You are undoubtedly aware that Verizon has claimed Vonage infringed on seven patents covering areas including VoIP billing, fraud detection, call waiting, and voicemail, gateways between VoIP and circuit-switched phone networks, and methods for using Wi-Fi handsets for VoIP.
Thankfully for Vonage and unfortunate for Verizon, the jury agreed on just three of the seven accusations. This brought the 197 million dollar lawsuit down to a less difficult to swallow $58 million. I’m sure Vonage CEO’s were happy for this call. It apperars Vonage unwillfully infringed on three patents, and TWO of them were related to billing. The jury also ruled that Vonage did not willfully infringe on Verizon’s patents, which greatly reduced the damages award from the original $197 million figure Verizon was seeking.
It’s funny how all of this comes out in the wide open in the same time frame that I write an article pertaining to the pros and cons of vonage service. Would this need to be added to the list? I think probably not - it looks as if Vonage has signed a deal with Voiceone, an independent VOIP service provider, this would eliminate the need for two of the three patents in the spotlight. This should prove that Vonage will be able to recover from this lawsuit - it might not be the most favorable option to Vonage themselves, but it beats going under.
Vonage is in a sign-up freeze at the moment as a result of an injunction issued on April 6 by Judge Hilton against Vonage, saying that the company must stop signing up new customers unless it can avoid infringing Verizon patents. The negative effects of this freeze-out in conjunction with regular customer turnover, and now frightened customer turnover will probably be the largest factors in Vonage’s instability.
Vonage announced it would keep operating and servicing subscribers, pay a court-mandated $66 million appeal bond, and also pay a 5.5 percent royalty on the Verizon patents into an escrow account during the appeals process.
To stir the pot even more, Vonage CEO Michael Snyder resigned without giving reason on April 11th, and chairman Jeffrey Citron was appointed interim CEO while the Vonage board searched for a replacement.
Vonage has a tough situation to pull out of, think they will do it?