Vonage Settles With Nortel, AT&T

Vonage Holdings Corp. is clearing its slate of litigation.

The New Jersey-based IP telephony company on Monday said it has agreed to settle with Nortel Networks; the two corporations sued each other this fall and say their settlement wont require monetary payments by either party. Instead, they plan to create a limited cross license to three Nortel and three Vonage patents.

Claims over past damages and the remaining patents will be dismissed without prejudice, Vonage said.

Finally, on Dec. 28, Vonage announced a settlement of a suit brought by AT&T Corp. in October. AT&T accused Vonage of illegally using a patent for a wide-area packet technology system and wanted Vonage to stop using the platform. Vonage must pay AT&T $650,000 per month for five years, as well as $1.95 million by the end of January 2008. If Vonage defaults on the full monthly amount, it will have to pay an additional $222,666.

The settlements terms give Vonage a five-year, non-exclusive license of AT&Ts technology, but they do prevent Vonage from owning or operating a wireless network.

AT&T also will get a non-exclusive, royalty-free license to use some of Vonages patents so it can provide some of its existing services.

Vonage stocks were trading higher on Monday than they have in some time. During mid-morning activity, the companys shares were up 15 cents to $2.15. Thats compared to a close of $2 on Friday.

AT&T Corp.

Nortel Networks

Vonage Holdings Corp.

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