Vonage settles with Sprint; wins breathing space

Embattled internet telephony provider Vonage won itself a bit of breathing space on Monday, announcing a settlement of its patent dispute with US cellco Sprint.

The settlement is valued at $80m, including $35m for past use of licence, $40m for a fully paid future licence, and $5m in prepayment for services.

In September, a Kansas jury found that Vonage had infringed six Sprint patents on VoIP technology. As a result, Vonage has now entered into a licensing arrangement under Sprint’s Voice over Packet patent portfolio.

Vonage’s share price jumped on the news but the trouble is far from over for the firm. The VoIP company is also on the ropes after being found guilty of infringing three broad reaching VoIP patents owned by Verizon.

The internet telephony company won a stay of injunction allowing it to keep signing up subscribers and implemented workarounds for some of the patented technologies. However the legal saga with Verizon is ongoing.

Earlier this year, the legal wranglings with Sprint led to speculation that Vonage was considering selling itself to the operator to avoid further trouble.