Rockwell Signs Agreement With Modem Maker
Rockwell International Corp. said Monday that it has signed a license agreement with an Atlanta computer modem manufacturer that could expand Rockwell’s presence in that market.
The agreement reached by Rockwell’s Digital Communications Division in Newport Beach could shorten the cumbersome process by which numerous manufacturers now obtain the right to make modems that are compatible with those made by the industry leader, Hayes Microcomputer Products Inc.
Modems are devices that enable a personal computer to communicate with another and exchange data over a telephone line.
Under the agreement with Hayes, Rockwell will be the sole company with a license to produce and sell to other manufacturers the computer modem chips that are compatible with Hayes’ patented technology.
Rockwell, based in Seal Beach, is a major producer of modem chips for the $856-million modem industry in the United States, according to Dataquest Inc., a market research firm in San Jose.
The agreement will allow those who make modem circuit boards for personal computers to use the Hayes technology simply by buying the needed chips from Rockwell instead of going through the lengthy licensing process with Hayes, which has had to file lawsuits to protect its patent.
“We think resolution of the most contentious issues in the modem industry is good for the industry and its growth,” said Dwight Decker, a Rockwell vice president. “This agreement resolves legal issues for our customers.”
Decker declined to comment on whether Rockwell must pay royalties to Hayes, but he said that no additional costs will be passed on to Rockwell customers.
Greg Sheppard, a computer analyst at Dataquest, said the agreement will allow Rockwell to expand its market share in the chip industry and establish the Hayes-compatible technology as a standard for modems, much like the IBM-compatible technology is a standard for personal computers.
“This legitimizes Hayes as a standard, and it will provide a competitive advantage for Rockwell,” Sheppard said.
The Hayes patented technology ensures that a computer user can issue software commands on a computer without losing a telephone connection or scrambling data in transit, said Dennis C. Hayes, president of Hayes Microcomputer.
The Hayes Microcomputer patent on the modem technology has been a thorny legal issue. In January, 1991, the company won a lawsuit against three modem manufacturers who allegedly infringed on the patent.
Everex Systems Inc. and OmniTel Inc., both in Fremont, and Ven-Tel Systems Inc. in San Jose were ordered to pay $10 million in damages to Hayes. The first two settled out of court, but Ven-Tel has appealed the decision by the federal court in San Francisco.
