Vonage Wins Stay, Launches PR Counterattack
By Greg Scoblete -- TWICE, 5/7/2007
WASHINGTON — VoIP provider Vonage was afforded a measure of breathing room as a Court of Appeals judge granted the company a permanent stay of a previous court's injunction that would have barred Vonage from signing up new customers.
The Federal Circuit court ruling allows Vonage to continue to sign up new customers while it battles Verizon in the courts.
"It's business as usual for us," said Vonage chairman and interim CEO Jeffrey Citron in a statement addressing the verdict. Citron also thanked the court "for its thoughtful consideration of the merits of our case."
Vonage noted that it would pay into escrow a quarterly royalty of 5.5 percent throughout the appeals process and post a $66 million bond as required by the court.
"We believe the original verdict was based on an erroneous claim construction — meaning the patents in this case were defined in an overly broad and legally unprecedented way," said Sharon O'Leary, Vonage executive VP and chief legal officer in a statement. "We are confident this error will be rectified by the appeals court, which hears intellectual property cases exclusively. As a result, we remain highly confident Vonage will prevail on appeal."
The case will begin June 25.
The VoIP provider also initiated what it described as a "grassroots communications campaign to educate and mobilize consumers about preserving the freedom to choose their phone service provider."
The so-called "Free to Compete" campaign will include a Web site and a series of advertisements aimed at portraying the Verizon lawsuit as an effort by an entrenched corporation to stifle legitimate competition.
According to Vonage, "Verizon has pursued litigation against Vonage in an effort to achieve in court what it cannot achieve in the marketplace."
"We think this issue warrants national attention because when competition is stifled, consumers literally pay the price," Citron said in a statement. "Vonage is the target today, but what other innovative companies might be next?"
