The judge's new customer injunction is reportedly stayed until next Thursday, to give Vonage time for an emergency appeal. "[The injunction] effects only new customers and allows Vonage to operate with its current customer base," Judge Hilton snooted. "It keeps [Vonage] from taking more clients from Verizon."

Adding new customers is vital to Vonage. If the ruling is upheld, it could be difficult for Vonage to "continue in a viable way," surmised Rebecca Arbogast, a telecommunications analyst with Stifel & Nicolaus. "I think Verizon's legal strategy has been very aggressive and very effective. Vonage doesn't have very many attractive options except to hope for an emergency stay."

Vonage agreed. Vonage lawyer Roger Warin squawked at the judge that the partial stay is as "harmful as no stay at all. It's the difference of cutting off oxygen as opposed to a bullet to the head." Tallying Vonage's churn rate of 650,000 customers a year, Warin observed that the partial stay would "in effect slowly strangle Vonage. You have not preserved the status quo."

The judge also ruled that Vonage must post a $66 million appeal bond. This was the reply to Warin conceding that Vonage was willing to pay a 5.5% royalty for Vonage's current customer base of 2.2 million into a quarterly escrow account.

Vonage's share price has tumbled over 80% since its disastrous IPO late last year. When the dust settles on the Verizon litigation, Vonage is ripe for acquisition.

Vonage is beavering away on non-infringing workarounds.

Previous Vonage-Verizon coverage in the Patent Prospector.