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Payoff from Wi-Fi patent swells to $829 million but, time is running out for CSIRO to cash in

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It might be the last big cheque CSIRO will collect before its storied patent — used in an estimated three billion Wi-Fi devices worldwide — expires at the end of next year.

Last week, the Commonwealth Scientific and Industrial Research Organisation said it reached a $229 million agreement with several U.S. companies including three carriers — AT&T, Verizon and T-Mobile — days before the case was due to go to trial in Tyler, Texas.

In 2009, CSIRO collected $205 million in a settlement with several biggies including HP, Microsoft, Intel and Dell, and went on to sign licensing deals worth an estimated $400 million with others.

All told, the research group may have pocketed about $829 million, a lot of it grudgingly from American companies that, despite their early lead in development of wireless technologies, failed to solve what, loosely speaking, could be called a last-metre problem.

The best technology won

The problem called reverberation distorted high-speed exchange of large amounts of data, especially in indoor environments. Australian researchers led by John O’Sullivan solved the problem using radio astronomy. The resultant technique and the so-called ‘069 patent is now used in the two most popular wireless standards — 802.11a and 802.11g. In 2009, O’Sullivan, an electrical engineer with expertise in radio astronomy, was awarded the CSIRO Chairman’s Medal and the Australian Prime Minister’s Prize for Science.

Ars Technica, a Conde Nast publication, has published a fascinating account of the technology and CSIRO’s battles in the U.S. to protect its patent. It is, obviously, written from an American standpoint, and questions what may have happened if the cases went to trial and was ruled upon by an American jury. It also suggests defense attorneys may have found “serious flaws with CSIRO’s version of history.”

Still, the article quotes an American attorney, the late Dan Furniss, who carried CSISO’s fight to the U.S. courts. What Furniss reportedly told a jury in 2009 captures the gist of the technological battle:

“CSIRO did not invent the concept of wireless LAN, it just invented the best way of doing it, the best way it’s used now throughout the world.”

Still, the Australian agency may not have fully exploited the commercial potential of its technology. In 1996, it secured a patent in the U.S. but overlooked several other emerging markets.

“We couldn’t see the evolution of the innovation system in the way it has, so we didn’t apply for patents in Latin America, in Russia, and either China or India,” Nigel Poole, the agency’s acting group executive, told Reuters recently. “With the benefit of hindsight, of course, we would have loved to have a Chinese patent or a patent in India as well.”

With the ‘069 patent expiring at the end of 2013, there may not be too many big paydays for CSIRO but it can take heart from the battles it won in technology’s Mecca.

Caption for photo:

The WLAN Project Team: Mr. Graham Daniels, Dr. John O’Sullivan, Dr. Terry Percival and Mr. Diet Ostry. (Mr. John Deane, the other team member, is not in the photo.)

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