Court grants permanent stay; Vonage may sign up new customers

IDG News Service - WASHINGTON - A U.S. appeals court today granted Vonage Holdings Corp. a permanent stay against a lower court ruling barring it from providing service to new customers.

On April 6, Judge Claude Hilton of the U.S. District Court for the Eastern District of Virginia ordered Vonage to stop signing up new customers after a March jury ruling that the VoIP (voice over Internet Protocol) provider had infringed three Verizon Communications Inc. patents. On the same day, the U.S. Court of Appeals for the Federal Circuit in Washington gave Vonage a temporary stay of Hilton's order.

The appeals court made the stay permanent while Vonage appeals the patent infringement decision. Vonage believes it has a strong case for appeal, company officials said today.

Vonage applauded the appeals court decision. "It's business as usual for us," Jeffrey Citron, Vonage's chairman and interim CEO, said in a statement. "We remain focused on growing and strengthening our business and driving toward profitability."

Verizon, meanwhile, said it was happy that the appeals court set a tight schedule for hearing Vonage's appeal, about two months, instead of a year or more for a typical appeal. "The expedited schedule will accomplish the same thing that a partial stay of the injunction, pending a longer appeal, would have accomplished -- limiting Vonage's infringement during the appeal," John Thorne, Verizon's senior vice president and deputy general counsel, said in a statement. Verizon expects the jury verdict will be upheld.

Vonage and its allies have argued that the District Court interpreted the Verizon patents too broadly. The jury in early March ordered Vonage to pay $58 million for infringing three Verizon patents, two of which focus on using name translation to connect VoIP calls to traditional telephone networks.