Dispute brews over modem patent

3Com and an obscure inventor claim to have been granted a patent that could require makers of 56-kbps modems to fork over royalties.

2 min read
3Com and a relatively obscure inventor say they have been granted a patent that could require some modem makers to pay royalties.

3Com said the U.S. Patent and Trademark Office granted inventor Dr. Brent Townshend Patent Number 5,801,695 for technology called "PCM," or pulse code modulation, that both parties claim is key to making a 56-kbps modem work.

Last year, 3Com obtained exclusive rights to Townshend's patents, and the company now acts as a clearinghouse for licensing technologies developed by Townshend. Although this is only one of several patents Townshend applied for, 3Com said the patent issued is one of the key technologies used in consumer's modems.

Companies that make the chips for 56-kbps modems such as Lucent and Rockwell may eventually need to negotiate licenses with 3Com to make their chipsets. The terms of these negotiations could include royalty payment schemes as well as cross-licensing of other dial-up modem patents, but not everyone agrees that Townshends patents are fundamental to the workings of 56-kbps modems.

Lucent, for one, asserts that it was previously issued patents on PCM modem technology.

"Lucent still believes it has been issued some of the earliest and most fundamental patents relative to PCM technology which is used in all 56-kbps modems," said a Lucent spokesperson. "We can't speculate on the implications of today's announcement because we haven't studied the patent which was reportedly issued," he noted.

At times last year, issues surrounding the licensing of intellectual property rights delayed companies from reaching a consensus on a new standard way for 56-kbps modems to communicate.

While the standard, now referred to as V.90, was set by the International Telecommunications Union, some elements such as patent licensing remain up to companies to complete. Companies are required to license technologies related to the standard at "reasonable" terms, but those terms remain largely up to patent lawyers and companies to hash out.

For instance, in March 1998, Motorola and 3Com announced the settlement of an earlier patent infringement dispute and agreed to cross-license each other's modem patents.

Under the terms of that settlement, the companies have entered into a cross-licensing deal for all of their respective patents covering previous analog modem standards as well as the newer V.90 standard--including technologies devised by Townshend.

Rockwell, on the other hand, has yet to settle a prior lawsuit filed by Townshend, the inventor told CNET News.com today.

Rockwell spokesperson Eileen Algaze responded by saying "We don't see an impact on our products, technology or market (for 56-kbps modems)." Algaze noted that there are 10 other companies that have patents related to V.90 technology, including Rockwell, that all have to engage in cross-licensing of patents.

She declined to comment on the impact the patent could have on Townshend's lawsuit, saying the company has not yet read details of the patent.

While declining to comment on any specific legal issues, Townshend said "This will probably start some dialog regarding licensing."