Muni Wi-Fi threatened by patent decision

A federal judge rules last week that Australia's science research agency holds a valid patent to key technologies two Wi-Fi standards, 802.11a and 802.11g, News.com reports. If the patent withstands appeals, the additional licensing fees could drive up costs of the equipment to the point where the municipal wireless movement may be stopped in its tracks.

Judge Leonard Davis ruled that a patent granted in 1996 to the Commonwealth Scientific and Industrial Research Organisation (CSIRO), Australia's national science agency, is valid. The patent describes the implementation of several aspects of the 802.11a and 802.11g wireless standards developed by the Institute of Electrical and Electronics Engineers (IEEE). The court also ruled that Buffalo Technology, a small maker of Wi-Fi routing gear, had violated this patent.

Unusual for a patent case, the judge issues a summary judgment in the case, meaning the evidence is so clear on its face that there are no triable issues of fact.

The defendant in the case, Austin, Texas-based Buffalo Technology could be required to pay $1.5 million to $2 million in damages to CSIRO. But the impact on the wireless industry, the entire computer industry and local governments could be devastating.

"One reason that Wi-Fi has proliferated as it has is because it's reached a point where it's incredibly cheap, so it's easy to just stick a Wi-Fi chip in a consumer electronics device," said Stan Schatt, a vice president at ABI Research. "But if the cost of the technology goes up to pay for the license, even a little bit, it could throw off the economics."

In 2005, an estimated 140 million to 155 million Wi-Fi-enabled devices shipped. That number in 2009 is expected to balloon to 450 million devices shipped. That could be a lot of patent royalties.