Vonage Holdings Corp., the unprofitable Internet phone company, last week asked a U.S. appeals court to reconsider a patent ruling that would force it to alter its business and pay royalties to Verizon Communications Inc.
Vonage is seeking a reversal of a Sept. 26 ruling from the U.S. Court of Appeals for the Federal Circuit in Washington that upheld much of a $58 million jury verdict against Vonage. The company wants the original three-judge panel that heard the case or the entire 12-judge court to review the decision.
“This move represents the next logical step for Vonage in managing this litigation,” Vonage Chief Legal Officer Sharon O’Leary said in a statement.
Unless all of the verdict is thrown out, Vonage faces a court order that it stop connecting Internet calls to standard phone lines and providing certain features such as call waiting. Two analysts yesterday said the Verizon case could push Vonage into bankruptcy.
Vonage, based in Holmdel, N.J., agreed to pay $80 million to settle another patent-infringement trial it lost to Sprint Nextel Corp., the third-biggest U.S. mobile-phone service provider. Verizon Wireless, co-owned by Verizon Communications, is the second-biggest behind AT&T Inc.
The appeals court, which specializes in U.S. patent law, upheld a finding that Vonage infringed two patents owned by New York-based Verizon, and sent back a finding of infringement against a third for further review by the trial court.
Because the damage award was based on infringement of all three patents, that issue was sent back to the judge in Alexandria, Va., for review. •
