LONDON Optical component manufacturers Bookham and JDSU have settled their long-running legal battles over ownership of intellectual property related to tunable lasers in an out of court deal, according to specialist magazine Compound Semiconductor .
The deal includes a revised licensing arrangement between the companies but is also is said to leave Bookham with an immediate bill of $1.5 million, rising to a maximum of $8 million.
According to its filing with the U.S. Securities and Exchange Commission (SEC), Bookham (Caswell, England and San Jose, Calif.) will pay an initial $3 million to JDSU (Milpitas, Calif.), as well as a royalty of "up to" $1 million per year for the next five years.
The $3 million will be paid in two equal installments. The first of these is due immediately; the second will be paid in a year's time.
Other conditions in the agreement include both parties refraining from starting any new patent litigation with the other for four years.
The dispute was centered on the development of tightly integrated photonic chips based on InP. The IP on these was originally owned by Larry Coldren and colleagues at Agility Communications Ė a tunable specialist that JDSU acquired in 2005.
U.S. patent 6,658,035 Ė granted in late 2003 - describes a combined tunable laser source and optical amplifier, integrated within a common epitaxial structure.
Patent 6,687,278, which followed shortly afterwards, took this further by describing how the integrated device generated a tunable optical signal. Both the patents were filed in 12 July 2000.
However last March, JDSU warned Bookham its products impinged these patents.
Bookham responded by lodging an official complaint in the U.S. District Court for the Northern District of California, asking the court to declare that the JDSU patents were invalid, and that no infringement had taken place.
An additional suit was filed with the US International Trade Commission (ITC) in November 2008. In that case JDSU sought to ban imports of tunable lasers made by Bookham, which fabricates the InP-based chips at its Caswell, England facility.
JDSU also named CyOptics in that ITC complaint, which it says integrates chips sold by Sweden's Syntune into marketable products at its Mexican facility.
The suit also names Nortel, Tellabs, and Ciena, network equipment manufacturers that JDSU listed as customers in its most recent quarterly financial results, but which are using Bookham's tunable lasers.
Another Bookham customer, German network equipment producer Adva Optical Networking, is the final company involved in the ITC case.
The cross licensing deal is said to settle the ITC compliant against Bookham, but it is not clear whether the action against CyOptics and Sytune has been settled.
Meanwhile, JDSU is now ramping its production of tunable lasers, having last month announced what it described as "the industry's first monolithically integrated and tunable optical transceiver".
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