Monday, October 29, 2007

Patent disputes rarely end up helping charities, but two local organizations could get sizable donations from the resolution of a year-long legal battle between Verizon and Vonage.

As part of the settlement reached last week between the two companies, a total of $2.5 million will be given to five educational nonprofit organizations, two of which are based in the District.

The Washington Center for Internships and Academic Seminars and the Bishop John T. Walker School for Boys could each receive $500,000. The National Academy Foundation, a New York-based organization that promotes career development in urban schools and has a presence in the District, may also receive $500,000.

In June 2006, Verizon sued Vonage, claiming infringement of their patents relating to Internet phone service. Last month, an appellate court upheld a previous decision that found Vonage had infringed two of Verizon's patents. Vonage filed for a rehearing of the case.

The money for charities is not a sure thing, according to the settlement. If Vonage loses its rehearing on either of the patents in question, it will pay $120 million, including $2.5 million for the charities. If it wins, it will pay Verizon $80 million, and nothing will go toward charities.

Both companies said the idea of giving money to charities came up during settlement negotiations. Such donations are rarely used as bartering tools in litigation, said Carl Tobias, a law professor at the University of Richmond.

"Maybe Verizon is indifferent to the money," he said. "Just as long as it can extract as much money as it can from Vonage, they seem happy to give it to charity."

The Verizon Foundation, which gave nearly $70 million in grants to nonprofit groups last year, picked the organizations. Other recipients include Jobs for America's Graduates and the Inner-City Scholarship Fund of New York.

James R. Woody, project director of the Bishop John T. Walker School for Boys, learned of the potential donation after the settlement was reached. The school targeting low-income and minority students in Southeast Washington will open next fall to prekindergarten students, adding an additional grade each year up to eighth grade. The school will need $5 million over the next five years, Woody said.

The settlement money would go toward the $1 million needed to remodel an old church that will house the school. John T. Walker was the first African American bishop of the Episcopal Archdiocese of Washington. He died in 1989.

"We're trying not to count on the money yet, but it would be very helpful," Woody said.

-- Kim Hart