Question

The Internet phone company Vonage Holdings faced twoseperatepatent infringement lawsuits initiated by Verizon and Sprint Nexteldue to the technology used to provide Web-based communicationservices for its customers. The threat to Vonage's viability wassever, given its narrow business focus and relatively shortbusiness life. Verizon and Sprint Nextel are much larger and betterestablished companies. A. What is a patent, and how is it accountedfor on Verizon's and Sprint Nextel's financial statements? B. Wheremight a financial statement user find evidence of the suit onVonage's finanical statements, how might it account for this suit,and how might Vonage's external auditors react to thissituation?