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Agere and Multiplex Bury the Hatchet

Agere Systems (NYSE: AGR) and startup Multiplex Inc. have settled a nasty and long-running intellectual property dispute.

The companies jointly announced today that they have reached a settlement of all pending litigation between them (see Agere and Multiplex Make Friends). They also announced that they have entered into a patent cross-license agreement. Both parties are keeping the terms of the settlement under wraps.

Last summer, Agere filed two lawsuits against Multiplex, a maker of integrated 10-Gbit/s optical components. The first, filed in the U.S. District Court for Delaware, alleged that Multiplex was infringing on four patents held by Agere (see Agere Sues Multiplex). These patents are related to optical components and subsystems, including lasers and multiple quantum well modulators, which are used in optical systems like DWDM platforms.

The second suit, filed in the Superior Court of New Jersey Chancery Division, alleged Multiplex wrongfully possessed Agere optoelectronic device wafers and other related proprietary property. In a previous statement, Agere said it was seeking monetary damages for the patent infringements, recovery of its property, and an injunction against further infringement.

Agere seemed to have been turning up the heat on Multiplex back in February, when several Multiplex employees and executives were subpoenaed to testify in the cases (see Multiplex Employees Get Subpoenas). But now, eight months after the lawsuits were filed, the two have reached an agreement. Although the company still maintains that these claims were completely without merit, Multiplex will now license the disputed technology from Agere.

Some patent attorneys speculate that Agere’s lawsuits were aimed at Multiplex mainly because it is a startup. Joel Rosenblatt, a private practice patent attorney in Florida who is not involved in the lawsuit, says that large companies often go after startups because they cannot afford to spend the $1 million it could cost to defend themselves in a patent suit.

In this case, Agere gets a licensee added to its collection, which it can use to show that the industry respects and validates its patent. Multiplex gets a bargain license and some know-how, as well as licenses to other patents owned by Agere. It might also get rights to Agere processes, now in use or perhaps in development, adds Rosenblatt.

“For Multiplex, it's a cost of doing business, where fighting the suit could have put it out of business by an injunction or by its legal fees,” he says.

Indeed, Robert J. Ott, CFO for Multiplex, says that the company is glad to have the lawsuits behind them.

“We don’t have the 'bandwidth' to deal with these things as readily as somebody like Agere,” he says. “It takes up a lot of time and resources. We’re pleased to move forward and devote more of our efforts to developing the technology.”

— Marguerite Reardon, Senior Editor, Light Reading
http://www.lightreading.com
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