Vonage settles Verizon patent dispute

Vonage settled its patent dispute with Verizon for as much as US$120 million.

There are worse things in life than getting bopped in the head with a heavy orange box. Paying US$120 million to settle a patent dispute is likely one of them.

Vonage announced that it has reached a settlement with Verizon to resolve a patent infringement suit that was first filed in June 2006. According to Vonage, the settlement could be worth as much as US$120 million if the company does not win an appeals court rehearing for two of Verizon's patents. If Vonage does win a rehearing on the two patents, which both enhanced name translation servers, then the company will pay US$80 million to settle the case.

"We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers," said Sharon O'Leary, Vonage Chief Legal Officer. "This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers."

Earlier this year, a federal jury found Vonage guilty of infringing upon three of Verizon's patents and ordered the company to pay US$58 million in damages, and to also pay a 5.5% royalty rate on any future sales using Verizon technology. Despite Vonage filing appeals to have the verdict overturned, an appeals court last month affirmed the federal jury's original verdict. An earlier request for a retrial was also rejected.

The settlement comes just two weeks after Vonage agreed to pay US$80 million to Sprint Nextel to settle a similar patent suit.

Verizon's rehearing for the '711 and '574 patents will be considered by the U.S. Court of Appeals for the Federal Circuit.

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