14 September 2010


Finisar and Source Photonics settle patent dispute

Fiber-optic communications component and subsystem maker Finisar Corp of Sunnyvale, CA, USA has entered into a settlement and cross-license agreement with optical communication product maker Source Photonics Inc of Chatsworth, CA, USA (a subsidiary of system maker MRV Communications Inc), resolving a lawsuit brought by Finisar claiming infringement of Finisar's portfolio of digital diagnostics and transceiver module patents. The agreement also provides a general release to MRV Communications Inc.

Under the terms of the settlement agreement, Source Photonics will pay a license fee to Finisar in the amount of $14.5m for a fully paid-up license to the Finisar digital diagnostics and transceiver module patents through end-December 2015. Payment in full is to be made by end-September.

The settlement agreement also provides a fully paid-up license to Finisar of certain Source Photonics patents and a mutual covenant not to sue for certain products currently made or sold by Source Photonics or Finisar, in each case through end-December 2015.

If Source Photonics is subject to a change in control, shipments subject to the license granted by Finisar to its digital diagnostics and transceiver module patents will be limited to a 20% annual revenue growth rate.

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