updated 06:30 pm EDT, Thu October 25, 2007
Verizon Communications has settled a patent spat with Vonage based on the companies' respective voice-over-IP technologies. Accused by Verizon of violating "at least" seven patents, Vonage was facing a possible interruption of service if Verizon was declared the victor. In March, a jury found that Vonage is infringing on three valid, and awarded $58 million in damages. The trial judge subsequently issued an injunction which was stayed pending an appeal. In September, the U.S. Court of Appeals upheld the earlier court decision. Vonage again staved off an injunction by filing a petition for rehearing. The legal to-and-fro has been marginalized, however, by the settlement.
The outcome of current litigation is still important however: If Vonage wins rehearing on either the '574 or '711 patent or if the injunction is vacated as to the '574 or '711 patent, Vonage will pay Verizon $80 million. If Vonage does not win rehearing on either the '574 or '711 patent, or if the stay is lifted reinstating the injunction, Vonage will pay Verizon $117.5 million. A joint statement read succinctly "The parties are pleased to have resolved this matter."
AT&T recently threw its hat in the Vonage lawsuit ring. The voice-over-Internet provider is now known to have been sued by AT&T on October 17th regarding a patent for connecting a traditional phone to an Internet service; the complaint follows two years of unsuccessful negotiations with Vonage to license the patent, AT&T says. Vonage chief counsel Sharon O'Leary vowed that her company would continue to work for an "amicable" negotiated solution and avoid a court battle.