Hayes grants Rockwell license on escape sequence specs

Electronic News, June 8, 1992 by Dan Cray

ATLANTA -- Hayes Micro-computer Products avoided a fresh round of legal wranggling over its patented modem technology by granting a license for an electronic escape sequence specification to Rockwell International's Digital Communications division.

Hayes, having in recent years vigorously pressed its escape sequence patent in court against system-level manfacturers such as Everex Systems and Omni-Tel (EN, April 29 and Aug. 26, 1991), made Rockwell's unit "the exclusive patent licensee at the semiconductor level." Neither company would disclose financial terms, although several industry sources said Hayes will probably get a flat-out royalty of roughly three percent per chip-set sold.

While the deal diffuses the potential for a Hayes/Rockwell confrontation, a licensing skirmish appears to be developing between Hayes and AT&T. The latter firm questioned the validity of the agreement, saying it has been licensed to incorporate the same Hayes patent into its own chip-sets since 1988. An AT&T spokesman said company executives have documents from Hayes that grant AT&T complete rights to U.S. patent 4,549,302, which also is known as the Heatherington '302 patent.

Hayes president Dennis C. Hayes maintained the licensing agreements "are different, and the license to Rockwell does give them exclusivity. As far as we know, Rockwell is the only (Hayes-licensed) semiconductor manufacturer that makes parts which include Hayes technology, and Hayes will not license anyone else for it in the future." Mr. Hayes declined to elaborate, citing separate confidentiality agreements with Rockwell and AT&T.

The Rockwell/Hayes agreement formalizes what may have been a virtually symbiotic relationship for the past several years. According to sources, Rockwell--holding 40 percent of the worldwide modem chip-set market, according to Dataquest--has been incorporating the Hayes '302 patent in its chip-sets since 1985. In exchange, Hayes came to rely upon Rockwell as one of its biggest suppliers of modem chip-sets.

Both Rockwell and Hayes declined any detailed comment on their dealings during the past few years. "We had an undertaking," said Dwight Decker, vice president and business director of Rockwell Modem Systems, who added that the licensing agreement was "under discussion" with Hayes for the past five years.

The '302 patent employs guard time, a period of empty transmission space, to bracket the streams of characters that instruct a modem to shift off-line and await software commands. This lessens the chance of losing telephone connections or receiving scrambled data.