[The Orckit Prospectus As It Relates To The Existing AMTX/MOT Deal]
Steve Green,
You were kind enough to supply the following (emphasis added by me):
<<Further fuel for thought......
From the Orckit Prospectus........"DMT technology, a portion of which is subject to
patents owned by Amati, Telebit Corporation and *Motorola Corporation* has been
selected by ANSI and ETSI as the standard for ADSL transmission>>
Although its not incontrovertible, it seems logical that the Motorola
patents mentioned in the Orckit prospectus would be the same ones that
Motorola licensed to AMTX as part of the existing AMTX/MOT deal for
development of what will be known as the CopperGold DMT chip.
Keep in mind the "rocking chair" analogy from the explanatory patent
website I posted a few weeks ago. The MOT Trellis Code patents, taken
collectively, can be viewed as the "chair" patent.
Whatever portion of the 11-14 AMTX patents cover technology necessary
for the CopperGold chip to meet the specifications in Exhibit "A" to
the AMTX/MOT license agreement, taken collectively, can be viewed as
the patents on the improvements that turn the "chair" into a "rocking
chair."
Neither AMTX nor MOT can make, use, or sell a product incorporating
a mix of both technologies (i.e, the DMT modem "rocking chair") unless
they cross-license each other's patents.
The existing AMTX/MOT deal DOES cross-license each other's patented
technology, but the duration of the licenses is not equal. As I pointed
out in a recent post, MOT received a license of whatever AMTX patents
are necessary for MOT to make a CopperGold chip that complies with the
Exhibit A specifications. Although those specifications were not
published on Edgar, it seems reasonable to assume that the Exhibit A
specs dovetail with the ANSI standard for DMT modems. The license that
MOT received cannot be cancelled by AMTX (assuming that MOT doesn't
breach the agreement by, for example, failing to pay the required
royalties to AMTX when CopperGold chips are sold by MOT to whomever
MOT wishes have as a customer).
If the Exhibit A specs would need to be revised to make a DMT chip
that would be compliant with the ANSI Issue II standard, the question
becomes whether AMTX has any patents, issued or in the pipeline, that
give AMTX proprietary rights to whatever *new* specs are added to the
existing ANSI standard to make up the forthcoming Issue II ANSI
standard. From memory, I *think* (not absolutely certain) that somebody
posted a blurb from somewhere about how many different companies
proposed *additions* to the existing ANSI standard to make a more
comprehensive Issue II ANSI standard.
If nothing proprietary to AMTX gets added to the original ANSI specs,
then MOT *might* have to renegotiate the existing AMTX/MOT deal to make
a second generation CopperGold chip, that would be Issue II compliant,
*only* if the added functionality required modifications to the software
that MOT could not make on its own. I did not have this issue in mind
when reading the existing AMTX/MOT deal, so it would be worth a second
look to see exactly what the deal said about AMTX software.
I think Bill C made a similar point, but phrased it somewhat differently,
when he asked if MOT had access to the Amati DMT source code as part of
the development effort for making the first generation CopperGold
ANSI-complaint DMT chip. My guess, but until I reread the AMTX/MOT
agreement its only a guess, is that AMTX was savvy enough to keep the
sufficient control to make MOT come back to the bargaining table when
and if MOT decides to design a second generation, Issue II compliant,
Coppergold DMT chip.
Conversely, the existing AMTX/MOT deal gives AMTX a license to use
the 3 MOT Trellis Code patents for making the DMT "rocking chair," but
only until 1/1/98.
In the absence of further negotiations between AMTX and MOT, AMTX loses
the right to use the patented MOT Trellis Code technology on DMT chips
from LSI (or anyone else) on 1/1/98. In the absence of further
negotiations between AMTX and MOT, AMTX has three choices if it wants to
make an ANSI-compliant DMT modem after 1/1/98 -- (1) buy all of its
DMT chips from MOT (the existing deal requires MOT to make CopperGold
DMT chips available for sale to AMTX); (2) continue making DMT modems
with chips from other chipmakers and run the risk of a patent
infringement suit by MOT after having signed the existing AMTX/MOT
deal which strongly implies that both parties believed AMTX needed
to license the MOT patents to legally use the LSI chip in the first
generation AMTX DMT modems; or (3) find a way to design an ANSI
compliant DMT modem without using the patented MOT Trellis Coding
technology.
If DSP-based DMT modems don't use the patented MOT Trellis Coding
technology, then the planned AMTX DMT modems based on the TI C6x DSP
chip would fall under category (3) above. Does anybody *know* whether
a DSP-based DMT modem somehow avoids using the patented MOT Trellis
Coding technology that the AMTX/MOT deal and the Orckit prospectus imply
is necessary for a non-DSP DMT ANSI-compliant DMT chip?
BTW, anybody who buys a CopperGold chip from MOT doesn't need a separate
license to use it in a DMT modem. MOT cannot sell the chip to an ADSL
modem manufacturer, and then turn around and demand a separate royalty
payment. The license to use the CopperGold chip would be implicitly
granted by the sale. This is why, for example, *IF* ADI ever licenses
AMTX's patented DMT technology from AMTX, and pays royalties to AMTX based
on ADI's sale of chips incorporating the licensed rechnology, Aware (or
anyone else who buys the chip from ADI) does not need to make a second
royalty payment to AMTX on the same chip for which ADI already paid
a royalty to AMTX.
Anyway, FWIW, those are my thoughts on what you read in the Orckit
prospectus.
BTW, a very similar analysis probably applies to the Telebit patents.
Based on what the Orckit prospectus says, Telebit was apparently
claiming that its own patents were in effect also part of the basic
"chair" technology, and claiming that Orckit could not make a DMT modem
"rocking chair" without licensing the Telebit patents. More on Telebit
in a later post, if I can.
Good luck to us all,
Bozo T. Clown |
