Friday, September 24, 2004

Changes coming in Wi-Fi?

In sorting out how to pay for its patent infringement loss in 2003 to Symbol, Proxim, to reduce its future payments from 6% to a more manageable two percent, has agreed to hand over some of its own patents to Symbol. These are related but different to the Symbol patents, but Symbol general counsel Peter Lieb believes they will produce another royalty stream. Also, the transferred patents have more life left, because the patents handed over by Proxim last until 2014, while the Symbol patents referred to in the suit, run out in 2009.

The technology in question in the patent litigation, a power save feature, is built into standard Wi-Fi chipsets but, but according to analysis of the jury verdict, does not infringe the Symbol patent until the chipset is built into a system. This is a standard feature on every 802.11 access point. This means that every other Wi-Fi system supplier could be infringing claims of the patent of Symbol and liable to pay 6% royalties.

The next licensing targets could be Linksys, Belkin, Apple, and Cisco.

Ironically, this bad result for Proxim originated in a patent suit brought by Proxim against Symbol. This result illustrates the careful analysis required in deciding whether to bring a patent infringement suit at all.


---->Unstrung has the following post on 9/24/04:

Chris Quilty, analyst at Raymond James & Associates Inc., writes in a research note that the Symbol/Proxim case involved a number of patents that are "fundamental" to the 802.11 standard. Therefore, he reckons, Symbol could use the $23 million settlement as a lever in "a targeted campaign against low-end equipment vendors that possess no intellectual property position."

"That's my supposition -- it's not supported by anything the company has said," Quilty told Unstrung on Friday. "But they are extremely litigious, and they've been successful at it... I'm just connecting the dots.

--> In response, one notes that the Symbol/Proxim case involved litigation over claims of a patent directed to a power save feature. Further, as noted, it was PROXIM, NOT SYMBOL, that started the litigation.

----> from wifiplanet:

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.

[Of the projected lawsuit by PowerOasis against Wayport], 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.

[Wayport is 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.]

UPDATE: has posted a copy of the complaint in the PowerOasis/Wayport matter at

UPDATE from internetnews (Oct. 23, 2004):

The Newport Beach, Calif.-based company is sending out information packets to Wi-Fi operators informing them of the patent claim and including a licensing agreement. Companies have 30 days to ask questions, sign the licensing pact, or prove to Acacia that the wireless operator is not infringing the patent.

The licensing pact demands that hotspot operators pay Acacia $1,000 a year for up to 3,500 redirected connections -- after which operators would have to pay 5 to 15 cents for each redirected connection.

"Anybody who operates a hotspot with redirection can assume they'll hear from us," Acacia's executive vice president of business development and general counsel Rob Berman told Wi-Fi Networking News.

Berman emphasized that this is not a "shakedown" of mom-and-pop coffee shops that operate a Wi-Fi hotspot.

Austin, Texas-based Wayport—on its way to becoming the nation's biggest hotspot provider through a deal with McDonald's—says it is one of the many Wi-Fi hotspot companies under scrutiny from Acacia.

"Wayport has received a package of materials from Acacia," says Amy Shields, a spokesperson for the provider. The letter seeks "Wayport's acquiescence to a licensing agreement by which Wayport would pay Acacia a usage-based fee."

"Our IP attorneys are reviewing this matter and we are evaluating next steps," Shields says.

T-Mobile USA's response was "no comment," according to Bryan Zidar, a spokesman. Earlier this week, T-Mobile announced it had finished rolling out 802.1X security throughout its 4,700 hotspots using new Connection Manager software. Using the software, there is no redirection.

Berman has said Acacia believes the royalties will not burden small operators, nor stifle the Wi-Fi market.

"We don't think it will have any impact at all on the Wi-Fi industry," Berman told Wi-Fi Planet.

In 2001, the patent in question (No. 6,226,667) covering "controlled communications over a global computer network," was granted to LodgeNet. LodgeNet provides hotel guests with interactive television services. Acacia purchased the patent from LodgeNet in July.

Earlier this year, Nomadix raised eyebrows when it announced it would enforce its own patent (No. 6,636,894 B1) covering how Wi-Fi hotspots redirect users. Acacia appears to have beat Nomadix to the U.S. patent office: the Nomadix patent was filed in December 1999, while Acacia's was filed in January that same year.

"Nomadix has always respected the valid and enforceable patent rights of others in our industry, as we expect our competitors to do the same," said Kurt Bauer, CEO of Nomadix.

"We are communicating with our customers and partners to ensure them that business continues as normal, and we will stand behind them," Bauer said in a statement.

