Bookham burned in tunable laser case

16 Apr 2009

Out-of-court settlement with JDSU leaves Bookham with an immediate bill of $1.5m, rising to a maximum of $8m.

Optical component manufacturers JDSU and Bookham have ended all ongoing legal battles over their compound semiconductor-based tunable lasers, with JDSU set to benefit handsomely from a new licensing deal.

According to its filing with the US Securities and Exchange Commission (SEC), Bookham will pay an initial $3m to JDSU, as well as a royalty of "up to" $1m per year for the next five years.

The $3m will be paid in two equal installments. The first of these is due immediately; the second will be paid in exactly one year's time.

Other conditions in the settlement agreement include both parties refraining from starting any new patent litigation with the other for four years.

The dispute was centred on the development of highly integrated photonic chips based on InP. JDSU's key tunable laser patents were originally filed by Larry Coldren and colleagues at Agility Communications – a tunable specialist that was acquired by JDSU in 2005.

US patent 6,658,035 – granted in late 2003 – describes a combined tunable laser source and optical amplifier, integrated within a common epitaxial structure. Patent 6,687,278, which followed shortly afterwards, took this further by describing how the integrated device generated a tunable optical signal. Both the patents were filed on 12 July 2000.

In March last year, JDSU warned Bookham that its products impinged on this intellectual property. Bookham responded by lodging an official complaint in the US District Court for the Northern District of California, and asking for the court to declare that the JDSU patents were invalid, and that no infringement had taken place.

That strategy now appears to have back-fired.

An additional suit was filed with the US International Trade Commission (ITC) in November 2008. In that case JDSU sought to ban imports of tunable lasers made by Bookham, which fabricates the InP-based chips at its Caswell, UK, facility.

JDSU also named CyOptics and Syntune in its ITC suit, although it is not clear whether these claims have been dropped after the Bookham agreement. The deal with Bookham also settles the pending ITC claim.

Milpitas-based JDSU is now ramping its production of tunable lasers, having last month announced what it described as "the industry's first monolithically integrated and tunable optical transceiver".

Claimed to be 85% smaller than previous tunable transceivers, the XFP product has been sampling since last year and is expected to ship in volume by this summer.

• Bookham and Avanex, due to complete their merger within weeks, have announced the imminent resignation of four directors. Peter Bordui, Joseph Cook, W Arthur Porter and David Simpson have said that they will resign immediately after the merger is consummated.

• This article first appeared on compoundsemiconductor.net.