The two sides came to terms on Thursday, sending Vonage stock up 60% to $2.34 a share Friday morning. Previously, Vonage had settled patent litigation with Sprint Nextel and now its patent suit with AT&T is its only remaining major intellectual property dispute.

The precise amount that Vonage will be obliged to pay Verizon is still in limbo, however, because it will be determined by the U.S. Court of Appeals for the Federal Circuit.

The final amount will be capped at $32 million, Vonage said, noting that it has already earmarked $88 million, which has accrued and held in escrow. Verizon had initially cited three of its patents that it claimed were being infringed by Vonage.

"We're pleased to put this dispute behind us and believe this settlement is in the best interests of Vonage and its customers," said Sharon O'Leary, Vonage chief legal officer, in a statement. "This settlement removes the uncertainty of legal reviews and long-term court action and allows us to continue focusing on our core business and customers."

A Verizon unit instituted the legal action against Vonage in June of 2006 and in March 2007 a jury held that Vonage infringed the three Verizon patents.

Earlier, Vonage had settled its patent litigation with Sprint Nextel for $80 million. However, the VoIP pioneering firm still is faced with a patent suit filed recently by AT&T. Both firms claim they have been trying to settle the dispute amicably since 2005.

Vonage offers several different VoIP plans; its standard offering is about $25 a month.