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Vonage this week received a permanent stay of injunction from the U.S. Court of Appeals for the Federal Circuit in Washington D.C. that would have barred it from signing up new customers.
Vonage sought the stay following an April 6 decision by the U.S. District Court in Alexandria, Va. enjoining the company from using certain VoIP technology to add new customers. The court ruled that the VoIP technology Vonage was using infringed on three patents awarded to Verizon.
The permanent stay enables Vonage to add new customers as the company pursues an appeal to that ruling. Existing customers remain unaffected by the company's ongoing patent litigation, Vonage said.
"We thank the appellate court for its thoughtful consideration of the merits of our case," said Jeffrey Citron, Vonage chairman and interim CEO, in a statement. "It's business as usual for us."
Some Vonage users believe they won a stay too -- but only a temporary one.
"It's a breather for Vonage, but only that," says Mark Leahy, a project manager for IBM Global Service's American IT services department.
"I don't see it as the end of the argument -- just a way for Vonage to survive until they resolve the rest of the case (and the Sprint case, too)," he says. "Right now, anything extending Vonage's survival is good news for them, and thus for me."
Vonage will continue to serve existing customers by paying into escrow a quarterly royalty of 5.5% throughout the appeals process and by posting a $66 million bond as required by the court. The company says its current cash position allows it to pay these fees to secure the stay as it continues to make progress on workaround solutions and pursues its legal appeal over the coming months.
Vonage says it remains “highly confident” in the strength of its appeal.
The company said it believes the original verdict defined the patents in an overly broad in a “legally unprecedented way." Vonage said it believes the district court's decisions repeatedly neglected well-established law on claim construction and, as a result, artificially expanded the coverage of Verizon's patents beyond what was intended by the patent trademark process.
Vonage believes the appeals court will interpret the patents correctly.
"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," Citron stated.

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Comments (9)
Verizon vs. VonageBy Anonymous on May 8, 2007, 3:36 pmVerizon made me a victim from 4/5/2007 to present. Verizon disconnected my DSL services with them and did not give me any notice. I called Verizon on 4/5,/4/7,4/10,4/12,4/16,4/20,4/27,5/7,...
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This suit, in my opinion agreementBy Anonymous on May 7, 2007, 1:00 pmI agree and Verizon loses the opportunity to collect high "per call" fees from everybody if anyone finds a way to bypass them. Of course they will be protective...
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Vonage's legal actions not surprising, but also not admirableBy Anonymous on May 3, 2007, 5:59 pmThe decision makers at Vonage are embroiling the company in an expensive legal battle that will cede all value and control to their legal advocates. It is an implicit...
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This suit, in my opinion,By Anonymous on May 3, 2007, 2:54 pmThis suit, in my opinion, shows the inability of the juggernauts to innovate. I can't say whether or not Vonage violated Verizon's patents because I'm not an attorney,...
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SnohomishBy Anonymous on April 26, 2007, 11:10 pmYou are correct Verizon does needs to improve thier service. There lines her in Snohomish are so bad you can only get a 12 k dial up connection, and no DSL anytime...
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