Lucent grabs $9.5 million in patent case

Newbridge Networks today said it is open to takeover offers as the company plans to slash 10 percent of its workforce and outsource some of its businesses to cut costs.

The struggling networking equipment firm said it will cut about 700 employees, shut down some sales offices and outsource its manufacturing and customer service operations.

Industry sources said it's likely Newbridge has signed on IBM to run its customer service division. Newbridge chief financial officer Kenneth Wigglesworth in an interview with CNET News.com declined to comment, saying only that the firm has struck a deal with a "world-class organization."

Newbridge executives announced the firm's new direction today following months of financial problems and strategic questions. The one-time leader in networking and telecommunications equipment has struggled in recent years to compete against Cisco Systems, Nortel Networks, Lucent Technologies and others.

Newbridge's new president Pearse Flynn said today's changes were made to help revitalize the company, yet he added that he is not opposed to selling the firm outright.

"We're working with [financial advisors] to explore all options at this point," Flynn said during a conference call with Wall Street analysts.

Dataquest analyst John Armstrong said Newbridge's moves today were not surprising.

"I figured they'd be slicing and dicing after having a lousy quarter. They had a change at the top and you can't be complacent if your company's not doing well," Armstrong said.

In the past two weeks, Newbridge's stock has risen as published reports say European telephone equipment makers Ericsson or Alcatel could buy the company.

Ericsson executives fueled speculation earlier this week by saying the company was not opposed to making large acquisitions, such as a possible takeover of Newbridge. A Bloomberg report today said Alcatel executives have no interest in purchasing Newbridge.

Newbridge is still a leader in asynchronous transfer mode (ATM) technology, which sends voice and data signals over networks at high speeds. The company sells ATM-based high-speed routers and is developing products in the emerging high-speed Internet access market, such as Internet Protocol switches, broadband wireless and digital subscriber line (DSL) technology.

Executives said the new products will improve revenue numbers within the next few quarters. "It will more than propel the company," Flynn said.

Wigglesworth said the plan to outsource customer service and manufacturing allows the company to focus on the new markets.

"We felt we needed to focus on the high-growth areas. We were considered spread too thin and trying to be all things to all people," he said.

Outsourcing customer service and manufacturing operations is common in the technology industry and is a good way for Newbridge to cut costs, Armstrong said.

"They obviously need to rein in expenses. [Outsourcing] manufacturing and customer service are efficient ways to do that."

Yet the company continues to deal with shocks on a daily basis. Rival Lucent Technologies today won a multimillion-dollar patent lawsuit against Newbridge.

Additionally, the company lost another top executive. Giulio Gianturco, executive vice president of the North and South America region. He resigned yesterday and has been replaced by Edward Minshull, an executive who ran the channels and alliances group for Newbridge's Europe, Middle East and Africa region, a company spokeswoman said.

President Alan Lutz left the company two weeks ago after the company's seventh profit warning in the last 11 quarters

Sources close to the company said Gianturco's departure was no surprise, as U.S. sales have been weak the last few quarters.

"Obviously, North America sales were most disappointing. It had flat growth the last several quarters," a source close to the company said. "If Newbridge wants to turn it around, you've got to win in the U.S. to win around the world."

Last week, Newbridge had to revise its agreement to purchase Stanford Telecom. The two firms changed the deal from a stock swap to an all-cash deal after Newbridge's stock price plummeted in the last few months.

Two weeks after Hotmail implemented a controversial junk-email filter, users are complaining that the flow of "spam" to their in-boxes has not slowed.

In addition, some Internet business owners contend that Microsoft has aligned itself with the online equivalent of "vigilante militants."

Microsoft's Hotmail, a free Web-based email service, last week said it had subscribed to the Mail Abuse Prevention System's (MAPS) Realtime Blackhole List (RBL). The list filters email coming from servers known to be conduits for unsolicited commercial email, or spam.

