Vonage to pay Sprint $80 million

By Justin Mann on October 8, 2007, 11:28 AM
Everyone has been after Vonage it seems. First Verizon went after them and sent them reeling, which ended in Vonage losing a lot of cash and having to change their business. They next were targeted by Sprint and even a defunct company.

The dust is far from settling, with only now Sprint and Vonage reaching a settlement. For violating Sprint's patents – much in the same way the courts found that they violated Verizon's patents – Vonage will be forced to pay out $80 million, in fees ranging from prior use of technology to future use of the same technology. Interestingly, a spokesperson for Vonage claimed this was “good news”:

"We believe this deal is good news for Vonage, our customers and our shareholders," Sharon O'Leary, Vonage's general counsel, said in a statement. "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."
I can't fathom that losing nearly $150 million in less than two years is a good thing, particularly for a company that is exploring a relatively new market. Over the past year, the value of Vonage stock has dropped dramatically – and yet, settling this suit with Sprint caused their stock value to nearly double in a single day. Are they on the road to recovery, now?




User Comments: 1

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buttus said:
Honestly...how is loosing $150 million good for business especially when most of your revenue goes out to mareting dollars to generate new clients?On the other hand who knows. Vonage is receiving the same kind of treatment and battering that RIM endured for years and now look at them (RIM). Still, I don't have much confidence in the future of Vonage especially in the face of such losses.
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