Verizon is claiming in a suit that Vonage has stolen its patented voice-over-IP (VOIP) technology and is asking the court to prevent Vonage from continuing to do so.
The filing is the latest legal headache for Vonage, while being choked by class-action suits from customers who claim Vonage violated stock security rules.
If Verizon prevails, Vonage would have to pay royalties to the phone service provider, find another way of providing its service or risk going under and shutting its doors (like so many others), surprise, surprise.
Verizon is not just claiming that Vonage has infringed on patents allowing to offer value-added services; it is arguing that Vonage has stolen the "technology" of the business. Please someone help me understand this!
Verizon cited several instances of infringement, including inventions relating to, "gateway interfaces between packet-switched and circuit-switched network, which is critical to implementing commercially-viable VoIP telephony." Other patents named in the suit include solutions for fraud detection, services such as call forwarding and voicemail, and methods relating to the use of wireless handsets over a VoIP network.
The lawsuit comes like an unwanted muscle-cramp (out of nowhere!!) for Vonage. In a statement released today, Vonage noted that it was not confronted by Verizon before the suit was filed. This to me is surprising.
Bobbi Henson, media relations director with Verizon, told internetnews.com that she couldn't comment beyond the words of the filing itself.
In the filing, Verizon noted that Vonage has gained 1.1 million new customers in the last 15 months, "many of whom are Verizon's former customers."
The complaint also noted that Vonage scooped up 350,000 new subscribers in the first quarter of 2006 alone, and has spent over $400 million on advertising and marketing since its inception -- all of which it found in the May 24, 2006 filing.
Verizon also claims in the suit that Vonage has no patents or intellectual property of its own. But Vonage countered that its services "have been developed with its own proprietary technology and technology licensed from third parties."
Verizon is asking the court for damages, in addition to a "permanent injunction... restraining and enjoining Defendants" from "making any further sales or use of their infringing products and services."
Vonage said that it would "vigorously defend the lawsuit."
Just like in my post of Mitel suing ShoreTel, I have the exact same opinion - play fair, there is enough for everyone.
Shares of Vonage fell almost 12 percent on the news, while those of Verizon lost just 1 percent, in line with the rest of the market.
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