The MAPS blacklist is one of several to have gained notoriety on the Internet. Supporters hail them as powerful tools against spammers and server administrators who leave their computers vulnerable to use by spammers. Detractors tend to be businesses that have wound up on these lists, often, they say, without having been warned that they had fallen afoul of what MAPS considers responsible email policies.

Whatever MAPS' reputation, Hotmail users are questioning the effect of its list after two weeks of apparently unabated spam intake.

"I haven't noticed any decrease in the amount of spam landing in my in-box," wrote one Hotmail user in an email, representative of many solicited and unsolicited emails received by CNET News.com. "In fact, it's jumped from 11 per day (average) to 16 per day in November. High so far was 33 in one day. Catch so far for the month: 281 spams, 1.2MB of space consumed. That's over half my allotted space."

Others bolstered the claim that Hotmail's spam problem is not going away, and that it may even be increasing.

"I have received double if not triple the amount of spam email in the past two weeks," wrote another Hotmail user. "Many of the messages are duplicates sent on sequential days. I use my Hotmail account often, but the spam messages are a real annoyance."

Microsoft countered that by implementing the RBL, Hotmail has reduced spam by thousands of emails a day, but the company declined to disclose more exact figures.

MAPS did not return several phone calls and email inquiries today or yesterday seeking comment.

While users gripe that Hotmail's implementation of the RBL has had little effect on their spam intake, some businesses and advocacy groups are voicing concerns that Hotmail has aligned itself with what they term a "vigilante" group exercising inappropriate and possibly illegal control over Internet communications and business transactions.

"My concern about all of the self-appointed vigilante anti-spam groups is that they're sloppy," said Dave McClure, executive director of the Association of Online Professionals (AOP), an Internet trade association. "I do sympathize with people trying to fight the problem of unsolicited commercial email, which is a problem that the industry is going to have to find a solution to. But vigilante law is not a good solution."

Three different businesses backed up McClure's concern about the administration of the email blacklists. Web hosting company Digital Aquarius and marketing firm BBS Press Service said they had been blacklisted without first having been warned by MAPS. MAPS promises warn each offender with two email notifications and one phone call.

Another company, which asked not to be identified, said it lost thousands of dollars after MAPS blacklisted its credit card processor after another one of that company's clients was suspected of facilitating spam relay.

All three complained that MAPS did not respond in a timely fashion to their complaints about being put on the list.

"They have had numerous complaints over the years," McClure said. "I don't think it will be long before we see these services legally challenged on business interference or unfair restraint-of-trade grounds."

Although MAPS was not available to comment for this story, MAPS ally the Coalition Against Unsolicited Commercial Email (CAUCE) said MAPS welcomed a legal challenge.

"MAPS wants to get sued to establish that this is a legal boycott method," said CAUCE founder John Mozena. "The threat of a lawsuit is not going to stop them."

Mozena said MAPS had its share of critics who thought it was too lax with suspected spammers.

"There are plenty of people in the anti-spam community who think that the RBL doesn't go anywhere near far enough," said Mozena. "The more militant people in the anti-spam community think RBL is too nice to people. But while they might not be perfect, the reason they're so widely implemented is that by and large people trust their methodology."

Mozena said MAPS has acknowledged it needs to improve its response time in addressing complaints. He said the all-volunteer group was considering a number of funding schemes that would let them hire full-time employees to respond to complaints of those who think they were mistakenly put on the RBL.

"This may be a question of growing pains more than anything else," Mozena said.

