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Vonage Settles More Patent Disputes

Raymond McConville
News Analysis
Raymond McConville
12/31/2007

Vonage Holdings Corp. (NYSE: VG) and Nortel Networks Ltd. announced today that the two companies have settled a patent dispute that had been brought to court only a couple of weeks ago. (See Vonage Sued Again.) In the settlement, Vonage is not required to make any payments towards Nortel.

The settlement also calls for a cross license of three Nortel and three Vonage patents and claims over all past damages will be dismissed without prejudice according to Vonage. The dispute had centered around patents behind 911 and 411 call numbers and click-to-call technology.

Vonage also put an end to its patent dispute with AT&T Inc. (NYSE: T) on Friday, agreeing to pay up to $7.8 million per year over a five-year period.

In total, Vonage has entered into and settled patent disputes with four major telecom companies in 2007 -- Verizon Communications Inc. (NYSE: VZ), AT&T, Sprint Corp. (NYSE: S), and Nortel. (See Vonage Settles With Verizon, Vonage Soars on Sprint Settlement, and AT&T Sues Vonage.)

The legal troubles caused Vonage's stock, at one point, to dip as far as below $1, but it has since "recovered" to climb back over $2. The stock is up 7.5 percent ($0.15) to $2.15 today in early afternoon trading.

— Raymond McConville, Reporter, Light Reading

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