Nortel, Redback settle patent lawsuit

Nortel Networks Corp. and Redback Networks Inc. have settled a legal spat over alleged claims of patent infringement and have signed a cross-licensing deal that requires Redback to pay Nortel an undisclosed sum, the companies announced Wednesday.

Nortel claimed in November 2001 that certain Redback products infringed on five of its patents and requested that Redback enter into a royalty-bearing license agreement, according to a recent Redback 10-K securities filing. In December 2001, Redback, in San Jose, California, filed a complaint against Nortel, asking a court to declare the five Nortel patents invalid and unenforceable. Nortel countersued Redback, alleging infringement of the five patents.

In March 2002, Redback amended its complaint, stating it was not infringing on any Nortel patents. In June 2002, the companies agreed to drop one of the five patents from the lawsuits filed against each other.

Under the settlement terms, Nortel will dismiss its claims against Redback related to the remaining four patents, and the cross-licensing agreement will cover Redback's use of the four patented technologies being disputed, a Redback spokesperson said.

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