Funding methods under consideration by MAPS include charging for a more advanced version of the service called RBL+. Another idea is to charge for consulting services for email administrators.

 
special coverage

 

Following are the latest developments in the antitrust suit filed against Microsoft by the Justice Department and attorneys general from 19 states. Latest stories Microsoft judge sets date for more oral arguments The judge in the Microsoft case will hear oral arguments in February to help him decide whether the company violated the nation's antitrust law, lawyers involved in the case say. (November 18, 3:30 p.m. PT) Drama unfolds in wake of judge's ruling Microsoft meets with Judge Thomas Penfield Jackson for the first time since the release of his harsh findings nearly two weeks ago in the ongoing antitrust case. (November 18, 4:40 a.m. PT) Microsoft, DOJ to meet with judge Thursday Microsoft and Justice Department lawyers will meet with the judge Thursday to discuss scheduling matters in the firm's landmark antitrust case, people close to the case say.(November 15, 4:45 p.m. PT) Linux firms gain from Microsoft's loss update Friday was a bad day for Microsoft, but makers of alternative operating systems are reaping the benefits on the stock market today. (November 8, 1:20 p.m. PT) Justice Department considers Microsoft breakup update The Justice Department is considering a breakup of the world's largest software company as a possible remedy in its historic antitrust case, Assistant Attorney General Joel I. Klein says. (November 8, 4:35 a.m. PT) "Microsoft enjoys monopoly power" full text of judge's findings Strong findings from Judge Thomas Penfield Jackson in the landmark trial. (November 5, 8:25 p.m. PT) Judge calls Microsoft a monopoly update A U.S. federal judge rules that Microsoft wields monopoly power in PC operating systems and has issued a decision highly favorable to the government. (November 5, 5:35 p.m. PT) All eyes on Microsoft stock, markets update Market watchers expect shares of Microsoft to open lower following a federal judge's finding that the software giant holds a monopoly in the computer software market. (November 8, 4:55 a.m. PT) Microsoft faces uncertain penalties in case The judge in the Microsoft antitrust trial issues stinging findings of fact against the software giant, but the outcome is still far from certain. (November 5, 8:30 p.m. PT) Judge: Microsoft's monopoly power hurt many Think of any major high-technology company. Chances are it is mentioned as a victim of Microsoft in the findings of fact issued in the landmark antitrust trial. (November 5, 8:25 p.m. PT) Microsoft's competitors "delighted" For many high-tech firms, today's findings indicate that there may come a time when they'll have a clearer shot at nabbing Microsoft's customers. (November 5, 8:30 p.m. PT) Microsoft investors weigh impact on stocks Investors are likely to put pressure on the stock on Monday, but Microsoft has proven to be quite resilient to any short-term setbacks. (November 5, 7:50 p.m. PT) Chat rooms alive with Microsoft talk Internet pundits and online punters agree the federal ruling against Microsoft threatens the firm's lofty stock price, but some see a predicted drop as a fine chance to snap up cut-rate shares of the software giant. (November 5, 7:50 p.m. PT) Microsoft presents alternative facts in closing Microsoft took an approach of not directly disputing key pieces of the government's evidence, but instead presenting an alternative set of facts, antitrust experts say. (September 22, 1999, 7:10 a.m. PT) Final arguments in Microsoft antitrust trial In final arguments at the antitrust trial, Microsoft will contend the government put on a good show but failed to prove its case against the software maker. (September 21, 1999, 4:00 a.m. PT) Government: Microsoft "grasping at straws" Microsoft attacks the credibility of an economics expert who testified against the company in its U.S. antitrust trial, suggesting that he tailored testimony to benefit his private consulting firm. (June 2, 1999, 3:20 p.m. PT) Microsoft facing four-front legal war After a 13-week hiatus, Microsoft's defense of charges that it doesn't play by the rules is about to go into hyperdrive. (May 24, 1999, 6:15 p.m. PT)

Special reports  Puppet masters: Who controls the Net? August 6, 1999 The new world order May 10, 1998 Microsoft sued May 18, 1998 Microsoft and the $1 million question January 22, 1998 MS-DOJ case in court January 8, 1998 Microscope on Microsoft November 14, 1997

Liberate Technologies, a provider of software for interactive television, continued on its upward trajectory today as the company announced a new deal to supply software to Star TV in Asia.

