• SIP
Broadband & Mobile Featured Article
November 08, 2007
Vonage Comes to Terms with AT&T on Patent Infringement Lawsuit
By Tim Gray TMCnet Web Editor
Vonage (News - Alert) Holding Corp. has reached an agreement to settle the third major patent dispute filed against it this year. However, the company’s financial woes continue as it reported Thursday a larger than anticipated third-quarter net loss.
The Holmdel, N.J.-based Internet phone service company has been plagued of late by a rash of patent lawsuits from the major U.S. telephone companies, but has now managed to reach an agreement with the last holdout, AT&T (News - Alert).
Vonage said both it and AT&T would drop their lawsuits against each other, and that Vonage would pay the telecom giant $39 million over five years.
"We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers," said Sharon O'Leary, Vonage Chief Legal Officer, in a statement. "This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers."
O'Leary also said both parties will "work diligently to finalize the specific terms of the settlement agreement,” the company said in a statement.
“If negotiations of a definitive settlement agreement fail, then Vonage intends to vigorously defend itself in this matter,” added O’Leary.
The company last month settled the two other major patent lawsuits with Verizon Communications and Sprint (News - Alert) Nextel, agreeing to pay $120 million to Verizon and $80 million to Sprint.
Verizon had sued Vonage in federal court, claiming the technology used to connect Vonage's 2.2 million subscribers to telephone service through Internet connections infringed on five Verizon (News - Alert) patents.
The Internet phone company said at the time that its legal woes have severely restricted its ability to add new customers and ultimately could lead to bankruptcy court, according to a regulatory filing.
Vonage has been accused by the telecoms of lifting technology that links calls made over IP
networks with phones on traditional phone circuitry.
While today’s agreement likely eases some pressure on the company, Vonage still reported a net loss of $161.8 million, or $1.04 a share, compared with a net loss of $62.2 million, or 40 cents a share, a year earlier, according to the company.
However, company climbed 16 percent, or 34 cents, to $2.38 after news of the settlement hit the street. The stock hit a high of $17 shortly after its May 2006 initial public offering.
TMC President and Editor-in-Chief Rich Tehrani (News - Alert) blogged about this subject today.
Tim Gray is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To see more of his articles, please visit Tim Gray’s columnist page.
The Holmdel, N.J.-based Internet phone service company has been plagued of late by a rash of patent lawsuits from the major U.S. telephone companies, but has now managed to reach an agreement with the last holdout, AT&T (News - Alert).
Vonage said both it and AT&T would drop their lawsuits against each other, and that Vonage would pay the telecom giant $39 million over five years.
"We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers," said Sharon O'Leary, Vonage Chief Legal Officer, in a statement. "This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers."
O'Leary also said both parties will "work diligently to finalize the specific terms of the settlement agreement,” the company said in a statement.
“If negotiations of a definitive settlement agreement fail, then Vonage intends to vigorously defend itself in this matter,” added O’Leary.
The company last month settled the two other major patent lawsuits with Verizon Communications and Sprint (News - Alert) Nextel, agreeing to pay $120 million to Verizon and $80 million to Sprint.
Verizon had sued Vonage in federal court, claiming the technology used to connect Vonage's 2.2 million subscribers to telephone service through Internet connections infringed on five Verizon (News - Alert) patents.
The Internet phone company said at the time that its legal woes have severely restricted its ability to add new customers and ultimately could lead to bankruptcy court, according to a regulatory filing.
Vonage has been accused by the telecoms of lifting technology that links calls made over IP
networks with phones on traditional phone circuitry. While today’s agreement likely eases some pressure on the company, Vonage still reported a net loss of $161.8 million, or $1.04 a share, compared with a net loss of $62.2 million, or 40 cents a share, a year earlier, according to the company.
However, company climbed 16 percent, or 34 cents, to $2.38 after news of the settlement hit the street. The stock hit a high of $17 shortly after its May 2006 initial public offering.
TMC President and Editor-in-Chief Rich Tehrani (News - Alert) blogged about this subject today.
Tim Gray is a Web Editor for TMCnet, covering news in the IP communications, call center and customer relationship management industries. To see more of his articles, please visit Tim Gray’s columnist page.
