Vonage Holdings Corp. (NYSE: VG) continues to pay big bucks to settle patent infringement cases.

The Internet phone company today settled its long-running dispute with Verizon Communications Inc. (NYSE: VZ). In March, a jury awarded Verzion $58 million and issued an injunction that basically would have forced Vonage out of business. That decision was upheld by the U.S. Court of Appeals for the Federal Circuit.

Vonage will pay Verizon up to $117.5 million, depending on the outcome of pending appeals, the Holmdel, NJ-based company said in a statement. It will also give $2.5 million to charity. This settlement isn't surprising. Patent litigation is really expensive and takes forever to wind its way through the courts which is why companies are eager to settle these cases before trial.

Earlier this month, Vonage settled a patent dispute with Sprint Nextel Corp. (NYSE: S) for $80 million. It faces a separate legal action from AT&T Inc. (NYSE: T). With all of these huge companies wanting a piece of it, it's a wonder that Vonage is still standing.

Absent the patent issues, Vonage's future remains bleak. It competes to offer what is basically a commodity service against much larger rivals. Once these patent cases are settled, my suspicion is that one of them will try to snap up Vonage while the stock continues to trade well-under its $17 IPO price. It closed today at $1.53.

As reported by our sister blog Engadget, Apple (NASDAQ:AAPL) has been sued for patent infringement. SP Technologies of Florida claims to have prior ownership of the iPhone's sexy touchscreen keyboard concept. Shades of the RIM/NTP BlackBerry patent struggle?

Not quite. In this case, the plaintiff, SP Technologies, comes to court with a very bad reputation for filing frivolous suits against companies such as Canon, Kyocera and others. The patent itself is testimony to the ongoing problem with our protection of intellectual property, in which vague or obvious ideas are granted patent protection. In this case, the patent abstract includes these cutting-edge (in 1970) ideas:

"A method and medium for a computer readable input area. The input area is created by a computer program on a display capable of receiving touch-screen input. The computer on which the input area is used is at least a 32-bit system. The input area may contain a keyboard which is an image map."

Looking deeper at SP Technologies, we find the company apparently is really just Iowa surgeon Peter V. Boesen. Perhaps Boesen is hoping this lawsuit will help pay for an appeal of the prison sentence that currently hangs over his head -- 51 months in federal lockup for healthcare fraud.

I doubt that Steve Jobs has much to worry about in this case.

Over the next few years, we should see the emergence of the so-called digital home. But it requires some tough technology. And a major player in the space is Intellon (with about 15 years' experience).

To ramp things up, the company has filed to go public.

Essentially, Intellon is a fabless semiconductor operator and its chips allow for high-speed communications over existing wiring. In other words, it's possible for a person do things like download video on a computer and share it on a television in another room.

it's pretty cool stuff and the technology has 25 issued patents – and there are 29 pending. And the business is certainly robust. Over the past year, revenues surged from $16.6 million to $33.7 million.

The lead underwriters include Goldman Sachs Group, Inc. (NYSE: GS) and Deutsche Bank Securities. The proposed ticker symbol is ITLN. The company's prospectus is on the SEC website. And, if you want to see more recent IPO filings, click here.

Tom Taulli is the author of various books, including the Complete M&A Handbook and the EDGAR-Online Guide to Decoding Financial Statements.

Qualcomm (NASDAQ: QCOM) has been in a long-running patent dispute with rival Broadcom (NASDAQ: BRCM). Yesterday, Broadcom won a big victory. The International Trade Commission decided to punish Qualcomm by barring cell phones with is chips from imports into the US. The ruling covers newer 3G models, but not most models that are sold here now. But, as 3G build-outs grow to ride the wave of multimedia-enabled phones, the decision could hurt the industry.

Most large cell service companies in the US plan to use 3G phones with Qualcomm chips. The means that Verizon (NYSE: VZ) and AT&T (NYSE: T) could find themselves short of new models.

By refusing to settle its dispute with Broadcom, Qualcomm has hurt many of its best customers. A shortage of popular phones is hardly a problem that big US telecom companies need. As their land line businesses are being taken from them by VoIP providers, wireless revenue is becoming the key growth factor keeping their overall revenue increases strong.

If the decision is not overturned. cell providers may be in their biggest bind since the industry started.

Douglas A. McIntyre is a partner at 24/7 Wall St.

The news hasn't been good for Qualcomm Inc. (NASDAQ: QCOM) lately in its myriad lawsuits with Broadcom. Its most recent setback occurred in Santa Ana, California as the San Diego company lost a dispute with Broadcom Corp. (NASDAQ: BRCM) over three patents that Qualcomm has now been declared as willfully infringing. The news came on the heels of an expected ITC resolution (that was again delayed, this time to June 7) on whether to ban phones containing Qualcomm's chipsets that have been determined to violate another Broadcom patent.

