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Vonage settles Verizon patent lawsuit

[JURIST] Internet VoIP [backgrounder] provider Vonage Holding Corp. [corporate website] on Thursday settled a patent lawsuit [press release] against it brought by Verizon Communications [corporate website] for up to $120 million. The exact amount of damages Vonage will have to pay Verizon hinges upon whether the US Court of Appeals for the Federal Circuit [official website] agrees to hear an appeal of an earlier federal jury verdict awarding Verizon $58 million. If the Federal Circuit agrees to re-hear the case, Vonage will pay Verizon $80 million; if the Federal Circuit declines to re-hear the case, Vonage will pay Verizon $117.5 million and give $2.5 million to charity. Although it awards substantial damages to Verizon, the settlement agreement allows Vonage to continue using technology patented by Verizon for Vonage's Internet based phone service.

In March 2007, a federal jury awarded Verizon $58 million in damages plus a 5.5 percent future royalties rate after it found Vonage had violated three Verizon patents. The Federal Circuit held in April that Vonage could continue to subscribe new customers pending patent appeal [JURIST report] despite an earlier ruling by a lower court judge that they could not. The New York Times has more.

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