Wi-Fi patent has driven CSIRO money mad


opinion When that grand old hoarder of intellectual property, IBM, promised in 2005 that it would make 500 patents in its 40,000-strong database freely available to anyone working on open source projects, it was applauded.

“This is exciting,” said famed Stanford Law School professor Lawrence Lessig, who is known for his strong opinions on the need to reduce copyright and intellectual property restrictions. “It is IBM making good on its commitment to encourage a different kind of software development and recognizing the burden that patents can impose.”

In a statement made several weeks later, Linux founder Linus Torvalds echoed Lessig’s praise for Big Blue.

“Software patents are clearly a problem, and I think it’s a problem that the open source community has been pretty aware of for the last five years,” he said. “The good news is that a lot of proprietary vendors are starting to see it as a problem as well.”

I can’t recall any specific instances of public comments, but I have no doubt that Australia’s open source community was also in favour of Big Blue’s move.

You can easily imagine Linux and *BSD fans crowded around tables at lunch during the nation’s Linux.conf.au conference held around that time every year. “Great that IBM is finally opening its patent library,” one bearded Apache coder would have likely stated. “Indeed,” would say another be-spectacled Solaris kernel engineer. “It’s about time.”

As a capitalist society, it is a truism that we need to reward such positive and open behaviour on the part of corporations so that we do not let money become the sole currency in which we trade. This is why I find the lack of reasoned discussion around the Commonwealth Scientific and Industrial Research Organisation’s insane pursuit of those who it claims are infringing on its Wi-Fi patent disturbing.

We should be applying the same standards to the CSIRO when it comes to patents as we did back in 2005 to IBM. To do any less will demean us and sully us in the eyes of our descendants.

To illustrate my point I encourage you to read an article published in the Sydney Morning Herald yesterday which details the CSIRO’s actions in attempting to enforce what it claims is its patent on the Wi-Fi technology which is used everywhere in modern society – from laptops to mobile phones to the Nintendo Wii.

The patent apparently had its genesis in a 1977 paper which one of the CSIRO’s scientists wrote about how a set of mathematical equations could be used to sharpen images from optical telescopes … developed while the search went on for exploding black holes. How Star Trek.

By the late 1980’s, so the story goes, the research agency was looking at computer networking, and the Wi-Fi patent landed in 1992.

But, as an extensive article in the Economist in the subject demonstrates (PDF), the history of Wi-Fi is far from simple, and a common sense definition of where the standard came from would seem to make the CSIRO’s claims rather laughable.

Maybe the CSIRO’s equations did have their role to play, but the truth is that the Wi-Fi standard arose only after a number of proprietary standards had already existed, and it took more than half a decade and a similar amount of expensive effort by the largest networking vendors of the day (some of the names are still around today, like Nokia and Lucent) to get the technology off the ground.

But let’s set all this aside and assume that the CSIRO’s argument that its technology is at the heart of the Wi-Fi standard that we enjoy today.

Isn’t there an argument to be made that it has already reaped a substantial benefit from its patent, and that it should release the intellectual property to the industry (as IBM did, in a limited form), so that the globe can benefit from its use and continued development?

The SMH article documents the fact that the CSIRO has already made about $250 million from its lawsuits against those who it claims have stolen its ideas.

And yet the same article also quotes CSIRO’s commercial executive director, Nigel Poole, as saying that the practical task in front of the research agency is trying to extract licences for use of its patent – which it holds in some 19 countries – from the entirety of the technology industry.

You can imagine the outrage if a commercial organisation was trying to pursue the path the CSIRO is on right now.

Say, for example, that Microsoft, Apple, or even a lower-profile company such as Avaya filed lawsuits against every single company in the technology sector with the intent of enforcing its patent on the Ethernet networking standard.

Technology workers across the globe would damn such a company for its outrageous action and then laugh themselves sick as the CEOs of every technology company in existence lined up a battery of law firms to eat the CSIRO’s lunch … with pleasure.

It is perhaps only the non-commercial nature of the CSIRO as a government entity which is protecting it from such censure in the eyes of the technology community.

It is also perhaps instructive to examine the CSIRO’s motives for pursuing, as one IP lawyer put it, returns from its Wi-Fi patent which could add up to a billion smackeroos. As a number of news articles have recently made clear, the research agency is losing staff and cutting budgets … not the least affected is its IT department, with union action already starting to raise its ugly head.

One can only imagine the pressure that the CSIRO’s commercialisation department is under at the moment. With such tough times going on at Australia’s research flagship, who can blame it for trying to milk its the cream-filled udders of its lucrative Wi-Fi patent for all that they’re worth?

Well, I can.

