3Com, inventor state their terms

Electronic News, Sept 8, 1997 by Will Wade

Menlo Park, Calif.--3Com and an individual inventor have released terms to license their proprietary technology which is likely to be incorporated into the open standard for 56K modem communications. However, Brent Townshend, a private researcher who has filed for several patents which he says are an integral element of all 56K modems, will not make public the technical specifications of his work until a patent is granted.

With a 56K standard meeting opening today in Oregon, many players in the negotiations find themselves in the difficult position of working toward a common protocol which may include technology upon which they will be forced to pay royalties, before being able to evaluate the information.

3Com last week announced the company will license all its patents related to the expected International Telecommunications Union (ITU) 56K standard for a flat price of $100,000, or a running royalty capped at $150,000. Industry observers say this price is quite low, since the potential market for high-speed modems is projected to reach into the hundreds of millions of dollars. 3Com says the move is aimed at speeding the standards process, which has bogged down over intellectual property issues since the last meeting in July (EN, Sep. 1).

3Com is also acting as a representative for Mr. Townshend. The company acquired x2 modem manufacturer U.S. Robotics earlier this year, which has already paid the inventor "millions" for an exclusive license on his work they negotiated last year, 3Com said. The company will sublicense the technology for $1.25 per modem, and $9.00 per port for server units.

Mr. Townshend says his work on 56K modems and his patent filings date back to before 1995. "I did a lot of the original development of the 56K technology, and I came up with the original idea of how to get higher rates over a phone line," he said. Mr. Townshend is president of Townshend Computer Tools and CEO of Ordinant, two Silicon Valley design firms, as well as a consulting associate professor in electrical engineering at Stanford University.

3Com and the inventor both say his ideas are crucial to all 56K modems, and are certain to be included in the pending ITU standard. "I've never seen any method of doing more than 33.6K that doesn't use this technique," said Mr. Townshend. "This is not an issue of x2 and K56flex. All 56K modems use the same basic technology."

"We believe his work is fundamental to any 56K modem," agreed Larry Kraft, director of product marketing for 3Com. He said the company has been working with the designer since 1995, and that Mr. Townshend's work had played a key role in developing their x2 modem format. "We believe he will get patents fundamental to the technology, meaning nobody will be able to build a 56K modem without using his technology."

At this point, nobody knows when the U.S. Patent Office will approve any of Mr. Townshend's filings. "There is definitely going to be patents on this, that much is clear, but what they are or when they will be issued is not clear," said the researcher. And until he receives a patent and receives legal protection for his work, Mr. Townshend is reluctant to release detailed technical information on his ideas. "This is a little sensitive. After the patent is issued, what is in the application is a trade secret."

3Com and Mr. Townshend both say they would like to see the ITU standard decided as soon as possible, at this week's meeting, if possible, and that announcing their terms should facilitate this process. In addition, Mr. Townshend stresses that nobody will need to pay for licensing his work until after any patents have been issued. But since he asserts any standard will use his work, his claims should not be a factor in current technical discussions over the ITU standard. "I'm doing everything I can to facilitate this process," he said. "When the patent issues, we're telling people what they will have to pay."

However, this doesn't sit well with some people involved in the standards discussions. "If Mr. Townshend wants royalties, a lot of people are going to be upset," observes Ken Krechmer, a technical editor at Communications Standards Review, who has closely followed the ITU talks. "Many companies find the idea of paying royalties almost morally wrong." Besides the monetary issues, he noted that fees based on sales mean companies must disclose their sales volume to competitors, information which is often regarded as private.

In addition, without examining the technical information, nobody is really sure how critical Mr. Townshend's work will eventually prove. "It's very difficult to imagine that (3Com) would license something they didn't think was important," he said, "but we don't know if the patent filings are basic to 56K modems or if they only apply to one format. If the K56flex contingent can avoid licensing a patent, they will definitely want to do so."

Although Mr. Krechmer said 3Com's licensing terms announcement and their efforts on Mr. Townshend's behalf are likely to smooth any IP negotiations, he added that 3Com's competitors, notably Rockwell Semiconductor Systems and other companies promoting the K56flex protocol, will probably move through the standards process more slowly while they try to evaluate the pending patent claims.