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Vonage Says Its Survival At Stake In Verizon Suit

4/18/2007 12:59:00 PM Eastern

Holmdel, N.J. — In a filing to the Security and Exchange Commission, VoIP provider Vonage said that its viability was threatened by the continued “damaging and disrupting” patent litigation brought against it by Verizon.

The VoIP provider said the possibility of bankruptcy loomed if its emergency stay is not extended through its appeals process.

Vonage also said it was attempting to design a work-around for the Verizon patents, but that such an effort may not be feasible, may disrupt its service or “be temporarily or permanently incompatible with some of the features we currently offer.

“If service interruptions affect the perceived reliability of our service or if we are required to limit our offering of service features, we may have difficulty attracting and retaining customers and our brand reputation, results of operations and financial condition could be materially and adversely affected,” Vonage said.

Despite the looming challenges, the company also re-affirmed its retail strategy, noting that it is currently negotiating with “several major retailers to expand our retail sales network.” National retailers, the company said, “give our displays prominence in their selling space and direct most customer inquiries about VoIP to our service.”

The full text of the filing is available here.

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