Australia's Commonwealth Scientific and Research Organisation (CSIRO) has turned its budgeted deficit of $34.2 million for the 2008-09 financial year into a $122 million surplus, with the unexpected windfall primarily attributed to its intellectual property revenues.

It follows the CSIRO's pursuit in the courts of companies that owed it royalties for the use of a patent employed in three of the four main standards used for WLANS, including the 802.11n wireless standard, developed by the IEEE. As such any company that incorporated the 802.11 wireless standard in its products — including PCs, notebooks and networking products — had to pay royalties for the use of the technology.

In 1992 the CSIRO patented a solution to the "multipath signal problem" of radio wave signals bouncing off surfaces — such as walls, furniture and people — in many directions. The team solved the problem by exploring the methods used in radioastronomy to detect short pulses given off by black holes and applying them to radio signals.

"CSIRO’s solution to the 'multipath problem' and its subsequent commercialisation ranks as one of the most significant achievements in CSIRO’s 82 year history," said CSIRO chairperson Dr John Stocker. “The technology is used in over 800 million devices right now and its use is rapidly expanding.”

A US patent was granted in 1996. In 1999, the first modern international standard for WLAN (IEEE 802.11a) was ratified. It relied on the technology covered by CSIRO's patent for its implementation. In 2001 the first products using the standard entered the market.

According to the CSIRO's annual report, tabled in parliament this week, the organisation netted over $200 million in royalties from the patent in the financial year ending 30 June 2009.

"The CSIRO set out to encourage the industry to take licences for the use of its patented technology," said Nigel Poole, CSIRO executive director. "When that did not prove successful, we initiated legal proceedings which then led to proceedings being initiated against CSIRO."

"The result earlier this year was that 14 companies settled with CSIRO under confidential terms. The revenue arising from these settlements to date is approximately $200 million."

At a ceremony in Melbourne this week the CSIRO honoured the scientific, commercial and legal teams responsible for pioneering the wireless protocol, awarding them the Chairman's Medal for Research Achievement — the organisation's highest honour.

The award recognises the teams' efforts in delivering major technical benefits to Australia and the world, and for substantial returns to CSIRO from the WLAN technology now underpinning wireless communication systems in millions of products worldwide.