How the Aussie Government Sued Its Way to Bagging $430 Million

In the United States, consumers will pay a fee to the Commonwealth Scientific and Industrial Organisation, or CSIRO. The majority of US consumers will not be aware of the donations. The money will fund scientific research, including health, agriculture, energy, and national security projects.

In 1916 the Australian Commonwealth Government established the Advisory Committee of Science and Industry. The states initially funded it but soon ran out of money and had to rely on private donations. In 1920 it became a permanent body but lacked support. In 1926 it started doing its research. By 1949 it became the CSIRO, an institution that has made huge milestones in the scientific industry.

This organisation won a $229 million settlement against nine companies that manufacture wireless products, including Broadcom, AT&T, T-Mobile, and Lenovo. The lawsuit was filed in 2010 when CSIRO accused them of infringing its radio frequency technology patents. The settlement was made right before those companies were scheduled for a jury meeting in Tyler, Texas.

CSIRO added that lump sum to the money it received in 2009 after a settlement of $205 million was reached with 14 companies. Soon after, it started bragging the Australian press that WiFi was invented here. It anticipated an additional billion dollars from tech products sold in the United States using its patent. Eventually, this didn’t quite come true—but CSIRO is almost halfway there.

CSIRO has not mentioned “Australia” when discussing its US legal actions. Instead, the organisation prefers to refer to itself as an “Australian entity” or “Australian company.” And while CSIRO has been eager to brag to the Australian press about the big money it has made suing a couple of firms in US courts, it has been cautious about those cases in the United States. 

When it first filed suit in 2005, CSIRO thought it might file under the name “Government of Australia” but decided it would be slightly off the edge. CSIRO also considered filing at the US International Trade commission—a move that could result in a ban on importing wireless devices—but decided that was “too drastic.”

At first, CSIRO demanded an astronomical amount of money ($4 per device) for its invention. When the company failed to get what it wanted, it threatened to sue any company that made similar products. The total payout wasn’t close to the $4 per device figure. US diplomats were informed about the $4 billion offer. The amount was an “opening figure” that CSIRO didn’t expect to receive in the end.

Now that we have all the facts straightened out, it begs the real question, who exactly are we as consumers paying? And what’s the reason behind it?

WiFi, According to CSIRO

WiFi, According to CSIRO

CSIRO is an Australian public company that conducts scientific research across many fields, including agriculture, health, engineering, environment, mining, and defence. Their primary focus is on improving productivity through innovation and technology development. They also provide services to industry and government.  

Since its inception in 1911, CSIRO has become one of the largest research organisations in the world. It employs around 10,000 scientists and engineers, including 1,500 PhD students. With an annual budget of A$1.3 billion, it has opened 55 sites across Australia.

It all began when an Australian scientist named John O’Sullivan was tasked with building a fast wireless network. He didn’t start building his team until the early 90s, after many critical technological innovations had already been invented. The ultimate relevance of O’Sullivan’s project is now one of Australia’s biggest litigations. CSIRO’s $230 million payouts are the latest example of the government’s willingness to pay big bucks for inventions that were never commercialised.

The recent court ruling means the nine defendants will not face further legal proceedings in East Texas. The Australian government claims that 90% of the WiFi-enabled devices market has already licensed its patent.

But what would have happened if the case had continued? The 2009 trial partial transcript is the only public record extension of CSIRO’s claims to have invented WiFi. A small panel would have decided the ultimate decision of the inventor of WiFi. The panel would have lasted almost two weeks in Tyler, Texas, listening to competing teams of lawyers representing different firms arguing about the actual inventors of WiFi.

It is not surprising that there is a debate about the origin of WiFi. After all, the IEEE created a working group for 802.11 wireless technology in 1990, three years before CSIRO filed its patent application. The group repeatedly voted to choose the best path forward and produced many records, but CSIRO never participated in the 802.11 Committee. The group published the 802.11 standards in 1997, and CSIRO came forward many years later.

