ALR Wins Patent on Process for Upgrading Old Computers : Technology: The idea is to assure buyers that their new machines will not quickly become obsolete.
In a development that could send ripples through the computer industry, Advanced Logic Research Inc. said Tuesday that it has won a patent on its method of upgrading older personal computers to new technology.
The ALR technology allows a computer user to easily snap out an obsolete microprocessor--the main computing unit of a PC--and replace it with a faster microprocessor and other updated components, which generally allows the PC to work faster and use the latest software programs.
The idea behind the invention, which has been included in computers made by the Irvine-based company since 1989, was that PC buyers would not delay computer purchases if they could be assured that their machine would not soon become obsolete.
The upgraded component could be purchased for a smaller price than buying an entirely new computer, assuring customers that their machine would last longer.
Such modular design, which also lets manufacturers keep up with the constant change in computer chip speed, spread throughout the industry and is now regularly used by other companies such as Compaq Computer Corp. in Houston and cross-town rival AST Research Inc.
And since modular PCs use many of the same parts, ALR was able to simplify its inventory, devote less of its resources to technical engineering and lower its overall production costs.
The strategy helped ALR set itself apart from the so-called “clone makers” that merely mimicked brand-name computer makers such as IBM. Some experts viewed ALR’s technology simply as a marketing ploy aimed at eliminating buyer’s remorse. But on some early models, ALR said as many as 30% of its customers upgraded their PCs to faster microprocessors.
ALR lost $10.6 million, or 86 cents a share, in fiscal 1993 on revenue of $169.3 million, compared with net income of $500,000, or 5 cents a share, on revenue of $206.8 million the previous year. The company, which is now marginally profitable, has been hurt by fierce price wars in the PC industry.
“The patent seems fairly broad, but we have to conduct a competitive analysis before we know its value,” said Vic Sial, ALR treasurer. “We know that it is important and that PowerFlex technology made our company famous.”
In past interviews, ALR President Gene Lu, 39, has said that ALR invented the CPU upgrade technology. It is not yet clear whether ALR could force other companies to pay it royalties.
“You have to analyze the patent’s claims to see the boundaries of the patent,” said Susan Nycum, a patent attorney for Baker & Mackenzie in Palo Alto. “There isn’t enough information to go on yet.”
Under patent law, ALR cannot collect royalties on machines sold before it received the patent, Nycum said. But if the patent is upheld against legal challenges, companies deemed to infringe on that patent could be forced either to withdraw their machines from the market or pay a royalty on any future computer sales.
In one such case, Gilbert Hyatt, an inventor who formerly lived in La Palma, began collecting millions of dollars in royalties for a patent he received for invention of the microprocessor. He had said he invented it before industry giants Texas Instruments Inc. and Intel Corp.
Lu, David Kelly, vice president of engineering, and engineers Norman Hack and Scott Rushford were credited by the patent office as the inventors of the upgrade technology. The patent is the first won by ALR since its founding in 1984.
Officials at AST Research Inc. have applied for their own patent on what AST called its Cupid-32 architecture, another method for upgrading microprocessors. Emory Epperson, spokesman for AST, said no executives were available Tuesday evening for comment.
