Wi-LAN.

Wi-LAN has lived up to its word, but instead of going after other Wi-MAX equipment makers, Wi-LAN is going after a much bigger market that is available to hit up with patent licensing requests right now: Wi-Fi. Today it sued Cisco claiming Cisco's 802.11a and 802.11g products infringe on various Wi-LAN patents. Obviously, this effort isn't limited to just Cisco, but any company that makes 802.11a or 802.11g equipment, and could add an additional "patent tax" on all Wi-Fi equipment.

Cisco may choose to fight these patents. So far, Cisco's only response has been to say that lawyers were looking over the claims and would respond appropriately in time. If Cisco decides it's not worth fighting, it would give Wi-LAN a de facto victory, which likely will be used to go after every other player in the market. Wi-LAN claims that it didn't file these suits earlier because no one wanted to stunt the market's growth -- which is an odd sort of admission. It's basically conceding that by enforcing Wi-LAN's own patents it's doing damage to the industry. While it's unlikely that Wi-Fi products will simply go away, this will likely make them more expensive, and could slow down an industry that is still very early on in its development. It should also be a warning sign to everyone jumping on the WiMAX bandwagon, since Wi-LAN's patents deal with WiMAX as well. For all the talk of open standards in both Wi-Fi and WiMAX, it looks like both now have a patent problem to deal with.