ALEXANDRIA, Va. – Internet telephone service provider Vonage Holdings Corp. Friday was ordered to stop using Verizon Communications Inc. technology to allow its customers to make calls to standard phone lines, according to Bloomberg News. But U.S. District Court Judge Claude Hilton, who approved Verizon’s request, said he wouldn’t sign the order before a hearing in two weeks where Vonage will have a chance to present its arguments for a stay.
On March 8, a Virginia jury found Vonage guilty of infringing upon three Verizon patents, though not willfully, and said it should pay $58 million. The infringements alleged in Verizon’s June lawsuit (“Verizon Services Corp. v. Vonage Holdings, 06-cv-682, U.S. District Court for the Eastern District of Virginia”) include the method by which Vonage transmits voice-over-Internet calls to regular phones.
Vonage – still losing money, though its sales last year more than doubled to $607.4 million – says it is developing “technical workarounds” to achieve the same goals. “My impression is, they have to shut down if they have no workaround, and that’s obviously disastrous,” Clayton Moran, an analyst with Stanford Group in Boca Raton, Fla., who covers Vonage but doesn’t own any shares, told Bloomberg. “If they are able to complete the workaround, it’ll be an added cost.”
“We are confident Vonage customers will not experience service interruptions or other changes as a result of this litigation,” CEO Mike Snyder said in a statement. “Our fight is far from over.” The company also faces separate lawsuits by shareholders, who claim they were misled, and Sprint Nextel Corp., which seeks both cash compensation and to stop Vonage from using disputed technology.
