Sprint & Verizon to ride the patent gravy train

Sprint Nextel and Verizon Communications both see an opportunity to make a buck on their IP telephony patents after successfully suing Vonage Holdings last year.

On Thursday, Sprint Nextel said in a U.S. District Court in Wichita, Kan., that it was suing four small phone companies. Sprint alleges that Nuvox Communication, BroadVOX Holdings, Big River Telephone, and Paetec Communications are infringing on six of its patents.

Those patents, part of a larger portfolio of patents that cover voice over IP technology owned by Sprint, are the same ones used to successfully sue Vonage. The two companies eventually settled the dispute last year. And Vonage agreed to pay Sprint a total of $80 million, which includes $35 million for past use of the license, $40 million for a fully paid future license, and $5 million in prepayment for services.

Verizon Communications, which won a $120 million settlement from Vonage last year, is also asserting its patent claims. Earlier this month the company filed a suit in the Eastern District Court of Virginia against cable operator Cox Communications for infringing on eight patents that had to do with voice over IP technology. Two of the patents in the Cox case are the same ones Verizon successfully sued Vonage for infringing.

Since Sprint and Verizon have already successfully asserted these patents, it certainly strengthens their new cases. And it's very likely the companies will either win in court or be able to pressure these companies and any other VoIP providers into licensing deals.

This is very good news for Sprint, which would benefit greatly from turning its existing patent portfolio into a cash cow. The beleaguered cell phone carrier has been bleeding customers and is in desperate need of new revenue growth to boost earnings.