U.S. Patent 6,487,200: Method for Eliminating Struggling VOIP Rivals
Unlimited local and long-distance calls aren’t the only things Vonage is selling at a steep discount these days–check out its stock. Shares of the Internet phone company, which went public in May 2006 at $17, are this morning trading at $1.32, down 14.29% on news that AT&T has filed a patent-infringement lawsuit against it.
In a filing with the U.S. District Court for the Western District of Wisconsin, the telecom accuses Vonage of willfully infringing upon a single AT&T patent: No. 6,487,200, which describes, broadly, a system for routing telephone calls over data networks. From the abstract:
A packet telephone system which employs a packet network that provides virtual circuits. The packet telephone system employs short packets containing compressed speech. The use of the short packets makes possible compression and decompression times and bounded delays in the virtual circuits, which are together short enough to permit toll-quality telephone service. The packet telephone system employs an intelligent network interface unit to interface between the packet network and standard telephone devices. The network interface unit does the speech compression and decompression and also responds to control packets from the packet network. Consequently, many telephone system features can be implemented in the network interface unit instead of in the switches. The network interface unit may also be used to provide data connections to devices attached to it. The combination of virtual circuits, with bounded delays, short packets, rapid compression and decompression, and intelligent network interface units makes it possible to build a telephone system with fewer and cheaper switches and fewer links for a given volume of traffic than heretofore possible and also permits substantial savings in provisioning and maintaining the system.”
Seems a bit broad, but now that Sprint Nextel and Verizon have proved you can win a jury verdict on such claims, AT&T would have been foolish not to sue. And, to be fair, the company claims it sued only after it failed to negotiate a “reasonable licensing arrangement” with Vonage. “We were forced to file a lawsuit,” said an AT&T spokesman.
In a statement, Vonage vowed to continue negotiations. “It’s our preference to settle disputes through negotiation rather than litigation,” said Vonage chief legal officer Sharon O’Leary. “We will continue to work toward an amicable solution.”