Vadem

» see vadem.com as it lived, on the wayback machine

~ the obituary ~

Henry Fung had been an engineer at Intel. Chikok Shing had worked at Osborne Computer Corporation, which filed for Chapter 11 at roughly the moment the two of them incorporated in San Jose in 1983. They named the company after vade mecum, the thing you carry with you, and set out to design portable computers for companies that wanted one and did not want to work out how to build it.

The first customer was George Morrow, who put under three million dollars of seed money in and got the Morrow Pivot out of it in 1984, one of the earliest battery-powered MS-DOS portables. The agreement was non-exclusive, so Vadem turned around and sold the same design to the reorganized Osborne, which shipped it as the Osborne III. The Pivot II came next, this time exclusive, and Morrow sold that design on to Zenith Data Systems, who sold it as the Z-171 and then won a contract to supply 20,000 of them to the IRS for $27 million, beating IBM's own Convertible. Sharp hired Vadem for the PC-7000 and then the PC-4500. Zenith came back for the Eazy PC.

It is a strange shape for a company. The things it made were real and shipped in volume, with other people's logos on them. By 1988 it was eighteen full-time employees in six thousand square feet with a handful of consultants, and it was about to stop designing whole computers and start designing the chips inside them, which is where the money and the trouble both were.

The name ends in 2013 with a dissolution rather than a bankruptcy or a sale. There were no products left by then. There were patents, and there had been a lawsuit about where they went.

~ the case file ~

~ the chip inside other people's laptops ~

Vadem signed two five-year contracts with Intel in 1988 for chipset designs, taking investment and sales referrals in exchange. The VG-501/VG-502 pair emulated an IBM PS/2 Model 30 using an 80186, a processor whose built-in peripherals are famously not PC-compatible, by trapping accesses to the PC's interrupt and DMA controllers with a non-maskable interrupt and translating them in a routine held on the chip. It ran at 16 MHz, which Vadem claimed put it level with a 10 MHz 286, and it used fewer parts.

The one that mattered came in August 1992. The VG-230 was a whole PC on a single chip built around a 16 MHz NEC V30HL, carrying a PC Card controller and an LCD controller, plus a hardware buffer for stylus input so the main processor could keep working while handwriting came in. Hewlett-Packard put it in the OmniGo 100. IBM put it in the Simon, the device usually named as the first smartphone. If you have ever held a Simon in a museum case, the processor you were looking at was designed by a company whose name is not written anywhere on it.

~ the clio ~

In late 1998 Vadem finally shipped something under its own name. The Clio was a Windows CE machine on an NEC MIPS VR4111 with a hinge Vadem called SwingTop, which let the screen swing forward over the keyboard into a slate. Sharp sold the same hardware as the Mobilon TriPad. It arrived into a handheld PC market that Palm was already winning with a smaller device and no keyboard at all, and Vadem was in financial trouble that same year.

~ the chancery opinion ~

On 27 October 1999 Microsoft announced that it had bought the rights to CalliGrapher, the handwriting recognition built by ParaGraph, by then a division of Vadem, and that it had also made an equity investment in the company. Vadem's chairman and chief executive, named in the release as John Zhao, gave the usual quote about accelerating development.

What the Delaware Court of Chancery described thirteen years later is what happened next. In a restructuring in late 1999, Vadem, Ltd., a British Virgin Islands company, moved its assets into four separate operating companies. One block of those assets was patents, and they went to Amphus, Inc. for nominal consideration, after misrepresentations by the chief executive, Henry Fung, who held 20 percent of Amphus. The opinion names Fung in that role while Microsoft's press release of 27 October 1999 names John Zhao, and nothing I found reconciles the two. The day after the transfer, Amphus sold the same patents on for a great deal more. The board had done it without the shareholder vote its own Memorandum of Association required, and the shareholders, Microsoft among them, found out afterward, when they were asked to approve the merger of Vadem, Ltd. into a holding company called Vadem LLC.

Microsoft says it learned what the patents were actually worth during unrelated patent litigation in 2010, and sued in 2011. Vice Chancellor Parsons dismissed the case on 27 April 2012: the derivative claims because Microsoft had not sought leave from the High Court of the BVI first, the direct ones because Delaware's three-year limit had run out years before anybody noticed. The Delaware Supreme Court heard argument on 10 January 2013 and affirmed. Vadem LLC dissolved that year, its patents long gone into spin-offs that went defunct shortly after they were created.

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