January 18, 2005 11:54 AM PST
Ciena and Nortel to duke it out over patents
Ciena filed the complaint Tuesday in U.S. District Court in Texas. Three of the patents in question are related to Ciena's Asynchronous Transfer Mode switching technology. Two relate to Ciena's wave division multiplexing technology, and one is connected to Ciena's Sonet technology. Specific Nortel products that Ciena feels violate the patents have not been identified.
A Ciena representative said the company is asking the court to stop Nortel from selling products that violate the patents until a licensing agreement can be arranged. The company will also seek damages, but no dollar amount has been publicly discussed yet.
The lawsuit is the latest in a series of legal battles between the two companies. Troubles between Ciena and Nortel began when Ciena bought an optical start-up called ONI Systems in 2002. Nortel had filed a lawsuit against ONI in 2000 for patent infringement. In the original suit filed in district court in California against ONI, Nortel alleged that the company had violated five of its patents. In April 2002, Nortel dropped four of those complaints. The remaining complaint was settled in January 2003.
As part of that settlement, Ciena paid Nortel $25 million. Ciena also licensed certain Nortel patents. The companies agreed not to sue each other for two years while they tried to work out several cross-licensing agreements. But the companies have been unable to strike licensing deals. Now that the two-year period is over, Ciena is free to resume litigation.
A Nortel representative declined to comment on the current lawsuit, saying the company had not yet received a copy of the complaint.
Nortel has been struggling to put behind it a financial scandal that has plagued the company for almost a year now. Last week, the company restated financial results for 2001 through 2003, and announced that several executives would repay millions of dollars in bonuses.