Vonage, Sprint Settle Patent Fight for $80 Million

Vonage Holdings Corp., the Internet phone-service provider that lost two patent cases last month, will pay $80 million to settle an infringement lawsuit won by Sprint Nextel Corp. Vonage shares surged more than 50 percent.

Sprint, the third-largest U.S. phone company, agreed to license more than 100 patents of Internet telephone technology to Vonage, according to a statement today by the companies. The settlement includes $35 million for past use of the licenses, $40 million for future use and a $5 million prepayment for services.

``This deal is good news for Vonage, our customers and our shareholders,'' said Sharon O'Leary, Vonage's general counsel. ``It allows us to put this litigation behind us and continue to focus on our core business by removing the uncertainty.''

Vonage shares rose 46 percent, or 53 cents, to $1.68 at 10:03 a.m. in New York Stock Exchange composite trading. Shares of Reston, Virginia-based Sprint fell 21 cents to $18.80.

A federal jury in Kansas City, Kansas, decided Sept. 25 that Holmdel, New Jersey-based Vonage violated six Sprint patents and awarded $69.5 million damages.

Vonage also lost a $58 million patent verdict to New York- based Verizon Communications Inc., the second-largest U.S. phone company, in March. That decision was mostly upheld on appeal the day after the Sprint verdict. San Antonio-based AT&T is the biggest U.S. telephone company.

The case is Sprint Communications Co. v. Vonage Holdings Corp., 05-2433, U.S. District Court, District of Kansas (Kansas City).