Vonage AT&T Battle Ends

Boston (dbtechno) - The use of proprietary information by the Voice Over Internet Phone (VoIP) company Vonage has been in dispute with AT&T. That appears to be settled.

Vonage announced late Friday that it had reached a settlement with AT&T over the use of patients held by the phone giant. Vonage is not admitting liability, but it says that a settlement has been reached.

The phone business is very competitive, and Vonage is a relative newcomer. It does not have phone lines of its own, but uses a computer router and phone modem set up to send voice telephone calls over the Internet. Using other firm’s infrastructure and the Internet network itself has led to explosive growth on the part of Vonage the last two years.

Until AT&T stepped in. They filed suit in Oct 2006 claiming that Vonage violated certain processes and patents.

The lawsuit was a final effort by AT&T. Initially both companies were negotiating but then talks broke down in September and early October, leading to the filing of the lawsuit. Precise terms of the final settlement are not known, but earlier figures quoted by both firms were in the $340 million dollar range.

Being the upstart new kid on the block makes one a target, and Vonage has been no exception. It settled several lawsuits regarding patent infringement over the last two years, including rivals Sprint Nextel, and Verizon phone companies.

Often it has taken going to court to get Vonage to settle. The settlement with Verizon is thought to be between eighty to one hundred twenty million dollars. As part of its settlement, Spring Nextel will be selling licenses to Vonage for use of their technology in Vonage phones.

In its announcement, Vonage stated the settlement was for an undisclosed amount, and settlement was reached on November 7th, and finalized last Friday.