Vonage filed the suit in March 2004 shortly after the launch of the new service, claiming that the brand name and certain web addresses purchased by AT&T were too similar to its trade marks. They might confuse potential Vonage customers, alleged the suit.
According to reports, AT&T, which recently announced that it is to be taken over by its spin-off, SBC Communications, in a $16 billion deal, must now call the service "AT&T CallVantage".
This, says the telco, has always been the official brand name of the service.
"I can't help it if the media shortens the name – they do that all the time," AT&T spokesman Gary Morgenstern told CNET News.com.
Other details of the settlement were not disclosed.