Universal to Pay SoundBite $4.6 Million in Suit Settlement

Communications technology provider SoundBite Communications announced late yesterday that Universal Recovery Systems will pay it $4.6 million as part of a settlement of suits the two firms had filed against each other.

Investors saw the settlement as major victory for SoundBite (Nasdaq: SDBT) sending its stock up more than 9 percent in midmorning trading to $3.80.

As part of the settlement, SoundBite won worldwide, perpetual rights to several Universal Recovery patents that relate to whether the right party is on a phone call. The two firms also agreed to dismiss remaining parts of the lawsuits they had filed against each other.

Universal owns the patent to the Right Party Contact Solution, a system designed to maximize right party contacts. SoundBite is a provider of on-demand, integrated communications systems for call centers.

The suits arose last year as SoundBite prepared its initial public offering in October. According to Seeking Alpha analyst Chris Fernandez, Universal sent a letter to SoundBite indicting that its technology might infringe on Universal’s current and pending patents. Within a week, Universal filed a statement that there was no infringement.

Still, the confusion apparently caused SoundBite to delay its IPO and lower its offering price from $12 to $14 a share to $8 a share, Fernandez writes. Suits and counter suits followed.