Net2Phone, ADIR sue Cisco over VOIP technology

By Joris Evers, IDG News Service

March 20, 2002 12:00 PM ET

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IDG News Service - Net2Phone Inc. and its subsidiary ADIR Technologies Inc. have filed a lawsuit against Cisco Systems Inc. seeking compensatory and punitive damages for breach of contract, the charging companies said yesterday.
Newark, N.J.-based Net2Phone, a provider of services for voice phone calls over the Internet, and ADIR, which makes voice over IP (VOIP) software, claim that network hardware giant Cisco breached a contract with Net2Phone, stole trade secrets, engaged in fraud and unfair competition and breached fiduciary duties, the companies said in a statement.
ADIR was set up by Net2Phone and Cisco two years ago to make ADIR's software compatible with Cisco's hardware and to ultimately develop a "highly marketable" product for voice communication over the Internet. However, Cisco "seriously misinterpreted" the relationship, failed to support the project and produced its own competing product, according to Net2Phone and ADIR in their suit.
Net2Phone could seek as much as $700 million in total damages, The Wall Street Journal reported, based on comments from a person familiar with the lawsuit. By contrast, Net2Phone's market capitalization was about $316 million yesterday.
Cisco spokesman Stephen Langdon said, "This appears to be an effort to justify a business failure by filing a lawsuit."
The suit was filed in U.S. District Court for the District of New Jersey.
Linda Rosencrance of Computerworld contributed to this report.
Related stories:

Yahoo to charge for PC-to-phone calls through messaging service , May 7, 2001

Yahoo launches new voice services, Oct. 10, 2000

AOL deals to give users phone access, Nov. 23, 1999

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