Since Liberate's first day of trading in August, the stock has shot up more than 700 percent. Shares closed up 9.19 percent today to 160.44.

Liberate is the renamed former NCI subsidiary of Oracle. Oddly enough, Oracle chief executive Larry Ellison has decided to revive the NCI name as well as the original vision for the company. Speaking at the Oracle OpenWorld trade show in Los Angeles Tuesday, Ellison introduced the Network Computer Version 2, a sequel to Network Computing Incorporated's original.

Ellison promised that a new chief executive and management team will be announced soon, along with several companies that will manufacture the NC2 for the new company.

Liberate, which also announced a deal to supply Cable & Wireless in the United Kingdom last week, said that Star TV has started using its software in technical trials and will begin offering interactive television services in the first quarter of 2000. Star TV is a subsidiary of Rupert Murdoch's News Corporation and is one of the largest TV service providers in Asia. It has 300,000 subscribers in Hong Kong alone, where the trials are taking place.

Liberate's software is used to provide email, Web browsing and e-commerce through a TV set-top receiver. The company has modified the software for use in Asian markets, displaying information in the local language.

Liberate's chief executive Mitchell Kertzman said in an interview that the deal is another strong validation of the company's technology, especially because News Corp's BSkyB satellite service was using technology from another competitor, OpenTV. OpenTV is one of the top interactive TV service providers, counting nearly over 3.5 million subscribers that are using its software.

"This is a significant design win that will help make our platform the standard for interactive TV," said Kertzman.

One factor in Liberate's favor, say analysts, is Oracle.

"No doubt, having Oracle behind Liberate is helping them to really leverage their technology, and to make all these partnerships with other companies," said Sean Badding, vice president with research firm Carmel Group. But Badding thinks that the deal doesn't necessarily mean OpenTV is in disfavor with News Corp., compared to Liberate. He said the company is just using different technologies in different markets as he takes regional differences in product usage into account.

Liberate's deal adds an interesting twist to the competitive landscape in Hong Kong. Cable & Wireless HKT entered into a deal with Microsoft to create a broadband portal which was launched in late October. The new service allows subscribers with PCs or televisions to choose movies on demand, videoconferences, view news video clips and shop via the Internet.

Meanwhile, HKT and Star TV formed a joint venture last week to provide entertainment and information services for PCs and TVs. Liberate's deal with Cable & Wireless as well as Star TV may help get its foot in the door as the new venture brings its products to market. Fort Lauderdale, Fla.--Citrix Systems executives comment on the company's software for application service providers, or ASPs, and its rising stock price.

Chairman Ed Iacobucci: "I'm not sure I have any crystal ball when it comes to the [stock] market. My focus is on the business and building the market. I think the types of things we're doing is becoming more generally understood by the investment community and analysts."

Chief financial officer Jim Felcyn: "This is a relatively new, seemingly hot area. We see this market evolving, as being very important, but certainly over a longer period of time."

Scott Davidson, corporate treasury director: "Historically, we at Citrix have not talked about the size of markets as dramatically as [analysts]. There's nothing different today than there was three days or three months ago. But people are just starting to wake up and see where we fit in. It's a great market, but people are getting ahead of themselves here. There's a lot of pieces that need to be put together."

Iacobucci: "There's probably still more smoke than fire in this [ASP] market now. It won't be a material element of our revenues until late next year or early 2001. Acquisitions are always part of the toolbox that any company has, and we certainly have the capacity to do that. We do not dismiss anything."

Felcyn: "Our mission statement is to provide any application over any network, to any device, wired or wireless. Obviously, there are a lot of pieces that have to fall into place, but this is where it's going."

Davidson: "Citrix helps ASPs run the servers that have the applications on it, and deliver it to the customers. It can be delivered on a variety of computers, helps reduce amount of bandwidth and lets incompatible devices all use stuff from the same ASP."

Copyright 1999, Bloomberg L.P. All Rights Reserved.