This most recent case centered around five patents that Broadcom acquired and then asserted against Qualcomm. By the end of the litigation phase, Qualcomm was found to infringe upon three patents broadly covering topics of video encoding, network management, and hierarchical networks. Broadcom was awarded $19.6 million in damages, but this value could be tripled as the infringement was determined to be willful.

With no compromise yet reached on a licensing deal to cover the extent of products that Broadcom sells, the company has been methodically attacking Qualcomm's intellectual property base. Both Broadcom and top handset supplier Nokia Corp. (NYSE: NOK) hope to demonstrate legally and in the court of public opinion that they deserve more equal footing with Qualcomm in terms of intellectual property, and should not have to pay significant royalties to Qualcomm.

With the additional leverage, though minor, that Broadcom is achieving through court victories, I wonder at what point it makes sense for Qualcomm to buy Broadcom outright, or conclude some sort of merger. While there may be obstacles or egos in the way, I think Broadcom would be a good compliment to Qualcomm's strategy of becoming more than just a kingpin in the cellular and CDMA markets. Both companies are organized around an elite engineering core with proportionally more advanced degrees in their ranks than many other tech companies, aligning their core R&D centers.

Should the two companies take off their gloves and come to terms of even a strategic partnership, it will go a long way towards helping Qualcomm fend off Nokia and the rest of the industry that wants to dismantle Qualcomm's business and limit its influence in the lucrative wireless markets.

Dave Mock is author of The QUALCOMM Equation and an analyst with Pacific Ridge Capital.

Even if Vonage Holdings Corp. (NYSE:VG) can resolve its patent issues with Verizon Communications Inc. (NYSE: VZ) -- and that's a huge if -- , the pioneering Internet phone service provider is still doomed.

As I've argued before, Vonage is in a commodity business where people decide what to buy based solely on price. I just don't see how the Holmdel, New Jersey-based company will be able to compete against much larger rivals including Verizon and Comcast Corp. (NASDAQ: CMCSA).

Plus, the company continues to spend bucket loads of money. Selling, general and administrative expenses soared 72 percent in the first quarter compared with a year earlier and 11 percent from the fourth quarter in part because of the Verizon litigation. SG&A represented 46 percent of revenue in the quarter, up from 44 percent last year, and 45 percent in the fourth quarter.

Customer churn, long a problem for Vonage, rose in the 2.4 percent from 2.3 percent in the last quarter. Earlier this week, Vonage named Jamie Haenggi, who joined the company last year from ADT, as chief marketing officer where she will be responsible for "spearheading a more unified marketing approach at Vonage in line with the company's announced strategy of improving its competitive position in the marketplace," according to a press release.

Ultimately, the court will decide whether CEO Jeffrey Citron's claims that the company has found a way to work around the Verizon patent is correct. His opinion, which helped push Vonage's shares up yesterday and today, isn't the one that matters.

Vonage Holdings Corp. (NYSE: VG), which has been found to have infringed on three Verizon patents, warned investors that its legal woes could push the company into bankruptcy. Investors are heading for the hills, sending the stock down 7%.

Could this be a buying opportunity? Successful investors often go against the grain. With all the negative sentiment surrounding the company, whose shares have plunged 80 percent since going public last year, there just may be value here.

This stock, though, isn't for everybody. Vonage's warnings, which is part of the 10-K that the company filed with the SEC yesterday, says that intellectual property litigation, especially our ongoing patent litigation with Verizon, if determined against us, could... lead to the bankruptcy or liquidation of the company."

With a current market cap of half a billion dollars and the potential of court-imposed limitations on its ability to add new customers, Vonage is about as contrarian of an investment as it gets. And while I consider myself a contrarian, I definitely don't have the guts to touch this one.

But people make money in the stock market by buying low and selling high. For those who are game enough to buy Vonage's stock. I wish you the best of luck. You'll need it.

This is the question raised by an SEC filing by Vonage Holdings Corp. (NYSE: VG) yesterday. According to Reuters, the risks of its ongoing litigation with Verizon Communications Inc. (NYSE: VZ) They include the possible interruption of service, an inability to repay its debt and a decline in its stock that could lead to the delisting from the New York Stock Exchange.

As I posted last week, Vonage had only $154 million in cash at the end of the year. And it has $278 million in long-term debt which needs to be repaid. I would not want to be the lender. Nor would I be holding the stock or using Vonage's service.

It's time to get a backup plan in place for service. And if you hold the stock, get out now.

Peter Cohan is President of Peter S. Cohan & Associates, a management consulting and venture capital firm. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in Verizon or Vonage.

This week, Google Inc. (NASDAQ:GOOG) launched another vertical search site -- this one devoted to patents. Yes, now you can easily look up information on the seven million patents in the U.S.

True, the U.S. Patent and Trademark Office has its own database. But it simply can't bring the kind of resources Google can.

