Vonage, Verizon settle patent spat for up to $120 million
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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) - A federal court ruled on Tuesday that struggling VoIP provider Vonage infringed on patents owned by Sprint Nextel. Jurors in the U.S. District Court in Kansas found that Vonage willfully infringed on Sprint's patents as part of its VoIP service, Vonage said. The jury awarded Sprint $69.5 million in damages, which amounts to 5 percent of Vonage's revenue during the infringing period. Vonage plans to initially ask the court to set aside the verdict, but if that fails, the company will appeal the decision. In the meantime, Vonage will also develop workarounds that don't require Sprint's patents, it said. This is the second legal blow to Vonage this year. A court found earlier this year thatÂ Vonage infringed on Verizon patents. That case came with an injunction that would have prevented Vonage from signing up new customers.Â Vonage won a stay of that injunctionÂ and is appealing the original infringement ruling. Although it's clearly bad news for Vonage to have two patent infringement rulings against it this year, the appeals could change everything, said Seth Ostrow, a partner specializing in patents in Dreier LLP. "Often there are mistakes made during various stages of a case that form the basis for a successful appeal, and that, coupled with the statistics, gives reason to think that Vonage has a significant chance of getting this changed," he said. Statistics show that patent cases often get changed on appeal, he said. In August, Vonage said it had nearly completed rolling out workarounds for two of the three patents claimed by Verizon. Still, the Verizon case alone appears to have slowed growth for the company, the largest independent VoIP provider. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year. Vonage has said that Verizon pursued the lawsuit in an effort to eliminate a competitor. Vonage stock opened the day at $1.99 and closed at $1.20, a 33 percent drop. This story was updated on September 25, 2007
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- Broadband telephone services provider Vonage  Holdings Corp.  said it intends to continue its fight  against a patent infringement lawsuit filed by Verizon  Communications Inc. .
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Verizon Communications Inc. has charged that Internet phone carrier Vonage Holdings Corp. violated patent rights that Verizon has on technology for making phone calls over the Internet.
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Patent disputes rarely end up helping charities, but two local organizations could get sizable donations from the resolution of a year-long legal battle between Verizon and Vonage.
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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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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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The two parties in one of the most recent patent lawsuits concerning Vonage's VoIP technology waited almost two months to tell the public they had actually settled their dispute just days after it was filed.
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Troubled VoIP service provider Vonage is rolling out new products and services at the Consumer Electronics Show in a bid to reverse its downward spiral.Intellectual property lawsuits brought by Nortel, Verizon, Sprint, and AT&amp;T have distracted Vonage for the past year. During that time, customer acquisition slowed, and defections grew to 3 percent in the third quarter last year.But Vonage says it is ready to turn a corner. The suits were a weapon that the phone companies used to defend their businesses in the face of competition from Vonage, said Jeffrey Citron, chairman, chief strategist and interim CEO at Vonage. &quot;It was a successful strategy. It distracted us and slowed us down,&quot; he said. &quot;Instead of rolling out MyVonage six months ago, we were dealing with workarounds.&quot; MyVonage is the name of a new campaign at the company to introduce a host of services geared toward customer lifestyles.While the lawsuits were ongoing, the company was developing workaround technology that would allow its business to move forward without infringing on the relevant patents. Vonage has now settled all four major lawsuits against it.That has left Vonage free to spend more time focusing on its business, said Citron. It hired new engineers who designed a router, the first time Vonage will sell its own router rather than one from Cisco or Motorola.The router has an unusual feature: a screen. It displays information about problems that the modem might have in plain language. For instance, rather than showing a flashing light like most routers, this one displays words telling users that the Ethernet cable is unplugged.New customers will be able to buy the V-Portal router online starting Wednesday for $9.99 after rebates.In addition to the new router, Vonage is beginning to roll out many new features that it is showcasing at alpha.vonage.com. For instance, customers can now use voice-activated dialing, simply speaking a name to place a call. Customers can also send a voice message to anyone via e-mail. The message arrives as an attached audio file.Call blast is a new feature that lets customers send out a voice mail simultaneously to a group of people. Citron anticipates that will be useful when he&#39;s in charge of calling 15 kids who go to school with his kids to tell them there is a snow day.&quot;We expect to roll out a new capability every month or two,&quot; Citron said.Vonage also plans to offer another service that lets users access the voice recognition system from any phone to make a call through Vonage. The company is also testing software that would let customers make Vonage calls via software on their laptops.Many of these services are free to Vonage customers.Citron said that the future for Vonage will be brighter. Despite continued high churn, last quarter it had a gain of 77,000 customers, which he says isn&#39;t as good as it should be. The company has worked to cut costs, and improvements in customer service should help decrease customer losses, he said.In the meantime, speculation continues to circle that the payouts Vonage made to settle the lawsuits will cripple it. But Citron was confident that the company&#39;s troubles are behind it.
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A jury dealt a blow to  loss-making Internet phone provider Vonage Holdings Corp.   on Thursday, ordering the company to pay $58 million  plus royalties on future sales for infringing three patents  owned by Verizon Communications Inc. .
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Net phone company says it didn't copy Verizon's patents, but the telecommunications giant says harm has been done and its VoIP rival must pay.
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AT&amp;T Corp., the largest US long- distance telephone company, agreed to pay $100 million to settle lawsuit by shareholders who sought $2.
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Vonage tells customers to hold fast after patent court rules in favor of Verizon. Plus: Stocks tumble again. LG goes to Iran. And more.
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An appeals court on Wednesday upheld  a verdict that Vonage Holdings Corp  infringed two  patents held by Verizon Communications Inc .
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Promises to side-step its way out, again VoIP provider Vonage has lost another patent battle, this time with Sprint Nextel, which owns six infringed patents and stands to gain almost $70m in a court-ordered payout.â¦
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An appeals court on Wednesday upheld a verdict that Vonage Holdings Corp  infringed two patents held by Verizon Communications Inc .
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Internet-based calling company Vonage Holdings  Corp  said it settled a patent dispute with Nortel.