Vonage Settles With Verizon, Ends Lawsuit

Boston (dbTechno) – Vonage made the announcement Thursday that they have settled a patent lawsuit with Verizon Communications which could cost Vonage up to $120 million.

Vonage shares dropped 7 cents per share on Thursday before the announcement was made. This was a 4% drop. Later in the day though following the announcement Vonage shares shot up 80% to $2.75.

Back in March a jury in Virginia found that Vonage infringed on three Verizon patents. Verizon was awarded $58 million in damages plus a royalty on future sales of the VoIP service.

An appeals court sent it back to trial in September. If Verizon wins the rehearing Vonage will pay Verizon $120 million to end the lawsuit.

“We’re pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers,” Sharon O’Leary, Vonage’s chief legal officer, said in the prepared release announcing the deal. “This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on or core business and customers.”

The patents cover the translation of domain names and IP addresses to telephone numbers when internet calls get sent through a normal everyday phone set-up.

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