BankAmerica Corp. agreed last week to pay $125,000 to settle its part in lawsuit over a technology patent for networking personal computers.
If the suit -- which is still pending against software maker Novell Inc. -- succeeds, thousands of U.S. corporations could be liable to pay licensing fees for crucial software that they installed years ago to link their PCs.
Roger Billings, an inventor who runs a technical institute in Independence, Mo., devoted to "environmentally sound" technologies, filed the suit against BankAmerica and Novell in December 1991 in U.S. district court in San Francisco.
Mr. Billings charged that Novell -- and by extension, all Novell's customers -- are violating a patent he owns as the inventor of "client-server" computing, in which personal computers and servers share information on a network. He is claiming damages of $220 million.
BankAmerica's settlement did not affect the suit against Novell, which still faces claims that in developing NetWare, its popular network operating system, it copied Mr. Billings' design.
Novell, which had revenues of $933 million in fiscal 1992, says it believes the suit is without merit. Mr. Billings said he named BankAmerica in the suit because it is a large and prestigious user of NetWare.
The bank says its decision to pay had nothing to do with whether the suit has merit. "This was a business decision to settle what was nuisance litigation for us in the most cost-effective manner," said Peter Magnani, a spokesman for the bank.
"BankAmerica clearly did not engage in patent infringement."
"This marks a great breakthrough for us in gaining recognition for this invention," said Mr. Billings. "Whatever their reason for settling, I'm very gratified."
BankAmerica and Novell had filed a motion for summary judgment in the case, but the bank decided to settle before the motion was heard last week.
Federal Judge Eugene Lynch is expected to make a formal decision on Novell's motion this week, but he has indicated he will deny it. That would send the case to trial.
A spokesman for Mr. Billings said that if the suit is successful, one possible outcome is that Novell -- and other networking software companies that employ client-server computing -- might have to pay the licensing fees on behalf of their customers. Such a judgment could cost the software companies millions of dollars.
Mr. Billings said he believes that Novell used technical documentation that he made available at the National Computer Conference trade show in 1982 to create NetWare, which went on the market a year later.
At the time Mr. Billings developed the model he ran a company in Provo, Utah, called Billings Computer. He said he sold his equity in the business in 1984.
A year later, he started the International Academy of Science, in Independence, Mo., a nonprofit foundation seeking to to develop alternative-fuel vehicles. He says that after he received his patent, he approached Novell about a licensing agreement, but the company refused to talk to him.
Early Form of Client-Server
Mr. Billings says his patent covers a method of sharing information among computers in which programs on computers or servers perform tasks requested by computer workstations, or clients. The model is an early form of client-server computing, now a feature that is central to many software firm's products.
Mr. Billings says that the design enabled Novell to outperform competing systems, and to gain early leadership in market share.
Under the terms of the agreement, Mr. Billings, dismissed its action against Bank of America and granted a license for the bank's systems believed to use the patented technology.
Mr. Billings said he hopes that further litigation will be unnecessary, and that other companies employing the same "client server" model that the patented will voluntarily pay licensing fees.