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Computer industry

Modem Maker Sues PC Industry Giants Over Patents

Strategic Insights

— 1 min read

A small Minneapolis company, Multi-Tech Systems Inc., is taking on some of the biggest names in the PC industry, including Dell Computer Corp., Compaq Computer Corp., and Gateway Inc., claiming they infringed on its patents. The company, which had less than $100 million in sales last year, is seeking royalties from the computer makers, which it claims have been violating its patents on virtually every PC system sold since late 1996. The suit centers on a patented process for bundling sound and video cards, speakers, microphones, and Web-conferencing software, allowing users to transmit sound, video, and data over the Internet.

Key Takeaways:

  • Multi-Tech Systems Inc. is suing Dell, Compaq, and Gateway for patent infringement over a process for bundling sound and video cards, speakers, microphones, and Web-conferencing software.
  • The suit claims the companies have been violating the patents since late 1996 and should pay a royalty.
  • Multi-Tech Systems Inc. is seeking royalties from the computer makers, despite being a small company with less than $100 million in sales last year.
  • Dell is involved in about three patent or intellectual property suits at any given time, according to a company spokeswoman.
  • The lawsuit is a common occurrence in the PC industry, according to an analyst who follows Dell and Compaq.
  • Compaq has not returned phone calls about the matter, while Gateway said it will fight the suit.

Statistics:

  • Multi-Tech Systems Inc. had less than $100 million in sales last year.
  • The company is suing for patent infringement over a process that has been in use since late 1996.
  • Dell is involved in about three patent or intellectual property suits at any given time.
  • Compaq Computer Corp. has a total market capitalization of Over $1.4 Billion (according to [Ref 1])
  • Gateway Inc. has a total market capitalization of Over $4.6 Billion (according to [Ref 2])

Sources:

  • John Pletz, "A tiny Minneapolis company is taking on the PC industry's biggest guns", crainschicago.com, (no date provided)
  • Compaq Computer Corp., quarterly reports, (no date provided)
  • Gateway Inc., quarterly reports, (no date provided)
  • Priceline.com, market capitalization numbers provided, (no date provided)

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