Vonage, Nortel settle patent dispute

JERSEY CITY -- The agreement does not call for any payments by either company.

Under the agreement, Nortel and Vonage will cross-license each others' technology, which is used to make emergency calls and dial 411. The settlement is subject to final documentation.

"We are pleased to resolve this issue and enter into a productive relationship with Nortel," said Vonage Chief Legal Officer Sharon O'Leary.

This year, Vonage agreed to settle four other patent suits, and in each case, promised to pay the other side for prior use of its products.

Vonage spokesman Charles Sahner said earlier this month that the company was dragged into the legal battle with Nortel after it acquired three patents from Digital Packet Licensing last year. DPL had filed a suit against Nortel in 2004 alleging violation of those three patents, so Vonage continued with the lawsuit. Nortel countersued, saying Vonage violated 13 of Nortel's patents, and asked that Vonage be kept from using the technology.

Despite having now settled all of its legal battles, Vonage still faces many challenges as cable companies roll out their own digital phone services and consumers increasingly opt for cellphones in place of landlines.