Vonage wins permanent stay in Verizon patent litigation

Granting permanent stay against a lower court injunction issued earlier this month, internet phone company, Vonage, can keep marketing to new customers while it appeals a patent suit against telecom giant Verizon Communications, the U.S. Court of Appeals for the Federal Circuit ruled on Tuesday.

Furthermore, briefs by Vonage and Verizon have to be filed by May 30. With Vonage's first brief due for May 9, an oral argument is set for June 25. Till then Vonage will continue serving existing customers by paying a quarterly royalty of 5.5 percent into a reserve during the appeals process and by posting a $66 million bond as required by the court.

Existing customers remain unaffected by the company's ongoing patent litigation.

On April 6, a judge issued an injunction that barred the Internet phone service provider from signing-up new customers while it infringes Verizon's patents.

Caught in the patent war since June, 2006, in March, 2007 a jury found Vonage guilty of infringing three patents held by Verizon namely, Internet to phone-system connection technology, phone features such as voice-mail and call-waiting, and wireless to Internet phone calls.

The ruling ordered Vonage to pay fifty-eight million dollars, and a royalty rate of 5.5 percent of every sale to a Vonage customer, back to Verizon, but Vonage announced its intentions of appealing against the jury’s verdict.

"It appears that Vonage has won a reprieve for now, but possibly a short reprieve," Rebecca Arbogast, an analyst with Stifel Nicolaus said.

Elated over the new development, Jeffrey Citron, Vonage chairman and interim chief executive officer said, "We continue to believe we have not infringed on any of Verizon's technology and remain optimistic that we will ultimately prevail in this litigation."

Headquartered in Holmdel, New Jersey, Vonage, founded in January 2001 is a registered trademark of Vonage Marketing Inc., a subsidiary of Vonage Holdings Corp. The company is a leading provider of broadband telephone services and is currently operating on 2.2 million subscriber lines.

While, Verizon Communications is an American broadband and telecommunications company founded in 2000, with headquarters at New York, USA.