In its heartless pursuit of the world’s technology giants for their claimed violation of its virgin patent, the CSIRO has lost what veneer of scientific respect I had previously accorded it and has taken on the appearance of a giant shambolic gorilla trying to wring all the benefit it can from a technology that it only partially invented and that benefits everyone by remaining an open and free standard.

The agency is not only ruining its own reputation with the technology sector – which, no doubt, will be loathe to work with it ever again — but also Australia’s reputation in the global technology community.

Surely a $250 million pricetag for one puny mathematical patent is enough. The CSIRO should give up its pointless chase of global technology giants and telcos, and let sleeping laptops lie.

Image credit: Max Romersa, royalty free


  1. Not saying it’s right, but your comparison to the CSIRO chasing people making devices for profit, is that they should be more like IBM who released patents to OPEN SOURCE developers?

    I’m pretty sure that the CSIRO probably isn’t trying to make money off not-for-profits or people who release their work for free either.

    It doesn’t seem to be quite the same thing.

    And given that the CSIRO is supposed to be a research arm, really, how were they ever supposed to make money off the advances they make, if they gave everything away for free?

    Again, not saying any of their activities are right, and I’d have to read more about it – but it seems nuts to say “These people are giving their ideas away free to people who also give away their product for free – so you shouldn’t be allowed to charge for your ideas when people who make millions take them”.

    • Well, to my mind, firstly, I’m not entirely clear that the CSIRO definitely has a basis for its case. If you read the history of Wi-Fi development and what part the CSIRO has claimed to play in it, it doesn’t seem that major. But secondly, I agree with you that the CSIRO needs to recover its costs and make money so that it can fund further research … but is it really appropriate to sue every single company in the technology sector to do so? How will that make those companies feel about dealing with the CSIRO in future? In addition, if the CSIRO has already made $250 million, I think that is more than enough for now. Going any further just makes the CSIRO a serial pest.

  2. The CSIRO is as valid patent as many others in the admitidly broken US patent system.

    The algorithm asaik is for the MIMO style technology of signal correction for walls and other things that can reflect radio.

    The issue was much of the industry was using the technology unlicenced and the CSIRO jumped in to protect its IP.

    I for one think the whole patent is FUBAR, but the patent was tested in court and won convincingly. The issue can be asked should Commonwealth funded tech be entered for the Public Domain, or used as a revenue stream for the government. If you want to patent stuff, you need to play it hard, and the CSIRO imho is on the side of the angels on this one.

    • I think there should be a limit to this kind of thing. I have no problem with the CSIRO defending its patent rights. But proactively going after every company in the technology sector is going way too far.

      We are happy to throw the label “patent troll” onto other companies when it happens overseas. All that is happening here is that I am applying this badge a little too close to home for many people ;)

      • What sort of limit do you think?

        A limit to the number of times they can sue?

        Then company y has an advantage over company x because they don’t have to pay the patent license because they released later – they’ve made more profit, and haven’t had the cost of the licensing.

        A limit to the amount they can sue off each company?

        If the limit were say $250,000.00 and Apple made a billion dollars without the further need for research, little innovation, would that be fair?

        I am against software patents as the next person (or at least a short life, of say 2 – 5 years), as long as the companies that “steal” those patents/technology go into it with that understanding and don’t get sued unfairly/treated differently to any other competitor.

        As that is not what we’ve got, and the CSIRO have the rights to license this technology, then why should they not enforce that, when people aren’t legitimately paying for it?

        In other industries this would be theft or copyright.

        • I believe the CSIRO should place some form of self-limits on the amount of money it attempts to recoup through this sort of action. There is no possible way to argue that one patent is worth $1 billion … I am sure that if every technology company in the world threw researchers at this problem they could have solved the same issue for much less.

          The CSIRO is only earning itself a reputation internationally for its zeal in seeking to defend a patent that it has already earned hundreds of millions of dollars for. Isn’t that enough ‘commercialisation’ for anyone? I get the feeling the agency is attempting to fund a stack of stuff over the next few years through this one initiative alone. And that makes me feel uncomfortable.

          You don’t want to set out to earn the enmity of every technology company in the world if you are a research agency like the CSIRO. Odds are you will need to work with them in future.

          • That may be the case – but I doubt it cost Billions of dollars to make an iPhone, but should that stop Apple from charging for them once they think they have gotten a “fair” amount back?

            And that’s an argument I backflip on, because drug companies do not stop overcharging when they recoup their funds – but they never know how much they need to reinvest to get the next solution.

            The difference there of course is that the CSIRO doesn’t have shareholders, but they probably do have to fund a lot of science that isn’t as glamourous and doesn’t break even let alone make a profit, and this is how they’ll do it.

