BEDFORD, Mass.—Boston Communications Group Inc. settled its long-running legal dispute with Freedom Wireless Inc., agreeing to pay $55.3 million to the patent-holding firm.
The provider of prepaid billing software suffered a potentially fatal blow last year when a Massachusetts U.S. District Court ruled the company had infringed on two patents held by Freedom Wireless. Freedom was awarded $128 million in damages, and later BCGI was ordered to pay tens of millions of dollars more to cover additional revenues—sums that threatened to push the company into bankruptcy.
The $55.3 million settlement includes a $12.6 million prepayment for licensing fees under a new agreement. That sum is expected to cover BCGI’s royalties to Freedom through February of next year.
Freedom also agreed to drop litigation against BCGI’s carrier customers including Cingular Wireless L.L.C., Sprint Nextel Corp. and Alltel Corp. The operators had been named as co-defendants in the suit.
“We are thankful to be able to end this chapter in BCGI’s history,” Chief Executive Officer E.Y. Snowden said. “We believe (our) competitive position is dramatically enhanced” by the settlement.
BCGI’s stock skyrocketed on the announcement, increasing 96 percent, or $1.85, to $3.74 per share.
