SunRocket, whom most thought was dead and buried, has reached out from the grave and grabbed Vonage by the neck – with a lawsuit alleging that the pure-play VoIP carrier has misappropriated the list of its former customers. It also now turns out that Vonage was, unsuccessfully, in talks to buy SunRocket before the poor thing imploded.
As if Vonage didn’t already have enough legal troubles – what with the appeal of its patent lawsuit loss versus Verizon and its forthcoming trial on charges of trampling Sprint patents – the SunRocket suit is the last thing the beleaguered VoIP house needs. A ruling on the Verizon appeal is expected imminently.
In papers filed in Delaware Chancery Court by SunRocket LLC (LLC is apparently a previously unknown holding company created to care for the assets of what used to be SunRocket Inc), Vonage is charged with, among other things, breaching a confidentiality agreement it signed during negotiations to buy SunRocket, or at least its assets. And the most valuable of those assets, most believe, was the customer list.
“SunRocket and Vonage entered into a confidentiality agreement for the purpose of allowing Vonage to conduct due diligence for potentially entering into a business transaction, such as the acquisition of SunRocket or its assets by Vonage,” the lawsuit discloses those talks, without detailing either why they broke down or what terms were being discussed. SunRocket, in the lawsuit, calls the customer list “one of its single most valuable remaining assets,” so although there’s no confirmation its considered a safe bet that was primarily what Vonage was negotiating to buy.
A few weeks after the talks ended SunRocket, with essentially no notice, shut down operations (TelecomWeb news break, July 16). In place of the deal with Vonage, 48 hours after announcing the shut down Sherwood Partners, the California outfit handling the disposal of SunRocket assets, said it had cut deals with VoIP houses 8×8 and USA Telecom under which the two were named as the “preferred” carriers for SunRocket subscribers to migrate to.
Nonetheless, SunRocket subscribers were free to move to any VoIP carrier of their choice and most in the industry rolled out the red carpet with special offers in hopes of snagging some of the estimated 200-220,000 customers that SunRocket was abandoning. Barely a week after SunRocket imploded, Vonage was reported to have snagged 15,000 of its subscribers (TelecomWeb news break, July 27).
It’s not clear whether Vonage had the SunRocket subscriber list at that point, but Vonage has publicly admitted that it does currently have a copy of the list. It says that it bought it from a list marketing house ParadyszMatera, rather than getting the list as a result of the talks with SunRocket. Thus, Vonage reasons, the list isn’t covered by the confidentiality agreement. Just where and how ParadyszMatera, which has yet to comment on the entire situation, got the list is unknown. Vonage is insisting that it was told the list was obtained legally.
SunRocket, claiming that use of the list is creating “immediate and irreparable harm and injury,” is asking the court to order Vonage to return the list and pay it as yet unspecified damages.