Verizon has claimed in a complaint to a Virginia court in the US
that Vonage has violated at least seven of its patents, including
those relating to connecting internet calls with traditional
networks. Vonage said it will fight the claims.
The dispute adds to Vonage's woes. The US VoIP firm went public
in May and has been the US markets' worst initial public offering
(IPO) performer this year. Shares which were listed at $17 have
fallen by 44% in total, and dipped by 11.7% to $8.48 on the
announcement of the Verizon case.
In a case which is expected to last over a year, Vonage will
have to defend itself against its more established competitor. It
is also defending nine class action law suits in relation to its
stock market flotation.
The lawsuit does not demand that Vonage immediately halt its
services, asking the court to halt the use of the alleged patented
technology only if Verizon wins its case.
"Vonage respects the valid intellectual property rights of
others," said Vonage in statement. "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,"
said the company.
The suit over the seven patents comes from Verizon Services Corp
and Verizon Laboratories Inc.
Vonage was an early pioneer of VoIP telephony, but analysts have
put the falling share price down to increasing competition from
bigger operators. Traditional telcos are now spending heavily to
launch their own companion VoIP services, and analysts fear that
Vonage may not be able to compete with such renowned brands.
"I'm getting more and more concerned," Pali Research media
analyst Richard Greenfield told The New York Times. "It
increasingly feels like the competitive dynamics are getting more
severe."
