AT&T sued the company, accusing it with using packet-based telephony products, which allows voice conversations to be carried over the Internet, based on products that use technology covered by AT&T patents.
Vonage did not disclose the nature of the settlement, which it said occurred on November 7. The settlement was finalized on Friday , Reuters reports.
On June 19, 2006, Vonage acknowledged that Verizon filed a lawsuit charging that Vonage infringed on five of Verizon's patents related to its VoIP service. The patents 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. Verizon is using this technology in its own VoIP service called VoiceWing.
In a statement, 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. There are concerns that if the patent infringement issue is not resolved Vonage could be forced into bankruptcy.