TORONTO -(Dow Jones)- Wi-LAN Inc. (WIN.T) has reached a memorandum of understanding to settle its patent dispute with Atheros Communications Inc. (ATHR) over several of the Ottawa-based company's patents for Wifi and other wireless technologies.
The agreement will include the dismissal of all litigations between the companies in the U.S. District Court for the Eastern District of Texas. Wi-LAN, a patent-licensing company, expects a final agreement to be signed within the next few weeks, though specific financial terms are confidential.
Wi-LAN still remains embroiled in a patent dispute with a number of top-tier technology companies, including Broadcom Corp. (BRCM), Apple Inc. (AAPL) and Hewlett-Packard Co. (HPQ). The case alleges infringement of several Wi-LAN patents that cover aspects of various wireless technologies, including Wifi, CDMA (code division multiple access), DSL (digital subscriber line) and bluetooth. The case is scheduled to begin Feb. 2 in the U.S. District Court for the Eastern District of Texas.
Wi-Lan's pending settlement with Atheros is the second settlement announced by Wi-LAN in less than a week. On Jan. 14, the company announced a MOU to settle its patent dispute with Intel Corp. (INTC). Terms of that settlement weren't disclosed either, though company Chief Executive Jim Skippen told Dow Jones at the time the settlement was for a "significant amount."
Atheros is a bigger player than Intel in the Wifi market, suggesting that the settlement with the Santa Clara, Calif., firm may involve a larger sum than the Intel settlement. Earlier this month, Qualcomm Inc. (QCOM) offered $3.1 billion to acquire Atheros.
An Atheros spokeswoman declined to comment.
Research In Motion Ltd. (RIMM), Texas Instruments Inc. (TXN), UTStarcom Inc. (UTSI) and LG Electronics Inc. (06670.SE) have already settled with Wi-LAN. Intel was the lead defender in the case so its decision to settle could compel remaining defendants to follow suit.
Analysts estimate Wi-LAN could be in line for total settlements that range anywhere from C$500 million to C$1 billion over a five-year period. In November, the company increased its 2010 guidance range to C$46-C$48 million from C$43-C$47 million. It has a year-end of Dec. 31.
In Toronto Wednesday, Wi-LAN closed down 8.4%, or 60 Canadian cents, to C$6.57 on 4.49 million shares. The decline came after the company announced plans to raise C$75 million from the sale of 11.4 million shares at C$6.60 each. As of Tuesday's close, the stock had surged 15% to C$7.17 in the three sesions that followed news of the Intel settlement.
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