updated 10:50 am EDT, Mon October 8, 2007
Vonage Settles Sprint Suit
(Updated with final terms) Vonage and Sprint together announced on Monday that they had settled their ongoing patent dispute for $80 million, including $35 million for infringement allegations, $40 million for future licenses, and $5 million for unknown services. The deal tentatively allows Vonage to avoid paying the $69.5 million it would have owed Sprint for patent costs alone after the latter successfully argued that Vonage's VoIP calling service infringed on more than 100 patents relating to switching between IP and analog phone networks. In return, Vonage will license the relevant Sprint patents and so escapes any future legal confrontations between the two companies.
The move represents a continued turnaround for Vonage's fortunes since it was first threatened with patent suits several months before. Verizon also sued Vonage over alleged patent conflicts and successfully won royalties plus $58 million in damages in the spring, but had its verdict partially overturned and its damages voided after a court found that the previous trial had overlooked important details when making its verdict.