PCTEL LOOKS PAST PATENT SUIT TOWARD FUSION OF WI-FI, PC

PCTEL, the soft modem technology developer turned Wi-Fi roaming software specialist, filed lawsuits against Agere, Broadcom, Lucent Technologies and U.S Robotics claiming infringement on its host signal processing (HSP) modem patents. However, the company's efforts to collect on debts due may not be as intriguing as what's to come: a soft access point that could radically change the home Wi-Fi networking model.

The lawsuits are similar to an infringement case initiated by PCTEL against 3Com in March. They charge that the defendant companies have used PCTEL patents in high-priced modem products without compensating PCTEL, said PCTEL Chairman and CEO Marty Singer. PCTEL developed the HSP patents several years ago before Singer took over management of the company in November 2001. However, the previous management never pursued litigation, in part because PCTEL had its own HSP product line. It divested that HSP business recently in a deal with Conexant in which it also acquired some Conexant patents.

Chicago-based PCTEL was hoping to settle all the suits out of court, Singer said, but the company needed to initiate legal proceedings to accelerate the process. “You show me a court date and I'll show you a settlement,” Singer said.

All the companies targeted in the lawsuits declined comment.

PCTEL calculated the past licensing fees covered in the suit to be about $448 million, and it assumed an additional $61 million in future considerations in its filing, according to Singer. “I don't know that we'll get all of it, but we'll get a significant cash award,” he said.

The company has not decided what it will do with the payback, but Singer speculated that it could be used for a stock buyback to create a shareholder dividend, or funneled into further Wi-Fi product developments.

In the 18 months since Singer took charge, PCTEL has completely refocused its core business from wireline modem technologies to wireless through a series of acquisitions and product developments. Last year, it entered the wireless market by acquiring start-up CyberPIXIE. Earlier this year, PCTEL launched its Segue Wi-Fi client roaming software, which was quickly licensed by Boingo Wireless. The company also acquired DTI, a maker of software-defined radio technology, and bought patents from IteX that could be used in future integration of DSL and Wi-Fi.

In the third quarter of 2003, PCTEL will launch the Segue Soft Access Point Module, a Wi-Fi client card for PCs and laptops that incorporates “soft” access point technology into the card itself. The result, Singer said, will be home PCs connected to DSL lines that can “illuminate the home as a Wi-Fi hot spot when they're turned on. From there, you can network other devices in the home,” he said.

Currently, many DSL users install actual Wi-Fi access points and routers in their homes to the same effect. Single-unit antenna/routers also are available, but PCTEL wants to take the technology integration a step further.

“Our core competency is making things soft, so we asked our engineers if they could take the existing Wi-Fi client card and make it a soft access point and router,” Singer said. “This soft technology eventually will be embedded into PC motherboards to make them access point-enabled.”

The soft access point could help accelerate the trend of precipitously falling prices for home routers and access points, though Singer said some users may still want a demarcation between PC and a wireless router.