Nortel, Ciena announce settlement

Fiber Optics Weekly Update, Feb 7, 2003

Nortel and Ciena announced that they have entered into a settlement agreement to resolve the pending lawsuit originally brought by Nortel Networks in March 2000 against ONI Systems Corp. for patent infringement and misappropriation of trade secrets. Ciena subsequently acquired ONI and thus became the defendant in the action. The lawsuit, Case No. C-0000864 in the United States District Court, Northern District of California, San Francisco Division, will be dismissed.

As part of the settlement, Nortel Networks has granted Ciena a license under certain patents, including U.S. Patent Nos. 6,084,694 and 6,493,117 and their non-U.S. equivalents, as well as any patents that issue under certain related patent applications. Ciena will make a one-time payment of US$25 million to Nortel Networks. Nortel Networks has also agreed to dismiss without prejudice the patent infringement lawsuit it brought against Ciena in November of 2002 in the United States District Court, Eastern District of Texas, Marshall Division, Case No. 2:02CV286. Nortel Networks and Ciena have agreed not to sue each other for patent infringement for two years, during which time they will seek to negotiate a cross-license arrangement between them.