A federal judge in Tyler, Texas, ruled last week that an Australian government agency holds the rights to patents on the underlying technology used in two Wi-Fi standards and a third proposed standard. The decision could have a wide-ranging impact on wireless equipment makers and consumer electronics manufacturers.

Australia's Commonwealth Scientific and Industrial Research Organisation filed a patent in 1996 that it says is employed in some IEEE standards, potentially including 802.11. The group said that Microsoft, Dell, HP, Intel, Apple, and Netgear have initiated legal action in an attempt to overturn the patent. The organisation says it intends to fight the action.

This isn't the first time a company or organisation has tried to pursue companies in the 802.11 space for patent infringement. Last year a patent buying firm called Acacia began sending letters to access point makers that use redirect technologies, saying those firms owed royalties for a patent Acacia owns on redirect technologies. It's unclear how vigorously Acacia followed up on its pursuits, but the move caused an uproar in the industry.

The question remains why the Australian organisation is deciding to pursue this patent at this stage in the market. While companies must be able to reap the rewards of their own research and development, there also must be consideration for the positive affects that low cost products can have on a market.

"One reason that Wi-Fi has proliferated as it has is because it's reached a point where it's incredibly cheap, so it's easy to just stick a Wi-Fi chip in a consumer electronics device," said Stan Schatt, a vice president at ABI Research. "But if the cost of the technology goes up to pay for the license, even a little bit, it could throw off the economics."

Indeed, Wi-Fi products generate billions of dollars in revenue for equipment makers. Just the access points that provide the actual Wi-Fi signals in local area networks are expected to generate USD 1.9 billion in 2006, according to ABI Research. That figure is expected to jump to USD 3.7 billion in 2010.