Another settlement from Vonage in its saga with AT&T, Sprint and Verizon:

Vonage on Thursday announced it has settled a protracted patent lawsuit with telecom giant Verizon Communications that will cost the struggling VoIP firm a maximum of $120 million.

Ahead of the announcement, Vonage shares slid 7 cents a share, or four percent, to $1.53 a share before storming up $1.22 a share, or 80 percent, to $2.75 a share in after-hours trading following the news.

In March, a Virginia jury found Vonage had infringed on three Verizon patents and awarded the company $58 million in damages plus a royalty on future sales of its Internet-based telephone service. In September, an appeals court sent the remaining two patents in dispute back to a lower court for retrial.

Vonage had already set aside a $66 million cash-collateralized bond, a $12 million second-quarter escrow payment and a $10 million third-quarter escrow payment to cover the initial damages awarded to Verizon in March. While the Court of Appeals weights the merits of the two remaining patents, identified as ‘574 and ‘711, Vonage has effectively capped its maximum exposure to damages at $120 million. If Vonage wins a rehearing on either of the remaining patents in dispute, it will only pay a total of $80 million in damages to Verizon.