Vonage has settled its patent litigation suit with Sprint offering the company US$80 million in a combined payment that terminates the lawsuit and assures Vonage can continue using 100 of Sprint’s VOIP related patents.
The deal, which included US$35 million for past use of license, US$40 million for a fully paid future license, and US$5 million in prepayment for services, settles one the Vonage’s patent suits that have arisen since the company had a massive intake of funds from its IPO, the other, against Verizon may not be settled so easily.
Vonage has formally appealed against what’s left of the Verizon suit in an effort to reduce its liability and claims to have work-arounds in place that avoid using Verizon’s patents.
The agreement with Sprint Nextel follows a jury result in late September where the U.S. District Court in Kansas City found Vonage had infringed six Sprint patents. The settlement agreement resolves all claims related to this dispute.
Under terms of the deal Vonage now has access to a patent portfolio of 100 patents covering different methods, components and systems that efficiently connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.
“We are pleased to resolve our dispute with Sprint and enter into a productive future relationship,” said Sharon O’Leary, Vonage chief legal officer.
“We view this settlement and licensing agreement as a validation of the strength and breadth of our patent portfolio,” said Harley Ball, Sprint Nextel’s vice president of intellectual property. “This is an affirmation of Sprint’s research and development and a testament to the rich history of innovation at Sprint Nextel.
Shares in the company rebounded strongly (but are still a small fraction ofthe float price) before falling slightly on news of the Verizon appeal.