Wi-LAN Inc. and Alcatel Lucent USA Inc. have agreed to settle their dispute over several patents and withdraw litigation before U.S. district courts in Florida and Texas.

Terms of their agreements weren’t disclosed but shares of Ottawa-based Wi-LAN rose about eight per cent on Monday.

The stock is still down since mid-July, when a jury in Texas ruled against Wi-LAN on four patents in a suit against several companies, including Alcatel-Lucent. Wi-LAN traded at $3.69 at mid-morning, up 30 cents.

“In our opinion this is a significant milestone for WiLAN when considering this comes only two months after losing the 3GPP case in which Alcatel was a defendant,” said Eyal Ofir, an analyst at Clarus Securities.

He noted that WiLAN has filed motions for a retrial in that case and is likely to appeal if the motions are denied.

The analyst believes the major catalyst for this settlement relates to the upcoming CDMA/WiFi trial scheduled for early October.

Mr. Ofir reminded investors that while Wi-LAN lost the last trial, the upcoming trial includes patents that have been tried and tested and have been licensed to companies such as Intel, Broadcom, Atheros and others in advance of a trial in 2011.

“From a strategic standpoint, while the company has already settled with and licensed Dell, signing Alcatel is a more significant settlement in this case and should apply more pressure on the remaining defendants including Apple, HTC and others to come to the table,” he said.