Shares Rise as Vonage Settles Fight Over Patent
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Shares of Vonage, the Internet telephone provider, rose sharply after it announced it had settled a patent dispute with Verizon and would have to pay a maximum of $120 million.
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Vonage Holdings and Nortel Networks have preliminarily agreed to cross-license several patents, ending a dispute between the companies without any monetary payments, Vonage said Monday.All claims relating to past damages as well as remaining payments will be dismissed, the company said. Documents sealing the agreement have not yet been finalized.The agreement is a minor victory for Vonage. The company has settled or reached tentative agreements in three other patent disputes related to VoIP (voice over Internet Protocol) and other telecommunications technology for what could ultimately reach $239 million in payments.Vonage tentatively agreed last month to&#160;settle a patent infringement lawsuit filed by rival AT&amp;T&#160;for $39 million. Prior to that deal, Vonage had reached&#160;settlements with Sprint Nextel&#160;for $80 million and&#160;with Verizon Communications&#160;for $80 million to $120 million, depending on the results of an appeal.&#160;
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Internet phone company Vonage loses a patent case that could threaten its business.
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Companies say they have "resolved" dispute over three voice-over Internet protocol patents. Precise amount of settlement depends on whether appeals court agrees to review case.
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(InfoWorld) - Vonage Holdings lost less money in the fourth quarter of 2006 than a year earlier, but it didn't attract as many new subscribers to its VOIP (voice over Internet Protocol) service despite heavy marketing. The company, a pioneer in selling phone service that uses packet data networks instead of traditional circuits, now faces competition from cable operators and the established telecommunications carriers. The big players recognize the potential cost benefits of the technology as well as its flexibility, including the ability to give subscribers a browser-based portal for using voice mail and changing service preferences. But those big players are also bundling VOIP with other services, such as broadband Internet access and TV. Vonage ended the fourth quarter with a net gain of 166,267 subscriber lines, bringing its customer base to more than 2.2 million. But that was less than the 204,591 subscribers it gained the previous quarter as well as its gain in the fourth quarter of 2005, when it added 207,252 subscribers. Revenue soared to $181 million, up 91 percent from a year earlier, and the company's net loss narrowed. Vonage lost $65 million, or $0.42 per share, compared with a loss of $72 million in the fourth quarter of 2005. The company's margins also improved, according to a statement Thursday. But Vonage has built its business on being an early mover and drawing a big base of customers that can later drive profits. The company's marketing costs still amounted to 53 percent of revenue in the fourth quarter, although this was down from 71 percent a year earlier. Vonage still expects to reach its goal of making an operating profit, adjusted for certain factors, as early as the first quarter of 2008, the statement said. The company's stock (VG) dropped sharply after its initial public offering on the New York Stock Exchange last May at $17. Among other things, investors worried about the company's losses and growing competition. On Thursday afternoon local time, the share price was down $0.42 at $5.42. Though the future is cloudy for dedicated VOIP companies, VOIP itself is looming larger in major service providers' plans, according to IDC analyst Will Stofega. For example, mobile operators are looking at VOIP overÂ combined cell and Wi-Fi phonesÂ as a way to improve in-home coverage without the expense of beefing up the cellular network itself. However, it's too soon to count out Vonage. The company has started to focus on small and medium-size businesses, where it faces less competition from cable operators, Stofega said. Consumers may also see providers such as Vonage get into mobility themselves. Vonage could buy minutes from a cellular carrier and offer a service that lets subscribers hop on to Vonage via Wi-Fi at home, Stofega said. It has no traditional cellular minutes business to protect and could move early, jump-starting the trend, he added. The company could also team up with public hotspot providers or a municipal Wi-Fi operator such as EarthLink to provide mobile service over those networks, he added. But both of these are hard ways to make a profit, Stofega said.
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The beleaguered provider of telephone service over Internet connections said that it had settled a patent lawsuit brought by Verizon for a maximum of $120 million.
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Vonage Holdings Corp. is set to go  public even as the money-losing Internet phone service provider  faces high costs and growing competition, leading analysts to  call it a risky bet whose long-term fate may lie in a buyout.
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A federal jury in Alexandria yesterday ordered Vonage Holdings, an Internet telephone company, to pay $58 million to Verizon Communications for infringing its patents in a case that raised the possibility that Vonage could be barred from conducting much of its business.
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'You might get $120m. You might get less' Vonage has settled its legal tete-a-tete with Verizon, agreeing to pay the telcom giant somewhere between $80m and $120m. Final terms of the deal depend on one last ruling from the US Court of Appeals.â¦
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Asks if provisions for 'workaround' are appropriate The black clouds that for the last three months have been hanging over VOIP service provider Vonage parted ever so slightly today, allowing through the tiniest sliver of sunshine as a federal appeals judge raised the possibility of a compromise in its patent war with Verizon.â¦
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Telecommunications provider Vonage  Holdings Corp.  said on Wednesday that it is not buying  back shares that were allocated for its customers to purchase  in its initial public offering last week.
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Company "delighted" it wasn't more A US District Court jury said Vonage Holdings violated three patents held by Verizon Communications and ordered the VoIP telephony company to pay $58m in damages and annual royalties.â¦
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Agreement bundles Vonage software with Hewlett-Packard computers.
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Settlement is latest in a string of patent cases against Internet phone company. Vonage has settled disputes with Sprint, Verizon in recent months.
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Vonage tanked after its IPO. It's not entirely clear anymore why eBay paid $2.6 billion for Skype. And the long-awaited rollout of advanced TV services based on Internet technologies has resembled the drip of a faucet.
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Shortly after being ordered to pay $58 million to Verizon in a patent suit, voice-over-the-internet phone service Vonage has now been ordered to pay $69.5 million to Sprint Nextel.
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ALEXANDRIA, Virginia  - A federal jury on Thursday found that Vonage Holdings Corp. , an Internet phone service, infringed on three key patents owned by Verizon Communications Inc.