Vonage Racks Up Another Patent Suit

Nortel Networks Corp. (NT) is finally catching up with some of its telecommunications industry brethren -- by suing Vonage Holdings Corp. (VG) Following Verizon Communications Inc. (VZ), Sprint Nextel Corp. (S) and AT&T Inc. (T), the Canadian telecom equipment maker is filing suit against the online telephony provider for allegedly infringing its patents. Nortel filed its suit in the U.S. District Court in Delaware on Friday in an attempt to counter a three-year-old lawsuit filed against it by Digital Packet Licensing. Vonage bought Digital Packet Licensing in 2006 and continued the infringement lawsuit against Nortel.

In afternoon trade Vonage shares, which have been rocked this year by the patent litigation, were down 1.5% to $2.02. The company has spent about $240 million to settle the suits. Despite the turmoil and reporting a net loss in its most recent quarter, Vongage did generate positive cash flow in the period for the first time ever. Perhaps Vonage should focus more on its operations than legal battles.

See Dec. 17 post from News.com

See Nov. 8 story from TheDeal.com($$)

See Dec. 16 post from Blogging Stocks