Rapid Drop of Vonage Shares

Vonage received more bad news today, as a federal judge in Alexandria, VA issued a permanent injunction against the use of three Verizon patents regarding Internet telephony. Shares in Vonage, which have been dropping since it went public ten months ago, and trading was halted briefly when the decision was announced. The company's stock then dropped to a lifetime low, according to Reuters.

On March 8, a jury decided against Vonage in a patient infringement case file by Verizon, and $58 million in damages were awarded, says CNET News. The damages would have been tripled if the infringement were determined to be intentional. In today's decision, the judge agreed with Verizon's claim that it would suffer irreparable harm if the use of the patents continued. Vonage claimed that the public interest would suffer if it were forced to cease.

The patents involved connection to the public network including call waiting and voicemail technologies, and also the implementation of WiFi-based phones. The CEO of Vonage said that the company was developing a workaround, and customer use of their service would not suffer.

Verizon's suit originally claimed infringement by rival Vonage on seven of its patents, CNET notes. CNET also mentioned that a suit is pending for infringement on Sprint-Nextel patents as well. The CEO of Vonage continues to maintain that they "relied on open-standard, off-the-shelf technology when developing its service," while Verizon's senior vice president and deputy general counsel hailed the decision "to protect Verizon's patented innovations for offering commercial-quality VoIP and Wi-Fi services." Both will have a further chance in two weeks to argue whether the injunction should be lifted.