June 19th, 2006
And now this: Verizon sues Vonage for patent infringement: what's the deal?
Already busy fielding nine shareholder class-action lawsuits related to its IPO, Vonage has just been served with a patent infringement lawsuit from Verizon units Verizon Service Corp. and Verizon Laboratories.
The suit alleges that Vonage has infringed on seven VoIP-related patents held by Verizon.
Vonage said in a statement it believed its services had been developed with proprietary technology and technology licensed from third parties, and the company intended to "vigorously defend the lawsuit."
Update: "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 company says.
Fellow VoIP blogger Tom Keating sees revenge in the air.
"What sweet revenge Verizon could have simply by hurting Vonage’s stock whether or not the lawsuit has any merit," Tom writes. Vonage more than any other VoIP company is responsible for bringing <$30/month unlimited voice calling to residential homes which absolutely killed the RBOCs profit margins - forcing them to price match and get into the VoIP game much sooner than they would have liked.
Tom thinks it is possible that AT&T- and maybe even other telcos - could sue Vonage next.
"Certainly the phone companies have "deep pockets" to hurt Vonage," he writes. "A few more hits to Vonage stock by the carriers using lawsuits will certainly bring utter glee to the boardrooms of the large carriers. Revenge is a dish best served cold…
Vonage investors are singing "Monday, Monday can’t trust that day.." At 10:45 a.m. the stock was $8.92 (after a reactive morning low of $8.56).
Stay tuned. More to come…
Russell Shaw is an enterprise computing journalist, analyst and author based in Portland, Oregon. See his full profile and disclosure of his industry affiliations.
