Wang Labs keeps up heat on SIMM resellers, OEMs

Electronic News, Dec 23, 1991 by Richard McCausland

LOWELL, Mass. -- Wang Laboratories has notified another 35 systems manufacturers and module resellers that they are infringing its by-nine-configured SIMM patents.

"Based on information obtained through investigation as to industry practices and from a review of your commercial brochures, advertising and promotional literature, Wang believes that your company is and has been marketing in the United States multiple variations of SIMM modules covered by Wang's patents," wrote Michael H. Shanahan, chief patent counsel for Wang, to a mixture of OEMs and resellers.

"Your use, selling, reselling, importing and/or exporting of 30-pin, 9-bit wide SIMM products violates Wang's rights in this technology," the letter continues. "Your company is guilty of such violations whether it sells SIMMs (as) individual components or incorporates SIMMs in higher level equipment for sale or internal use."

Mr. Shanahan points out "At the present time, Wang is actively enforcing its patents and seeking to license all SIMM (single in-line memory module) manufacturers who supply infringing product to your company. However, Wang will enforce its patents directly against equipment manufacturers, end-users and resellers in order to ensure that its rights are properly protected."

The letter, dated Dec. 10, goes on to point out that "To ensure that your company does not incur additional liability by the acquisition and/or use of this technology from unlicensed sources," current licensees of the X9 SIMM know-how include Motorola, Micron Technology and PNY Electronics. In addition, IBM and Hewlett-Packard are licensed to acquire the technology from third parties.

"Your company should cease all acquisition of infringing SIMMs from unlicensed sources," Mr. Shanahan cautions. "You should not provide unlicensed SIMMs to any other party other than those enumerated above as proper recipients of this technology."

A Wang spokesman said the letter from Mr. Shanahan was sent to "approximately 35" smaller-volume users and resellers of 30-pin x9 modules, bringing the total of those contacted about possible patent infringement up to 135.

Meanwhile, the list of licensees grew longer last week with the inclusion of Kingston Technology Corp., a Fountain Valley, Calif.-based manufacturer of memory upgrades for personal computers, laser printers and workstations.

"By reaching an agreement with Wang, our customers don't have to worry about being pursued by Wang at a later date for patent infringement," said Steven Weinberg, Kingston's vice president of sales, in a prepared statement.

Ron Seide, the firm's marketing director, declined in a subsequent interview to specify the financial terms of the agreement except to say "The amount Kingston Technology paid (to Wang) was certainly not insignificant."

Asked about the prospect of price hikes, he said "Customers can expect SIMM pricing to increase by at least 4 percent," the percentage sought by Wang for royalty fees.

Noting that with regard to 30-pin x9 modules "The margin is pretty thin ... in the neighborhood of 10 percent," he added, referring to the royalty fee, "It's certainly nothing that can be absorbed by the manufacturer."

With annual sales of about $130 million, Kingston produces 386SX processor upgrades for 286 systems and a line of data for storage subsystems as well as add-on memory boards. Mr. Seide estimated the x9 SIMMs represent about 5 percent of revenues, or $6.5 million.

As reported (EN, Nov. 18), Wang last month notified a group of leading semiconductor suppliers of potential infringement of two of its SIMM patents. The move followed its success in October in obtaining a permanent injunction barring Toshiba and NEC from further U.S. sales of the contested modules. The two Japanese suppliers are appealing the verdict of patent infringement.

In recent weeks, module manufacturers Micron Technology and privately-held PNY Electronics of Moonachie, N.J. took out licenses (EN, Dec. 2 and 9), as did Dallas-based all Components Inc., a reseller of memory upgrade products (EN, Dec. 16).