Wi-LAN: Licensing process should not hinder WiMax growth

When Qualcomm Inc. signed a licensing agreement with Soma Networks Inc. in April, some analysts took it as an indication that the company would be aggressively enforcing its WiMAX patents much the same way it did with its CDMA patents. According to one industry peer, being too vigorous in enforcing patents can hurt an entire sector. Qualcomm held substantial CDMA patents and and enforced them insistently, to a point where they limited the market for the technolgy, according to Hatim Zaghloul, chairman of the board at licensing company Wi-LAN Inc. He says had Qualcomm played a lesser role, CDMA would have grown faster and overtook Global System for Mobile (GSM) as the world’s top cellular network. However, Zaghloul welcomes Qualcomm’s WiMAX signing and doesn’t view the company as a threat in this space. "I don’t believe Qualcomm has substantial patents in the WiMAX arena," Zaghloul tells Report on Wireless. "It doesn’t bother me if they do. I cheer for every patent company out there, I want the patents to be enforced and I want people to respect the patents. In everybody’s business model they should have 5%, 6%, 7% of the product sale price assigned to the innovations that others have done." The agreement between Qualcomm and Soma covers Orthogonal Frequency Division Multiplexing/Orthogonal Frequency Division Multiplex Access (OFDM/OFDMA) technologies. Qualcomm obtained OFDM-related patents when it purchased Flarion Technologies Inc. earlier this year. But Edgar Masri, COO of Markham ON-based WiMAX equipment maker Redline Communications Inc., feels the nature of the WiMAX sector should prevent any one company from being guarded with its patents. "From our historical knowledge of WiMAX, unlike the CDMA world, the technology, innovation and ownership of intellectual property is being widely provided by a variety of companies. So the concentration risk is not as high as it was in CDMA," Masri says. "Of course these are perceptions because ultimately the laws of the land will determine on each specific what’s going to happen." By selling its technology development division to Fujitsu Microelectronics of America Inc. (FMA) this week, Calgary-based Wi-LAN completed its transformation into a pure patent licensing company. "In WiMAX, we are very friendly, a future technology and we want to licence it, but we don’t want to hurt the market," says Zaghloul. "The prices are low and we are not threatening anyone." So far Wi-LAN has signed WiMAX licensing agreements with Cisco and is has a letter of intent with FMA. The company also holds patents in Wi-Fi and CDMA, and Zaghloul says it will aggressively enforce the latter because the technology is older and people should be aware of the patents, adding: "We’re not here to teach big companies patent law, so if they don’t respect it they can expect lawsuits." But in the other sectors, Wi-LAN will be more cautious. Because OFDM is part of the new Wi-Fi as well as WiMAX, Zaghloul says they don’t want to be to hard on the Wi-Fi developers for fear of burning some bridges in WiMAX. Bearing that in mind, he also says in the licensing world it’s not unusual to be suing over one thing, discussing another and barely agreeing on a third, all with the same company. " going to be a middle of the road kind of thing," says Zaghloul. "We’ll maintain an aggressive stance but we’re not necessarily going to sue left and right." Wi-LAN is currently suing D-Link Canada Inc. for infringement of one of its wideband OFDM patents. From a business perspective, Wi-LAN feels that getting a big piece of a huge market outweighs dominating a smaller sector, so fostering WiMAX growth is good for the bottom line. And according to Redline’s Masri, the market is ahead of schedule. "I would have expected this level of enthusiasm and the level of orders to more around late ’06, early ’07," he says, adding that the certification effort, open architecture and competitive pricing are all prompting early adoption of WiMAX products. On the licensing front, Masri says Redline always works within the context of the requirements for intellectual property. In the past, he adds, Redline’s licensing agreements have been very limited in scope and were always easily negotiated. And like Zaghloul, he feels simple patent negotiations are beneficial for the industry. "Any business-minded entity will want to foster an acceptance and deployment whether it’s on the product side, like Redline, or on the intellectual property side," says Masri. "The balance needs to be struck and so far we have seen everybody approaching the WiMAX space with a very business-minded approach." The fact that Wi-LAN is extremely confident in the scope of its patents in the WiMAX sector should help it maintain its friendly approach to licensing agreements. Of whether a company is using a Wi-LAN patent, he says: "In our case it’s not uncertainty, it’s certainty. Our patents are very strong in the WiMAX arena. We’re one of the main players that people look at before they look at anybody else."

Wi-LAN: Licensing process should not hinder WiMax growth

News | 06/01/2006 4:00 am EDT

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