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12/31/2007
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Vonage Settles Patent Fights With Nortel, AT&T

The agreement, which also involved Digital Packet Licensing patents acquired by Nortel, centered on the use of 411 and emergency calls.

Plagued for months by a series of patent infringement suits, voice-over-IP provider Vonage Holdings announced Monday that it had settled patent litigation with Nortel Networks in what is arguably the last of the firm's intellectual property battles.

According to Vonage, no monetary payments will be made by either company in the settlement; Vonage and Nortel each will share three of their IP cross-licenses with each other.

"We are pleased to resolve this issue and enter into a productive relationship with Nortel," said Sharon O'Leary, Vonage's chief legal officer, in a statement.

The Vonage-Nortel settlement, which also involved Digital Packet Licensing patents acquired by Nortel, centered on the use of 411 and emergency calls, according to media reports.

Patent litigation tends to drag on even after agreements have been reached, and Vonage said the Nortel settlement is subject to "final documentation."

The settlement comes on the heels of a patent agreement between Vonage and AT&T. The two sides finalized their accord on Dec. 21. In early November, the companies agreed to settle their patent litigation amicably.

Vonage, which offers various VoIP calling plans for about $25 a month, has been hit with a series of legal setbacks since its initial public offering in May 2006.

On Sept. 26, a U.S. appeals court upheld a verdict that Vonage infringed two patents held by Verizon, although it reversed a lower court's interpretation on the third patent and ordered more proceedings to recalculate damages and royalties. Vonage also recently settled a patent lawsuit filed by Sprint Nextel.

Under the final accord with Verizon, Vonage will have to pay $117.5 million. The Sprint accord calls for Vonage to pay Sprint $80 million. Vonage is slated to pay $39 million to AT&T.

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