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Intellectual property suits filed on computer makers

Data communications maker Multi-Tech Systems files separate intellectual property lawsuits against Compaq Computer, Dell and Gateway that, if sustainable, could lead to suits against nearly every computer maker.

    Data communications maker Multi-Tech Systems today filed separate intellectual property lawsuits against Compaq Computer, Dell and Gateway that, if sustainable, could lead to suits against nearly every computer maker.

    Mounds View, Minn.-based Multi-Tech alleges in its lawsuits that the three PC makers violated six of its U.S. patents for how voice, data and video are digitized for transmission over phone lines or corporate networks.

    If the patents are found to be valid, they could affect virtually every computer manufacturer shipping PCs with a sound card, modem and Web browser, said legal experts. But there is no guarantee any or all of the patents would be validated in a protracted legal battle.

    Ronald Schutz of Robins, Kaplan, Miller & Ciresi filed the suits with the U.S. District Court for the District of Minnesota on behalf of Multi-Tech. Both the court and law firm are located in Minneapolis.

    "We have not been served, so we are not aware of the suit," said Gateway representative John Spelich. "We defend all suits of this type vigorously, and we will do so here."

    "Compaq hasn't seen the suit and therefore cannot evaluate any claims that may be made in it," said Compaq spokesman Alan Hodel.

    "We haven't seen the lawsuit, so we cannot comment on it," said Dell representative Adrianne MacPherson

    The suits allege the three PC manufacturers violated six patents granted between Sept. 19, 1995, and Aug. 4, 1998.

    "The patents relate broadly speaking to technology that covers the convergence of data, voice and video," Schutz said. A PC equipped with a modem, sound card and Microsoft Netmeeting software could conceivably violate the patents, he added.

    The patents appear to cover the "simultaneous transmission and reception of data, voice and video over a communications line" but do not necessarily apply to streaming technologies, such as RealVideo or Apple QuickTime.

    Multi-Tech's lawyer contends the patent violations extend well beyond the three PC makers named in the suits.

    "There are probably a hundred computer companies out there and we didn't want to sue 100 companies, but the rest of the industry will be hearing from us," Schutz said.

    While it may seem inconceivable a company could hold patents affecting potentially a whole industry, legal experts say this would not be the first time. A patent roughly provides protection for a process, rather than a specific implementation of an idea, and therefore can apply broadly.

    An inventor named Jerome Lemmelson filed 18 patents in the mid-fifties. The patents spawned more patents, but also several multimillion-dollar lawsuits against manufacturers of automobiles, semiconductors, toys, medical equipment, VCRs and fax machines, among others.

    "What leaps to mind are the old windshield wiper lawsuits that kind of cruised around for a very long time and then started hitting gold mine after gold mine," said Rich Gray, an intellectual property attorney with Outside General Counsel Silicon Valley. "Just because a patent seems to hold an entire industry at gunpoint doesn't mean it's not a good claim."

    But Gray warned, "if you pick a fight with the industry heavyweights included in this lawsuit, you better have a strong patent, because they're going to turn over every rock for a way to invalidate the patent or for it to be read so restrictively it doesn't apply. If you're going to shoot at the king, you better not miss."

    Multi-Tech first applied for the patents in 1993, and since 1998 has tried unsuccessfully to get Compaq, Dell, Gateway and others to license them, Schutz said. "No computer manufacturers have licensed the patents," he added.

    Muli-Tech, which makes data communications equipment and systems, holds 49 patents, according to the U.S. Patent & Trademark Office. The 1995 patent covers the "computer-based multifunction personal communications system."

    The more recent patent applies to "voice and data transmission systems."

    Multi-Tech did not request specific damages. Suits filed in federal court do not require a dollar amount for damages be included in the suit. In the case of patent infringement, a winning plaintiff typically is awarded a royalty, said legal experts.

    "We don't know the extent of the infringing sales," said Schutz, who therefore could not speculate on the extent of a possible award."