Boston Pops

Boston Communications (BCGI Quote) doubled Friday after the wireless back-office shop settled a patent dispute that had threatened to drag it into bankruptcy court.

The Bedford, Mass., company agreed to pay $55 million to settle a patent suit brought by Freedom Wireless. The dispute centered on a prepaid wireless billing system Boston has sold to big carriers like Cingular.

A court ruling in 2005 handed Freedom a $128 million damage award. Boston said at the time that the ruling could put it out of business if upheld.

"In terms of prepaid subscribers served, this license agreement makes bcgi the largest Freedom Wireless licensee," CEO E.Y. Snowden said. "We believe that the protection this license affords our customers will allow future pricing to accommodate the cost of the royalties. With our license of these patents, and our industry leading real-time billing features, performance and flexibility, we look forward to reinforcing our prepaid wireless leadership as the segment continues to grow."

Boston said it had previously accrued a $64.3 million estimated loss related to the Freedom litigation. While the company is still evaluating the accounting treatment relating to the payments and obligations of the settlement and license agreements, for the quarter ended June 30, 2006, Boston expects to reverse a portion of the previously recorded loss, resulting in a net gain to operating income to reflect the amount of settlement related to past damages.

The company also said the staff of the Securities and Exchange Commission had contacted it by telephone regarding an informal inquiry relating to certain option grants made between 1998 and 2002. An internal review shows possible backdating but is ongoing.

Boston jumped $2.09 Friday to $4.01.