The US technology industry has just woken up to the fact that it has been effectively patent trolled by an Australian government agency.
Ars Technica is moaning that US consumers will have to make a multimillion dollar donation to an Australian government agency.
The “bad guys” were the Commonwealth Scientific and Industrial Research Organisation, or CSIRO, which after ten years managed to score a $229 million settlement from a group of nine companies that make a variety of wireless devices and chips, including Broadcom, T-Mobile, AT&T, and Lenovo. CSIRO has won before. It squeezed $205 million from 14 companies in 2009.
But that does not seem to have got the tech press’ goat. What appears to be most annoying was that CSIRO began boasting to the Australian press that WiFi was a homegrown invention which is not quite true. Ars points out that the New York based IEEE created a working group for the evolving 802.11 wireless standard in 1990, a full three years before CSIRO filed for its key wireless patent. But CSIRO didn’t even show up.
The US likes to believe it invented everything and finds it difficult to understand how the diggers who bailed out a lot of US soldiers during World War II in the pacific could actually invent WiFi. Next, people would be saying the New Zealanders were the first to split the Atom and the British invented the steam engine.
CSIRO had been a fairly benign patent troll. Unlike Apple or Samsung it did not fling a case at the US International Trade Commission, which would have resulted in a ban on the importation of wireless devices. It started out wanting $4-per-device royalty demand but modified that a lot.
CSIRO is fairly typical of government research agencies Down Under, which were built when colonial governments needed expertise, usually on agricultural matters. In New Zealand a similar body, the DSIR, gave the world the kiwi fruit.
It all started when CSIRO astrophysicist John O’Sullivan was told to build a high speed wireless network. He didn’t begin building a team for the project until the early 1990s and most of the key technologies already existed.
But according to court documents, CSIRO’s idea was using “multicarrier modulation” to defeat the problem of indoor interference with radio waves. On 23 January, 1996 the US Patent Office granted CSIRO US Patent Number 5,487,069. So while they did not invent the wirelessLAN they came up with the best way to do it.
CSIRO could not find anyone interested in its invention. But when that IEEE adopted the 802.11a standard in 1999 and the 802.11g standard years later it used CSIRO’s idea and it took off.
In 2005, a Japanese company called Buffalo Technology accused CSIRO of being “swindlers” in daring to make an assumption that it invented all those American standards. CSIRO took the outfit to the cleaners in the Eastern District of Texas for its troubles. Buffalo lost on a summary judgement before Judge Leonard Davis.
From then on, CSIRO behaved like any other patent troll. It always used Judge Davis and always filed in the Eastern District of Texas. But Ars sees it all as example of patent trolling of the highest order, but has to admit that the defendants all settled out of court.
“For the Australian inventors, perhaps it’s just as well that a jury never ruled on the matter,” it sniffs. “Without ever having sold a WiFi device and without having finally proven their case in court, CSIRO has reaped a $430 million windfall.”
That might be true, but then looked at another way, they are Aussie heros who took on big multinational companies who just incorporated their idea under the bonnet of their standard without paying up. If the CSIRO had been a real patent troll, our guess is that it would have scored a lot more.