Vonage, AT&T Agree On Patent Lawsuit Settlement

Vonage and AT&T finalized the settlement of a lawsuit AT&T filed in October, which alleged the VoIP provider infringed AT&T patents. AT&T claimed Vonage used proprietary technology that allowed Vonage to make VoIP calls possible using traditional telephones hooked up to a Vonage-branded router. The terms of the settlement were not disclosed.

On November 7, Vonage agreed to settle with AT&T, announcing it might pay the company up to $39 million. The deal was agreed upon with relative expediency, as a finalized deal emerged less than three months after AT&T filed the suit on October 17.

Vonage has been no stranger to settlements in the past, agreeing in October 2007 to pay Sprint Nextel $80 million for infringement on voice over packet technology after a lawsuit filed in October 2005. The terms of that settlement also included Vonage's agreement to license Sprint's technology.

That same October, Vonage also agreed to settle with Verizon Communications after the company was sued for patent infringement, with the settlement costs falling between $80 million and $120 million, depending on appeal results regarding two patents.

Earlier this month, Vonage was hit with another patent infringement lawsuit, this time from Nortel Networks, a telecommunications equipment manufacturer. The company charges the beleaguered VoIP company violated nine patents related to Nortel's Internet phone service.

AT&T declined to disclose the terms of the settlement and would not comment further. Vonage confirmed the settlement and declined to comment further on details.