CSIRO’s invention of multicarrier technology was met with scepticism by the tech industry. They didn’t get it until January 23, 1996. The US Patent Office granted them a patent for their innovative solution. Multicarrier technology became the standard for wireless communications, and the industry moved toward the next generation of mobile devices.

In 2006, CSIRO researchers were awarded a US patent for their invention of WiFi technology. Their research team had spent years testing different ways of creating a wireless network. They discovered that using multiple antennas and frequencies could create a fast connection. They also realised that if they put an access point in every room of a house, then everyone could connect to the internet wirelessly. This became the foundation of the modern WiFi network.

CSIRO’s invention combined multiple technologies to create an innovative system for transmitting the information. Multicarrier modulation (MCM), also known as Orthogonal Frequency Division Multiplexing (OFDM), is a technique used to transmit digital signals over radio waves. It allows many different signals to be sent simultaneously over the same frequency band. 

Apart from the modulation, the company used two other techniques: “Forward Error Correction” and “interleaving”. Forward Error Correction (FEC) is a coding method that helps ensure reliable communication despite transmission errors. Interleaving is a technique that rearranges bits within a message to help reduce errors caused by noise. These three elements were combined to form the basis of the technology known as ADSL2+.

In 2001, CSIRO partnered with IBM to create a demonstration chipset. However, the chip was never commercially released, and the partnership ended after just two years. The closest the CSIRO had ever been to becoming a commercial success was a chip produced by Radiata, an Australian wireless company founded by former CSIRO employees. 

Cisco bought Radiata for $295 million. The company’s products were unsuccessful, and its stock price fell. Cisco eventually wrote down the value of the Radiatatta acquisition by $300 million.

CSIRO officials knew they had nothing to offer the real market of wireless products. But they also realised there was one place they could go to try to make money off their idea: suing companies in far-off US courtrooms. It was a practice quickly becoming an industry of its very own. In 2003 and early 2004, the organisation sent letters to 28 wireless firms across different states and countries asking for money but was rejected by each. By 2005, CSIRO decided to pick a “test case” and sued a Japanese firm called Buffalo Technology. 

Buffalo didn’t stand out because it was big or even a Japanese company. Instead, it stood out for its audacity. CSIRO officials told reporters that Buffalo had practically “picked itself as the first target” by accusing the Australian government agency of being “swindlers.” Even if other companies agreed with CSIRO, Buffalo said it. The company went public with its complaint in February 2006.

The case began in the Eastern District of Virginia. Buffalo wasn’t comfortable with the venue and asked for a change, but Judge Leonard Davis refused to let them move. The Buffalo case never got to trial. Davis’ ruling was based on summary judgement that the company had infringed CSIRO’s patents. Even though he issued an injunction to ban the company from the US Market, Buffalo appealed and eventually settled.

CSIRO didn’t manage to bag a massive amount of money from the Buffalo case, but for a “test case”, it wasn’t that bad. The cases that followed were presided over by a judge who previously ruled in CSIRO’S favour in courts preferred by the organisation’s lawyers. 

What Was the Real History Of WiFi

What Was the Real History Of WiFi?

In 1985, the US government allowed companies to use the radio waves for free. The first commercial cell phone call was made in 1987. Defence law from previous cases pointed out a couple of faults behind CSIRO’s history.

All of the elements that CSIRO claimed to have invented didn’t just exist before; they were existing technologies. For example, multicarrier modulation was not an innovation since it was already well established in the radio industry. It was used for military communication in the 50s. Interleaving was also nothing new and was widely used in optical fibre communication systems. 

Similarly, forward error correction wasn’t special since it was used in many other areas like satellite communications for NASA when they sent out a Mariner for a mission, as explained by Intel’s lawyer in Infront of the Texas jury. And while there were patents on error-correcting codes, none of them covered the particular method CSIRO claimed to have discovered.

