In a move that could have far reaching implications for the Wi-Fi industry, HP has reached a confidential settlement with an Australian government agency that claims to own the US patent for technology used in most wireless LAN (WLAN) equipment.

Australia's national science agency CSIRO (Commonwealth Scientific and Industrial Research Organisation) has been engaged in a long-running legal battle over its patent, which could affect all IEEE 802.11 wireless LAN equipment. In 2005 it sued a number of tech companies and is seeking royalties for the patent through the US courts.

Indeed, so serious does the tech industry view the patent, that some of the largest IT players undertook their own legal action against CSIRO back in May 2005 to nullify the patent. There were also concerns that the patent dispute would delay the 802.11n Wi-Fi standard, although this turned out not to be the case.

CSIRO achieved a victory in November 2006 after it won an injunction that prevented Buffalo Technology from selling certain products in the United States, but after a lengthy appeal, that injunction was stayed in December 2008.

And now it seems that Hewlett-Packard has broken ranks with its other co-defendants and has reached a confidential settlement with CSIRO.

"CSIRO can confirm that a settlement has been reached with Hewlett-Packard Company (HP) in relation to the wireless patent case," Huw Morgan, CSIRO's media liaison manager told Techworld via email.

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"There will be no further comment at this time due to confidentiality and on-going litigation," he added.

The settlement will come as a blow to the others currently fighting the patent, and will no doubt boost the confidence of CSIRO as it continues its on-going litigation in the United States against Microsoft, Dell, Toshiba, Intel, Nintendo, Netgear, Belkin, D-Link, Asus, Buffalo Technology, 3com, Accton and SMC.

HP did not respond at the time of writing.

The US patent number 5,487,069, entitled "Wireless LAN", was issued to CSIRO on 23 January 1996, and is for a "peer-to-peer wireless LAN" that can operate in the kind of multi-path environment created by radio echoes in typical office buildings.

CSIRO has previously said that its patent allowed speed increases up to a factor of five over previous WLANs by a factor of five, and that it had "offered licences on reasonable and non-discriminatory terms to major suppliers as soon as they started selling devices which used the CSIRO technology."

The patent describes three ways to get high speed transmission despite the hostile conditions in an office: transmitting over a relatively large number of parallel sub-channels within the available bandwidth so that each channel has a low bit rate; transmitting data in small packets with forward error correction (FEC); and using interleaving. These concepts all feature in descriptions of the 802.11 physical layer.