Wayport in Patent Suit
September 24, 2004
A 'patent apocalypse' may be arguable, but infringement suits are hitting all areas of the Wi-Fi vendor community with this latest announcement. Even those that have settled sometimes appear far from over for all parties.
As some lawsuits end in our Wi-Fi planet (as the settlement between Symbol and Proxim seemed to last week), other suits always come up to take up the time of the court and, in some eyes, call into question the validity of current patent laws. Worse, settlements for some might not mean much in the long run to all.
The latest company facing a suit for patent infringement is Austin, Texas-based Wayport, the wireless ISP known for its successful locations in hotels and airports, and even more for landing the deal to unwire as many as 8,000 McDonald's restaurant locations in the United States over the next year.
According to Unstrung.com, papers have been filed with the U.S. District Court of Massachusetts by PowerOasis, a Nashua, New Hampshire company that says it has a patent on providing pay-as-you-go Internet access.
PowerOasis has asked the court to stop Wayport from providing Internet access to customers on a pay-as-you-go basis. The company claims that Wayport has deprived it of the "ability to sell and expand its services in airports and other locations, including hotels." This doesn't appear on the US Patent Office Web site, however.
Wayport's official response to inquiry about this law suit is that it "hasn't formally been served with a lawsuit yet—in fact we had never even been contacted by PowerOasis before they filed this suit—but we have obtained a copy of the documents and begun our review. We believe that the claims made are without merit and intend to vigorously contest them."
The 'without merit' feeling is shared by others. The technology commentary Weblog techdirt said this week, "Basically, PowerOasis is admitting that Wayport has a better sales and marketing force. No one at Wayport deprived PowerOasis of anything. They just beat them in the market." Not to mention companies like T-Mobile Hotspot, Sprint PCS, Boingo Wireless, Hotspotzz -- just about every consumer hotspot provider around has some form of pay-as-you-go access for customers not looking for a long term subscription.
Techdirt says the US Patent office is to blame, and that current laws have us on the "eve of a patent apocalypse," tech companies in particular.
Another big lawsuit ongoing in the wireless industry is Canadian company Wi-LAN taking on Cisco over some radio modulation patents that could give it control over technology that's at the heart of the 802.11a and 11g standards for wireless LANs.Even when a lawsuit is settled, it's never really over. Take for example the much talked about $23 million dollars that Proxim will be paying to Symbol over the course of the next few years.
Proxim's vice president of corporate marketing, Ben Gibson, says his company settled to "avoid the distraction"—but that doesn't mean Proxim is happy about how it went down, and is sending out a warning that Symbol might be going after other companies soon.
"The patent in question is for a power save feature that is in all standard 802.11 chips," says Gibson. "The jury said it was infringed when built into our systems—but that could go for every Wi-Fi system out there." The actual infringement on that patent only happens when the power save is used in an interaction between an access point and a client, so it would only affect product vendors, not the chipset makers.
"This power save is not something we developed," says Gibson.
Gibson says the history goes back two management teams within Proxim—Proxim sued first. The Symbol suit was actually a counter-suit.
After the settlement was announced, Raymond James & Associates put out a research comment on the status of Symbol saying that the company not only could sue, it probably would: "Symbol could ostensibly sue every other equipment vendor within the $3.3 billion WLAN industry. This strategy would likely open a Pandora's box of counter lawsuits, but a more targeted campaign against low-end equipment vendors that posses no intellectual property (IP) position should be viewed as a distinct possibility given Symbol's patent litigation history." It conceded, however, that this is supposition and that the company's management has made no noise about its intentions, if any, in this regard.
However, according to a column by Peter Judge at TechWorld in the UK, Symbol is talking about starting a licensing program rather than going crazy in the courts. The company sees the extra 6% royalty on the patent that Proxim is paying after the settlement as a entitlement, and says some access point vendors are already paying.
This is the same tactic that Wi-LAN would like to take. In its case, though, a win against Cisco would set a precedent that would allow Wi-LAN to expect royalty payments from chipmakers. Cisco is a big name that could dig in its heels, but by filing in Canada, Wi-LAN will save money, and the onus of proof is on the defendant.
Meanwhile, lawsuit or not, Wayport is not slowing down. A subsequent message from the company's vice present of marketing, Dan Lowden, said, "Everything is going great and we're deploying like mad, as many as 100 locations a day. So things are good."