Vonage Wins One, but the Future Still Is Bleak

Carl Weinschenk

It's win one, lose one for Vonage as it fights what increasingly appears to be an uphill battle for its life in the shadow of its defeat by Verizon in a patent suit last month.


Initially, Verizon -- which last month had three patents upheld before the U.S. District Court in Alexandria, Va. -- was granted an injunction that would have stopped Vonage from signing up new customers while an appeal was heard. This week, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., granted a permanent stay of the injunction. Vonage can sign up new subscribers if it posts a bond of $66 million and pays 5.5 percent of royalties into an escrow account.


That's the good news. The bad news is that claims it had a workaround to the Verizon patents were, shall we say, a bit exaggerated. Court filings paint a different picture: Such workarounds are at best "many months" off and may be altogether impossible to create, NewsFactor reports.


The bottom line is that Vonage remains in serious jeopardy. While not granting the stay could have been crippling in the short-term -- perhaps even a knockout blow -- the idea that the service provider may be depending on a reversal of the initial verdict or the licensing of technology from a competitor to stay in business casts almost as big a pall over the Vonage's prospects.

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