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Nortel, Redback settle patent suit

Nortel Networks will license patents to telephone equipment supplier Redback Networks as part of a settlement that ends a patent dispute between the two telephone industry rivals.

Nortel Networks will license patents to telephone equipment supplier Redback Networks as part of a settlement announced Wednesday that ends a patent dispute between the two telephone industry rivals.

Redback will pay an undisclosed amount for the licenses, the two companies announced. Neither company would elaborate on other terms settling the lawsuit Redback filed two years ago in U.S. District Court in Oakland, Calif.

The tussle was over techniques such as "inverse multiplexing," a faster way to speed a telephone call through a network. Instead of being sent in one piece, the call is divided into several pieces and transmitted at the same time.

This is the third time Nortel has settled patent infringement lawsuits since September 2002, when optical network equipment maker Ciena and Nortel settled a patent claim Nortel brought. In January, network equipment maker Extreme Networks and Nortel also settled a patent infringement case.

Redback sued Nortel in December 2001 to invalidate five patents network Nortel had been awarded. Nortel fought back claiming Redback was infringing on the patents.