Vonage Loses Another Patent Battle

After losing a legal patent dispute to Verizon Communications Inc. earlier this year, Vonage Holding Corp., a leading provider of broadband telephone services in the United States, has suffered another legal jolt, this time to Sprint Nextel Corp., in a dispute over patents related to Internet-phone technology.

A Federal court jury in Kansas City, Kansas in its verdict has found Vonage guilty of willfully infringing Sprint's patents in providing its VoIP telephony services. The jury ordered the broadband subscriber to pay $69.5 million in damages to Sprint, which the jury found was equivalent to 5 percent of Vonage’s revenue for the infringing period.

However, Vonage denies using Sprint's patents and announced its intension's to appeal against the U.S. District Court jury verdict.

"We are disappointed that the jury did not recognize that our technology differs from that of Sprint's patents," said Sharon O'Leary, chief legal officer for Vonage said in a statement.

Holding high that Vonage's customers were not affected by the Verizon decision and would not be hurt the Sprint ruling, either, O'Leary added, "Vonage has already demonstrated that it can keep its focus on customers and on its core business while managing ongoing litigation."

To recall, in March this year, a Federal jury in Virginia found Vonage guilty of infringing three patents held by Verizon, the company was ordered to pay $58 million and a royalty rate of 5.5% of every sale to a Vonage customer, back to Verizon. A decision on the appeal of the case is still awaited.

Meanwhile, with markets reacting to the jury verdict, Vonage shares plunged 33 percent to its all time low to close at $1.30.

Founded in January 2001, Vonage was originally based in Edison, New Jersey. With current headquarters in Holmdel, New Jersey, the company offers services to subscribers throughout the United States, Canada and the United Kingdom.

With over 2.45 million subscriber lines, Vonage technology enables its subscribers to make and receive phone calls almost anywhere a broadband Internet connection is available.