[OOPS! Wrong one...try this one. <teh hee>]June 19, 1998: 8:46 a.m. ET
Lucent sues Cisco
Telecom equipment maker accuses networking king of patent infringement
NEW YORK (CNNfn) - Lucent Technologies Inc. said it has filed a patent infringement suit in a federal court against Cisco Systems Inc.
The suit marks another phase in the heated battle among data-networking companies and telecom-equipment makers as those two markets converge.
In its suit filed in U.S. District Court in Wilmington, Del., late Thursday, Lucent (LU) accused Cisco (CSCO) of infringing on eight of its data-network patents.
Lucent said it is seeking an injunction prohibiting Cisco's use of its patents in the future. It also is seeking unspecified damages.
"After numerous attempts to negotiate with Cisco, we were left with no other recourse but to file suit," said Michael Green, Lucent president of intellectual property.
The patents cover technology developed by Lucent's Bell Labs research and development arm. The technologies in dispute are essential in developing Internet networks.
Lucent is the leading maker of telecommunications equipment in the United States; Cisco is the largest data-networking firm.
The companies have been battling it out as the distinction between telephone and computing networking equipment have essentially disappeared.
Lucent has been expanding its line of data-networking equipment to help telephone companies manage heavier loads of data, voice and video information transmitted over their networks.
Tim Luke, an analyst at Lehman Brothers, said the suit amounts to nothing more than Lucent flexing its muscle and showing it's serious about taking on Cisco.
"These things usually get settled out of court," Luke said. "It shows (Lucent) is being very aggressive. But it's not that big a deal. Cisco shares were up yesterday and Lucent was down. I think people are looking at this and saying, 'Yeah, whatever.' "
Shares of Lucent finished down 1-11/16 at 72-15/16 in Thursday trading. Cisco shares closed at 82-1/8, up 1-7/16.
Competition in this field has been intense. Monday, Canadian telecom equipment maker Northern Telecom Ltd. (NT) bought data-networking company Bay Networks Inc. (BAY) for $9.1 billion in stock.
The deal was seen as a means for the companies to take on both Lucent and Cisco.
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