VONAGE MUST STOP USING VERIZON PATENTS

A federal judge issued a permanent injunction against Vonage forcing the VoIP phone company to stop using Verizon's patented technology. From The New York Times:

Judge Claude Hilton said an injunction, which followed a jury decision that Vonage had infringed on three Verizon patents, is required because simply providing monetary damages ''does not prevent continued erosion of the client base of the plaintiff.''

Hilton said he will not formally enter the injunction for another two weeks while he considers Vonage's request to stay the injunction. Vonage is requesting a stay of either 120 days or until its appeal is heard.

But Verizon lawyer Dan Webb said any of Vonage's business difficulties should not be a factor in determining a stay. Webb said a stay will cause irreparable damage to Verizon because Vonage will continue to lock up the marketplace of Voice over Internet Protocol, or VoIP.

Vonage stock lost nearly 26% of its value today as investors worried that the company may not be able to continue to provide service without the use of Verizon's technology.

VONAGE VIOLATES VERIZON PATENTS - MUST PAY $58 MILLION FINE

From USA Today:

Internet phone provider Vonage must pay Verizon $58 million in damages for infringing on three of the phone giant's technology patents, a jury ruled on Thursday. The U.S. District Court in Virginia has scheduled a March 23 hearing to determine whether Vonage can continue to use the patented technology — which goes to the heart of how it provides low-cost Internet telephone service to more than 2 million customers. If the court lets Vonage use the technology, then it must pay Verizon 5.5% of total revenue on an ongoing basis, the jury ruled. That could tack an additional $47 million to $50 million onto Vonage's tab this year.