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Vonage, AT&T working on legal settlement

updated 01:05 pm EST, Thu November 8, 2007

Vonage, AT&T negotiate

AT&T has agreed to settlement talks in its lawsuit against VoIP carrier Vonage, according to the Associated Press. AT&T had made the accusation that Vonage violated a patent for connecting traditional phones to Internet services; the companies had actually attempted to negotiate a license for the patent for two years, but the issue was never resolved. Under a proposed deal, Vonage would compensate AT&T with $39 million over the course of five years. Word of new talks caused Vonage stock to rise 23 percent (to $2.70) in premarket trading.

Although the payout would be another hardship for Vonage, which as been rumored to be near bankruptcy in recent times, it would represent the smallest settlement the company has so far had to make in similar legal woes. In October the company settled with Sprint for $80 million, and Verizon for $80 to $120 million, details of the latter arrangement depending on a future court hearing.

by MacNN Staff




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