Vonage settles with Sprint

Vonage agreed this morning to pay Sprint Nextel $80 million to settle a patent dispute. A federal court in Kansas city awarded Sprint $69.5 million in damages to cover the revenues Vonage generated with the violated patents. The $80 million settlement is said to cover past and future use of the 100 or so patents at issue.

Vonage, based in Holmdel, N.J., denied violating the Sprint patents and said it would appeal the court's ruling. The same strategy in a similar lawsuit with Verizon prompted the judge in that case to prohibit Vonage from signing up new subscribers. The company had to post a $66 million bond to be able to continue to do so. Settling with Sprint eliminates the possibility of a similar situation.

Vonage shares made a 40 percent rebound on the news. The company in the meantime awaits the final verdict on the damages award in the Verizon suit. An appeals court judge recently tossed out one of three lower court rulings in that case and vacated the $58 million award to Verizon. Vonage socked away nearly $197 million for the lawsuits, so the damage awards and legal fees are most likely covered. There just isn't a lot left over for a rainy day. The company has to start making money. 

For More:
- CNNMoney is carrying wire reports here [1]

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