Vonage Settles Patent Dispute, Sees Shares Rise

Longer-term troubles still loom for vexed Internet phone provider
By Jane Yager,  Newser Staff
Posted Oct 26, 2007 7:26 AM CDT
Attendees make free phone calls over VoiP at the Vonage booth at the 2007 International Consumer Electronics Show (CES) in Las Vegas, in this Jan. 10, 2007 file photo. Internet phone company Vonage Holdings...   (Associated Press)
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(Newser) – Troubled Internet telephone company Vonage gained a "new lease on life" yesterday when it settled a longstanding patent infringement dispute with rival Verizon. Vonage share prices shot up 70% in after-hours trading on the heels of a settlement that observers see as a "big win for Vonage," the New York Times reports.

Under the settlement, Vonage will pay Verizon either $80 million or $117.5 million, depending on an upcoming court ruling, and will be allowed to use technology governed by two Verizon patents. Though the deal offers Vonage short-term relief, the company faces such longer-term problems as a new patent lawsuit from AT&T and increasing competition from cable companies.