Voange and Sprint finally settle dispute

Internet phone company Vonage Holdings Corp. and Sprint Nextel Corp. have settled their long-running patent argument and inked a licensing deal under Sprint's Voice-over-Packet portfolio.

A jury in the U.S. District Court in Kansas City, Kansas, on Sept. 25, found that Vonage infringed six Sprint patents, and Vonage was ordered to pay Sprint Nextel 69.5 million U.S. dollars in damages. Vonage said at the time it didn't expect the decision to have an adverse effect on its business because it had deployed workarounds for the two patents in question for some time.

Today Sprint Nextel and Vonage announced that they have settled their patent dispute and are ready to move onward and upward. Not only have they settled their dispute, but they will start working together! The companies entered into a licensing arrangement under Sprint’s Voice over Packet (”VOP”) patent portfolio. Additionally, Sprint will license Vonage their VOP portfolio, which consists of over ”100 patents covering different methods, components and systems that efficiently connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.”

Monday's settlement agreement resolves all claims related to this dispute, the companies said.

“We are pleased to resolve our dispute with Sprint and enter into a productive future relationship,” said Sharon O’Leary, Vonage chief legal officer.

“We view this settlement and licensing agreement as a validation of the strength and breadth of our patent portfolio,” said Harley Ball, Sprint Nextel’s vice president of intellectual property. “This is an affirmation of Sprint’s research and development and a testament to the rich history of innovation at Sprint Nextel.”

Sprint also agreed to license Vonage its VOP portfolio, which includes more than 100 patents covering different methods, components and systems which connect telephone calls between a regular telephone network and a packet-switched network such as the Internet.

The companies’ new agreement is valued at $80 million, which includes a one-time payment of $35 million for the past use of license, $40 million for a fully paid future license, and $5 million in prepayment for services. Given Vonage’s headaches in the past, it will be nice for them to at least put this behind them and move on to the business of providing services.....well until something else happens....