Jury orders Vonage to pay $58 mln in patent case
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ALEXANDRIA, Virginia  - A jury on Thursday ordered Internet phone provider Vonage Holdings Corp. to pay $58 million for infringing on three patents owned by Verizon Communications Inc..
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A federal court ruled that VoIP provider Vonage Holdings Corp. infringed on patents owned by Sprint Nextel Corp.
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By MATTHEW BARAKAT ALEXANDRIA, Va. - A federal jury on Thursday found that Internet phone carrier Vonage Holdings Corp. had infringed on Verizon Communications Inc.'s patents and ordered Vonage to pay $58 million.
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Digital phone service Vonage   said on Friday it has settled a patent dispute with AT&T .
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(InfoWorld) - A federal court ruled on Tuesday that struggling VoIP provider Vonage infringed on patents owned by Sprint Nextel. Jurors in the U.S. District Court in Kansas found that Vonage willfully infringed on Sprint's patents as part of its VoIP service, Vonage said. The jury awarded Sprint $69.5 million in damages, which amounts to 5 percent of Vonage's revenue during the infringing period. Vonage plans to initially ask the court to set aside the verdict, but if that fails, the company will appeal the decision. In the meantime, Vonage will also develop workarounds that don't require Sprint's patents, it said. This is the second legal blow to Vonage this year. A court found earlier this year thatÂ Vonage infringed on Verizon patents. That case came with an injunction that would have prevented Vonage from signing up new customers.Â Vonage won a stay of that injunctionÂ and is appealing the original infringement ruling. Although it's clearly bad news for Vonage to have two patent infringement rulings against it this year, the appeals could change everything, said Seth Ostrow, a partner specializing in patents in Dreier LLP. "Often there are mistakes made during various stages of a case that form the basis for a successful appeal, and that, coupled with the statistics, gives reason to think that Vonage has a significant chance of getting this changed," he said. Statistics show that patent cases often get changed on appeal, he said. In August, Vonage said it had nearly completed rolling out workarounds for two of the three patents claimed by Verizon. Still, the Verizon case alone appears to have slowed growth for the company, the largest independent VoIP provider. In its second quarter this year, Vonage added 57,000 customer lines, compared with 256,000 in the same quarter in the previous year. Vonage has said that Verizon pursued the lawsuit in an effort to eliminate a competitor. Vonage stock opened the day at $1.99 and closed at $1.20, a 33 percent drop. This story was updated on September 25, 2007
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A federal jury on  Wednesday began reviewing evidence in Verizon Communications  Inc's $197 million patent infringement case against Internet  phone service provider Vonage Holdings Corp..
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Internet-based calling company Vonage Holdings  Corp  said it settled a patent dispute with Nortel.
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(InfoWorld) - Shares of Vonag plunged Friday in the wake ofÂ a patent-infringement ruling against the companyÂ that some analysts called a grim outcome for the VoIP service provider. Vonage stock fell $0.69 to $4.17 on the New York Stock Exchange, losing more than 14 percent of its value, after a jury decided on Thursday that the company infringed three Verizon patents on commercial VoIP services technology. Vonage was ordered to pay $58 million in damages and a 5.5 percent royalty rate on future sales. Verizon also is seeking a permanent injunction to keep Vonage from using the technologies. Vonage plans to appeal. The ruling comes after a string of setbacks for the scrappy service provider, which has yet to make a profit. Vonage was founded in 2001 and has built up its customer base to more than 2.2 million through heavy investments in marketing. Along the way, it has become the most visible independent provider of VoIP, which puts voice calls on data lines for lower cost and some extra features. TheÂ company has claimed Verizon sued in order to eliminate a competitor to the traditional circuit-switched phone service that is its bread and butter. Although the judgment is not very big compared to some, it could be devastating to Vonage if it stands, analysts said. "It's a drop in the bucket, but they need every cent they can get," said Will Stofega, a VoIP analyst at IDC. The company is already dealing with shareholder lawsuits over its disappointing IPO last year along with difficulty meeting regulatory requirements like E911 emergency service and the Communications Assistance for Law Enforcement Act, he said. The $58 million sum is about as much as the company is losing every quarter, Ovum analyst Jan Dawson pointed out in a research note on Friday. Vonage lost $65 million in the fourth quarter of 2006. "As this case gets more coverage, potential customers will be worried about signing up for new service with Vonage, and existing customers may churn in larger numbers than usual. Both of these effects would be disastrous for Vonage," Dawson wrote. Verizon might also go after other VoIP providers for infringing the patents, Stofega said. Big providers like the cable operators could absorb royalties, but smaller independent players would be even more vulnerable than Vonage. Already, regulatory requirements and "a race to the bottom" on pricing are threatening the stand-alone VoIP service business, he said. In a few years, many more people will be using the technology, but VoIP companies as such may become a thing of the past. Jeff Pulver, a longtime VoIP booster who co-founded Vonage before leaving the company, was more optimistic in an entry on The Jeff Pulver Blog, in which he called the ruling "the end of the seventh inning," a reference to baseball, which has nine innings. "This isn't the end of the battle," Pulver wrote. "I hope and trust this decision does not curb innovation and progress in VoIP and other Internet communications products, services, and applications."
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A U.S. federal jury found that Microsoft Corp infringed on audio patents held by Alcatel-Lucent and should pay $1.52 billion in damages, Bloomberg News reported on Thursday.
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The cost of Vonage's VoIP technology development policy - build now, ask questions later - hardened a bit more after the close of stock trading this afternoon. Vonage has agreed to settle with the first of its three aggrieved parties, Verizon, in an unusual deal that hinges upon a forthcoming ruling from an appeals court and a separate injunction ruling from a district court.
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Verizon Communications and Vonage Holdings settled a patent-infringement lawsuit with Vonage agreeing to pay as much as $120 million.
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Vonage is downplaying an appeals court decision affirming an earlier verdict of patent infringement on two patents owned by Verizon Communications.
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Nortel Networks Corp., the Canadian maker of telecom equipment, filed a lawsuit on Friday against Vonage Â claiming that it violated nine patents related to Internet phone services and related features such as 911 and 411 calling and click to call.
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Battered and bruised from its patent fights with Sprint and Verizon over technologies used in its VoIP service, Vonage disclosed Friday that it has also been sued by AT&T.
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Analysis: Verizon's victory in patent-infringement case is the latest challenge for Internet telephony provider Vonage.
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Settlement is latest in a string of patent cases against Internet phone company. Vonage has settled disputes with Sprint, Verizon in recent months.
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A federal court rules that struggling VoIP provider Vonage Holdings infringed on patents owned by Sprint Nextel.