IP Democracy: VoIP Companies Hit with Lawsuits

As I called it, Vonage has been hit with its first class-action lawsuit (the suit was filed Friday but I didn’t know that when I predicted the lawsuit on Saturday). Filed in the U.S. District Court in New Jersey, the suit alleges that Vonage tried to compensate for a lack of sophisticated institutional investors by pitching its stock directly to customers.

According to the complaint, securities law “requires that a company recommending the purchase or sale of its securities to a customer must have a reasonable basis for believing that the recommendation is suitable for the customer.” The suit doesn’t mention another SEC violation that Vonage may have committed — its failure to link to a prospectus from the emails or voice mails it sent to customers. But just give it time…a suit accusing Vonage of unlawful activity in this regard is no doubt on the way.

Meanwhile, VoIP company Net2Phone also filed suit last week in the U.S. District Court in New Jersey, only this complaint was filed against another VoIP pioneer, Skype. Net2Phone is accusing Skype of infringing on one of its key VoIP patents that it received in August 2000. Net2Phone is seeking a permanent injunction plus damages.

Posted by Cynthia Brumfield on June 5, 2006 4:31 PM to IP Democracy