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Redback's Wireless Past

Light Reading
News Analysis
Light Reading
7/3/2002

Before it struck an alliance with Nokia Corp. (NYSE: NOK), Redback Networks Inc. (Nasdaq: RBAK) had explored plans to build its own wireless networking products and even looked at entering a joint venture with an unnamed wireless equipment company, according to information disclosed in an August 2001 lawsuit Redback filed against Tahoe Networks.

In the suit, Redback accused Tahoe and two of its employees of using Redback's trade secrets and unlawfully trying to hire away Redback's employees. The two companies settled the suit about six months ago.

In Redback's complaint, filed in Santa Clara County Superior Court, the company cites a message from Richard Beach to Martin Lord that was written in April or May 2001. Beach had already left Redback to join Tahoe and the suit alleges that Beach was trying to recruit Lord and other engineers.

Neither Beach nor Lord could be reached for comment.

Beach's message, however, does give an interesting glimpse into the circumstances that may have led Redback into Nokia's arms. (Nokia Corp. recently invested about $36 million in Redback, giving it a 10 percent stake in the company, a seat on the board, and an option to buy up to 20 percent of Redback at a later date -- see Nokia Invests $36M in Redback).

"Last October, at my previous employer [Redback], I was asked to see what it would take to make the 10K [Redback's SMS 10000] operate as a GGSN," Beach wrote, according to Redback's complaint. A GGSN is a gateway GPRS support node -- a wireless networking box that acts as a gateway between the general packet radio service (GPRS), or wireless, network and the packet switched public data network (PSPDN).

"This was derailed two months later in a pile of paperwork," the note continued, "while the attorneys decide [sic] how they can form a joint venture with a well known wireless company."

In March 2001, sources close to Redback told Light Reading that Nokia was one of several companies that Redback had held merger talks with (see Redback and Juniper Talked, Balked).

As of late last week, both Lord and Beach were employed by Tahoe, which had a round of layoffs recently (see Tahoe Confirms Cutbacks).

Redback declined to comment for this story, citing a policy of not discussing past or current litigation.

"Part of the settlement is that we're not supposed to talk about the settlement," says Alan Cohen, Tahoe's VP of marketing, who declined further comment.

— Phil Harvey, Senior Editor, Light Reading
http://www.lightreading.com

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