VoIP company Vonage has waved the white flag and agreed to settle the patent dispute with Verizon Wireless. Buying peace is a very expensive proposition. In the case of Vonage, it can go from $80 to $120 million, depending on the final decision of the lawsuit. The consolation is it will free Vonage from shutting down its network and sharing monthly revenues with Verizon.
At this time, payment remains variable and depends mainly on the decision of Court of Appeals on how many patents were really infringed by Vonage. The latest decision came on September 26, 2007 with a verdict that Vonage violated 2 Verizon patents. Vonage has filed a petition for a rehearing on October 10, 2007 and the outcome of this event will be the basis of the payment.
“We’re pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers. 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,” said Vonage Chief Legal Officer Sharon O’Leary, in a press release.
This is the 2nd time Vonage settled. Recently, it paid $80 million to Sprint Nextel for another patent case. Still, the road is still bumpy for this VoIP company. It will face another big carrier, AT&T, for allegedly violating one of its Internet telephone patents. To make matters worse, AT&T is also requesting for an injunction to shut Vonage’s networks.
It’s sad to see a revolutionary company poised to lower our call rates being bullied by the big bad phone carriers.
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