VoIP Systems

AT&T Sues Vonage

Vonage Holdings Corp. (NYSE: VG) is being sued yet again, as the company announced late last Friday that it is involved in yet another patent dispute, this time with AT&T Inc. (NYSE: T).

In this case, Vonage is being charged with violating U.S. Patent No. 6,487,200. Titled "Packet Telephone System," the patent describes how calls are compressed into data form in short packets.

That makes three major carriers to kick Vonage when its down. Verizon Communications Inc. (NYSE: VZ) was the pioneer back in March when it sued Vonage for $58 million for violating three technology patents. Vonage was found guilty by a U.S. District Court and later lost its appeal. One of those patents in question was remanded to the district court and is still pending a decision. (See Vonage Ordered to Pay $58M to Verizon and Vonage Loses Verizon Appeal.)

Separately, Vonage settled a patent dispute with Sprint Corp. (NYSE: S) for $80 million. (See Vonage Soars on Sprint Settlement.)

Vonage's stock fell nearly 20 percent in after-hours trading last Friday, and shares were down 15 cents (9.8%) at $1.39 in late morning trading today.

While the lawsuits can hardly be considered good news, Vonage appears well prepared to deal with its situation, as it has more than $300 million in reserve cash as of June 30.

— Raymond McConville, Reporter, Light Reading

paolo.franzoi 12/5/2012 | 3:00:21 PM
re: AT&T Sues Vonage
That would be the result of the deal - of course what happens is that the value of IP ATT minus value of IP Vonage becomes the basis of the exchange.

When you can not reach agreement on this basis, you go to court.

slayer666 12/5/2012 | 3:00:21 PM
re: AT&T Sues Vonage Are the big telco's not acting as a combine here to crush the low cost incumbent? Granted they are hiding behind IP patent portfolios, but they simply cross license each other and agree not to sue. Why not grant Vonage the same cross license? I'm sure Vonage has some IP in the area...

My 2 cents.

rjmcmahon 12/5/2012 | 3:00:19 PM
re: AT&T Sues Vonage The ILECs have pretty much beaten previous generations in their creation of FTC and FCC, not that that was too hard with the current "free market" ideologues holding "public service" offices. They've also beaten the 1996 Telco Act and those attempts at creating local loop competition. So, I don't think VG stands a chance - not that they ever were anything more than a Wall Street con and/or being used as a strawman by federal regulators claiming a "functioning market" in access networks services.

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