In June 2006, Verizon brought a lawsuit against Vonage to enforce several Verizon patents relating to Voice over Internet Protocol (VoIP) services.

In March 2007, a jury held that Vonage is infringing three valid Verizon patents. The jury awarded $58 million in damages. The trial judge subsequently issued an injunction which was stayed pending Vonage's appeal.

In September 2007, the U.S. Court of Appeals for the Federal Circuit upheld the trial court's decisions on infringement, validity, and injunction as to two of the Verizon patents (the '574 and '711) and remanded as to the third patent (the '880). Vonage filed a petition for rehearing which is pending in the Court of Appeals.

Today the parties have agreed to resolve the patent lawsuit. The terms of the resolution depend on how the Court of Appeals decides Vonage's pending petition for rehearing regarding two of the Verizon patents (the '574 and '711). If Vonage wins rehearing on either the '574 or '711 patent or if the injunction is vacated as to the '574 or '711 patent, Vonage will pay Verizon $80 million. If Vonage does not win rehearing on either the '574 or '711 patent, or if the stay is lifted reinstating the injunction, Vonage will pay Verizon $117.5 million.

The parties are pleased to have resolved this matter.