Not surprisingly, the Google site is a bit fun. For example, there are five patents that pop-up on the front page (randomly). For example, one was for a "toilet seat deodorizer apparatus" (what will they think of next?)

When you search for a patent, you also have the ability to zoom in or out on the drawings. Other details include claims, citations, and references.

Depending on who you are, this new resource can either be a tremendous time saver or a tremendous time sink. Wasting time at work has never been more fun -- or informative.

Now if only they can do this with the SEC's EDGAR database. It would certainly make my life easier.

Tom Taulli is the author of various books, including the Complete M&A Handbook. He also operates DealProfiles.com.

Each year, International Business Machines Corp. (NYSE:IBM) spends about $6 billion on R&D. It not only allows the company to launch better products -- but is also a source of licensing revenues. And the occasional lawsuit, such as the one filed against Amazon.com. The amount? Like most of these kinds of suits, it is unspecified. IBM's suit covers five patents, which cover things like storage, customer recommendations and other common features that any e-commerce company would provide.

Interestingly enough, IBM filed its case in Texas, which tends to be favorable to patent-holders. But, one thing is certain: patent litigation is time-consuming. So, unless there is a settlement (which does not seem like something Amazon.com likes to do), expect this case to continue for several years.

And, as seen with the stock price of Amazon.com, investors seem blissfully unconcerned. The stock is up this morning after the news by 24 cents to $32.81.

Tom Taulli is the author of various books, including the Complete M&A Handbook and operates InvestorOffering.com.

When at first (and second, and third) you don't succeed, sue. According to the news this morning, that's IBM's strategy. International Business Machines Corp. (NYSE:IBM) filed two lawsuits against Amazon.com, Inc. (NASDAQ:AMZN), claiming that Amazon was violating five of its patents, including those for technology that provides customer recommendations, advertising, and the way data is catalogued.

Not only had IBM tried to negotiate license fees with Amazon -- which Big Blue says everyone else simply pays -- but it had tried "over a dozen times" with zero response from the internet retailer.

Has Jeffrey Bezos lost his marbles? No media outlet was able to garner a response from the company at this early hour on the West Coast. But it's certainly well-known that Bezos has a history of staking his claim, but big, in the world of IP -- most recently, demanding license fees from everyone who tried to copy their one-click ordering system (I feel I should put "copy" in quotes as many pundits and lawsuit subjects believe there is significant prior art here, which the US Patent & Trademark Office plans to soon review).

In my knowledge of the IP world, IBM's ownership isn't much challenged here. The customer needs prediction algorithms are used by many different companies and taught in statistical marketing courses. While Amazon.com's use of them is considered smart, I've never heard claim that it's of the company's own design. Is Amazon.com a wronged innovator, or is the company's management just playing dirty pool?

In a piece in today's NY Times, Julie Creswell shows how venerable Wall Street firms – like Goldman Sachs and Citigroup – are stockpiling patent portfolios. Hey, in the ultra-competitive space of global high-finance, it's hard to maintain any edge.

Basically, these firms are looking at just about all key processes and trying to own them. This includes complex things like derivatives, as well as prosaic things like credit cards. Last year, there were over 6,000 patent applications for financial-related innovations. Interestingly enough, Goldman Sachs has its own chief patent officer.

Finance and technology are certainly blurring. In fact, financial firms are competing against firms like Yahoo, Google and eBay for top-talent.

And, given the huge profits of the giant financial firms, it looks like this investment in technology is quite savvy.

I talked to Vic Lin, who is a patent lawyer at Myers Dawes Andras & Sherman LLP and has his own patent blog. According to him: "The growing trend among financial services firms seeking patent protection goes to show how intellectual property (IP) is becoming a critical component of every business, regardless of the industry. Whether the owner intends to use the patents offensively or defensively, there's a bit of game theory going on - the attitude that 'I better get this patent before someone else does.'"

Tom Taulli is the author of a variety of books, such as the Complete M&A Handbook (Random House) and has his own firm, InvestorOffering.com.

In the midst of all the bad Microsoft news and yesterday's four-year low, it's worth asking the somewhat theoretical question: what premium does Microsoft's laudable and long-term commitment to basic research add to the long-term value of the stock? 

There's little question that MSFT has created a research establishment that's much in the mold of the early Bell Labs and Xerox PARC (more in a moment as to whether that's a good or bad thing): lots of pure academics hired from top universities who apparently have quite a bit of freedom to select research topics and to publish.  Here's a quote from a recent speech by Rick Rashid, the well-respected Microsoft head of research: "...we started investing in basic research at Microsoft 14 years ago...today we’ve grown to over 700 researchers worldwide. And to put that in perspective, that’s the equivalent of growing a major computer science department, like a Berkeley computer science faculty, a year every year for 14 years. And we’re expecting to double that rate of growth over the next two years. We believe that investing in basic research in Computer Science is critically important at this juncture."

But is it critically important to the value of the company?