U.S. group sues Nokia, Samsung over Bluetooth
Wednesday, January 3, 2007; 10:37 AM
AMSTERDAM (Reuters) - A U.S. research institute has sued Nokia (NOK1V.HE), Samsung Electronics (005930.KS) and Matsushita-owned (6752.T) Panasonic for violating a patent for Bluetooth technology, potentially putting the free wireless standard at risk.
The Washington Research Foundation, which markets technology from the University of Washington, is seeking damages from the three mobile-phone makers for using a radio frequency receiver technology without paying royalties, according to court papers obtained by Reuters on Wednesday.
A University of Washington scientist Edwin Suominen was awarded a patent in 1999 for "simplified high-frequency broadband tuner and tuning method."
Bluetooth was invented as a wire replacement by Ericsson (ERICb.ST) engineer Jaap Haartsen in the mid 1990s and developed by engineers at Ericsson and four other companies that made it available at no cost through the Bluetooth Special Interest Group (SIG).
Haartsen told Reuters that others had previously tried unsuccessfully to claim part of the Bluetooth technology.
"We'll have to see how this one pans out," he said before looking at the claim in detail.
Nokia declined to comment. "We are currently studying the claims," said spokeswoman Eija-Riitta Huovinen. Samsung and Panasonic were not immediately available to comment.
Bluetooth was given away by Ericsson and others to create a global wireless standard to connect mobile phones, laptops, headsets and other electronic gadgets wirelessly. Since the first standard was set in 1998 it has become hugely popular, and hundreds of millions of devices a year are produced with Bluetooth capability.
"As they say, 'Where there is a hit, there is a writ'," said analyst Neil Mawston at market research group Strategy Analytics.
The claim appears to restrict itself to Bluetooth devices sold or used in the United States, which means any ruling will affect around 15 to 20 percent of total global Bluetooth mobile phone and headset sales in the near-term, Mawston said.
"The mobile Bluetooth market in the U.S. is relatively immature and it is not yet as important to vendors as, say, Western Europe with 30 to 40 percent of total," he said.
But Ben Wood, a mobile telecoms consultant at CCS Insight, said the implications for the standard could be more serious if the foundation's claim is successful.
"A standard which everyone assumes to be royalty free is now at risk of becoming a chargeable element inside mobile phones and other devices," he said.
Although the complaint, filed in the United States Western District Court of Washington State at Seattle, was filed against the three companies, it targets products containing Bluetooth chips from British chip maker CSR (CSR.L), which has a world market share of more than 50 percent.
Cambridge-based CSR, which was not sued by the research group as it does not sell the chips directly in the U.S., said: "CSR has taken advice from its attorneys. The suit is without merit in relation to CSR's Bluetooth chips, and CSR will defend its products vigorously."
Its shares lost as much as 6.6 percent but recovered most of the early losses after its reaction. They were down 2.9 percent at 640 pence by 1407 GMT, but still underperforming a 0.2 percent higher European technology index (.SX8P).
Nokia shares were down 0.7 percent at 1322 GMT.
The suit set apart CSR rival U.S.-based Broadcom (BRCM.O), which has acquired a license to use the radio technology, the Washington Research Foundation said.
The foundation said it had informed the three mobile phone makers about Broadcom's license, and that they could have bought their chips from Broadcom and avoided a legal battle.
"The document is positive news for Broadcom, but negative for CSR. These two are the main global players in the Bluetooth chip market," Mawston said.
Broadcom shares were up 2.75 percent at $33.20.
Bluetooth SIG Marketing Director Anders Edlund said he could not yet comment on the validity of the court case.
(Additional reporting by Marc Jones in London and Tarmo Virki in Helsinki)