Vonage faces disconnection

Internet telephony player Vonage is exercising damage control this week after a US judge threatened to cut off the company’s service late Friday.

The US District Court in Alexandria issued an order enjoining Vonage from using certain VoIP technology named in its patent litigation with Verizon.

The court will hear a stay argument from Vonage in two weeks’ time, after which the judge will ban the company’s VoIP service.

Vonage, however, said that it remains confident its customers will see no change in their phone service.

If the court denies the stay, Vonage said it will seek a stay through appeal from the Federal Court of Appeals.

“We are confident Vonage customers will not experience service interruptions or other changes as a result of this litigation,” said Mike Snyder, Vonage’s chief executive officer.

“Our fight is far from over,” Snyder said. “We remain confident that Vonage has not infringed on any of Verizon’s patents – a position we will continue vigorously contending in federal appeals court – and that Vonage will ultimately prevail in this case.”

Earlier this month, Vonage was ordered to pay Verizon $58m (£30m) plus monthly royalties for infringement on some of the US telco’s proprietary patents.

The award of $58m is much less than the $197m that Verizon had requested – partly because the jury found that Vonage did not act wilfully.

However, Verizon’s success has resulted in speculation that the company could go after other VoIP providers in a similar fashion.

Vonage claims that it relied on open standard, off the shelf technology when developing its service.

Jan Dawson, VP at industry analyst Ovum, previously warned that the $58m payout Vonage is required to make is in the same range as quarterly losses at Vonage, so losses would double if it came in the next quarter.


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