            If they ever do stop asking for money in return for an iPhone because they doubled their production and research costs, let me know.

          • It’s a different situation with Apple … they are fair and square making their own devices in their own manufacturing plants. The CSIRO has no plans to manufacture anything … their only plan with this patent, as far as I can see, is to make money from licensing it. That’s fair enough. But the way that the CSIRO is going about it right now — sending the lawyers out to every major company in the technology sector — leaves me with a bit of a bad feeling.

  3. If the CSIRO had no basis for claim, then companies would not be settling with them and industry lawyers would not be nervous. So your opinion is wrong there. I can also tell you that if government funded technology went into the public domain by default, with no revenue stream potential, then great organisations like the CSIRO would be nothing but a fruit stand on the side of the road within ten years while the government diverted its budget to more election friendly avenues. Then you will be in the exactly the same boat because the talented people in CSIRO would be snapped up by the private sector, who will take their ideas and patent them just as much as the CSIRO does.
    It would be nice if so called tech journalists such as yourself covered more of the technology and research being developed in this country, especially those in the government and non-private sector instead of 480 photo articles on the latest Apple product release.

    • The CSIRO may have a basis for claim, Dee, but that would be a legal basis — and I am speaking here primarily about a moral basis.

      Suing every company in the world to enforce a patent — long after the horse has bolted and that patent has already been applied everywhere in the world, in virtually every networked consumer device sold in 2010, is a ridiculous situation that we would not accept from any corporation in existence anywhere in the world. Why should the CSIRO be exempt from that kind of moral judgement?

      I agree the agency should defend its patent rights … but it looks like this one is a little too late, and a little too much.

      As for covering Australian technology, I think you’ll find it hard to find someone who covers Australia more than I do :) Delimiter does regular profile pieces on Australian startups, and we only cover the Australian market — we don’t cover what’s happening overseas. If you have an issue or Australian piece of research and technology, send some information about it to us and we’ll take a look.

      • Suing every company in the world to enforce a patent — long after the horse has bolted and that patent has already been applied everywhere in the world, in virtually every networked consumer device sold in 2010, is a ridiculous situation that we would not accept from any corporation in existence anywhere in the world.

        Nope, I’m firmly in the CSIRO camp on this one. The CSIRO has bent over backwards trying to do the right thing for nearly twenty years. The CSIRO has been offering perfectly reasonable licensing partnerships to Wifi-using companies for years, and at every step those companies have responded by pointing and laughing at the polite yokels from Australia. Going to the lawyers is the only option the CSIRO had left.

        Personally I hope the CSIRO takes ’em for everything they’ve got.

  4. Renai, you’re wrong on this one. The work by O’Sullivan and others at CSIRO and then later at Radiata was brilliant and indisputably provided the best solution to reverberation problems in short distance wireless at wifi frequencies. Morally they have plenty of basis to assert their patent rights.

    Their patent was published in 1992, and then again in 1996 in the US, which means competing groups had access to the research that it represented from that time. The quid pro quo is that implementers must respect the patent and pay licencing fees.

    IBM’s donation of patents has zero relevance to this debate. Most of those patents were junk, and IBM meanwhile contined to aggressively licence the tens of thousands of valuable patents that it possesses. That story just highlights how gullible the so-called open source community is. Who cares what Larry Lessig thinks?

    • hey Tony,

      so you would say there are no repercussions from Australia’s flagship research agency suing every large technology company in the world for use of a technology which is already widespread?

      I again must raise the point, that if we saw this behaviour from an overseas company towards Australian organisations about a common standard such as Wi-Fi, Australians would likely be up in arms about this sort of thing — and I imagine some international executives are as well.

      There are two sides to this story, and I think it’s worth debating.

      • Hi Renai

        Look, the fact that the technology is widespread does not mean it did not derive from the CSIRO work. The CSIRO effectively published its solutions in 1992, and the later standards were developed in recognition of the superiority of the CSIRO solution. (By the way, The Economist is no authority on technology at this level.)

        So, no, I don’t think there are negative repercussions from the CSIRO asserting its patent rights. (I presume you mean negative repercussions.)

        Technology companies pay patent licencing fees all the time, to each other. It’s part of the price of products. Not a big deal. The issue here is that leading American firms tried to stiff-arm an Australian group that didn’t normally play in this area.

        If your story is that open sourcers are arch hypocrites, I agree entirely. Have done for a long time.

        • I take your point about derivation Tony — is there any evidence online which would point to the CSIRO’s patent being the basis of the further development?

