Verizon sues Vonage for VoIP patent infringement

Verizon says the newly public Vonage has infringed on seven of its Internet telephony-related patents.

The bad news for Internet phone provider Vonage keeps piling up, as the company now faces a patent infringement lawsuit from telephone giant Verizon Communications.

On Monday, less than a month after the company's disappointing debut on the New York Stock Exchange , Vonage acknowledged that Verizon, the second-largest phone company in the United States, has filed a lawsuit charging that Vonage infringed on seven of its patents related to its voice over Internet Protocol, or VoIP, service.

Verizon's complaint was filed last Monday in a U.S. District Court in Virginia. It alleges that Vonage infringed on patents held by Verizon that describe technology for completing phone calls between VoIP users and people using phones on the traditional public switched network, authenticating VoIP callers, validating VoIP callers' accounts, fraud protection, providing enhanced features, using Wi-Fi handsets with VoIP services and monitoring VoIP caller usage.

Vonage's service uses software that turns voice signals into packets and then transmits them over broadband connections, essentially turning any Internet connection into a telephone line. Verizon sells a similar service, called VoiceWing .

In a statement released Monday, Vonage said "its services have been developed with its own proprietary technology and technology, licensed from third parties." The company also said it would "vigorously defend (against) the lawsuit." Vonage said it hadn't been previously notified by Verizon that the company thought it was infringing on its patents.

Verizon acknowledged that it had filed the complaint, but a company representative declined to comment further. The representative also would not clarify whether the company is looking into filing lawsuits against other VoIP providers.

The lawsuit comes shortly after Vonage's disappointing stock market debut. The company lost nearly 30 percent of its value in the first week of trading. The Internet telephony provider has also been gearing up to defend itself against several investor lawsuits . Shareholders allege that the company misled them and created artificial demand for the stock.

News of the Verizon lawsuit sent shares of Vonage down $1.03, or 8.13 percent, to $8.22.

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