Print 32 comment(s) - last by icab.. on Mar 27 at 2:22 AM

Vonage can hear Verizon now after losing infringement lawsuit

A suit filed in June by Verizon Communications against Vonage made its way to court last week.  Verizon claimed that Vonage infringed on several patents including the technology Vonage used to connect phones from its Internet Protocol service to traditional phone networks.

Vonage claims it had never violated any of Verizon patents, saying that it has been using third party technology that is already the standard throughout the industry.  One of the such is the voice gateways from Cisco Systems, to route voice traffic over the internet.

The final decision made by a federal judge stated that Vonage Holdings Corp. must pay out $58 million in damages to Verizon along with 5.5% future revenues royalty for any continuing infringements, according to a press release.  The decision came from the U.S. District Court of the Eastern District of Virginia, filing the infringements of three of the five patents under consideration.

The number of Vonage subscribers dropped from 256,000 from the second quarter of last year to 204,591 in the third quarter and then to 166,000 in the fourth with is Q4 loss from $72 million last year to $65 million this year.  Company executives say this is partly due to the bust of the company's commercials.  The next step is to replace the commercials and design infomercials that use customer testimonials to promote the service.

The pull themselves out of the hole, Vonage formed an agreement early this year with Earthlink to begin reselling wireless broadband in Earthlink’s covered cities.  To add to diversity of the companies marketing, Vonage executives have also mentions the company's stake in dual-mode handsets that will allow VoIP along with cell phone calls.

"We are confident in Vonage's future health, growth prospects and longevity," said Jeffrey R. Citron, Vonage's chairman and chief strategist.   Vonage has announced that it is not going out of business and its service will not be disrupted.

Currently, Judge Claude Hilton issued a permanent injunction against Vonage.  The reason behind the injunction is that the judge believes that providing monetary damages "does not prevent continued erosion of the client base of the plaintiff."  The injunction will not formally be entered for another two weeks, said Hilton.

Vonage is requesting to stay the injunction of either 120 days or until its appeal is heard.

Comments     Threshold

This article is over a month old, voting and posting comments is disabled

The ship is almost sunk
By cochy on 3/25/2007 3:21:48 AM , Rating: 2
Vonage has been an utter disaster of a business almost from day one. This lawsuite might just about do them in for good. They are facing legal battles from customers who claimed Vonage conned them into buy their stock, which is at a wopping $3 now. I don't think they've had one profitable quarter in their existance. With this huge drop in subscriber base, I just can't see this company making it for much longer. Honestly I don't see them offering much of a savings to customers over traditional phone line. Especially with the added complexity inherent in Voip services. Power failure? No phone. Internet down? No phone. Voip will fly with business models like Skype and such. Not with Vonage.


RE: The ship is almost sunk
By alifbaa on 3/25/2007 5:59:43 AM , Rating: 4
I don't understand this nonsense going on recently of investors suing companies when their stock declines precipitously. If the stock had gone up half as much as it's gone down, would they be suing? Of course not. No one "duped" them into buying stock. In fact, I'd bet they got a pretty good deal on it with reduced transaction costs, etc.

Our financial system is built, indeed its success is dependent upon, people being able to both gain and lose money. I think it is the worst kind of attitude which says that if you lose money on an investment you can just sue to get some money back. Do your research, invest wisely, don't whine when you lose.

“We do believe we have a moral responsibility to keep porn off the iPhone.” -- Steve Jobs
Related Articles
Verizon Sues Vonage Over VoIP Patents
June 20, 2006, 5:40 AM

Copyright 2016 DailyTech LLC. - RSS Feed | Advertise | About Us | Ethics | FAQ | Terms, Conditions & Privacy Information | Kristopher Kubicki