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Vonage and Sprint settle patent dispute |
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Written by Felix Da Silva (fdasilva@bitnip.com)
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Tuesday, 09 October 2007 |
 Vonage and Sprint have announced that they have settled their patent dispute for
$80 million. The agreement comes a little less than two weeks after a federal jury found in September that Vonage had infringed patents belonging to Sprint, and
ordered the company to pay $69.5 million in damages plus future royalties.
According to Reuters, wireless service provider Sprint agreed to settle a patent lawsuit against Vonage, the Internet phone serivce provider, for $80 million. This news triggered a sharp rebound in the Internet phone company's shares on Monday.
Of the $80 million payout, $35 million covers past use of the patents, $40
million is for a "fully paid" license for future use of Sprint's IP, and $5
million is for prepayment of services. In addition, Vonage will also gain full access to Sprint's voice over packet (VOP) patent
portfolio under the terms of the settlement.
Sharon O'Leary, general counsel for Vonage said
We are pleased to resolve our dispute with Sprint and enter into a productive
future relationship. We believe this deal is good news for Vonage, our customers and our
shareholders. It allows us to put this litigation behind us and continue to
focus on our core business by removing the uncertainty of legal reviews and long
term court action.
The news of a settlement pushed Vonage shares up 74 percent to $2 in
composite trade. However, they are still a fraction of their May 2006 initial
public offering price of $17. This might be because of their still unsettled $58 million patent infringement case with Verizon, another wireless service provider.
Hopefully Vonage will dig themselves out of this hole a lot quicker as the uncertainty of the future of their services is greatly affecting its business.
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