  5. I’m sure if CSIRO had no right to this money then the courts wouldn’t be awarding it to them.

    As a taxpayer who funds CSIRO, I’m more than happy to see them get what the courts believe is rightfully theirs (mine/yours/ours). It’ll give them more money to invest in climate change alarmism ;)

    Sorry, but some of your arguments to the contrary really seem a little Dennis Denuto “It’s just the vibe of the thing your honour”.

    • Because we all know the US courts system is completely fair and correct in all their decisions ;)

      I would ask you this question — if this was a US research organisation suing Australian firms, would you still be happy for this to happen? Or is just your Australian patriotism coming out in this case? I think we need to apply the same standards to our own institutions as we would to overseas ones.

      As for Dennis Denuto … I would be quite happy to be compared to him ;) And I think there is nothing wrong with getting a bad vibe about this one. Bad vibes, in my experience, often lead to bad business outcomes. Everyone can agree that the CSIRO should receive just recompense for its intellectual property … it’s when you start to talk about the fact that it is suing every major technology company around the globe that the bad ‘vibe’ comes in.

      • “I would ask you this question — if this was a US research organisation suing Australian firms, would you still be happy for this to happen?”

        Yes I would be, absolutely.

        And in response I’ll a question of you :)

        You claim that what CSIRO are undertaking may be legally correct, but not so morally.So, is it morally correct to profit from someone else’s patents and not pay them any royalties for that idea that you are profiting from? I notice that you charge a licensing fee for your content…

        Don’t get me wrong, I can see your point, but like the other comments here, I would respectfully disagree with you on this one.

      • Because we all know the US courts system is completely fair and correct in all their decisions ;)

        The $250 million the CSIRO has obtained was an out-of-court settlement, not an award from a court.

        Put it this way, when the combined legal firepower affordable by Dell, Intel, Microsoft, Asus, Fujitsu, HP, Nintendo, Toshiba, Netgear, Buffalo, D-Link, Belkin, SMC, Accton, and 3Com took a look at the patent and the CSIRO’s claim, all those super-high-powered lawyers turned around and said to their clients “Make a deal. It does not matter how much you are paying us, you do not want this to go to court.”

  6. I’m with Renai on this one. CSIRO is supposed to be a public interest organisation in a sense but what it is doing is forcing up the price of WiFi for everyone including the poorest people who are just joining the digital economy. This action potentially widens the digital divide. CSIRO is entitled to do what it is doing legally but I wonder of it thought deeply enough about why it exists and what it is for. After all it hardly risked capital to do what it has done, it is taxpayer subsidised.

  7. Having worked at CSIRO for many years, I can understand why they are doing what they are doing.

    Morally speaking, it would be nice if an organisation like CSIRO could just do work for the greater good of Australia, as that is what it is supposed to do, without pursuing patents and just posting everything into the public domain.

    However, with globalisation happening and in particular ICT having barely any Australian company to actually work with the CSIRO to exploit their technology in production, what CSIRO would be doing without patents is to develop technology that other countries would be taking advantage of. This has happened so much that the government has been wondering if the CSIRO should be doing any ICT research at all.

    Instead, they require CSIRO to bring in income from its ICT research – if I’m not mistaken, it’s still about 50% of its money has to come from somewhere else but the government. So, what options does CSIRO have to gain this money? Not much really, since large ICT Product Development companies in Australia are almost non-existent. Thus, using its patents to make money is the almost the only means for them to survive its ICT research, actually making sure that its ICT research provides value to Australia.

    Further, I have heard that the CSIRO is actually not seeing much of the money that it makes from the patents – that money goes directly to government, which in turn decides which share it will return back to CSIRO. On this, they have decided to only return a very small percentage to CSIRO, which has resulted in the cut-downs that you are mentioning. It is, in fact, the government that is causing all this to happen in the way it is and CSIRO ICT seems to be screwed over whichever way they go.

    Finally, you seem to imply that the CSIRO is the only government research organisation in the whole world acting like this and that they will be punished somehow for it – maybe by industry and the big companies that they are suing. That is, in fact, not the case. A prime example of another organisation that has survived and strived on its patents is the German Fraunhofer Institute with its MP3 patents that has given them a persistent income stream for its research for years. Companies actually start respecting your research more if they see you being able to defend your patents (and don’t think the big companies didn’t try to get together and counter-sue CSIRO – they did and they lost). Your work is being valued more, you get to have more contracts with the big companies, and you get to do more interesting research work. Yes, in the eyes of the public and the open source community, you lose moral status – but how much is that worth to CSIRO, really?

    Don’t get me wrong. I am a member of the open source community, I like open standards and open technologies, because they further humanity instead of the interests of individual organisations, countries, or company owners. But unfortunately in most aspects the world doesn’t work that way and you cannot make a living or even a great reputation by contributing to the greater good of humanity. The human race hasn’t evolved to that level yet.

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