Files patent infringement charges against three of the sector's biggest companies. Could others be in the firing line?

July 20, 2004

3 Min Read
Telcordia Sues Alcatel, Cisco, Lucent

Telcordia Technologies Inc. is clearly not on a major popularity drive at the moment.

Already the scourge of many an equipment vendor because of its Osmine process, it has filed lawsuits against three major equipment companies -- Alcatel SA (NYSE: ALA; Paris: CGEP:PA), Cisco Systems Inc. (Nasdaq: CSCO), and Lucent Technologies Inc. (NYSE: LU) -- alleging the infringement of its intellectual property.

This appears to be a new revenue-generating tactic for the New Jersey outfit. Last week, Marconi Corp. plc (Nasdaq: MRCIY; London: MONI) announced it had paid $21 million to Telcordia in an out-of-court settlement related to a patent infringement (see Telcordia Pockets Patent Payment).

The intellectual property at the heart of the Marconi case was U.S. Patent 4,893,306, "Method and Apparatus for Multiplexing Circuit and Packet Traffic," which relates to a data transmission technology known as Dynamic TDM, or DTDM.

That patent identifies "a flexible network transport system capable of effectively handling both circuit and packet traffic. By combining conventional time division multiplexing techniques and packet transmission techniques, DTDM enables a flexible transition from the existing circuit type networks to future broadband packet transmission networks." Details of the patent can be found by clicking on this link. Now Telcordia alleges that Alcatel, Cisco, and Lucent have infringed that very same patent.

In three separate lawsuits filed with the U. S. District Court of Delaware in Wilmington, Telcordia claims the three firms have each infringed the DTDM patent, and, in addition, claims that Cisco has infringed Reissue Patent RE 36,633, entitled "Synchronous Residual Time Stamp for Timing Recovery in a Broadband Network." In each case Telcordia has requested a jury trial.

None of the accused was prepared to comment on the situation, with Lucent saying it would not comment on any pending litigation, and Cisco noting that is has yet to be served with any legal papers.

And Telcordia isn't keen to elaborate on these particular cases, or say whether other vendors can expect to face similar legal action. But given the nature of the patent, based as it is on the hot networking topic de jour, convergence, it seems most likely that other vendors could find themselves on the wrong end of similar legal action.

So is the patent infringement business likely to be a lucrative one for Telcordia? A company spokeswoman says the Marconi payment is "our first revenue from patent infringement litigation," and that the company "expects more in the future," though she declined to comment on any potential revenues.

In an email response to questions, she adds: "Telcordia has an extensive [intellectual portfolio] that we are prepared to license. But Telcordia, [like] most other companies, isn't going to give its intellectual property away."

To that end, the company recently asserted its ownership of a key patent at the heart of softswitch technologies (see Telcordia's Softswitch Timebomb). That intellectual property has already been licensed to VOIP systems developer NewCross Technologies Inc., in which Telcordia now owns a stake.

— Ray Le Maistre, International News Editor, Light Reading

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