CSR vows to fight US lawsuit over bluetooth technology

CSR, the semiconductor developer, has vowed to fight claims that its bluetooth chips have infringed US patents after some of its largest customers were sued for using its technology.

The Washington Research Foundation has filed a federal lawsuit against the mobile phone manufacturers Nokia, Samsung and Panasonic for selling handsets that allegedly breach the University of Washington's radio frequency receiver patents. It said it has been pursuing a settlement for three years.

CSR's bluetooth technology is at the heart of the complaint. Broadcom, a competitor to CSR which provides chips to Motorola, is paying a licence fee to the university.

CSR rejected the notion that it had infringed the university's patents. It said: "The suit is without merit in relation to CSR's Bluetooth chips and CSR will defend its products vigorously."

Dan Ridsdale, an analyst with Bridgewell Securities, said: "It is hard to second-guess who is in the right. Presumably CSR looked at this quite carefully."

Bluetooth was developed by the Swedish communications giant Ericsson in the 1990s and enables the transmission of data between electronic devices without the need for wires.

The legal action has significant implications for the mobile phone industry as bluetooth was intended to be a royalty-free technology. If the US action succeeds it could drive up the cost of devices that use bluetooth.

Ben Wood, an analyst with CCS Insight, said: "This opens a Pandora's box. There has been a flurry of litigation around intellectual property in the mobile phone sector because the potential gains are extraordinarily high. If this complaint is upheld it might have a much wider effect."

Patent disputes have become commonplace in the mobile phone sector. Last year the Blackberry developer Research In Motion paid $612.5m (£314m) to the patent holder NTP, while Nokia remains embroiled in a patent dispute with Qualcomm.

It is unclear what impact the suit could have on CSR as it has not detailed what proportion of its sales are derived from North America. The region accounts for less than 20 per cent of the global bluetooth market as the technology has yet to take off as quickly as it has in western Europe and Asia.

CSR has a market share in excess of 50 per cent in the bluetooth sector. The company's shares fell nearly 3 per cent to 640p on the back of the action.