Vonage, a voice over IP provider facing a patent infringement lawsuit from Verizon Communications, won a permanent stay of a previous injunction, which means it can carry on to conduct business as usual and it can resume adding new customers. A federal appeals court ruled on Tuesday that Vonage Holdings, the leading Internet telephone provider, can continue doing business as usual while it seeks to reverse a lower-court ruling that it infringed on three patents held by Verizon.
An attorney for Vonage, requested the court that the firm in question facing an apparent threat of insolvency if expelled from selling its service to new customers, as a lower court ordered earlier this month. He asked the three-judge panel to extend an emergency grant a stay of execution allowing the company to continue adding new customers.
Responding to the verdict Vonage in its official statement has said, ‘Vonage will continue to serve existing customers by paying into escrow a quarterly royalty of 5.5 percent throughout the appeals process and by posting a $66 million bond as required by the court. The company’s current cash position allows it to pay these fees to secure the stay as it continues to make progress on and pursues its legal appeal over the coming months.’
Recently, a lower court’s verdict had prevented Vonage from signing up new customers, a move that could have had disastrous consequences for the ailing company. Vonage in its response had said that a Verizon victory could cause a decline in its stock price that could lead to the delisting of its stock or possibly even bankruptcy. While its petition is pending, Vonage is paying a quarterly royalty of 5.5 percent to Verizon and has posted a $66 million bond.
Vonage is the most important supplier of Internet-phone service in the US, which has yet to report a profit since its inception. Vonage in point of fact lost $286 million in 2006 on revenue of $607 million. Vonage has reportedly more than 2 million customers, a portion of which is supposed to have been snatched from Verizon.
