Riverstone, Tellabs settle suit

Susan Rush and Jeff Baumgartner, CED
From the October 25th edition of CED Broadband Direct

Riverstone Networks Inc. and Tellabs Inc. have settled their legal spats that have been pending for more than a year.

In Aug. 2001, Tellabs filed a $10 million suit charging Riverstone with breach of contract, fraud, misappropriation of trade secrets and deceptive trade practices.

In response to the suit, Riverstone filed a breach of contract suit against Tellabs, after Tellabs ended their alliance. The alliance called for the companies to jointly plan, develop and manufacture router-based CMTS headend products under the "Cablespan" brand. At the time, Tellabs said that Riverstone's products did not fulfill contract requirements for voice traffic and Riverstone failed to meet certain milestones under the deal.

The companies have resolved their pending litigation on "mutually acceptable terms." Under the terms of the settlement, Tellabs has agreed to pay Riverstone a one-time payment of $12 million, Riverstone said in a statement.

Terayon Communication Systems also has a deal to resell Riverstone CMTS gear under the “BE” brand and based on Broadcom Corp. chipsets, but has since rolled out home-grown "BW" versions of the equipment powered by silicon from Imedia Semiconductor, a chipmaker spin-off that's wholly owned by Terayon.