The beleaguered VoIP provider Vonage (VG) has been taking it on the chin for so long that even a marginal bit of good news is worth noting. The company said today it has “settled its pending patent dispute with Sprint (S)” and has “entered into a licensing arrangement under Sprint’s Voice over Packet (“VOP”) patent portfolio.” The settlement has sent Vonage shares soaring this morning, up 73 percent to roughly $2 a share.
The agreement is valued at $80 million: $35 million for past license use, $40 million for a fully paid future license, and a $5 million prepayment for services. On Sept. 25, a Kansas jury handed down a verdict finding that Holmdel, N.J.-based Vonage had infringed six of Sprint’s patents. Vonage was asked to pay $69.5 million in damages.
Why is this good news? It’s one less thing for Vonage to worry about; now the company can focus all its energies on resolving the patent imbroglio with Verizon (VZ). The courts asked Vonage to pay $66 million to Verizon back in June. If they can resolve that issue, then they can get back to battling cable companies for customers.
4 thoughts on “Sprint Patents Get Vonage Cash”
That is, until the next teleco decides to sue Vonage (who is next in line? T-Mobile? AT&T?)
yeah im getting a sinking feeling as a Vonage user that this isnt over and the patent holders are lining up. Vonage barely cuts a profit(if at all) so I don’t know what cash reserves their pullin money out of these payments.
It is likely that between this mess and the Sunrocket melt down – many people will be scared off by any VoIP services provider and so stem this likely erosion, service providers will undoubtedly begin to come up with great deals. I for one, am glad. I want to switch to a company that I feel won’t go under and I found an unadvertised special from Net2Phone that seems good. 3 months free and then $19.95 per month thereafter. They seem to be one of the first to have been in this market (for 12 years) and they are well funded by IDT. Anyone have any experience with them?
Jake, here is a comparison site I found for VoIP providers. I’m looking around for providers myself but when it comes down to it, none really gives the bells and whistles of what Vonage provides. I always see a feature I like in one company and not in the other, and always find myself steering back to Vonage as they have the full range of features I want. Bottom line is, when it comes to value for money with what they provide, there is no other better company.