Vonage gets permanent stay in patent case

A U.S. appeals court has granted Vonage a permanent stay of a lower court injunction barring it from signing up new customers. Earlier this month, the lower court had ordered Vonage to stop marketing its VoIP service to new customers after it lost a patent lawsuit brought by Verizon.

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 following a March jury ruling that the VoIP  provider had infringed three Verizon patents on VoIP technologies. On the same day, the U.S. Court of Appeals for the Federal Circuit in Washington, D.C., gave Vonage a temporary stay of Hilton’s order.

On Tuesday, 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 Tuesday.

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 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.