Computer Automation Gets Royalty of $485,000 From IBM in Patent Pact

Computer Automation of Irvine said Friday that it has received a royalty payment of $485,000 from International Business Machines Corp. under a patent licensing agreement characterized by some industry observers as a potential windfall for the company.

The patent covers technology used in certain models of IBM’s Personal System/2 line of personal computers.

Computer Automation said the royalties were in addition to other undisclosed payments received from IBM during a period of about a year, ending in June. The manufacturer of computers and electronic test equipment said it will disclose the full amount of IBM royalty payments when it files a financial statement for the current quarter ending Dec. 31.

Pratt said the $485,000 payment “is not necessarily indicative of royalties which may be received over comparable or shorter periods in the future.”

The patent became the subject of considerable industry speculation earlier this year after Computer Automation announced that personal computer makers who were seeking to produce copies or “clones” of IBM’s PS/2 models were likely to infringe the patent.

Computer Automation began a licensing program for computer makers, and some industry experts predicted that expected royalty payments would generate significant revenue for the firm.

The PS/2 market has been slow to develop, however, and few companies have signed up for the Computer Automation program.

Computer Automation’ stock was up sharply in over-the-counter trading Friday, closing at $4 per share, up 87.5 cents, or 28%.