MISSISSAUGA – Thanks to a lost patent lawsuit with Verizon, an American judge earlier this month told Vonage it could not add any further customers until the matter was sorted out.
Vonage immediately sought and got an injunction on the decision that would have crippled its business.
Then, this week the U.S. Court of Appeals issued Vonage a permanent stay of that previous court’s injunction that would have barred it from signing up new customers. Vonage sought the stay following an April 6th decision by the U.S. District Court in Alexandria, Va. enjoining the company from using certain VoIP technology to add new customers. The permanent stay enables Vonage to add new customers, including in Canada, as it pursues its appeal. Existing customers remain unaffected by the company’s ongoing patent litigation.
“We thank the appellate court for its thoughtful consideration of the merits of our case,” said Jeffrey Citron, Vonage chairman and interim CEO, in a release “It’s business as usual for us… We remain focused on growing and strengthening our business and driving toward profitability.
“We continue to believe we have not infringed on any of Verizon’s technology and remain optimistic that we will ultimately prevail in this litigation," he added.
Vonage will continue to serve existing customers by paying into escrow a quarterly royalty of 5.5% throughout the appeals process and by posting a $66-million bond as required by the court. The company’s current cash position allows it to pay these fees as it finalizes workaround solutions and pursues its legal appeal over the coming months.
Vonage remains highly confident in the strength of its legal appeal, added the release
“We believe the original verdict was based on flawed and erroneous claim construction – meaning the patents in this case were defined in an overly broad and legally unprecedented way,” said Sharon O’Leary, Vonage’s executive vice-president, chief legal officer and secretary. “The district court’s decisions repeatedly neglected well-established law on claim construction and, as a result, artificially expanded the coverage of Verizon’s patents well beyond what was intended by the patent trademark process.
“We are confident this error will be eminently clear to the appeals court, which hears intellectual property cases exclusively. As a result, we remain highly confident Vonage will prevail on appeal," she concluded.
