Proxim, Symbol Make Nice After Settlement

Today, Holtsville, N.Y.-based Symbol Technologies and WLAN equipment-making rival Proxim of Sunnyvale, Calif., announced a settlement and partnership deal bringing to a conclusion the company’s patent lawsuits of the last few years.

In September 2003, Symbol won a jury award in a patent infringement case against Proxim over technologies used in 802.11 and 802.11b products. After appeals, that decision was reaffirmed last month by the United States District Court for the District of Delaware. The order was for Proxim to pay $22.75 million in damages.

The terms of payment have been worked out, and Proxim has agreed to pay the money over the next 10 quarters (2.5 years) starting on September 30, 2004. Payments will be in $2.5 million installments for the first eight quarters, then $1.5 million in the ninth quarter and $1.25 million in the tenth quarter. Proxim will also pay a 2% royalty to Symbol on all future sales of unnamed wireless products.

Symbol and Proxim will now cross-license some patents, and Proxim has also signed over rights to some intellectual property to Symbol. The two companies have a “mutual covenant” saying they will not sue over patent issues for the next five years, through September 2009.

This move resolves all outstanding litigation between the two companies.

“We are extremely pleased with the outcome of this precedent-setting litigation, which has validated Symbol’s wireless intellectual property and confirmed Symbol’s entitlement to a six percent royalty on these patents,” said Peter Lieb, Symbol senior vice president and general counsel, in a company announcement.

Proxim’s CEO Frank Plastina said in a press release that his company is pleased to have the “matter finally resolved,” and that the move will let Proxim get back to concentrating on the Wi-Fi and future WiMax markets. Proxim is working with Intel to develop future WiMax/802.16 products.

According to Synergy Research Group’s numbers from the second quarter of this year, Symbol is the number two player in the enterprise WLAN equipment space worldwide with 15.1% of the market (revenue of $46.2 million for Q2), followed by Proxim with 4.4% (revenue of $13.4 million). Both trail far beyond Cisco Systems, which commands 44% ($133.6 million in Q2).

Overall, entire enterprise WLAN equipment market sales increased by 14% from the first quarter to the second quarter of 2004.

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