On the eve of its IPO, networking chip developer MMC Networks Inc has been hit with a patent infringement suit from ATM vendor Fore Systems Inc. According to the complaint filed by Fore in the US District Court for the Western District of Pennsylvania on Monday, MMC wilfully infringed patents issued to Fore by concerning the manufacturing and selling of MMC’s ATMS2000 ATM network processors which MMC sells to network systems vendors. The ATMS2000 ships in Cisco Systems Inc’s LightStream 1010 ATM Switch – in direct competition with Fore’s core-networking products. Last year, 51% of MMC’s revenues came from its long- standing relationship supplying its chips to Cisco Systems Inc. The company also supplies Fujitsu Ltd, NEC Corp and Ipsilon Networks Inc. It does not have any supply contract with Fore Systems Inc. The suit covers ATM cell transmission patents that manage memory use in ATM switches. The complaint seeks a permanent injunction against MMC Networks and recovery of damages. Last night, MMC said its IPO was should be launched today although a price had yet to be determined. The company plans a public offering of 3.5 million shares with an offer price expected to be between $7.00 and $8.00 per share. Morgan Stanley & Co Inc, Deutsche Morgan Grenfell Inc and Wessels, Arnold & Henderson LLC will act as the underwriters. According to Morgan Stanley, the suit should have no bearing on the IPO.