WASHINGTON--A Chicago man agreed to settle regulators' charges that he posted a bogus Internet announcement last July about a nonexistent strategic alliance between America Online and Canadian online auctioneer Bid.com International.

The Securities and Exchange Commission alleged that Leszek Zbierajewski, 25, using the Internet screen name "Jag 98," doctored a legitimate news release involving another company and displayed it on a Yahoo message board.

Bid.com's stock rose from about 8.5 to about 9 in the hour after Zbierajewski posted the phony announcement on July 8, the SEC alleged. The shares fell back to around 8.5 by the end of that day. The stock's volume, which had averaged 154,000 shares per hour that morning, surged to more than 1 million shares during one 60-minute period after the fake posting.

"This illustrates that the commission will respond aggressively to Internet stock hoaxes," said SEC enforcement lawyer John Sikora in Chicago.

The Chicago man, a wholesale tool dealer, retracted the fake announcement about 35 minutes after it was posted, according to the SEC lawsuit, filed in federal court in Chicago. AOL and Bid.com also declared the announcement to be a hoax.

Zbierajewski agreed today to be subject to stiffer sanctions if he commits similar violations in the future. A fine was waived because of his inability to pay, the SEC said. He neither admitted nor denied wrongdoing under the settlement.

Zbierajewski declined comment today.

"I don't really care to explain," Zbierajewski said in an interview. "I think I explained to the SEC. What happened, happened."

Shortly after posting the bogus release on July 8, according to the SEC, he retracted it by writing on Yahoo: "Sorry guys about the post, that news was something I hope will happen."

Zbierajewski had no special expertise that enabled him to display the fake release, SEC officials said.

"You don't need inside access or special equipment to post this type of message," SEC enforcement lawyer Caz Hashemi said.

The bogus posting was written to look like a PR Newswire release. Carrying a Toronto dateline, it quoted AOL as saying it signed a four-year, $89 million alliance with Bid.com.

The fake release duplicated almost verbatim a Reuters news story about AOL's $89 million strategic alliance with Drkoop.com, an online health information provider. The bulletin board posting substituted Bid.com's name where Drkoop.com had been mentioned in the July 6 news report.

The hoax followed an April incident involving former PairGain Technologies engineer Gary Hoke, who pleaded guilty to charges that he posted a fake Internet news story saying PairGain was being acquired by an Israeli rival. He was ordered in August to pay $93,000 and was sentenced to five years' probation, including five months of house arrest, for the hoax, which caused PairGain's stock to soar.

Copyright 1999, Bloomberg L.P. All Rights Reserved.

Hewlett-Packard's stock shot up over 16 percent today, aided by the afterglow of the successful spinoff of Agilent Technologies and an improved earnings outlook for 2000.

HP shot up 13.31 points, a 16.44 percent rise, to close at 94.31. The company holds an 85.4 percent stake in Agilent. Agilent closed its first day of trading at $44.75 a share, an increase of 49.17 percent from its opening price.

In addition, the Palo Alto Calif.-based firm yesterday met lowered expectations on earnings yesterday, helping the stock rebound from expectations that the company might not even make the lowered mark. Also, analysts were encouraged that executives were setting aggressive growth goals of 12 to 15 percent for next year.

"Many people had thought Fiorina would take a conservative stance and low-ball estimates so she could be sure of meeting them," George Elling of Lehman Brothers told Reuters. "But she didn't do that. She took the bull by the horns and was very aggressive."

Analysts said there had been a lot of fear that the company would suggest to them that earnings next year would be lower than they had forecast. After lowering fourth-quarter forecasts twice in October, analysts became concerned that HP's problems would take longer to correct than previously expected.

Yesterday, the company posted profits of $760 million, or 73 cents per share, compared with $710 million, or 72 cents per share, last year. Wall Street analysts surveyed by First Call were expecting profits of 73 cents per share after revising estimates downward.

