Inventor claims Rockwell used his 56K technology

Electronic News, Oct 27, 1997 by Will Wade

San Mateo, Calif.--Rockwell Semiconductor Systems has been named in a lawsuit alleging the company improperly acquired the fundamental concepts and technology behind its K56flex high-speed modems. The suit asks for an injunction preventing Rockwell from selling K56flex modem components and from licensing the technology to other firms. This suit could have a major impact upon the modem market, and may also affect the ongoing 56K standards development process.

Brent Townshend, a consulting electrical engineering professor at Stanford University and independent inventor, filed suit Oct. 14 in California Superior Court, County of San Mateo, claiming breach of contract, breach of confidence and misappropriation of trade secrets. This action stems from a series of 1995 meetings in which Mr. Townshend disclosed his ideas to Rockwell executives, who then attempted to hammer out a licensing agreement for the intellectual property.

No deal was reached, and Mr. Townshend later granted an exclusive, worldwide license to Rockwell modem competitor US Robotics (now a unit within 3Com). Less than a year later, Rockwell announced the development of a new high-speed modem technology, which Mr. Townshend contends is based on his developments.

"They used my information," said Mr. Townshend, who added he has no doubts that Rockwell's modems are based on information he revealed in those 1995 discussions.

"(Rockwell) incorporates the ideas he gave them," asserts Ken Wilson, Mr. Townshend's attorney. "It was a fundamental revelation."

Rockwell denies the allegations. Although company executives declined to comment on the suit, a statement indicated the firm does not believe any of its products use Mr. Townshend's intellectual property. "Rockwell believes that the claims made by Brent Townshend in his lawsuit are without merit," said Vijay Parikh, VP and general manager for the company's personal computing division, in the statement.

Technology To Exceed Rates of 33K

Mr. Townshend claims to have developed the basic concepts which allow analog modems to move data over telephone lines at rates exceeding 33Kps, which was once seen as the fastest speed possible. He has several patents pending for the technology, the oldest of which dates back to December 1994. He, and his partner 3Com, have stated that it is impossible to design a 56K modem without using the proprietary information, and both expect the U.S. Patent Office to grant him ownership of the technology.

In 1995, Mr. Townshend began shopping his ideas around to various modem companies, and first met with Rockwell in August of that year. After several meetings, Rockwell made an offer for an exclusive licensing agreement, which Mr. Townshend rejected in December.

In the meantime, he had begun negotiating with US Robotics, and a deal was concluded in April 1996. Since then, Mr. Townshend said he has received "millions," for the use of his technology from US Robotics, although neither party will discuss the specifics of the deal. US Robotics introduced its first 56K modem, using the proprietary x2 system, in October 1996. This came just a month after Rockwell made a technology announcement for its own high-speed communication system, the incompatible K56flex system.

K56flex modems began shipping in volume earlier this year, and the rivalry between the two technologies is one of the fiercest in the computer industry today.

This is not the first time Rockwell has been accused of stealing technology. A similar lawsuit brought by Celeritas Technologies in 1995 led to an award of $58 million, after a jury found Rockwell guilty of misappropriating trade secrets, patent infringement and breach of contract. This action also resulted from a series of licensing discussions, in which Celeritas disclosed its concepts for new cellular modem communications. Rockwell eventually declined to pursue a deal, but the jury decided the company had later incorporated Celeritas' ideas into its modem chipsets. That award is currently on appeal.

Injunction Would Impact Many

According to the suit, "Rockwell's K56flex modem technology appears to correspond in all material respects to Dr. Thompson's 'Asymmetrical High Speed PCM Modem' technology." This claim is based in part from a white paper describing the system, which is freely available on Rockwell's World Wide Web site.

The suit asks the court to issue an injunction against Rockwell, prohibiting the further manufacture, marketing or licensing of K56flex products. Mr. Wilson says the suit is targeted at only Rockwell because it was the only company which had access to Mr. Townshend's IP. However, he notes that such an injunction would impact all of Rockwell's licensees and would have ripple effects throughout the retail modem market and the rest of the communication industry. "It would be a very sweeping action," he said.

Some observers doubt the court would issue such an injunction, exactly because it would impact so many other companies, especially firms which had no way of knowing whether Rockwell's technology was acquired legally and no reason to assume it was not.