IBM settles lawsuit that accused company of patent infringement
MADISON, Wis. - International Business Machines Corp. on Tuesday became the latest company to settle charges of infringing a patent owned by the University of Wisconsin's research arm in making computer chips.
The Wisconsin Alumni Research Foundation, which owns patents granted to UW researchers, had accused IBM in a federal lawsuit of infringing on patented technology in making and selling copper-based chips.
The two sides told a federal judge last week they had a deal and finalized the out-of-court agreement on Tuesday, said foundation spokesman Andrew Cohn.
"Both sides are happy with the agreement," said Cohn, who would not provide details.
The patent in question covers a metal barrier that prevents conductive metals from getting into the silicon that stores data in computer chips, stopping them from overheating or malfunctioning. It was granted in 1986 to John Wiley, an engineering professor who is now the school's chancellor, and his colleague John Perepezko.
The lawsuit accused IBM of patent infringement in making two types of computer chips, including the PowerPC750, which IBM called the world's first copper-based microprocessor when it was introduced in 1998. At the time, the company said the technology would speed up computers and could be used in everything from printers to digital cameras.
A trial had been scheduled in December on the lawsuit, which sought unspecified royalties from New York-based IBM. Lawyers for IBM did not immediately return phone messages from The Associated Press seeking comment Tuesday.
Since discovering widespread use of the patent in consumer electronics, the Wisconsin foundation has waged a legal campaign for more than two years aimed at getting companies to pay royalties for sales of everything from PlayStation 2 consoles to laptop computers and cell phones.
IBM joins a string of companies that have agreed to settle with the research foundation, including Japan's Sony Corp. and its subsidiary Toshiba, South Korea's Samsung, and German chipmaker Infineon. Many others settled before lawsuits were filed, Cohn said.
The foundation continues to negotiate a settlement with Cypress Semiconductor Corp. of San Jose, Calif., he said.
"They have been settling left and right," Wiley said earlier this month. "It will bring in some serious change."
Because the settlements are confidential, the foundation refused to say how much revenue the patent has generated. In an interview, Wiley put that figure at "$25 million or more." Researchers typically get to split 20 percent of the royalties while the rest is pumped back into the university for research.
Aluminum had been the industry standard for about 30 years in electronics devices. When Wiley learned the industry had switched to copper a few years ago, he figured companies must be using the patented technology. Copper makes the chips run faster but would get into the silicon without the patented barrier, he said.
A law firm hired by the school discovered that the research - initially aimed at improving how electronic devices work at high temperatures, such as in oil wells and jet engines - was almost ubiquitous in consumer electronics.
The foundation accused Infineon of infringement in making a chip used in wireless mobile phones and data modems, and Samsung of using the technology on chips in cell phones and DVD players.
And in the case that has drawn the most attention - making Wiley a hero a few years ago at his daughter's Madison high school - the research foundation accused Sony and Toshiba of infringement in the main chip that runs its industry leading PlayStation 2 video game console. The two sides reached a settlement last year.
The patent expired in 2003, meaning the companies' settlements covered past use and they are free to use the technology in the future.
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