Lucent sued San Jose, California-based Cisco last June, alleging the computer-networking company had infringed on eight key Lucent data-network patents. Cisco responded with its own countersuit.

However, as part of a settlement announced Friday, Cisco and Murray Hill, NJ-based Lucent agreed to cross-license each other's technology. The two companies did not disclose further settlement terms.

Cisco said the agreement would not result in any charges against its earnings. ``We are extremely pleased with the outcome of this settlement, which we believe is fair to both companies and very good news for our customers as well,'' Cisco's general counsel Dan Scheinman said in a statement.

Lucent officials also expressed satisfaction. ``We brought this suit in order to ensure that our investment inthe intellectual property of (Lucent) was being protected,'' company General Counsel Richard Rawson said. ``We are delighted with the resolution that has been reached.''

As traditional voice networks and newer data networks begin to converge, Cisco and Lucent are increasingly competing against each other.

On Thursday, Lucent completed its $25.2 billion acquisition of Ascend Communications Inc - a Cisco rival - gaining access to networking equipment that will enable Lucent to compete more effectively in the data world. By the same token, Cisco has been active in purchasing smaller companies that are working on technologies to speed up integration of traditional voice communications with data networks.