Another Lawsuit Filed against Vonage

By Rev2 Team October 21st, 2007

AT&T Inc has filed a lawsuit against Broadband telephone service provider Vonage Holdings. “Infringement of patent” has been cited as the key subject for the lawsuit by AT&T which is apparently the third telecom company to have taken this action Vonage.

According to AT&T spokesman they had been looking to settle issues with Vonage for quite sometime since the last couple of years. However, AT&T failed to negotiate with Vonage over reasonable licensing agreement.

On the other hand Vonage mentioned that they were on the lookout for negotiations as according to them litigation is not a solution for dispute settlement.

The incident happened on Wednesday when AT&T had approached Wisconsin federal court with claims of enabling users access an Internet phone system through a normal telephone.

The lawsuit filing is definitely come across as a big shock for Vonage and its stock had gone down by 13 cents to $1.54 the following afternoon. The biggest problem for Vonage is that it has lost two major patent lawsuits before this lawsuit. Last time Verizon was involved and Vonage was ordered to pay $66 million and a 5.5% royalty fee. The initial appeals which barred Vonage from using Verizon patents have been upheld. However, one of them has been sent back for a detailed review.

The other lawsuit in question is with Sprint Nextel, where Vonage paid about $80 million for agreements involving use of past and future patents regarding connection of phone calls over Internet.

The series of recent events have badly tarnished Vonage’s image and has effected its customer base. Perhaps that’s why Vonage spokesman mentioned that improvement in quality of customer service and maximization of shareholder value is the key for them.

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