Update on Vonage vs Verizon

This is a quick update on my 4/7/07 blog posting about Internet phone company Vonage. A federal appeals court ruled yesterday that the company can sign up new customers while it appeals a patent infringement ruling. In our previous post on the subject, a lower court had ruled Vonage could only service its existing customer base and that they could not sign up any new customers. That ruling is now reversed permanently reversed, at least until the appeals court rules on the case.

The federal circuit appeals court, which specializes in hearing patent cases, put Vonage's appeal on a fast-track schedule, with arguments now set for June 25. Usually, it takes the appeals court more than a year to rule on most cases. But lawyers involved in the Vonage appeal said it could be decided as soon as this summer.

Verizon is seeking to bar Vonage from any use of its patented technologies after a jury in March found Vonage had infringed three of their patents. Verizon, through its lawyers, praised the decision by the appeals court to expedite the case, saying it would limit Vonage infringement of Verizon patents.

The extended stay ruling came about two hours after the appeals court heard arguments from lawyers representing Vonage and Verizon.

Vonage's legal team argued that the trial judge in the case had misconstrued key claims in three of the patents at issue and given the jury the wrong instructions on how to interpret technical terms such as data "translation" and "destination address." Lawyers for both companies faced a barrage of technical questioning by three judges during the hearing that lasted about 90 minutes.

Vonage said after the ruling it would pay a quarterly royalty of 5.5 percent into a reserve during the appeals process and post a $66 million bond as required by the court.