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Syntune settles JDSU suit ahead of buyout

As its tunable laser redesign draws a line under patent litigation, the Swedish company prepares to be bought for a nominal price tag of $4.6 million.

Norwegian fiber-optic technology firm Ignis ASA has agreed to buy Syntune, after the Swedish InP tunable laser supplier skirted the legal might of US-based competitor JDSU.

JDSU filed a motion to terminate the US International Trade Commission case it had brought against Syntune and its US collaborator Cyoptics on March 20.

“JDSU, Syntune and Cyoptics have reached a settlement and compromise such that issues of validity, enforceability and infringement are no longer in dispute,” the motion said.

That settlement also covers the companies dispute over the same tunable laser patents, due to be heard in California but consequently dismissed on April 16.

According to court documents filed, JDSU acknowledges that a redesign of Syntune s tunable laser set for future availability does not infringe its patents.

Most of the other details of the settlement remain confidential; however any damages are likely to be lighter than those felt by Bookham, the other chip-making defendant in the ITC suit.

With the San Jose-headquartered company unable to execute any similarly evasive maneuvers, it will pay up to $8 million in royalties (see Bookham burned in tunable laser case).

These agreements bring all the tunable laser suits JDSU had initiated over the past year to a prompt conclusion (see JDSU vies to switch off tunable competition).

Battle ends, buyout begins
Although the ITC case has yet to be formally dismissed, passive optical component producer Ignis signed off an agreement to purchase Syntune on April 17.

“Syntune has invested a significant amount of time and resources into the development of very promising tunable laser products,“ said Thomas Ramm, chief executive officer of Ignis ASA. “We believe Syntune grants us access to technologies and expertise which will be crucial to compete in the integrated optics markets of the future.”

Subject to agreement at an Ignis shareholder meeting on May 15, Syntune s current owners will receive 8.05 million Ignis shares in return for their equity. With Ignis stock currently valued at 3.9 Norweigan Krone ($0.57) per share, that alone would value Syntune at $4.6 million.

Ignis will take on Syntune s existing debts of 41.8 million Swedish Krone ($4.86 million). However the deal is contingent on Syntune's current owners contributing an additional 25 million Swedish Krone in return for additional Ignis shares to offset this debt.

Ignis and Syntune have been collaborating on the €9.1 million ($11.8 million) European project GigaWaM, since April 2008.

GigaWaM aims to develop and implement wavelength division multiplexed passive optical network (WDM-PON) technology for fiber-to-the-home (FTTH) communications, including developing a low-cost tunable laser.

Other partners include Swedish InP fab Svedice, in which Syntune bought a controlling stake shortly after the start of GigaWaM, German VCSEL maker Vertilas, and Swedish communication giant Ericsson.

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