Skip Links

Network World

  • Social Web 
  • Email 
  • Close

(Comma separation for multiple addresses)
Your Message:

Ethernet patent settlement is good for the industry

Standards advocates can breathe sigh of relief after FTC ruling
Network Architecture Alert By Jeff Caruso , Network World , 01/24/2008
Sign up for this newsletter now!

Site Editor Jeff Caruso helps you make sense of the evolving world of LANs and routers.

  • Share/Email
  • Tweet This
  • Comment
  • Print

The FTC this week reached a settlement with a company that was trying to make a few bucks off of an Ethernet autonegotiation patent it obtained from another company.

The IDG News Service's Grant Gross wrote that "the patent owner was attempting to collect huge license fees despite a prior commitment to the contrary."

In 2003, Negotiated Data Solutions, or N-Data, got the rights to two patents from Vertical Networks, a spinoff of National Semiconductor. The patents covered autonegotiation techniques, which allow different devices to configure themselves automatically and find a common data rate at which to communicate.

As part of a standardization process, National Semi had already negotiated a deal with the IEEE in 1994 - if the IEEE based its standard on its technology, the company would collect only a one-time fee of $1,000 from every company using the standard.

Gross reports that N-Data and Vertical Networks had collected fees "far in excess" of that amount.

The FTC said that N-Data knew full well that it would be expensive and difficult for the industry to move to another standard - one might say impossible - so it started demanding high royalties from companies using the patented technology it did not invent.

The FTC very sensibly ruled that consumers would be hurt by N-Data because its actions would push prices higher and cast doubt on standards agreements in general. The FTC wrote: "If N-Data’s conduct became the accepted way of doing business, even the most diligent standard-setting organizations would not be able to rely on the good faith assurances of respected companies."

That would make setting standards - the cornerstone of our industry's growth - very difficult indeed.

Jeff Caruso is site editor at Network World.

  • Share/Email
  • Tweet This
  • Comment
  • Print

Partner Content

Simplify Your Branch Infrastructure

Learn how to simplify your branch infrastructure while dramatically increasing app performance with Citrix Branch Repeater.

Download the Free Info Kit

Next-Gen Load Balancing

Free Guide: "Next Gen Load Balancing: 8 Things You Need to Handle Today's Network Traffic" shows you the functionality needed in your next load balancer.

Download the Free Guide

Accelerate Your Web Apps by up to 5x

Free Guide: "The Secret to Getting Maximum Speed from your Web Applications."' Learn how you can deliver Web apps up to 5x faster.

Download the Free Guide

Comments (4)
Login
Forgot your account info?

RE: Ethernet patent settlement is good for the industryBy Bob N on January 24, 2008, 9:32 amInteresting story, but am I alone in wanting to know what the actual settlement was? Frankly, that's why I looked at the story, but there is no mention if N-Data...

Reply | Read entire comment

Ethernet settlementBy Anonymous on January 24, 2008, 9:51 amNope, I'd like to know too.

Reply | Read entire comment

Good questionBy Jeff Caruso on January 24, 2008, 10:53 amSorry, I should have spelled that out. The original article: The settlement bars N-Data from enforcing the patents unless it has first offered the patent license...

Reply | Read entire comment

Do Patent is goodsBy Anonymous on July 4, 2008, 4:59 amdo patent amounts to goods or not????

Reply | Read entire comment

View all comments

Add comment
Anonymous comments subject to approval. Register here for member benefits.
Have a NetworkWorld account? Log in here. Register now for a free account.

Videos

rssRss Feed
Partner Content

Simplify Your Branch Infrastructure

Learn how to simplify your branch infrastructure while dramatically increasing app performance with Citrix Branch Repeater.

Download the Free Info Kit

Next-Gen Load Balancing

Free Guide: "Next Gen Load Balancing: 8 Things You Need to Handle Today's Network Traffic" shows you the functionality needed in your next load balancer.

Download the Free Guide

Accelerate Your Web Apps by up to 5x

Free Guide: "The Secret to Getting Maximum Speed from your Web Applications."' Learn how you can deliver Web apps up to 5x faster.

Download the Free Guide