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Company News

UPDATE 1-Vonage settles patent litigation with Klausner

(Updates with Vonage confirmation, adds comments and details)

NEW YORK, Oct 11 (Reuters) - Internet phone company Vonage Holdings Corp VG.N said on Thursday it settled a patent lawsuit filed by Klausner Technologies Inc, a company specializing in voice-messaging technology.

It was the second settlement announcement this week by Vonage, which said on Monday it settled a patent dispute with Sprint Nextel Corp S.N for $80 million. Vonage has been hit by a string of lawsuits since going public in May 2006.

The privately held Klausner said it granted Vonage a patent license related to voice messaging. The two companies did not disclose the financial terms of the settlement.

Vonage said the move would help it focus on its business.

“It allows us to put this litigation behind us and continue focusing on providing reliable and innovative services to our customers,” said Vonage spokesman Charles Sahner.

Vonage shares inched up 2 cents to $1.95. However, they are still a fraction of their May 2006 initial public offering price of $17.

The Holmdel, New Jersey-based company said on Wednesday that it filed a motion seeking a review of a U.S. court's verdict on a patent litigation case with Verizon Communications Inc VZ.N.

On Sept. 26, a U.S. appeals court upheld a verdict that Vonage infringed two patents held by Verizon, although it reversed a lower court’s interpretation on the third patent and ordered more proceedings to recalculate damages and royalties.

In addition to such legal troubles, analysts cite worries over growing competition for Vonage.

Vonage was a pioneer in selling Web-based phone services to consumers looking for a cheaper alternative to traditional phone services, but cable providers and Internet firms now offer similar services. Analysts have also voiced concerns over its losses from heavy marketing spending. (Reporting by Ritsuko Ando)

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