Network Apps LLC has sued AT&T for at least $1.35 billion for allegedly stealing its patented technology after AT&T abandoned joint development and licensing agreements in 2014, according to Reuters.
In a statement to The Hill, AT&T (T) acknowledged the lawsuit and said that pending a review, it would respond to the allegations in court.
AT&T is accused of stealing Network Apps’ “twinning” technology, which allows smart watches and tablets to respond to phone calls. According to Reuters, AT&T abandoned a joint development agreement with Network Apps after realizing that it would owe “a fortune” in royalties, but a year later, incorporated the same technology into its own product, NumberSync.
NumberSync allows wireless customers to use one telephone number to send and receive calls and texts across all of their supported devices. It is free to AT&T subscribers and is compatible with all Apple and Android devices, including Alexa and wearables.
Reuters has discovered that Network Apps is seeking at least $450 million in damages but has asked that this figure be tripled to reflect AT&T’s “willful and egregious infringement.” (See T stock analysis on TipRanks)
Raymond James analyst Frank Louthan upgraded his rating on AT&T to a Buy from a Hold three weeks ago, setting his price target at $32. This implies upside potential of around 8% from current levels.
Louthan points out the difficulty in finding large-cap value names and given that AT&T shares have been heavily shorted, Louthan believes that investors could benefit from a mean reversion in price.
Consensus among analysts is a Moderate Buy based on 6 Buys, 4 Holds and 2 Sells. The average price target of $31 suggests upside potential of around 4% over the next 12 months.