Vonage, Nortel settle patent lawsuits

Canada's Nortel is the latest to settle a patent dispute with VoIP carrier Vonage, Reuters reports. Unlike the company's recent legal problems, however, Vonage was in this case the originator, having inherited a 2004 lawsuit when it bought Digital Packet Licensing in 2006; in question were patents relating to 411 and 911 services, along with so-called "click-to-call" technology. Nortel filed a counterclaim earlier this month, which may have been the trigger for the settlement.

Crucially for Vonage, which has been in serious financial jeopardy for several months, the agreement will require no cash damage payments. Instead, each side will let the other license three of its patents in a limited arrangement.

For much of 2007, Vonage was threatened with lawsuits from several major phone companies including Sprint, Verizon and AT&T. Had any of them succeeded, Vonage customers might have lost access to millions of American numbers; with the Nortel agreement though, Vonage is now free of all major legal concerns. Stocks are said to have risen by as much as eight percent with the news.

Filed under: industry
Other story tags: lawsuits, VoIP, Vonage, Nortel