Vonage Settles 2 Legal Accounts; Has A 3rd Reviewed

Staff On Oct 22 2007 - 6:00am

Vonage managed to bury two legal hatchets — with Sprint and Klausner Technologies — earlier this month while asking a court to review its Verizon suit.

Vonage first reached a settlement with Sprint.

According to Sprint, Vonage agreed to license the company's VoIP patent portfolio “which comprises more than 100 patents covering different methods, components and systems that efficiently connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.”

Vonage had been found guilty of infringing on six of Sprint's VoIP packets in late September. Vonage agreed to pay Sprint $35 million for the past use of patents, $40 million for future use and $5 million in “prepayment for services” — a total of $80 million out of the VoIP firm's coffers.

This settlement resolve all claims related to the dispute, Sprint said.

In a less-publicized suit, Vonage settled with Klausner Technologies over patents related to voicemail services. The terms of the settlement were not disclosed but Vonage said it would license Klausner's technology.

Klausner is a privately held VoIP technology company that claims to hold more than 25 Internet telephony-related patents. The firm counts Time Warner as one of its licensees.

The last major legal thorn in Vonage's side is Verizon. Vonage filed a motion for a review by the original three-judge panel or the full panel of the U.S. Court of Appeals for the Federal Circuit sitting en banc of the Sept. 26 decision in its patent litigation with Verizon. According to Vonage, en banc signifies a decision by the full court of all the appeals judges in jurisdictions where there is more than one three- or four-judge panel.

In late September, the U.S. Court of Appeals for the Federal Circuit partially remanded a March 8 jury verdict that found that the company had infringed on three Verizon patents. The U.S. Court of Appeals for the Federal Circuit remanded the infringement verdict on one of three disputed patents and vacated the entire award of $58 million in damages and a 5.5 percent royalty.

“This move represents the next logical step for Vonage in managing this litigation and continuing to move our business forward,” said Sharon O'Leary, Vonage chief legal officer, in a statement announcing the motion.

Despite recent legal woes, Vonage remains “the leading independent VoIP provider,” said chief merchandising officer Jamie Haenggi. The VoIP firm continues to see retail as a “strategic part of the Vonage acquisition network” and plans to introduce news products through that channel in 2008, she added.

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