AT&T embraces let's-sue-Vonage fad

Yet another big-name telco has sued Vonage for patent infringement.

This time, it's AT&T putting the screws to the plucky voice over IP provider. The erstwhile Ma Bell filed suit last week in a Wisconsin-based federal court, insisting that Vonage is violating its patent for a "wide-area packet telephony system."

The new suit arrived just days after Vonage forked over $80m to settle a patent infringement case with Sprint Nextel, and the company continues to battle a third suit from telco behemoth Verizon.

In March, after a federal judge ruled that Vonage had infringed on a trio of Verizon patents, the New Jersey-based VoIP provider was ordered to pay $58m in damages, but the case is still in legal limbo. Earlier this month, Vonage filed a motion asking for a full review of the case by the US Court of Appeals.

The company has already pieced together workarounds for the portions of its VoIP technology that allegedly infringe Verizon's patents, but it's still facing a hefty pay off for past infringement.

Meanwhile, AT&T is waving just the one patent, first filed back in 1996 and officially rubber stamped in November 2002. Awarded to AT&T's former chief scientist, Alexander Fraser, it describes a packet-based networking system that uses "short packets containing compressed speech" as well as "a network interface unit" that ties into standard telephone devices.

Yes, you can patent such a thing.

A Vonage spokesman told us that the company has been in discussions with AT&T "for some time" over the patent, and it still hopes to settle the matter out of court. "Our preference is to settle suits with negotiation wherever possible," said Charles Sahner, "and we will continue to work towards an amicable settlement with AT&T."

Yes, that means the company may settle with Verizon as well. "We're talking to lots of companies about lots of different things," Sahner continued. "We are going to explore all options available to put the Verizon litigation to rest. Again, an amicable settlement would be preferable."

Can the company survive not one, not two, but three big-money settlements? Only if you take pity and sign up for its dirt-cheap VoIP service. ®