OAKLAND, Calif. (CN) - An English tech firm claims a Texas company has monopolized the market for a frequency-hopping Bluetooth technology by "duplicitously persuad(ing)" the Institute of Electronics Engineers to adopt standards that the Texas company was secretly trying to patent.
Cambridge Silicon Radio (CSR) sued Jatotech Ventures, Bandspeed Inc. and eight of their owners, directors and employees, in a federal antitrust complaint.
"This is a class case of 'patent ambush,'" according to the 59-page complaint. "Defendants have engaged in a fraudulent scheme in at attempt to extract monopoly payments from CSR and numerous other companies for purportedly using the same wireless technology that Bandspeed duplicitously persuaded a major standards-setting to adopt. As part of defendants' conspiracy, Bandspeed participated extensively in a working group of the Institute of Electronics Engineers ('IEEE') responsible for 'coexistence mechanisms.' In that working group, Bandspeed advocated adoption of certain purportedly proprietary technology related to 'adaptive frequency hopping' ('AFH') into the IEEE's 802.15 standard. At the same time, Bandspeed surreptitiously sought to patent AFH technology never revealing its patent applications to the IEEE or its members despite a clear duty to do so. As part of defendants' conspiracy, Bandspeed also misrepresented that Bandspeed would either refrain from suing on its purportedly proprietary AFH technology or that Bandspeed would grant royalty-free or fair and reasonable licenses to that technology. In doing so, the IEEE reasonably relied on Bandspeed's representations and omissions, and excluded viable, competing solutions from the standard by members who actually did comply with the IEEE's policies. IEEE members, including CSR, and numerous technology companies then implemented the IEEE 802.15 standard, developing, manufacturing and selling chips and devices that adhered to IEEE 802.15. Bandspeed sat by until its patents in AFH technology issued, all the while concealing its patent applications and its intent to enforce its patents. Just days after Bandspeed's patents issued, Bandspeed, in conspiracy with the other defendants, then turned around and sued numerous companies, including CSR, accusing products that comply with the IEEE 802.15 standard and implement AFH of infringing Bandspeed's patents, a claim that CSR and those companies deny. By their course of conduct, defendants have violated federal antitrust laws, California's laws against the unreasonable restraint of trade, California's unfair competition laws, engaged in fraud, and made negligent misrepresentations."
Adaptive frequency hopping is a method of transmitting radio signals by switching rapidly among frequencies. Such signals are more difficult to intercept or jam, and reduce noise and interference from single frequencies.
According to the IEEE website, its 802.15 standard includes "IEEE Recommended Practice for Telecommunications and Information exchange between systems ... Coexistence of Wireless Personal Area Networks with Other Wireless Devices Operating in Unlicensed Frequency Band."
In its complaint, CSR says: "The IEEE is involved in setting and promulgating certain standards for wireless technology. As a general matter, the IEE exists to ensure that certain technologies are interoperable and compatible. The IEEE develops consensus standards for various technologies, including the 802.15 standard, which governs wireless personal area networks such as 'Bluetooth' wireless technology.
"The adoption of standards, however, creates a risk that those who created the standards will seek to extract monopoly rents and insist of anti-competitive licensing terms from other adopters, as defendants seek to do. To address this risk, standards organizations typically require patent holders (i) to disclose their essential intellectual property and (ii) to commit to license such essential intellectual property on fair, reasonable, and non-discriminatory ('FRAND') terms or on a royalty-free basis." (Citations omitted.)
CSR claims that during the standard-setting process, Bandspeed claimed that it "had no intellectual property interest in the technology it proposed," and that it "would either license its technology on FRAND or royalty-free terms, or would refrain from suing other companies for compliance with any standards adopted by the IEEE. When Bandspeed made its contributions to the IEEE, Bandspeed further acknowledged that its contributions became the property of the IEEE and would be publicly disclosed, and Bandspeed provided numerous explicit releases to that effect. When Bandspeed made those representations and released, Bandspeed knew they were false, but made them to induce reliance by the IEEE and future implementers of the IEEE standard. The other defendants authorized or ratified Bandspeed's misrepresentations, omissions and conduct."
Bandspeed worked with the IEEE from 2000 to 2002 to promote its adaptive frequency hopping technology, which "reduces interference between wireless technologies, including 'Bluetooth,' that share the 2.4GHz spectrum," according to the complaint.
A patent was granted in 2009 for the adaptive frequency hopping technology, to Bandspeed employees who were involved with the IEEE, according to the complaint. None of those employees, however, who are named in the complaint, are named as defendants.
Cambridge Silicon Radio describes itself as a "global leader in wireless technology" which supplies chips for Bluetooth, Wi-Fi, and other connection technology that complies with IEEE standards.
Mere days after Bandspeed acquired the adaptive frequency hopping patent, the company sued Sony, Nintendo, and Apple for patent infringement, Cambridge says. It claimed devices such as the iPhone and Playstation 3 infringed on Bandspeed's patents.
Cambridge intervened in the action to protect its interests in March 2010. Bandspeed countersued, alleging patent infringement of its adaptive frequency hopping technology.
"No company can now enter the field to propose a competing technology - Bandspeed has eliminated competition," according to the complaint.
CSR seeks an injunction and damages for antitrust violations, fraud and negligent misrepresentation.
It is represented by John Antoni with Antoni Albus, of Los Angeles.
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