Following on from yesterday’s story about Rockwell Semiconductor Corp suing Bay Networks Inc for breaching the terms of its license agreement for Rockwell K56flex modem technology, Rockwell finally got back to us to explain why. As we suspected, it was to do with Bay’s licensing the rival x2 56kbps technology from 3Com Corp’s US Robotics Inc. Bay licensed K56flex in March and x2 in June, and said at that time that it chose to license x2 because of the delays in the K56flex development, which is done jointly by Rockwell and Lucent Technologies Inc. Bay has said it would enable the rival technologies to both work in its Multi- Service Access Switch (MSX) line, Model 800 remote Access Controller (RAC) and Digital Signal Processing (DSP) products. And it is that dual compatibility that Rockwell says infringes the licensing agreement. Rockwell is claiming breach of contract, unfair competition and injury to business reputation and dilution. Rockwell says it has been trying to resolve the issue with Bay for some time, but has finally decided enough is enough and asked the court to enforce the terms of the license. Dwight Decker, the company’s president, said the delay in the approval of a single 56K modem standard was in part to blame for the litigation. There had been hope that the International Telecommunications Union would resolve the issue at its meeting in September, but this did not happen; and the next meeting is not until January. Bay Networks returned fire and says it will countersue in response to Rockwell’s lawsuit. Bay says it is unequivocally in compliance with its licensing pact with Rockwell, and is absolutely outraged about the suit. It believes Rockwell is only suing because Bay is supporting a rival modem technology.