The patent for redirecting Wi-Fi hotspot users joins other high-profile patents that have given Acacia a somewhat infamous reputation. In July, the non-profit digital rights group Electronic Frontier Foundation (EFF) named Acacia's patent for streaming audio or video to the top of the EFF's list of worst patents. Universities, local cable television and online porn outlets were asked to license the patent described as covering "the transmission and receipt of digital content via the Internet, cable, satellite and other means."

Wi-Fi service providers which stream audio or video wirelessly could hear from Acacia, says Berman.


Wi-Fi was an issue in the Scott Peterson trial.

from Ben Charny at

Wireless Internet access is the latest must-have technology inside courtrooms, but some courthouse administrators admit they installed the gear understanding very few of the pitfalls.

For instance, at the recently concluded trial of double murderer Scott Peterson, a savvy TV news reporter used the courthouse wireless network to bend, but not break, the media rules set by the presiding judge, Alfred Delucchi. While short of broadcasting a video image of the proceedings, which was banned, the reporter did cause a stir by supplying a live, text account of the proceedings. The judge's staffers later said they'd been outfoxed.

"After Delucchi banned cameras in the courtroom, we asked ourselves how can we do this and still put on a good product?" said Dan Weiser, news director of TV station KCRA-TV in Sacramento, Calif., whose reporter used the court's Wi-Fi network to paint the word picture for viewers. "The technology was there, so we did it."

Peggy Thompson, executive officer of the San Mateo County Superior Court, said the incident illustrated just how much she and other court administrators don't understand of the dangers associated with the wireless networks they're embracing.

Freely available software lets laptops make phone and videophone calls over the Internet -- and could easily be used for a guerilla broadcast of courtroom events, as they unfold, to anyone with a Web connection.

Jurors in jury assembly rooms are encouraged to use the wireless network to pass the time on the Internet -- but they could easily download illegal copies of music or movies. And because the networks create wireless zones that are hundreds of feet long, someone outside the courthouse could be logged on and up to no good.

"In my life, I would have never thought you could do any of that," Thompson said. "When we put the wireless network in about two years ago, we didn't think anybody would even use it."

Of the courts that built wireless networks, some experts estimate about half are in the same predicament as San Mateo County, in that they installed the technology with the best of intentions, but only afterward realize the Pandora's box of problems they have opened. The startling percentage is improving, however, as courts upgrade to more sophisticated wireless hardware and use better systems integrators, while court administrators urge judges to create rules about how and when courtroom visitors can use the networks.

"Courts in general don't have a good policy on this," said Michael Overing, an adjunct professor of Internet law at the University of Southern California's Annenberg School of Journalism.

No one is dismissing the benefits of wireless networks for courts, especially ones with heavy case loads. Known informally as Wi-Fi, or wireless fidelity, a single Wi-Fi wireless access point creates zones up to 300 feet in area, in which laptops and personal digital assistants can access the Internet at very fast speeds and without having to plug into anything. Courts turning to Wi-Fi will spend about three times less to outfit every office, desk and courtroom with Internet access than if they used traditional wired means, according to Tom Racca, a vice president of Chantry Networks in Waltham, Mass. And with more employees using the Net, productivity increases, with cases making their way through the system much quicker. But court administrators now realize that wireless networks also have downsides.

"Technology develops so quickly, and some people just don't realize what it can do," said a spokesman for the Administrative Office of the United States Courts, the administrative arm of the federal judiciary.

Courts can solve Wi-Fi headaches using a number of options. The most expensive results in state-of-the-art wireless networks such as the one the Bernalillo Metropolitan Courthouse in Albuquerque, N.M., installed when it built a new courthouse two years ago. The wireless network, supplied by Boulder, Colo., firm SpectraLink Corp. and Chantry Networks, doles out Internet access depending on your access privileges and where you are in the courthouse, and also blocks transmissions of instant messages, e-mails or other kinds of Internet data, said Paul Roybal, the court's chief information officer.

"We built this place from the ground up, and adding wireless was one of the easiest things we did," Roybal said.

A less expensive route, and better if you've already added a wireless network, is to ban, or further restrict, where laptops and other Internet-enabled devices are allowed in courthouses. Some courts let lawyers and other parties to a case use their laptops inside a courtroom, while members of the public cannot. At the Peterson trial, Delucchi allowed reporters to use their laptops, ostensibly to take more accurate notes. That probably won't happen again in Delucchi's courtroom, and may spark other San Mateo County judges to clamp down on courtroom laptop use as well, according to Thompson.

Also, according to Chantry Networks' Tom Racca, some courts don't realize that the access points they've installed have built-in security measures to shield the data being transmitted, and require a password to log on. Typically, the Wi-Fi access points are shipped with such security measures turned off. "It's easy enough just to turn these things back on," he said.


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