Network-1 Enters Into New Agreement With Microsemi

June 22, 2008 by Jeff Shepard

Network-1 Security Solutions, Inc. announced that it entered into an agreement with Microsemi Corp-Analog Mixed Signal Group Ltd. (previously PowerDsine Ltd.), a subsidiary of Microsemi Corp., which, among other things, amends the prior Settlement Agreement entered into between the parties in November 2005.

Under the new agreement, on June 25, 2008 Network-1 will commence an industry-wide Special Licensing Program for U.S. Patent No. 6,218,930 (the "Remote Power Patent") owned by Network-1 to vendors of PoE equipment. The Special Licensing Program is of limited duration (through December 31, 2008) and is being implemented on an industry-wide basis to offer discounted running royalty rates and exceptions to Network-1’s standard licensing terms and conditions for the ’930 Patent to PoE vendors who are "early adopters" and enter into license agreements without delay to avoid litigation and higher royalties. The new agreement enables Microsemi to assist in its customer’s evaluation of the Remote Power Patent and the terms being made available to vendors of PoE equipment pursuant to the Special Licensing Program, an activity that was previously prohibited by the 2005 Settlement Agreement with PowerDsine.

The new agreement also provides that Microsemi will, by August 15, 2008, enter into a license agreement under the Special Licensing Program for certain Midspan PoE products. Microsemi designs, develops and supplies PoE Midspans, systems, integrated circuits and modules that enable the implementation of power over Ethernet in local area networks and provide the capability to deliver and manage electrical power over existing data network cables.

"As has always been our goal, we are committed to simplifying the licensing of this critical technology in order to further accelerate the growth of PoE," said Corey Horowitz, Chairman and CEO of Network-1. "At the same time, we are providing vendors of PoE network equipment, including the major data networking equipment manufacturers against which we initiated patent litigation in February 2008, a new limited window to take advantage of very attractive licensing terms versus our standard rates and the higher rates that would result from unnecessary delay and wasteful litigation."

On February 11, 2008, Network-1 announced it had initiated patent litigation against several major data networking equipment manufacturers in the U.S. District Court for the Eastern District of Texas, Tyler Division, for infringement of its Remote Power Patent. Named as defendants in the lawsuit were Cisco Systems, Inc., Cisco-Linksys, LLC, Enterasys Networks, Inc., 3Com Corp., Inc., Extreme Networks, Inc., Foundry Networks, Inc., NETGEAR, Inc., and Adtran, Inc. The Special Licensing Program will be available to all vendors of PoE equipment including those companies that are defendants in the recent patent litigation filed by Network-1 in the U.S. District Court for the Eastern District of Texas and who enter into a license agreement with Network- 1 within 120 days of a scheduling order being entered in the case.