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Ruling May Be End for Vonage / Judge Enjoins Use Of Key Technology
From: David Farber <dave () farber net>
Date: Sun, 25 Mar 2007 15:19:19 -0400
Begin forwarded message: From: Monty Solomon <monty () roscom com> Date: March 25, 2007 2:34:19 PM EDT To: undisclosed-recipient:;Subject: Ruling May Be End for Vonage / Judge Enjoins Use Of Key Technology
Ruling May Be End for Vonage Judge Enjoins Use Of Key Technology By Alan Sipress Washington Post Staff Writer Saturday, March 24, 2007; D01 A federal judge yesterday dealt a potentially fatal blow to Vonage Holdings, the Internet-phone service that offers one of the few alternatives to traditional carriers, by ordering it to stop using a technology that connects its network to the public telephone system. U.S. District Judge Claude Hilton approved the request by Verizon Communications for a permanent injunction two weeks after a jury in Alexandria found that three of its patents had been infringed by Vonage, including one for the technology allowing the Internet company's 2.2 million customers to call regular phones. Hilton said the ban would not take effect before he holds another hearing in two weeks on Vonage's request for reprieve through a stay. The company said customers will not be affected by the court's decision, although analysts are skeptical the company will be able to sustain service if the ruling is not overturned. This is the latest setback in Vonage's troubled history, which has included some regulatory losses and a shareholder suit stemming from its public offering. Vonage, which has never generated a profit, helped popularize online calling as a cheaper alternative to traditional phone service, waging a flashy marketing campaign on prime-time television and over the Internet. But some industry analysts said its flat-rate service was already starting to lose its luster next to new offerings from phone and cable companies selling combined telephone, Internet and cable television services. The impact of the court's decision on other providers of Internet phone services, known as voice-over-Internet protocol, or VoIP, remains unclear, analysts said. This could depend on whether Verizon wants to shut down Vonage or sell its licenses for the technology. Vonage, which was ordered by the jury to pay $58 million in damages, has vowed to appeal the verdict and seek a stay from the federal appeals court if Hilton does not grant one. In his ruling, Hilton said that the financial award alone was not enough because it "does not prevent continued erosion of the client base and customer base" of Verizon. ...http://www.washingtonpost.com/wp-dyn/content/article/2007/03/23/ AR2007032300986.html
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- Ruling May Be End for Vonage / Judge Enjoins Use Of Key Technology David Farber (Mar 25)