Optical components

Bookham, JDSU Settle Laser Tiff

JDSU (Nasdaq: JDSU; Toronto: JDU) has emerged as the victor in a patent case against Bookham Inc. (Nasdaq: BKHM; London: BHM), although in dollar terms, you wouldn't call it a high-stakes battle.

Bookham is going to pay JDSU up to $8 million as part of a settlement that erases lawsuits the companies had filed against each other.

Details were disclosed in an SEC filing Monday. The payments will start with $1.5 million due today and another $1.5 million within the next year, followed by royalties of up to $1 million a year for five years. For its money, Bookham gets a license to the JDSU patents.

The maximum $2.5 million-per-year payout reflects how relatively small the tunables market is. Bookham reported that tunable lasers represented 15 percent of its revenues in the December quarter -- which represents about $8 million, for an annual revenue rate of $32 million.

Bookham shares were up 6 cents (12.5%) at 54 cents each in midday trading today. JDSU shares were down 6 cents (1.4%) at $4.19.

That might be because the settlement should defuse JDSU's request for the U.S. International Trade Commission (ITC) to ban tunable laser imports from Bookham, which uses a U.K. fab to build the devices. (See Tunable Wars.)

The patent fight appears to have started in March 2008 when JDSU sent Bookham warnings about possible infringements of three patents. Bookham countered by suing to invalidate JDSU's patent, which in turn led to a JDSU countersuit and then, in November, the ITC filing.

The concept at issue is a monolithically integrated tunable laser made of indium phosphide (InP), the idea being that other InP parts such as the modulator can be housed on the same chip as the laser.

Such devices have become a signature product for Bookham, which packed them into integratable, tunable laser assemblies (iTLAs) in 2006.

But JDSU is making a push in this area, too. It showed its own integated laser and modulator in 2007 -- fruits of the 2005 acquisition of Agility Communications -- and packed the device into an XFP module this year, creating a tunable, pluggable interface. (See JDSU Advances PICs, JDSU Tunes In Agility, and JDSU, Emcore Shrink Tunables.)

The settlement erases the lawsuits JDSU and Bookham had with each other, and it frees Bookham from the ITC complaint. But JDSU has other legal battles around tunables.

The ITC complaint also mentioned CyOptics Inc. and Syntune AB -- and potential customers ADVA Optical Networking , Ciena Corp. (NYSE: CIEN), Nortel Networks Ltd. , and Tellabs Inc. (Nasdaq: TLAB; Frankfurt: BTLA). Separately, JDSU sued Syntune for patent infringement last summer.

Unrelated to any of that, Syntune happens to be under consideration for an acquisition by European components company Ignis ASA , whose Ignis Photonyx AS subsidiary is a big supporter of WDM-PON. (See Ignis Eyes Syntune.)

— Craig Matsumoto, West Coast Editor, Light Reading

Pete Baldwin 12/5/2012 | 4:07:06 PM
re: Bookham, JDSU Settle Laser Tiff

So, was this a case of Bookham *losing*, or did they just settle because it's a manageable sum and preferable to letting the case drag on? 

Steve0616 12/5/2012 | 4:07:05 PM
re: Bookham, JDSU Settle Laser Tiff

Even if BKHM defended in court and won, its legal fees could have easily exceeded $8M, given high costs of jury trials, appeal, and maybe a retrial, and if they lost, damages could have been tripled if willfullness was found. BKHM got what it wanted for about the cheapest way it was going to get it. A smart deal....very smart.

Madoff_JR 12/5/2012 | 4:07:03 PM
re: Bookham, JDSU Settle Laser Tiff


Plenty of Lawyers....

And they intend to protect what they have earned ...  They have the stock holders covered.

The message is no matter how big or small you are....

you will be hearing this song

Bad boys bad boys,watcha gonna do

When JDSU comes for U.

I'm just wondering when they will go after the AWG portfolio?

tobeit 12/5/2012 | 4:07:01 PM
re: Bookham, JDSU Settle Laser Tiff

...and probably part of the merger conditions with AVNX to seattle this matter befor the merger can be completed? Not having access to the tunable market affects the value prop for that merger.

Balet 12/5/2012 | 4:03:13 PM
re: Bookham, JDSU Settle Laser Tiff It will be interesting to see if Infinera tries to embark on tunable InP modules!
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