Vonage, Nortel settle patent dispute

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Internet-based calling company Vonage said it has agreed to settle a patent dispute with Nortel Networks with no payment of damages, sending its share up more than 8 percent. The settlement would put to rest the last of the major litigation against Vonage after it settled suits brought by AT&T, Verizon Communications and Sprint Nextel earlier this year.

The settlement involves a limited cross license to three Nortel and three Vonage patents and will not call for any monetary payments by any party. Claims over past damages will be dismissed without prejudice, Vonage said. Sahner said the dispute originated in a lawsuit filed by Digital Packet Licensing against Nortel in 2004. Vonage bought that company in 2006 and Nortel filed a counterclaim to the suit earlier this month.

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