For the three-month period, HP had revenues of $11.4 billion, up from $10.3 billion for the same period in 1998. Excluding expenses related to the spin-off of Agilent Technologies, HP said that earnings from operations reached 75 cents per share.

"We really tested the ability of the organization to respond and it did. The business performance issues we face are not new, and it will take some time to address them. What is new is the amount of attention that management is paying to them," Carly Fiorina, HP's CEO, said in a conference call yesterday.

Hewlett-Packard has not been able to keep up with competitors such as Sun, in terms of revenue growth. Sun's sales rose 25 percent in the recently ended quarter, bolstered by demand from fast-growing Internet companies.

Fiorina said she has challenged management to meet goals of 12 to 15 percent revenue and profit growth in fiscal 2000. To spur employees on, Fiorina said a new compensation plan is now in place for the top 100 managers that measures performance against HP's best performing competitors.

Fiorina also noted that the company is working to cut $1 billion out of its operational costs through a reorganization. That money will be used to improve its sales force and to fuel strategic research and development activities.

Reuters contributed to this report. CLINTON, Mississippi--MCI WorldCom today said it will split its shares 3 for 2, the sixth time the company has split its stock this decade.

The telecommunications firm said shareholders of record Dec. 15 will be issued 1.5 shares for each share held, payable Dec. 30. Cash will be paid in lieu of fractional shares.

Companies generally split their shares to make them more affordable. MCI WorldCom's stock has risen 65 percent in a year, reaching a high of 96.75 in June. The company has used stock to make more than 60 purchases this decade, including its planned acquisition of long-distance company Sprint.

MCI WorldCom recently applied for approval of its multibillion-dollar merger, one that will be a hard pill for regulators to swallow. Federal officials have voiced concerns about competition in the Internet business as well as in the telephone business if the merger is completed.

MCI WorldCom and Sprint control two of the largest Net backbones, and are respectively the No. 2 and No. 3 long-distance telephone firms in the nation.

Clinton, Mississippi-based MCI WorldCom had 1.9 billion shares outstanding as of Oct. 31. The company last split its stock in July 1996, a 2-for-1 split.

Copyright 1999, Bloomberg L.P. All Rights Reserved. Sometimes small is big.

Established tech companies are increasingly spinning off portions of their businesses through initial public offerings, a trend that investors are finding nearly irresistible for a couple reasons: Tech IPOs are hot and the young companies have a strong pedigree through their association with the successful company that spawned them.

The past few months have seen several such deals, and more are in the works.

Oracle spun off set-top box software maker Liberate last July, and Microsoft marked its first spin off with online travel site Expedia earlier this month.

So far, the spin-offs have been can't miss propositions for investors, and in the case of HP the progeny is helping boost shares in the parent company.

Expedia shares went public early this month at $14 and are currently trading at about 42. Liberate went public in July at $16 and is now at about 160.

Meanwhile, HP owns 85.4 percent of Agilent, which jumped to as high as 50 today from its IPO price of $30. Because HP plans to distribute its Agilent stake to current shareholders, HP's stock also climbed about 17 percent today.

"At some point, the stocks will trade in tandem," explained Phil Rueppel, an analyst with Deutsche Banc Alex. Brown. "If you buy an HP share, you get more than 80 percent of Agilent. That's a quick and simple way to look at it."

Kurt King, an analyst with Banc of America Securities, said every $1 movement in Agilent's share price should translate into a 36-cent price movement for HP's stock.

He added that Agilent's spin-off represented 15 percent of HP, and, as a result, had a greater affect on the computer giant's shares.

"With Microsoft, I don't think they have anything in their operations that would be as big as the company if they were to spin it off that could move Microsoft's stock," King said.

If the parent company does not distribute shares in the spin-off to shareholders, "then there is the potential for the valuations to diverge much more greatly," Rueppel said.

