Vonage and Verizon to Resolve their Patent Dispute
In a recent announcement, Vonage and Verizon have made known their intention to sort out their patent lawsuit. Vonage has made it clear that the cost of its patent dispute settlement with Verizon will now be capped at a maximum of $32 million. This will be plus the $88 million that is already accrued and held in escrow. The money accrued comes from a $66 million cash-collateralized bond, a $12 million second-quarter escrow payment, in addition to a $10 million third-quarter escrow payment that was made in the fourth quarter of 2007.
Anyway, the terms of the resolution will actually depend on how the Court of Appeal decides Vonage's impending petition for rehearing with regards to two of the Verizon patents known as the '574 and '711. Vonage will pay Verizon $80 million if it wins the rehearing on either the '574 or '711 patent or if the injunction is vacated as to the two patent. If on the other hand, Vonage does not win rehearing on either the '574 or '711 patent, or if the stay is lifted reinstating the injunction, it will pay Verizon $120 million. The $120 million includes a $2.5 million sum that will be given to some charities.
According to Sharon O'Leary, the Chief Legal Officer of Vonage,"We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers.This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers."
The most recent decision in the lawsuit was on September 26, 2007. There the U.S. Court of Appeals for the Federal Circuit partially remanded a March 8 jury verdict in the U.S. District Court of Alexandria, Va. that the company infringed on three Verizon patents. The appellate court remanded the infringement verdict on the 880 patent. It further affirmed the verdict on one patent claim for each of the 574 and 711 patents.
In conclusion, the appellate court vacated the $58 million damages award and also the 5.5 percent royalty. It further directed that the original case be retried by the trial court. The petition for a rehearing en banc by Vonage was actually filed on October 10, 2007.
Anyway, the terms of the resolution will actually depend on how the Court of Appeal decides Vonage's impending petition for rehearing with regards to two of the Verizon patents known as the '574 and '711. Vonage will pay Verizon $80 million if it wins the rehearing on either the '574 or '711 patent or if the injunction is vacated as to the two patent. If on the other hand, Vonage does not win rehearing on either the '574 or '711 patent, or if the stay is lifted reinstating the injunction, it will pay Verizon $120 million. The $120 million includes a $2.5 million sum that will be given to some charities.
According to Sharon O'Leary, the Chief Legal Officer of Vonage,"We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers.This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers."
The most recent decision in the lawsuit was on September 26, 2007. There the U.S. Court of Appeals for the Federal Circuit partially remanded a March 8 jury verdict in the U.S. District Court of Alexandria, Va. that the company infringed on three Verizon patents. The appellate court remanded the infringement verdict on the 880 patent. It further affirmed the verdict on one patent claim for each of the 574 and 711 patents.
In conclusion, the appellate court vacated the $58 million damages award and also the 5.5 percent royalty. It further directed that the original case be retried by the trial court. The petition for a rehearing en banc by Vonage was actually filed on October 10, 2007.
posted by Solomon at 8:32 PM PERMALINK
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