Rockwell Sues Bay Networks on Modem Deal

Rockwell International Corp. said it sued Bay Networks Inc., alleging that Bay Networks breached an agreement letting it make computer-networking equipment using Rockwell’s modem technology. Billerica, Mass.-based Bay Networks makes remote-access products for Internet service providers and phone companies to handle calls from millions of customers. It’s remote-access products can use either Rockwell’s K56flex technology or 3Com Corp.’s rival X2 technology. Rockwell didn’t specify how it alleged Bay Networks broke the licensing agreement except to say that its actions “competitively disadvantage” companies that have licensed Rockwell’s K56flex modem technology. Bay Networks said Rockwell’s charges were groundless. Shares of Santa Clara-based 3Com fell 94 cents to close at $35.13 on Nasdaq. Costa Mesa-based Rockwell fell 38 cents to $45.63, and Bay Networks fell 75 cents to $29.39, both in NYSE trading.