Wi-Lan goes to court

In an effort to protect a potentially lucrative market opportunity to licence its wireless technology, Calgary’s Wi-Lan Inc. has launched a lawsuit against San Jose, Calif.’s Radiata Inc. for allegedly infringing upon its Canadian patent for OFDM technology.

Wi-Lan, maker of the I.Will line of wide band-orthogonal frequency division multiplexing products, launched the lawsuit only three days after Radiata was bought out by networking giant Cisco Systems Inc. for US$295 million.

In September, Radiata announced the release of a chipset based around the IEEE’s 802.11a standard. Only three months earlier, Wi-Lan had announced its belief that all companies producing 802.11a products without obtaining a licence from Wi-Lan were infringing upon the company’s North American patents.

Observers believe Wi-Lan’s Canadian lawsuit against Radiata is a test case for the company to prepare a similar patent challenge in the United States.

“(Wi-Lan’s) claiming lost opportunity,” said Rob Millham, an analyst with Research Capital Corp. in Vancouver. “The motivating factor was obviously, from Wi-Lan’s point of view, the fact that Cisco’s paying US$300 million for a company that (Wi-Lan believes) is violating a patent.”

The Globe and Mail has reported that Wi-Lan is seeking $780 million in damages it says Radiata may have made from the alleged infringement, $10 million in punitive damages, and an unspecificed amount for “reasonable compensation” of losses suffered by Wi-Lan, as well as legal costs.

“I think it’s still Wi-Lan’s hope to resolves this situation with a licensing agreement,” Millham said.

Losing this court case could prove devastating to Wi-Lan, say industry observers. The company stands to profit immensely if its claim that all makers of 802.11a products have to pay a licensing fee to them stands up.

IEEE-802.11a is a wireless LAN standard being developed around OFDM technology. Unlike the popular 802.11b standard, which is based on spread spectrum technology and operates at the 2.4Ghz frequency range, OFDM technology enables LAN connections of up to 54Mbps instead of the 11Mbps provided for by 802.11b.

Canada, the United States, and Europe have all opened up spectrum in the 5GHz range to accommodate the new wireless technology. The IEEE is frantically working to solve any remaining problems with the 802.11a standard, including the power limitations it faces due to regulation, in an effort to get these products to market as soon as possible.

Wi-Lan has already notified the IEEE that it is willing to licence its OFDM technology to any company interested in developing 802.11a networking products.

Observers are split over the merits of Wi-Lan’s case against Radiata. Millham said he was told by an IEEE committee member that with a liberal view of the patent, Wi-Lan could have a claim. A source who wished to remain anonymous, however, told Network World Canada that Wi-Lan faces an uphill battle due to the amount of variants on OFDM technology being developed. Cisco, for instance, announced in October the formation of an industry coalition to support the use of vector-based OFDM for broadband wireless access