Nortel, Others Named in Broad Patent Lawsuit

Alleging that their patented property was stolen, Stanford University and Litton Systems filed suit against 15 fiber-optic manufacturing companies, according to Randy Belote, spokesman for Litton Systems.

The companies accused of infringement include Corning Inc., Alcatel SA and Alcatel USA, Nortel Networks Corp., Pirelli SpA, Lucent Technologies Inc., Tyco International Ltd., Scientific-Atlanta Inc., Ciena Corp., JDS Uniphase Corp., SDL Inc. The suit was filed on Oct. 3 in U.S. District court in Los Angeles, California.

"It's our desire to resolve this out of the courtroom," said Belote, adding that Stanford and Litton Systems have already begun talks with the defendants.

The amplifier, according to the patent, is a set of crystals placed in series with a signal-carrying optical fiber. The optical fiber supplies the crystal with the signal to be amplified, which is eventually fed back into the crystal by use of a multiplexing coupler, resulting in amplification of the signal.

The patent was developed by Stanford University, and Litton Systems was given the exclusive license in 1989. Stanford and Litton are suing because they claim the defendants used the patent to enable certain technology behind fiber optics, and to enable wavelength division multiplexing, according to a report by Epoch Partners, an investment bank that does research on high-growth companies.

The suit is not expected to reach a quick resolution, and could have far-reaching implications, according to Epoch's senior research analyst Mark Langley.

"Stanford and Litton know this case is important. Why else would they be suing the largest manufacturers of fiber optic cables on two continents and Bermuda?" Langley asked.

Langley says that because of the large amount of manufacturing the defendants are doing, it is doubtful that the plaintiffs will receive their requested injunction, as that would shut down most of the fiber optic manufacturing.

The sale of fiber optic amplifiers is expected to increase from $US390 million this year to $US1.2 billion by 2003, according to a report by San Francisco research company RHK, as quoted in a story by Bloomberg News. According to the story, fiber optic amplifiers currently sell for up to $US40,000.

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