Analog Devices settles lawsuit over modem technology

A California inventor of a standard for dial-up modem technology has settled a patent infringement lawsuit with Analog Devices Inc. over charges that the company was improperly using patented technology.

Brent Townshend and Analog Devices have agreed to a licensing program for technology patented by Townshend that Analog Devices has used in some of its products, Townshend said Tuesday. The Norwood, Massachusetts, company manufactures chips that use the V.90 and V.92 standards for 56Kbps modems that Townshend developed, he said.

Townshend has secured licenses for the technology from IBM Corp., Motorola Inc., 3Com Corp., and Lucent Technologies Inc., among others. Litigation is still pending against Intel Corp., Cisco Systems Inc., and Agere Systems Inc., he said.

In 1994, Townshend obtained a patent for the technology that allows users of dial-up modems to download information from the Internet, he said. The patent covered an algorithm that allows an analog client to talk to a digital server, enabling the user to download data at 56Kbps. Uploads to the Internet are still restricted to 36.6Kbps, which was the previous limitation for downloads before Townshend’s invention.

The technology was originally licensed to US Robotics Corp., which is now owned by 3Com. Another modem manufacturer, Rockwell International Corp., began using the technology without a license around that time, and a settlement was eventually reached, Townshend said. Rockwell later spun out its modem business as Conexant Systems Inc.

In 1998, the International Telecommunications Union ratified the V.90 standard that incorporates Townshend’s algorithm, he said. That standard was later updated as the V.92 standard, said Townshend, whose company, Townshend Intellectual Property LLC is in Menlo Park.

Licensees are required to pay an up-front fee of $25,000, which can be credited toward the per-unit royalty fees also incorporated into the settlements. Licensees are required to pay royalties for infringing products sold prior to signing the license, as well as ongoing royalties.

Several types of modems are affected by the license agreements, including hardware modems as well as soft modems. Most of the original stand-alone and integrated modems were of the hardware variety, with a separate processor to run the modem, Townshend said. Soft modems took advantage of increases in processor performance by offloading some of the modem’s processing tasks to the main CPU (central processing unit), which decreased the cost to manufacture the modem, he said.

Licensees that manufacture client-based products must pay Townshend $1.25 per unit based on the V.90 standard sold prior to Dec. 31, 2001, and $0.50 per unit sold from Jan. 2, 2002, until the date the license is signed. This applies to both hardware modems and soft modems used by client devices.

After the license is signed, hardware modem manufacturers will pay $0.44 per unit sold in 2003, $0.38 per unit sold in 2004, and $0.31 per unit sold in 2005 or thereafter. Soft modem manufacturers will pay $0.22 per unit sold in 2003, $0.19 per unit sold in 2004, and $0.16 per unit sold in 2005 or thereafter.

Server products that use the V.90 technology will cost their makers $2.50 per port for products sold prior to Dec. 31, 2001, and $1 per port for products sold from Jan. 1, 2002, to the date the license is signed. After that is signed, licensees will owe Townshend $0.44 per port for products sold in 2003, $0.38 per port for products sold in 2004, and $0.31 per port for products sold in 2005 and thereafter.

Companies that have licensed the technology will not have to pay more than $55 million in total royalties under the terms of the agreement, Townshend said.

Court hearings in the other cases will probably get underway early next year, Townshend said.

Analog Devices did not return a phone message seeking comment.