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Vonage VoIP tech under threat

Internet telephony firm hit with injunction

A US federal judge has issued a permanent injunction against VoIP (voice over Internet Protocol) service provider Vonage to stop it from using patented Verizon Communications technology.

In a jury trial earlier this month in US District Court in Virginia, Vonage was found to have violated three Verizon patents for technology used for VoIP services. On Friday, US District Court Judge Claude Hilton issued an order banning Vonage from using the technology.

The decision is another win for the big incumbent telecommunications carrier in its legal fight against Vonage. Verizon sued last year, saying Vonage had infringed on seven patents. Vonage, a VoIP pioneer founded in 2001, alleges Verizon sued to eliminate a competitor to its traditional phone business. The jury verdict called for Vonage to pay $58m in damages plus royalties to Verizon, and the carrier then requested the injunction against Vonage.

However, the order is not effective immediately. At a hearing in two weeks, the court will rule on a stay on the injunction, Vonage said. If the court denies the stay and makes the injunction effective, Vonage will seek a stay at the US Court of Appeals, it said. The company has also appealed the patent-infringement verdict.

Friday's ruling won't affect Vonage customers' service, the company said. Even if Vonage were forced to stop using the technologies named in the injunction, their services wouldn't be affected, Vonage representatives said.

Meanwhile, Vonage is continuing with its appeal of the 8 March jury verdict on the patent-infringement itself. It has drafted its notice of appeal in the case and will file it at the appropriate time, the company 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," chief executive Mike Snyder said in a prepared statement.

Some industry analysts believe Vonage could be seriously hurt financially by the damage and royalties award.

Verizon, which requested the injunction after the 8 March verdict, applauded Friday's decision.

"We're pleased the court has decided to issue a permanent injunction to protect Verizon's patented innovations for offering commercial quality VoIP and Wi-Fi services," said John Thorne, senior vice president and deputy general counsel.


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