updated 04:25 pm EDT, Wed September 26, 2007
Vonage Partially Cleared
Vonage has earned at least a temporary stay on having to pay $58 million in awarded damages to Verizon in its patent dispute over VoIP phone service, according to a new ruling by the US Fourth Circuit Court of Appeals. While the court upheld the essential verdict, it denied the damage payment as well as a proposed 5.5 percent royalty fee since it was not clear how much of these monetary figures applied to each of the three patents involved. One of the patent verdicts was also remitted as the original court misinterpreted its terms, the appeals court said.
These changes will force the case back to its original district court to retry the disputed aspects and may mitigate the issue by reducing the number of affected patents and allowing Vonage to again present its argument. The company has already said it has developed a "workaround" to the two alleged violations that would allow its existing service to continue regardless of final damages.
The ruling is not expected to have any immediate effect on a similar ruling against Vonage in a similar patent dispute with Sprint, which found the Internet phone provider responsible for nearly $70 million in damages after purportedly infringing six patents.