Vonage and Nortel settle patent dispute

Jeffrey Citron, Chairman and CEO of Vonage, picutred in New York, December 1, 2006. Vonage on Monday said it settled a patent dispute with Nortel.

NEW YORK (Reuters) - Internet-based calling company Vonage Holdings Corp (VG.N) said it has agreed to settle a patent dispute with Nortel Networks NT.TO NT.N 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 (T.N), Verizon Communications (VZ.N) and Sprint Nextel Corp (S.N) earlier this year.

"This is the last of them and we're quite happy to put it behind us," Vonage spokesman Charles Sahner said.

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.

The dispute centered on patents behind "911" and "411" emergency and information call numbers, as well as click-to-call technology.

Vonage shares rose 14 cents to $2.14 on the New York Stock Exchange after trading as high as $2.17 early in the session.

(Reporting by Michele Gershberg in New York and Purwa Khandelwal in Bangalore; Editing by Maureen Bavdek)