Australia's peak science body stands to reap more than $1 billion from its lucrative Wi-Fi patent after already netting about $250 million from the world's biggest technology companies, an intellectual property lawyer says.
The CSIRO has spent years battling 14 technology giants including Dell, HP, Microsoft, Intel, Nintendo and Toshiba for royalties and made a major breakthrough in April last year when the companies opted to avoid a jury hearing and settle for an estimated $250 million.
Now, the organisation is bringing the fight to the top three US mobile carriers in a new suit targeting Verizon Wireless, AT&T and T-Mobile. It argues they have been selling devices that infringe its patents.
CSIRO, which is also now targeting Lenovo, Sony and Acer in new cases, says mathematical equations in its patents form the basis of Wi-Fi technology used in a whole slew of technology products including smartphones, laptops, routers and games consoles.
"CSIRO is poised to hit a home run ... any company using Wi-Fi technology has no choice but to pay up," said Trevor Choy, an intellectual property lawyer with Choy Lawyers.
"The widespread usage of the technology means that a few cents per customer / data volume usage could easily add up to a lazy billion or more.
"The fact that the court case is happening in the US is also good because US courts don't shy away from awarding big damages figures."
In a phone interview today, CSIRO's commercial executive director, Nigel Poole, said the Wi-Fi patent was the CSIRO's most lucrative yet but he would not comment on expected windfalls or on whether the next targets could be Apple, RIM and Nokia.
He pointed out that the existing cases could take a while to go through the courts unless the companies opted to settle.
"Every single company that sells products with Wi-Fi in them we would like to have a licence with ... [but] there's a practical limit to that - one of them is that there are very small or niche companies that are not going to sell very many units," Poole said.
"There is another limit which is we only hold patents in 19 countries and so there are many countries where we don't hold patents including Russia and China.
"After that it's a practicality process of trying to license an entire industry."
For as long as CSIRO has been fighting the tech giants, the targets of the suits have been battling to have the 1996 patent declared invalid, without much success.
Jim FitzSimons, an intellectual property lawyer and partner at Clayton Utz, said he did not know the specifics on CSIRO's patent but in general the first court case that tested any patent was "extremely important".
"The fact that they decided to settle ... they could only have done it on the basis that they were going to lose," he said, referring to the settlements with CSIRO in April last year.
Sydney CSIRO researcher John O'Sullivan, the man who came up with the theories behind the Wi-Fi patent, was awarded the $300,000 Prime Minister's Prize for Science in October last year.
He and his team of inventors also won the CSIRO Chairman's Medal last year and the Australian Academy of Technological Sciences and Engineering (ATSE) Clunies Ross Award last month.
The patent, which is owned by CSIRO, had its genesis in a 1977 paper O'Sullivan wrote about how a set of mathematical equations could be used to sharpen images from optical telescopes. He developed it while searching for exploding black holes.
"By the late 1980s, we started looking at the growth of computer networking," O'Sullivan told The Sun-Herald in December last year.
"It was several years before the worldwide web, there was just email and specialised computer services. But I started thinking that if you could just cut the wires and have portable computing, able to access networks at full data rates, there would be huge potential."
The CSIRO first applied for its Australian Wi-Fi patent in 1992, which solved the problem of patchy wireless reception caused by waves bouncing off objects.
"We realised this was going to be big," he said. "But I don't think any of us realised how big."
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