The IEEE settled for a proposal for 802.11a  by Lucent and NTT after turning down a couple of proposals. A rather compelling testimony was made by Hitoshi Takanashi, stating that he had no idea of the existence of an organisation called CSIRO, let alone stealing from it. An Intel Capital official stated further controversial testimonies during one of the trials. He claimed that other than CSIRO’S ex-employees from Radiata, engineers did not take the idea of a new WiFi patent that described CSIRO’S techniques seriously. 

One of the inventors of the technology, Australian inventor Terrence Percival, spoke at the hearing. He said his company had not invented any of the core components of its wireless strategy. However, he insisted that their solution to the “multipath problem”—the interference that distracts radio wave signals indoors —was unique and fast.

The 2009 court case was dismissed after two weeks of testimony. The parties agreed to settle out of court over the weekend. However, the jury never made a verdict. 

The Other Claims

The Other Claims

CSIRO is not the only company that has tried to get a slice of the WiFi patents pie. Despite WiFi’s widespread adoption, the IEEE 802.11 committee has never voted to grant ownership of the standard to any particular company. Instead, the committee has decided to allow multiple companies to claim ownership of the standard. As a result, many companies have filed lawsuits against other companies claiming to hold the patent rights to the standard. These suits have not resulted in any genuine products being released.

Many of the entities that have sued over patents are the type of shell companies often derided as “patent trolls.” These companies claim to hold patents but rarely actually produce anything. Instead, they sue other companies for infringement. Some even sell their patent licenses to other companies, making money off the licensing fees. One example is Innovatio IP Ventures, which claims to own a patent related to WiFi technology.

However, Innovation does not manufacture any products themselves. Instead, they seek small amounts of money from coffee shops and chain motel owners. Other firms in the same category include WIAV Network, Pac-ID, Finoc Design Consulting, WiLan, VIA Licensing and Northpeak.

There are endless lawsuits filed daily over ownership of a technology that no one ever invented. This drives a specific aphorism that Van Nest once quoted. He said, “Success has many fathers.” An act we have seen driven to the extreme limit. 

Hometown Heroes

Perhaps the jury’s lack of ruling over the invention of WiFi in Australia was a good thing for Australian inventors. But this particular firm made history and could bag a $430 million windfall without having to prove its case.

As for the CSIRO, scientists who claimed to have invented WiFi are now recognised and celebrated by Aussies as heroes. The fact that CSIRO was able to get most Australians has translated into that WiFi is made in Australia. Even though we know this is not entirely true, the title fits the organisation easily as no other firm has been able to claim, prove or acknowledge ownership. Anyone that’s not a CSIRO employee or rooting for them from the perspective of a nationalist cannot prove themselves as original inventors of WiFi. 

Paying out money to avoid a trial is not always the best option. Companies may lose against an extensive jury award if they don’t settle early enough. Settling for less than you deserve will leave your company vulnerable to future lawsuits. You might also get stuck paying legal fees and damages after the lawsuit ends. At least that’s what a Bay Area patent litigator, Rich Vasquez believes. He represented great forms such as 3Com, among other companies, during the 2009 trial.  

However, for most Aussies, none of that is essential. One of the leading inventors, John O’Sullivan, is a living example of an inventor that is celebrated by Australians and a lot of people all over the world. He was born in Ireland in 1957. He invented a device called the Smart Card in 1987. His invention was first sold to IBM in 1992. Since then, he has received many awards, including the Prime Minister’s Award For Science in 2009. The Smart Card is used all around the world. Nearly a billion people use it every day.

Now that CSIRO has managed to cover most parts of the world with its products and services ( and its patent expires in a couple of months), the Australian press is about to create another hero through the power of words. 

While other companies have managed to receive settlements from a lawsuit, CSIRO has, without a doubt, managed to make history. A great technology out of the widespread corporation has been used to create hero-inventors and historical stories that will be told for all decades worldwide. Even though the good guys have managed to convince non-believers in court this time, one can’t help but wonder what about the next time this happens and it happens to be one of the bad guys, in whose hands will consumers be safe?