Rockwell International Corp.'s semiconductor systems unit said Monday it has terminated a lawsuit alleging that Bay Networks Inc. is illegally licensing Rockwell's modem technology.
Costa Mesa-based Rockwell acknowledged that it voluntarily withdrew the suit, filed in November in Orange County, and will pursue the matter through mediation, which is faster and less expensive. The suit charged that Bay's decision to sell modem products that used both Rockwell's K56Flex computer chip sets and a rival technology from 3Com Corp. violated their licensing agreement.
An official for Bay, which is based in Santa Clara, said the company never told Rockwell it would use only Rockwell's technology.
"This is a vindication of our strategy to support both technologies," said Jonathan Seig, vice president and general manager of Bay's signal processing group.
Shares of Rockwell fell $1.50 to $59. Bay's stock fell $2.19 a share to $31.75.