Verizon sues Vonage over VoIP

By Steve Malone

Posted on 20 Jun 2006 at 10:48

You know that a technology is about to take off in a big way when the patent lawsuits start to fly. So it is with VoIP. Vonage Holdings has admitted that it has been served with a patent infringement lawsuit, along with its wholly owned subsidiary, Vonage America, filed by Verizon Services and Verizon Laboratories relating to VoIP technologies.

The disputed technologies include gateway interfaces between a packet-switched and circuit-switched network, call forwarding and voicemail, billing and fraud detection, and methods related to WiFi handset usage in VoIP.

In a statement Vonage said, '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.'

The news was badly received on Wall Street. The Vonage stock was launched at around $17 just a month ago and since then has drifted down steadily. Following the announcement today, Vonage shares fell over nine per cent to close at $8.69.

Last year Sprint-Nextel Corp filed a patent infringement lawsuit against Vonage, also over VoIP technology. Earlier this year Google was sued over patent infringement for the VoIP technology in Google Talk.