HP plans such a distribution to shareholders, although no details have been determined. Microsoft, which holds a 86.4 percent stake in Expedia, and Oracle, which owns 48 percent of Liberate, do not plan to distribute shares.

That difference apparently was reflected in the stock performance of the two giants on the day their spin-offs debuted, with Microsoft dipping slightly and Oracle rising slightly.

Phil Leigh, an analyst at Raymond James, said large companies are spinning off their operations more to unlock hidden valuation, rather than achieve a direct run up in their stock.

"Certainly they have P/E envy," said Leigh, referring to the high price-to-earnings ratios that many Internet companies now enjoy. "Spinning off a unit is a great way to unlock the valuations that might be locked up in their stocks that might be trading at more conventional price/earnings multiples."

But some analysts say such spin-offs may taper off.

"I think this is going to be a temporary trend," said David Menlow, president of IPO Financial Network. "Although these IPOs are getting a great reception now, the tune will turn flat with investors as a whole unless companies start spinning off operations that are in the heart of what the IPO market is most after right now."

Menlow said that investors are going to look for companies that are building the plumbing, or infrastructure, of the Internet.

For example, the stock of little-known companies such as Foundry Networks and Cobalt Networks have soared on the public market.

"Investors are coming after these 'plumbing' companies in a manner that is beyond description," said Menlow. "It is past a feeding-frenzy environment." As a result, if Cisco Systems or Lucent Technologies were to spin off a division, those IPOs would likely be wildly successful.

David Simons, managing director of Digital Video Investments, warned that a lot of the spin-offs come with baggage and may be less attractive despite the brand name tied to their background.

"A lot of these companies, with the exception of Liberate, come with baggage, with history, whereas many of the new companies come with limited or no history," said Simons. "So it is easier for investors to buy them on the sizzle of a story."

Other analysts, however, cited the name recognition as a contributing factor for helping these companies shoot out of the gate.

"I think that Expedia will benefit from its affiliation with Microsoft not only in perception of the investor, but also in the perception of the consumer," said Leigh.

Leigh said that consumers might feel greater confidence in the products and services offered by a company backed by a well-known parent.  

latest developments

Agilent, Liberate and Expedia pay off as the high-tech spin-off trend picks up steam. "Spinning off a unit is a great way to unlock the valuations." - Phil Leigh, an analyst at Raymond James

Young spin-off companies generate big rewards Established tech companies are increasingly spinning off portions of their businesses through initial public offerings, a trend that investors are finding nearly irresistible. Tech spin-offs boost billionaires' fortunes update As large tech companies spin off some of their subsidiaries in the public market, their major holders reap additional riches. Liberate lands another deal as shares soar Liberate Technologies, the renamed former NCI subsidiary of Oracle, continues on its upward trajectory as the company announces a new deal to supply software to Star TV in Asia.

WILMINGTON, Delaware--Lucent Technologies won $9.59 million from ailing Canadian rival Newbridge Networks for infringing Lucent patents for data transmission technology.

In 1997, Murray Hill, New Jersey-based Lucent sued Newbridge in U.S. District Court in Wilmington, claiming Newbridge was wrongly using technology protected by Lucent patents to control congestion when voice, video or other data are sent over telephone lines and communications network switches.

A jury of 5 men and 5 women deliberated for about 9 hours following the three-week trial, before deciding today that Newbridge wrongly used Lucent's inventions. The jury also said the infringement was intentional, allowing Chief Judge Joseph Farnan Jr. to triple the award to $28.7 million if he so chooses after post-trial arguments.

"They were doing the same thing, the same way, to achieve the same result," said Lucent lead attorney John Desmarais, describing Newbridge's systems.

Earlier this month Newbridge's president, Alan Lutz, resigned after the company halved its projected second-quarter profit figures, and company shares fell 25 percent. The company has been losing sales to Lucent as phone companies seek faster data equipment, and has been a subject of takeover speculation.

Copyright 1999, Bloomberg L.P. All Rights Reserved.