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April 06, 2007 | Comments: (0)
WSJ: Judge's ruling puts Vonage on Ice
A ruling from a Federal Judge on Friday prohibits Internet-based phone company Vonage from signing up any new customers and could be a death sentence for the company if it is not overturned on appeal.
The Wall Street Journal reported Friday that U.S. District Court Judge Claude Hilton ordered Vonage to stop signing up new customers until it has stopped using Internet calling technology owned and patented by Verizon Communications.
The order follows an injunction against Vonage, in March, which ordered the company to stop using the Verizon technology after a jury found that Vonage had violated three Verizon patents.
Verizon sued Vonage over the patents in June, 2006, just weeks after the company issued an Initial Public Offering.
According to the report, Vonage has pledged to appeal the ruling, which a company lawyer said would cut off oxygen -- new customers -- that Vonage needed to survive. Judge Hilton said that the company would need to post a $66 million bond for that appeal.
Failing victory on appeal or a technology fix that replaces the Verizon patents, Vonage will soon face an existential dilemma: how to service its millions of customers without the benefit of being able to add new customers to its rosters.
Posted by Paul Roberts on April 6, 2007 08:59 AM
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