News of the suit sent Vonage shares down 9% in early trading Monday. The stock has lost 48% of its value since its May 24 initial public offering.
"As a leading developer of VoIP technology, Vonage respects the valid intellectual property rights of others," Vonage said in a press release Monday. "Vonage believes that its services have been developed with its own proprietary technology and technology licensed from third parties and intends to vigorously defend the lawsuit. Vonage has not previously been notified by Verizon regarding the seven patents identified in the lawsuit and has engaged its outside intellectual property counsel to investigate the matter."
Early Monday, Vonage dropped 83 cents to $8.77 and Verizon rose 21 cents to $32.65.