February 9, 2005 12:31 PM PST

What's in a name? Plenty, says Vonage

AT&T has promised to never call its Internet phone service by any other name than AT&T CallVantage in order to settle a trademark infringement spat with competitor Vonage.

Rather than calling its service simply CallVantage, AT&T must now refer to the service as AT&T CallVantage, a Vonage representative said Wednesday.

An AT&T spokesman confirmed the settlement, adding that the operator considered the Vonage lawsuit frivolous because AT&T has always called its service that name. "I can't help it if the media shortens the name--they do that all the time," AT&T spokesman Gary Morgenstern said.

Vonage filed a trademark infringement lawsuit last year in U.S. District Court in New Jersey. The suit claimed that "CallVantage" sounded too much like "Vonage."

The settlement is part of an intense battle between Vonage and AT&T to lead the U.S. consumer market for services based on voice over Internet Protocol, or VoIP--software that turns a broadband connection into a phone line.

In the hands of commercial providers like Vonage and AT&T, VoIP is the backbone of unlimited calling plans available for a flat monthly rate that's typically $20 to $35 less expensive than service based on traditional phone technology.

In addition, providers like Skype and Free World Dialup allow for free calling between PCs running their software. These providers charge per-minute fees, however, for calls placed to traditional phone lines.

Vonage, which has more than 500,000 subscribers, is among the world's largest VoIP providers. AT&T has not revealed how many subscribers it has for AT&T CallVantage.

Analysts say the two companies are likely to duel for the top slot during the next few years.

 

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