Court Ruling Increases Bankruptcy Risk for Vonage
For the second time in two days, Internet phone company Vonage Holdings Corp. was hit with bad legal news yesterday when a federal appeals court upheld a jury verdict and injunction against it for patent infringement, the Associated Press reported yesterday. A Virginia jury had awarded Verizon Communications Corp. $58 million in damages in March plus 5.5 percent royalties on future revenues after finding that Vonage violated three Verizon patents in building its Internet phone system. The U.S. Court of Appeals for the Federal Circuit partially upheld the March verdict, directing the trial court to reconsider the verdict on one of the three patents. It also vacated the damages and royalty awards. On Tuesday, Vonage was ordered to pay Sprint Nextel $69.5 million in damages after a jury found that Vonage willfully infringed on six Sprint telecommunications patents. Buckingham Research Group analyst Qaisar Hasan said the risk of bankruptcy ”is now increasingly real” for the Internet telephone company.






