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Analog Devices settles modem technology lawsuit

A California inventor of a standard for dial-up modem technology has settled a patent infringement lawsuit with Analog Devices over improper use of patented technology.

Brent Townshend and Analog Devices have agreed to a licensing programme for technology, patented by Townshend,which Analog Devices has used in some of its products. Analog Devices manufactures chips using the V.90 and V.92 standards for 56K bps modems that Townshend developed.

Townshend has secured licences for the technology from IBM, Motorola, 3Com and Lucent Technologies, among others. Litigation is still pending against Intel, Cisco Systems and Agere Systems.

In 1994, Townshend obtained a patent for the technology which allows users of dial-up modems to download information from the internet. The patent covered an algorithm that allows an analogue client to talk to a digital server, enabling the user to download data at 56K bps. Uploads to the internet are still restricted to 36.6K bps, which was the previous limitation for downloads before Townshend's invention.

The technology was originally licensed to US Robotics, which is now owned by 3Com. Another modem manufacturer, Rockwell International, began using the technology without a licence around that time, and a settlement was eventually reached. Rockwell later spun out its modem business as Conexant Systems.

In 1998, the International Telecommunications Union ratified the V.90 standard which incorporates Townshend's algorithm. That standard was later updated as the V.92 standard.

Licensees are required to pay an up front fee of $25,000, which can be credited toward the per-unit royalty fees also incorporated into the settlements. They have to pay royalties for infringing products sold before signing the licence, as well as ongoing royalties.

Several types of modems are affected by the licence agreements, including hardware modems as well as soft modems. Most of the original standalone and integrated modems were of the hardware variety, with a separate processor to run the modem.

Soft modems took advantage of increases in processor performance by offloading some of the modem's processing tasks to the main central processing unit, which reduced the cost to manufacture the modem.

Licensees manufacturing client-based products must pay Townshend $1.25 per unit based on the V.90 standard sold before 31 December 2001, and 50 cents per unit sold from 2 January 2002, until the date the licence is signed. This applies to both hardware modems and soft modems.

After the licence is signed, hardware modem manufacturers will pay 44 cents per unit sold in 2003, 38 cents per unit sold in 2004, and 31cents per unit sold in 2005 or thereafter.

Soft modem manufacturers will pay 22 cents per unit sold in 2003, 19 cents per unit sold in 2004, and 16 cents per unit sold in 2005 or thereafter.

Server products using the V.90 technology will cost their makers $2.50 per port for products sold before 31 December 2001, and $1 per port for products sold from 1 January 2002, to the date the licence is signed.

After that is signed, licensees will owe Townshend 44 cents per port for products sold in 2003, 38 cents per port for products sold in 2004, and 31cents per port for products sold in 2005 and thereafter.

Companies which have licensed the technology will not have to pay more than $55m in total royalties under the terms of the agreement.

Court hearings in the other cases will probably get under way early next year, Townshend said.

Analog Devices was unavailable for comment.

Tom Krazit writes for IDG News Service


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