TORONTO, Mar. 15 -- Nortel Networks has sued Optical Networks Inc., alleging that the San Jose, Calif.-based firm has taken trade secrets and infringed on Nortel patents with its data transportation product. The suit also accuses privately held Optical Networks of unlawful business practices and unfair competition. On Friday, Optical Networks filed with the US Securities and Exchange Commission to raise $115 million in an initial public offering.
In 1999, Nortel won an injunction from a Montreal court that prevented several former employees now working at Optical Networks -- partly held by Cisco Systems -- from attempting to recruit other employees of Nortel or three of its contractors, and from using certain trade secrets.
In the current lawsuit, which was filed in California, Nortel accuses Optical Networks of infringing five patents with its Dynamic Transport System, described as a failure-protected transport system that shifts communications signals over optical networks.