Vonage Negotiates $80-Million Settlement in Sprint Patent Lawsuit
American wireless giant, Sprint Nextel Corp., has agreed to drop its massive patent infringement lawsuit against Vonage Holdings Corp., in exchange for a one-time cash settlement of $80 million.
A federal court jury ruled in Sprint’s favour last month, ordering Vonage to pay $69.5 million in damages, plus future royalties. The VoIP provider had planned to appeal this verdict, but said that the settlement deal will help it concentrate on growing its struggling broadband phone business.
“It allows us to put this litigation behind us and continue to focus on our core business by removing the uncertainty of legal reviews and long-term court action,” explained Vonage’s general counsel, Sharon O’Leary.
Vonage shares surged $1.42, or 123.5% yesterday, to close at $2.57 on the New York Stock Exchange, indicating that the Sprint settlement has put some hope back into the hearts of Vonage investors. The company’s shares are still worth only a fraction of their $17 IPO price, however, and have a long way to go to recover from their almost continual seventeen-month slide.