Net2Phone and ADIR sue Cisco over VoIP

Net2Phone and its subsidiary ADIR Technologies have filed a lawsuit against Cisco Systems seeking compensatory and punitive...

Net2Phone and its subsidiary ADIR Technologies have filed a lawsuit against Cisco Systems seeking compensatory and punitive damages for breach of contract, the charging companies said yesterday.

Net2Phone, a provider of services for voice phone calls over the Internet, and ADIR, which makes voice over Internet Protocol (VoIP) software, claim network hardware giant Cisco breached a contract with Net2Phone, stole trade secrets, engaged in fraud and unfair competition and breached fiduciary duties.

ADIR was set up by Net2Phone and Cisco two years ago to make ADIR's software compatible with Cisco's hardware and also to 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 $700m (£491m) in total damages, The Wall Street Journal reported. In contrast, Net2Phone's market capitalisation was about $316m.

Nobody at Cisco was immediately available for comment. However, a Cisco spokesman told The Wall Street Journal and other media outlets that the lawsuit "appears to be an effort to justify a business failure by filing a lawsuit."

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