Verizon Calls Vonage On Patents

    June 19, 2006
    WebProNews Staff

Things just go from bad to worse for Vonage. On top of a tanked initial public offering (IPO) and a class action shareholder lawsuit, Verizon has filed a patent infringement lawsuit against the voice-over-internet protocol (VoIP) company in a Virginia federal court.

Vonage acknowledged the lawsuit on the Investor Relations portion of its website:

Vonage Holdings Corp. (NYSE: VG), a leading provider of broadband telephone services announced today that it has been served with a patent infringement lawsuit, along with its wholly owned subsidiary, Vonage America, Inc., filed by Verizon Services Corp. and Verizon Laboratories, Inc. relating to voice over the internet (VoIP) technology.

As a leading developer of VoIP technology, Vonage respects the valid intellectual property rights of others. Vonage believes that its services have been developed with its own proprietary technology and technology licensed from third parties and intends to vigorously defend the lawsuit. Vonage has not previously been notified by Verizon regarding the seven patents identified in the lawsuit and has engaged its outside intellectual property counsel to investigate the matter.

A PDF copy of the complaint can be found here. ZDNet blogger Russell Shaw gives a brief breakdown here. Verizon says Vonage has violated patents associated with Internet to telephone network routing, billing, fraud detection, voicemail, and caller ID.

Verizon will have to get in line to sue Vonage, though. Vonage is already facing a patent infringement from Sprint Nextel and a class action suit from shareholders alleging the company misled investors prior to the sale of its IPO.

Shares in Vonage debuted at $17.25 before the market informed them they were overpriced, dropping the price per share 30 percent in the first week. As of 5:13 PM today, Vonage shares are down over 50 percent to $8.48.