Vonage fights patent suit by buying patents

July 10, 2006
In a tit-for-tat battle, Vonage today announced that it has acquired ownership of three patents from Digital Packet Licensing Inc. that enable voice over internet protocol technology (VoIP). The three acquired patents, U.S. Patent Nos. 4,782,485, 5,018,136 and 5,444,707, are directed to the compression of packetized digital signals commonly used in VoIP technology.

This acquisition of these VoIP patents is obviously in response to recent litigation by Sprint and also Verizon. I speculated that the rash of lawsuits by the carriers against Vonage, knocking Vonage's stock down even further, could be "sweet revenge" for bringing down their profit margins. But it could also be a precursor to a takeover of Vonage by Sprint or Verizon. The cheaper Vonage stock goes, the less money it takes to acquire them.

In any case, Vonage is claiming that this "acquisition of these three significant patents now places Vonage in control of pending litigation against Sprint Communications LP and Verizon Communications, among others, in federal court for infringement of one of these VoIP patents." We'll see.

As if on cue, Klausner Technologies, Inc. announced today that it has filed suit against Vonage Holdings, Inc. for patent infringement, with damages and royalties estimated at $180 million. The lawsuit asserts that the Vonage VoIP voicemail platform infringes Klausner Technologies' U.S. Patent. 5,572,576. Klausner Technologies filed a $200 million patent infringement lawsuit against America Online (AOL) before AOL gave in and licensed it for AOL Voicemail. I sincerely hope this isn't one of those "obvious" patents and Klausner Technologies isn't extorting money for obvious ideas. I hate patent trolls.

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