January 20, 2000
Does Geoworks Have a License To Print Money?
By Jason Krause
It will be pretty hard to duplicate, but
Alameda, Calif.-based software company
Geoworks (GWRX) may have lucked into
the easiest way to cash in on the
Internet this side of an IPO. The company
says a patent filed six years ago gives it
rights to demand payments anytime
someone uses a cell phone or any device
running the emerging Internet standard
Wireless Application Protocol, or WAP.
The company, launched in 1983, spent
many of its early years battling Microsoft
(MSFT) and other operating systems
makers with its own GEOS operating
system. When that didn't pan out,
Geoworks eventually directed research
and development efforts towards finding
other uses for its experience in creating
graphical interfaces.
One of the patents the company filed
during this period – U.S. Patent No.
5,327,529, issued on July 5, 1994 –
described a process for designing generic
user interfaces for application programs,
and making it possible for the same
application appear on different display devices. The patent gives the
company rights and legal protection in the United States and Japan
through July 5, 2011. That patent, the company believes, applies to
a nearly identical process used in the Wireless Application Protocol
for displaying data on the screens of various devices.
This wouldn't be the first time such a move was made. "It's
somewhat analogous to what Qualcomm has done, though not to the
same degree. (Qualcomm) has gotten incredible momentum from its
control over the CDMA wireless technology," says Andrew Cole, head
of Renaissance Worldwide (REGI) 's wireless practice. "Simply put,
Geoworks could get a cut of the action every time someone logs on
using one of these phones. That lends itself to unbelievable margins,
since you don't do any work, but just sort of rake in the cash."
Unlike Qualcomm, Geoworks does not control the technology – just
an important piece. However, Dave Grannan, president and CEO of
Geoworks, does expect to earn tens of millions of dollars over the
next couple of years from this windfall. "It's not uncommon for
someone to reinvent something someone else has already patented,"
says Grannan. "We're just asserting our rights as patent holder. Our
main business is still selling server software. But this is a nice
additional revenue stream."
So far, the WAP Forum, which created the WAP standard, seems to
support Geoworks' claim. "We don't want to have a chilling effect on
an emerging market," Grannan assures. To that end, the company is
offering to charge $20,000 to any company with revenues over $1
million that wants to use WAP in an application. It will negotiate with
smaller companies. "We don't want to scare two guys working in a
garage from innovating on the WAP platform because they're afraid
of us," Grannan says.
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